[July 21, 2014] |
|
Allergan Reports Second Quarter 2014 Operating Results
IRVINE, Calif. --(Business Wire)--
Allergan, Inc. (NYSE: AGN) today announced operating results for the
quarter ended June 30, 2014. Allergan also announced that its Board of
Directors has declared a second quarter dividend of $0.05 per share,
payable on September 5, 2014 to stockholders of record on August 15,
2014.
Operating Results Attributable to Stockholders
from Continuing Operations
For the quarter ended June 30, 2014:
-
Allergan reported $1.37 diluted earnings per share attributable to
stockholders compared to $1.17 diluted earnings per share attributable
to stockholders for the second quarter of 2013.
-
Allergan reported $1.51 non-GAAP diluted earnings per share
attributable to stockholders compared to $1.22 non-GAAP diluted
earnings per share attributable to stockholders for the second quarter
of 2013, a 23.8 percent increase.
Product Sales
For the quarter ended June 30, 2014:
-
Allergan reported $1,827.3 million total product net sales. Total
product net sales increased 15.9 percent compared to total product net
sales in the second quarter of 2013.
-
Total specialty pharmaceuticals net sales increased 13.2 percent,
or 13.7 percent on a constant currency basis, compared to total
specialty pharmaceuticals net sales in the second quarter of 2013.
-
Total core medical devices net sales increased 25.8 percent, or
26.1 percent on a constant currency basis, compared to total core
medical devices net sales in the second quarter of 2013.
-
Total specialty pharmaceuticals and core medical devices net
sales, which exclude sales from the transition services agreements
related to the sale of the obesity intervention business unit,
increased 15.1 percent, or 15.5 percent on a constant currency
basis, compared to total specialty pharmaceuticals and core
medical devices net sales in the second quarter of 2013.
"With continuing strong momentum, Allergan recorded the strongest
increase in absolute dollar sales in any quarter in our history, and
again delivered sales and earnings per share growth above the high end
of our expectations," said David E.I. Pyott, Allergan's Chairman of the
Board and Chief Executive Officer. "Furthermore, we are pleased with the
progression of key clinical programs into Phase 3 as well as the recent
FDA approval of OZURDEX® for Diabetic Macular Edema."
Product and Pipeline Update
During the second quarter of 2014:
-
On May 1, 2014, Allergan announced that BOTOX® (Botulinum Toxin Type
A) received a positive opinion from the Irish Medicines Board serving
as reference member state in the mutual recognition procedure (MRP)
for the treatment of focal spasticity of the ankle in adult post
stroke patients. To date this has led to Marketing Authorisations in
10 of the 14 European countries involved in the MRP and marks a key
milestone in bringing this treatment to stroke survivors across Europe
who are suffering from lower limb spasticity.
-
On May 15, 2014, Allergan announced that Agence Nationale du Securite
du Medicament et des Produits de Santé (ANSM) has extended the
Marketing Authorisation for BOTOX® (Botulinum Toxin Type A) to include
the treatment of idiopathic overactive bladder (OAB) associated with
symptoms including 3 urgency urinary incontinence episodes within 3
days, urinary frequency defined as 8 or more voids/day in adult
patients who don't respond to anticholinergic medication (after 3
months of treatment) or are intolerant to anticholinergic medication
and not responding to a well-controlled physiotherapy. This is the
eighth indication for BOTOX® in France and marks another key milestone
in bringing this innovative treatment to patients suffering from the
symptoms of OAB. BOTOX® is the only botulinum toxin indicated for the
management of bladder dysfunctions in France.
-
On June 10, 2014, the Court of Appeals for the Federal Circuit
reversed a ruling of the U.S. District Court for the Middle District
of North Carolina, and found U.S. patent numbers 7,351,404 and
7,388,029, which cover LATISSE®, to be invalid. As of today, none of
the Abbreviated New Drug Applications (ANDA) filed by the generic
applicants have received approval from the U.S. Food and Drug
Administration (FDA). A companion case against the generic applicants
involving U.S. patent numbers 8,038,988, 8,101,161 and 8,263,054,
which also cover LATISSE®, is currently pending in U.S. District Court
for the Middle District of North Carolina.
-
On June 13, 2014, the Canadian Federal Court ruled in favor of
Allergan in patent infringement applications against Apotex Inc. and
Cobalt Pharmaceuticals Company, a subsidiary of Actavis plc, issuing
orders prohibiting Health Canada from approving generic drug
applications on LUMIGAN® (bimatoprost ophthalmic solution) 0.01% until
the expiration of Canadian patent number 2,585,691 in 2026.
-
On June 30, 2014 Allergan announced completion of the topline analysis
of data from its Stage 3, Phase 2 study of abicipar pegol (Anti-VEGF DARPin®)
in neovascular, or "wet," age-related macular degeneration (AMD).
These data along with data from previous studies were reviewed with
the FDA at an end of a Phase 2 meeting where the FDA supported
Allergan's decision to advance abicipar pegol to Phase 3 clinical
trials and agreed with the proposed Phase 3 study plan. The complete
data from the Stage 3, Phase 2 study will be presented at the American
Association of Retinal Specialists in San Diego, California from
August 10, 2014 to August 13, 2014.
-
On June 30, 2014, Allergan announced completion of the review of data
from its Phase 2 clinical trials of bimatoprost sustained-release
implant for the treatment of elevated intraocular pressure and
glaucoma. Patients in this trial received a bimatoprost
sustained-release implant in one eye and topical bimatoprost in the
contralateral eye. The data suggests that bimatoprost
sustained-release implant efficacy is comparable to daily topical
bimatoprost with duration of 4 to 6 months. Allergan has shared the
bimatoprost sustained-release implant data with the FDA and the FDA is
supportive of the company's decision to advance to Phase 3 clinical
trials. Allergan expects to initiate the Phase 3 clinical trials by
the end of 2014.
-
On June 30, 2014, Allergan announced receipt of approval from the FDA
for OZURDEX® (dexamethasone intravitreal implant) 0.7 mg as a new
treatment option for diabetic macular edema (DME) in adult patients
who have an artificial lens implant (pseudophakic) or who are
scheduled for cataract surgery (phakic). OZURDEX® is a
sustained-release biodegradable steroid implant that demonstrated
long-term efficacy without the need for monthly injections.
-
On June 30, 2014, Allergan announced receipt of a Complete Response
Letter (CRL) from the FDA to its New Drug Application (NDA) for
SEMPRANA™ (dihydroergotamine), formerly referred to as LEVADEX®, which
is being developed as an acute treatment of migraine in adults. In the
CRL, the FDA acknowledged that Allergan has made improvements in the
canister filling process. The two specific items listed in the CRL are
related to specifications around content uniformity on the improved
canister filling process and on standards for device actuation. There
were no issues related to the clinical safety and efficacy of the
product and Allergan received draft labeling from the FDA for the
product in June 2013. Allergan plans to meet with the FDA and will
work to fully address these issues to the satisfaction of the FDA. The
Company estimates that the next FDA action will occur by the end of
the second quarter of 2015.
Stockholder Value Enhancements
As part of an ongoing effort to improve efficiency and productivity
which will further increase stockholder value, Allergan recently
completed a global review of its structures and processes, portfolio of
research and development projects and marketed products, and its
geographies in an effort to prioritize the highest value investments.
This will deliver enhanced non-GAAP diluted earnings per share (EPS)
growth and thus increased stockholder value.
As a result of this review, Allergan will restructure its operations and
processes as follows:
-
Allergan will execute a restructuring in the remainder of 2014 that it
estimates will deliver annual pre-tax savings of approximately $475
million in calendar year 2015 as compared to previously communicated
2015 expectations. Such savings will come from efficiencies and
reductions in spend across the commercial organization, general and
administrative functions, manufacturing and the research and
development organization.
-
Allergan will achieve these synergies by focusing resources on the
highest value opportunities, streamlining its organizational
structure, simplifying processes and interfaces, optimizing site
footprints, and enhancing strategic sourcing of goods and services.
-
As part of the restructuring, Allergan will reduce its workforce by
approximately 1,500 employees, or approximately 13 percent of its
current global headcount, and eliminate an additional approximately
250 vacant positions.
-
The restructuring will be conducted consistent with Allergan's model
of driving high quality earnings growth through a customer-centric
focus on net sales growth and ensuring that Allergan maintains an
innovation-focused research and development pipeline to deliver
sustained long-term growth. Hence, approximately 94% of all
customer-facing personnel are unaffected by the restructuring. All
pharmaceutical research and development programs in the clinic will
continue, and any reductions in discovery programs will not impact
approvals within the strategic plan period.
-
Additional strategic options are available including business
development / acquisitions and capital return.
-
Allergan reconfirms its aspiration of double digit sales growth across
the strategic plan period (2014 through 2019), as the planned
reductions in selling, general and administrative expenses and reduced
focus on lower-value spend will have only a modest impact on the net
sales growth.
-
Allergan's strategic plan (2014 through 2019) is expected to deliver a
compounded annual growth rate of greater than 20% EPS growth.
-
Allergan estimates 2014 EPS between $5.74 and $5.80.
-
Allergan estimates 2015 EPS between $8.20 and $8.40.
-
Allergan estimates 2016 EPS at approximately $10.00.
-
Allergan currently estimates that it will incur total non-recurring
pre-tax charges of between $375 million and $425 million in connection
with the restructuring and other costs, of which $65 million to $75
million will be a non-cash charge associated with the acceleration of
previously unrecognized share-based compensation costs and certain
other non-cash accounting adjustments. The restructuring charges and
other costs will primarily consist of employee severance and other
one-time termination benefits, facility lease and other contract
terminations, accelerated depreciation and asset write-downs,
accelerated equity-based compensation, temporary labor and duplicate
operating expenses. These non-recurring charges will be incurred
beginning in the third quarter of 2014 and are expected to continue
through the second quarter of 2015.
Unsolicited Proposal from Valeant
-
On April 22, 2014, Allergan confirmed receipt of an unsolicited
proposal from Valeant Pharmaceuticals International, Inc. (Valeant) to
acquire all outstanding shares of Allergan's common stock. Allergan
also confirmed receipt of revised unsolicited proposals from Valeant
on May 28 and May 30, 2014. Allergan's Board of Directors, in
consultation with its financial and legal advisors, have unanimously
rejected each of these unsolicited proposals, concluding that each
substantially undervalues Allergan, creates significant risks and
uncertainties for the stockholders of Allergan, and is not in the best
interests of the Company and its stockholders.
-
On June 18, 2014, Valeant commenced an exchange offer (the Offer) by
filing a Schedule TO and Registration Statement on Form S-4 with the
U.S. Securities and Exchange Commission (SEC). Pursuant to the terms
of the Offer, Valeant proposes to purchase each outstanding share of
Allergan common stock, at the election of the holder, for 0.83 common
shares of Valeant and $72.00 in cash, or an equal amount of cash or
number of shares of Valeant common stock, in each case subject to
proration. The Offer is not an all-cash offer.
-
On June 23, 2014, Allergan's Board of Directors issued its
recommendation that Allergan stockholders reject the Offer and not
tender their Allergan shares pursuant to the Offer. The Allergan Board
of Directors issued this recommendation after careful consideration,
in consultation with its financial and legal advisors, and unanimously
concluded that the Offer is grossly inadequate, substantially
undervalues Allergan, creates significant risks and uncertainties for
Allergan stockholders and is not in the best interests of Allergan and
its stockholders. Allergan filed this recommendation with the SEC on
Schedule 14D-9.
Outlook
For the full year of 2014, Allergan expects:
-
Total product net sales between $6,900 million and $7,050 million,
excluding any future anticipated revenue from the transition services
agreements related to the sale of the obesity intervention business.
-
Total specialty pharmaceuticals net sales between $5,865 million
and $5,975 million.
-
Total core medical devices net sales between $1,010 million and
$1,050 million.
-
ALPHAGAN® franchise product net sales between $460 million
and $480 million.
-
LUMIGAN® franchise product net sales between $600
million and $620 million.
-
RESTASIS® product net sales between $1,040 million and
$1,070 million.
-
BOTOX® product net sales between $2,200 million and $2,280
million.
-
LATISSE® product net sales at approximately $100 million.
-
Breast aesthetics product net sales between $400
million and $420 million.
-
Facial aesthetics product net sales between $610 million
and $630 million.
-
Non-GAAP cost of sales to product net sales ratio at approximately
12.5%.
-
Non-GAAP other revenue at approximately $100 million.
-
Non-GAAP selling, general and administrative expenses to product net
sales ratio between 37% and 38%.
-
Non-GAAP research and development expenses to product net sales ratio
at approximately 16.5%.
-
Non-GAAP diluted earnings per share attributable to stockholders
between $5.74 and $5.80.
-
Diluted shares outstanding at approximately 304 million.
-
Effective tax rate on non-GAAP earnings between 26% and 27%.
For the third quarter of 2014, Allergan expects:
-
Total product net sales between $1,675 million and $1,750 million,
excluding any future anticipated revenue from the transition services
agreements related to the sale of the obesity intervention business.
-
Non-GAAP diluted earnings per share attributable to stockholders
between $1.44 and $1.47.
In this press release, Allergan reports certain historical and expected
non-GAAP results, including earnings attributable to Allergan, Inc.,
non-GAAP basic and diluted earnings per share attributable to
stockholders as well as non-GAAP other revenue, non-GAAP cost of sales,
non-GAAP selling, general and administrative expenses, non-GAAP research
and development expenses, non-GAAP amortization of intangible assets,
non-GAAP impairment of intangible assets and related costs, non-GAAP
restructuring charges, non-GAAP interest expense, non-GAAP other, net,
non-GAAP earnings before income taxes from continuing operations,
non-GAAP provision for income taxes, non-GAAP earnings from discontinued
operations, non-GAAP loss on sale of discontinued operations, non-GAAP
net earnings and non-GAAP net sales reported in constant currency.
Non-GAAP financial measures are reconciled to the most directly
comparable GAAP financial measure in the financial tables of this press
release and the accompanying footnotes. The information that accompanies
the financial tables of this press release also includes an explanation
of why Allergan uses these non-GAAP financial measures, certain
limitations associated with the use of these non-GAAP financial
measures, the manner in which Allergan management compensates for those
limitations, and the reasons why Allergan management believes that these
non-GAAP financial measures provide useful information to investors.
Forward-Looking Statements
This press release contains "forward-looking statements," including but
not limited to the statements by Mr. Pyott and other statements
regarding pending legal proceedings and product development and
approval, including the initiation of Phase 3 trials for bimatoprost
sustained-release implant for the treatment of elevated intraocular
pressure and glaucoma and next FDA action related to SEMPRANA™, as well
as Allergan's earnings per share, product net sales, revenue forecasts
and any other statements that refer to Allergan's expected, estimated or
anticipated future results. Because forecasts are inherently estimates
that cannot be made with precision, Allergan's performance at times
differs materially from its estimates and targets, and Allergan often
does not know what the actual results will be until after the end of the
applicable reporting period. Therefore, Allergan will not report or
comment on its progress during a current quarter except through public
announcement. Any statement made by others with respect to progress
during a current quarter cannot be attributed to Allergan.
All forward-looking statements in this press release reflect Allergan's
current analysis of existing trends and information and represent
Allergan's judgment only as of the date of this press release. Actual
results may differ materially from current expectations based on a
number of factors affecting Allergan's businesses, including, among
other things, the following: changing competitive, market and regulatory
conditions; Allergan's ability to obtain and maintain adequate
protection for its intellectual property rights; the timing and
uncertainty of the results of both the research and development and
regulatory processes; domestic and foreign health care and cost
containment reforms, including government pricing, tax and reimbursement
policies; technological advances and patents obtained by competitors;
the performance, including the approval, introduction, and consumer and
physician acceptance of new products and the continuing acceptance of
currently marketed products; the effectiveness of advertising and other
promotional campaigns; the timely and successful implementation of
strategic initiatives; the results of any pending or future litigation,
investigations or claims; the uncertainty associated with the
identification of and successful consummation and execution of external
corporate development initiatives and strategic partnering transactions;
and Allergan's ability to obtain and successfully maintain a sufficient
supply of products to meet market demand in a timely manner. In
addition, U.S. and international economic conditions, including higher
unemployment, political instability, financial hardship, consumer
confidence and debt levels, taxation, changes in interest and currency
exchange rates, international relations, capital and credit
availability, the status of financial markets and institutions,
fluctuations or devaluations in the value of sovereign government debt,
as well as the general impact of continued economic volatility, can
materially affect Allergan's results. Therefore, the reader is cautioned
not to rely on these forward-looking statements. Allergan expressly
disclaims any intent or obligation to update these forward-looking
statements except as required to do so by law.
Additional information concerning the above-referenced risk factors and
other risk factors can be found in press releases issued by Allergan, as
well as Allergan's public periodic filings with the U.S. Securities and
Exchange Commission, including the discussion under the heading "Risk
Factors" in Allergan's 2013 Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q. Copies of Allergan's press
releases and additional information about Allergan are available at www.allergan.com
or you can contact the Allergan Investor Relations Department by calling
714-246-4636.
Important Additional Information
This communication does not constitute an offer to buy or solicitation
of an offer to sell any securities. Allergan has filed a
solicitation/recommendation statement on Schedule 14D-9, as amended,
with the SEC that has been mailed to Allergan's stockholders. In
addition, Allergan has filed a preliminary solicitation statement with
the SEC on June 16, 2014, as amended on July 15, 2014, and intends to
file a definitive solicitation statement. Any definitive solicitation
statement will be mailed to Allergan's stockholders. INVESTORS AND
STOCKHOLDERS OF ALLERGAN ARE ENCOURAGED TO READ THESE AND ANY OTHER
RELEVANT DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC CAREFULLY AND
IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and stockholders will be able to obtain free copies of these
documents as they become available and any other documents filed with
the SEC by Allergan at the SEC's website at www.sec.gov.
In addition, copies will also be available at no charge at the Investors
section of Allergan's website at www.allergan.com.
Copies of these materials may also be requested from Allergan's
information agent, Innisfree M&A Incorporated, toll-free at 877-800-5187.
Allergan, its directors and certain of its officers and employees are
participants in solicitations of Allergan stockholders. Information
regarding the names of Allergan's directors and executive officers and
their respective interests in Allergan by security holdings or otherwise
is set forth in Allergan's proxy statement for its 2014 annual meeting
of stockholders, filed with the SEC on March 26, 2014, as supplemented
by the proxy information filed with the SEC on April 22, 2014.
Additional information can be found in Allergan's Annual Report on Form
10-K for the year ended December 31, 2013, filed with the SEC on
February 25, 2014 and its Quarterly Report on Form 10-Q for the quarter
ended March 31, 2014, filed with the SEC on May 7, 2014. To the extent
holdings of Allergan's securities have changed since the amounts printed
in the proxy statement for the 2014 annual meeting of stockholders, such
changes have been reflected on Initial Statements of Beneficial
Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed
with the SEC.
About Allergan, Inc.
Allergan is a multi-specialty health care company established more than
60 years ago with a commitment to uncover the best of science and
develop and deliver innovative and meaningful treatments to help people
reach their life's potential. Today, we have approximately 11,700 highly
dedicated and talented employees, global marketing and sales
capabilities with a presence in more than 100 countries, a rich and
ever-evolving portfolio of pharmaceuticals, biologics, medical devices
and over-the-counter consumer products, and state-of-the-art resources
in R&D, manufacturing and safety surveillance that help millions of
patients see more clearly, move more freely and express themselves more
fully. From our beginnings as an eye care company to our focus today on
several medical specialties, including eye care, neurosciences, medical
aesthetics, medical dermatology, breast aesthetics and urologics,
Allergan is proud to celebrate more than 60 years of medical advances
and proud to support the patients and physicians who rely on our
products and the employees and communities in which we live and work.
For more information regarding Allergan, go to: www.allergan.com.
® and ™ marks owned by Allergan, Inc.
DARPin is a registered trademark of Molecular Partners AG
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ALLERGAN, INC.
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Condensed Consolidated Statements of Earnings and
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Reconciliation of Non-GAAP Adjustments
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(Unaudited)
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|
|
|
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Three months ended
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In millions, except per share amounts
|
|
|
June 30, 2014
|
|
|
June 30, 2013
|
|
|
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|
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|
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GAAP
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Non-GAAP Adjustments
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|
|
|
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|
Non-GAAP
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|
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GAAP
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Non-GAAP Adjustments
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Non-GAAP
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Revenues
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|
|
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Product net sales
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|
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$
|
1,827.3
|
|
|
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$
|
-
|
|
|
|
|
|
|
$
|
1,827.3
|
|
|
|
$
|
1,577.0
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|
|
|
$
|
-
|
|
|
|
|
|
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$
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1,577.0
|
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Other revenues
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|
|
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36.9
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|
|
|
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(9.7
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)
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|
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(a)
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27.2
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|
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20.7
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|
|
|
|
-
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|
|
|
|
|
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20.7
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|
|
|
|
|
1,864.2
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|
|
|
|
(9.7
|
)
|
|
|
|
|
|
|
1,854.5
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|
|
|
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1,597.7
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|
|
|
|
-
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|
|
|
|
|
|
|
1,597.7
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Operating costs and expenses
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|
Cost of sales (excludes amortization of intangible assets)
|
|
|
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222.2
|
|
|
|
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(0.9
|
)
|
|
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(b)
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|
|
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221.3
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|
|
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199.1
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|
|
|
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(0.1
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)
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|
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(l)
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|
|
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199.0
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Selling, general and administrative
|
|
|
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718.9
|
|
|
|
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(35.1
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)
|
|
|
(b)(c)(d)(e)(f)
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|
|
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683.8
|
|
|
|
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609.9
|
|
|
|
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(4.2
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)
|
|
|
(l)(m)(n)
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|
|
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605.7
|
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Research and development
|
|
|
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288.7
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|
|
|
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(0.6
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)
|
|
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(b)
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|
|
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288.1
|
|
|
|
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266.5
|
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(0.7
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)
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|
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(n)
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265.8
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Amortization of intangible assets
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|
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28.0
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(26.4
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)
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(g)
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1.6
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|
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29.0
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|
|
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(27.6
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)
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|
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(g)
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|
|
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1.4
|
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Restructuring charge reversal
|
|
|
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(1.5
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)
|
|
|
|
1.5
|
|
|
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(h)
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|
|
|
-
|
|
|
|
|
-
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-
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-
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Operating income
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|
|
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607.9
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|
|
|
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51.8
|
|
|
|
|
|
|
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659.7
|
|
|
|
|
493.2
|
|
|
|
|
32.6
|
|
|
|
|
|
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525.8
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Non-operating income (expense)
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Interest income
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2.4
|
|
|
|
|
-
|
|
|
|
|
|
|
|
2.4
|
|
|
|
|
2.0
|
|
|
|
|
-
|
|
|
|
|
|
|
|
2.0
|
|
Interest expense
|
|
|
|
(19.7
|
)
|
|
|
|
0.4
|
|
|
|
(i)
|
|
|
|
(19.3
|
)
|
|
|
|
(20.0
|
)
|
|
|
|
0.1
|
|
|
|
(i)
|
|
|
|
(19.9
|
)
|
Other, net
|
|
|
|
(16.2
|
)
|
|
|
|
10.9
|
|
|
|
(j)
|
|
|
|
(5.3
|
)
|
|
|
|
11.2
|
|
|
|
|
(11.3
|
)
|
|
|
(o)(p)
|
|
|
|
(0.1
|
)
|
|
|
|
|
(33.5
|
)
|
|
|
|
11.3
|
|
|
|
|
|
|
|
(22.2
|
)
|
|
|
|
(6.8
|
)
|
|
|
|
(11.2
|
)
|
|
|
|
|
|
|
(18.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
574.4
|
|
|
|
|
63.1
|
|
|
|
|
|
|
|
637.5
|
|
|
|
|
486.4
|
|
|
|
|
21.4
|
|
|
|
|
|
|
|
507.8
|
|
Provision for income taxes
|
|
|
|
156.0
|
|
|
|
|
21.2
|
|
|
|
(k)
|
|
|
|
177.2
|
|
|
|
|
132.4
|
|
|
|
|
5.5
|
|
|
|
(q)
|
|
|
|
137.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
|
418.4
|
|
|
|
|
41.9
|
|
|
|
|
|
|
|
460.3
|
|
|
|
|
354.0
|
|
|
|
|
15.9
|
|
|
|
|
|
|
|
369.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from discontinued operations, net of income tax expense
of $3.7 million
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
7.2
|
|
|
|
|
(7.2
|
)
|
|
|
(r)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
418.4
|
|
|
|
|
41.9
|
|
|
|
|
|
|
|
460.3
|
|
|
|
|
361.2
|
|
|
|
|
8.7
|
|
|
|
|
|
|
|
369.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling interest
|
|
|
|
1.2
|
|
|
|
|
-
|
|
|
|
|
|
|
|
1.2
|
|
|
|
|
1.3
|
|
|
|
|
-
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Allergan, Inc.
|
|
|
$
|
417.2
|
|
|
|
$
|
41.9
|
|
|
|
|
|
|
$
|
459.1
|
|
|
|
$
|
359.9
|
|
|
|
$
|
8.7
|
|
|
|
|
|
|
$
|
368.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to Allergan, Inc.
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
$
|
1.54
|
|
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
$
|
1.25
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
0.03
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Net basic earnings per share attributable to Allergan, Inc.
stockholders
|
|
|
$
|
1.40
|
|
|
|
|
|
|
|
|
|
$
|
1.54
|
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Allergan, Inc.
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
$
|
1.51
|
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
$
|
1.22
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Net diluted earnings per share attributable to Allergan, Inc.
stockholders
|
|
|
$
|
1.37
|
|
|
|
|
|
|
|
|
|
$
|
1.51
|
|
|
|
$
|
1.19
|
|
|
|
|
|
|
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
297.6
|
|
|
|
|
|
|
|
|
|
|
297.6
|
|
|
|
|
296.0
|
|
|
|
|
|
|
|
|
|
|
296.0
|
|
Diluted
|
|
|
|
303.9
|
|
|
|
|
|
|
|
|
|
|
303.9
|
|
|
|
|
301.3
|
|
|
|
|
|
|
|
|
|
|
301.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected ratio as a percentage of product
net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excludes amortization of intangible assets)
|
|
|
|
12.2
|
%
|
|
|
|
|
|
|
|
|
|
12.1
|
%
|
|
|
|
12.6
|
%
|
|
|
|
|
|
|
|
|
|
12.6
|
%
|
Selling, general and administrative
|
|
|
|
39.3
|
%
|
|
|
|
|
|
|
|
|
|
37.4
|
%
|
|
|
|
38.7
|
%
|
|
|
|
|
|
|
|
|
|
38.4
|
%
|
Research and development
|
|
|
|
15.8
|
%
|
|
|
|
|
|
|
|
|
|
15.8
|
%
|
|
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
Sales milestone revenue associated with a license agreement with
Senju Pharmaceutical Co., Ltd. (Senju)
|
(b)
|
|
|
Expenses related to the realignment of various business functions of
$2.5 million, consisting of cost of sales of $0.9 million, selling,
general and administrative expenses of $1.0 million and research and
development expenses of $0.6 million
|
(c)
|
|
|
Costs of $30.2 million associated with the Allergan Board of
Directors' consideration and rejection of an unsolicited proposal
from Valeant Pharmaceuticals International, Inc. (Valeant) to
acquire all of the outstanding shares of Allergan, consisting
primarily of investment banker fees, legal fees, public relation
costs, accounting services and other costs
|
(d)
|
|
|
Expenses from changes in fair value of contingent consideration of
$3.7 million and a $0.1 million reversal of integration and
transaction costs associated with business combinations
|
(e)
|
|
|
Transaction costs of $0.2 million associated with a license
agreement with Medytox, Inc. for technology that has not achieved
regulatory approval
|
(f)
|
|
|
Transaction costs of $0.1 million associated with an acquired
in-process research and development asset for technology that has
not achieved regulatory approval
|
(g)
|
|
|
Amortization of certain intangible assets related to business
combinations, asset acquisitions and product licenses
|
(h)
|
|
|
Net restructuring charge reversal
|
(i)
|
|
|
Interest expense associated with changes in estimated taxes related
to uncertain tax positions included in prior year filings
|
(j)
|
|
|
Unrealized loss on the mark-to-market adjustment to derivative
instruments
|
(k)
|
|
|
Total tax effect for non-GAAP pre-tax adjustments
|
(l)
|
|
|
Income from changes in fair value of contingent consideration of
$2.5 million included in selling, general and administrative
expenses and integration and transaction costs of $3.8 million
associated with business combinations, consisting of cost of sales
of $0.1 million and selling, general and administrative expenses of
$3.7 million
|
(m)
|
|
|
Aggregate charges of $2.9 million for external costs for stockholder
derivative litigation costs associated with the U.S. Department of
Justice (DOJ) settlement announced in September 2010 and other legal
contingency expenses
|
(n)
|
|
|
Expenses related to the realignment of various business functions of
$0.8 million, consisting of selling, general and administrative
expenses of $0.1 million and research and development expenses of
$0.7 million
|
(o)
|
|
|
Unrealized gain of $10.6 million on the mark-to-market adjustment to
derivative instruments
|
(p)
|
|
|
Gain on sale of investments of $0.7 million
|
(q)
|
|
|
Total tax effect for non-GAAP pre-tax adjustments and other income
tax adjustments, consisting of the following amounts (in millions):
|
|
|
|
|
Tax effect
|
Non-GAAP pre-tax adjustments of $21.4 million
|
|
|
|
$
|
(5.4
|
)
|
Estimated impact of the retroactive U.S. Research and Development
tax credit for 2012
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
$
|
(5.5
|
)
|
(r)
|
|
|
Earnings from discontinued operations associated with the sale of
the obesity intervention business unit
|
"GAAP" refers to financial information presented in accordance with
generally accepted accounting principles in the United States.
This press release includes non-GAAP financial measures, as defined in
Regulation G promulgated by the U.S. Securities and Exchange Commission,
with respect to the three and six months ended June 30, 2014 and June
30, 2013 and with respect to anticipated results for the third quarter
and full year of 2014. Allergan believes that its presentation of
non-GAAP financial measures provides useful supplementary information to
investors regarding its operational performance because it enhances an
investor's overall understanding of the financial performance and
prospects for the future of Allergan's core business activities by
providing a basis for the comparison of results of core business
operations between current, past and future periods. The presentation of
historical non-GAAP financial measures is not meant to be considered in
isolation from or as a substitute for results as reported under GAAP.
In this press release, Allergan reported the non-GAAP financial measures
"non-GAAP basic and diluted earnings per share attributable to Allergan,
Inc. stockholders" and "non-GAAP earnings attributable to Allergan,
Inc." and its subcomponents "non-GAAP other revenue," "non-GAAP cost of
sales," "non-GAAP selling, general and administrative expenses,"
"non-GAAP research and development expenses," "non-GAAP amortization of
intangible assets," "non-GAAP restructuring charges," "non-GAAP
operating income," "non-GAAP interest expense," "non-GAAP other, net,"
"non-GAAP earnings from continuing operations before income taxes,"
"non-GAAP provision for income taxes," "non-GAAP earnings from
discontinued operations," "non-GAAP loss on sale of discontinued
operations," and "non-GAAP net earnings." Allergan uses non-GAAP
earnings to enhance the investor's overall understanding of the
financial performance and prospects for the future of Allergan's core
business activities. Non-GAAP earnings is one of the primary indicators
management uses for planning and forecasting in future periods,
including trending and analyzing the core operating performance of
Allergan's business from period to period without the effect of the
non-core business items indicated. Management uses non-GAAP earnings to
prepare operating budgets and forecasts and to measure Allergan's
performance against those budgets and forecasts on a corporate and
segment level. Allergan also uses non-GAAP earnings for evaluating
management performance for compensation purposes.
Despite the importance of non-GAAP earnings in analyzing Allergan's
underlying business, the budgeting and forecasting process and designing
incentive compensation, non-GAAP earnings has no standardized meaning
defined by GAAP. Therefore, non-GAAP earnings has limitations as an
analytical tool, and should not be considered in isolation, or as a
substitute for analysis of Allergan's results as reported under GAAP.
Some of these limitations are:
-
it does not reflect cash expenditures, or future requirements, for
expenditures relating to restructurings, legal settlements, and
certain acquisitions, including severance and facility transition
costs associated with acquisitions;
-
it does not reflect asset impairment charges or gains or losses on the
disposition of assets associated with restructuring and business exit
activities;
-
it does not reflect the tax benefit or tax expense associated with the
items indicated;
-
it does not reflect the impact on earnings of charges or income
resulting from certain matters Allergan considers not to be indicative
of its on-going operations; and
-
other companies in Allergan's industry may calculate non-GAAP earnings
differently than it does, which may limit its usefulness as a
comparative measure.
Allergan compensates for these limitations by using non-GAAP earnings
only to supplement net earnings on a basis prepared in conformance with
GAAP in order to provide a more complete understanding of the factors
and trends affecting its business. Allergan strongly encourages
investors to consider both net earnings and cash flows determined under
GAAP as compared to non-GAAP earnings, and to perform their own
analysis, as appropriate.
In this press release, Allergan also reported sales performance using
the non-GAAP financial measure of constant currency sales. Constant
currency sales represent current period reported sales adjusted for the
translation effect of changes in average foreign exchange rates between
the current period and the corresponding period in the prior year.
Allergan calculates the currency effect by comparing adjusted current
period reported amounts, calculated using the monthly average foreign
exchange rates for the corresponding period in the prior year, to the
actual current period reported amounts. Management refers to growth
rates at constant currency so that sales results can be viewed without
the impact of changing foreign currency exchange rates, thereby
facilitating period-to-period comparisons of Allergan's sales.
Generally, when the dollar either strengthens or weakens against other
currencies, the growth at constant currency rates will be higher or
lower, respectively, than growth reported at actual exchange rates.
Reporting sales performance using constant currency sales has the
limitation of excluding currency effects from the comparison of sales
results over various periods, even though the effect of changing foreign
currency exchange rates has an actual effect on Allergan's operating
results. Investors should consider these effects in their overall
analysis of Allergan's operating results.
|
ALLERGAN, INC.
|
Condensed Consolidated Statements of Earnings and
|
Reconciliation of Non-GAAP Adjustments
|
(Unaudited)
|
|
|
|
|
Six months ended
|
In millions, except per share amounts
|
|
|
June 30, 2014
|
|
|
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
Non-GAAP Adjustments
|
|
|
|
|
|
Non-GAAP
|
|
|
GAAP
|
|
|
Non-GAAP Adjustments
|
|
|
|
|
|
Non-GAAP
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product net sales
|
|
|
$
|
3,446.4
|
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
3,446.4
|
|
|
|
$
|
3,009.5
|
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
3,009.5
|
|
Other revenues
|
|
|
|
63.9
|
|
|
|
|
(9.7
|
)
|
|
|
(a)
|
|
|
|
54.2
|
|
|
|
|
47.8
|
|
|
|
|
-
|
|
|
|
|
|
|
|
47.8
|
|
|
|
|
|
3,510.3
|
|
|
|
|
(9.7
|
)
|
|
|
|
|
|
|
3,500.6
|
|
|
|
|
3,057.3
|
|
|
|
|
-
|
|
|
|
|
|
|
|
3,057.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excludes amortization of intangible assets)
|
|
|
|
426.7
|
|
|
|
|
(1.7
|
)
|
|
|
(b)
|
|
|
|
425.0
|
|
|
|
|
399.0
|
|
|
|
|
(9.0
|
)
|
|
|
(m)(n)
|
|
|
|
390.0
|
|
Selling, general and administrative
|
|
|
|
1,377.5
|
|
|
|
|
(39.9
|
)
|
|
|
(b)(c)(d)(e)(f)
|
|
|
|
1,337.6
|
|
|
|
|
1,214.7
|
|
|
|
|
(22.1
|
)
|
|
|
(n)(o)(p)
|
|
|
|
1,192.6
|
|
Research and development
|
|
|
|
637.7
|
|
|
|
|
(77.8
|
)
|
|
|
(b)(d)(e)(f)
|
|
|
|
559.9
|
|
|
|
|
515.3
|
|
|
|
|
(0.7
|
)
|
|
|
(p)
|
|
|
|
514.6
|
|
Amortization of intangible assets
|
|
|
|
55.8
|
|
|
|
|
(53.0
|
)
|
|
|
(g)
|
|
|
|
2.8
|
|
|
|
|
59.7
|
|
|
|
|
(52.7
|
)
|
|
|
(g)
|
|
|
|
7.0
|
|
Restructuring charges
|
|
|
|
22.8
|
|
|
|
|
(22.8
|
)
|
|
|
(h)
|
|
|
|
-
|
|
|
|
|
4.3
|
|
|
|
|
(4.3
|
)
|
|
|
(h)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
989.8
|
|
|
|
|
185.5
|
|
|
|
|
|
|
|
1,175.3
|
|
|
|
|
864.3
|
|
|
|
|
88.8
|
|
|
|
|
|
|
|
953.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
4.2
|
|
|
|
|
-
|
|
|
|
|
|
|
|
4.2
|
|
|
|
|
3.6
|
|
|
|
|
-
|
|
|
|
|
|
|
|
3.6
|
|
Interest expense
|
|
|
|
(35.4
|
)
|
|
|
|
(1.8
|
)
|
|
|
(i)
|
|
|
|
(37.2
|
)
|
|
|
|
(37.4
|
)
|
|
|
|
0.2
|
|
|
|
(i)
|
|
|
|
(37.2
|
)
|
Other, net
|
|
|
|
(22.6
|
)
|
|
|
|
15.1
|
|
|
|
(j)
|
|
|
|
(7.5
|
)
|
|
|
|
2.5
|
|
|
|
|
(8.9
|
)
|
|
|
(q)(r)(s)
|
|
|
|
(6.4
|
)
|
|
|
|
|
(53.8
|
)
|
|
|
|
13.3
|
|
|
|
|
|
|
|
(40.5
|
)
|
|
|
|
(31.3
|
)
|
|
|
|
(8.7
|
)
|
|
|
|
|
|
|
(40.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
936.0
|
|
|
|
|
198.8
|
|
|
|
|
|
|
|
1,134.8
|
|
|
|
|
833.0
|
|
|
|
|
80.1
|
|
|
|
|
|
|
|
913.1
|
|
Provision for income taxes
|
|
|
|
259.1
|
|
|
|
|
56.5
|
|
|
|
(k)
|
|
|
|
315.6
|
|
|
|
|
206.0
|
|
|
|
|
39.1
|
|
|
|
(t)
|
|
|
|
245.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
|
676.9
|
|
|
|
|
142.3
|
|
|
|
|
|
|
|
819.2
|
|
|
|
|
627.0
|
|
|
|
|
41.0
|
|
|
|
|
|
|
|
668.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from discontinued operations, net of income tax expense
of $3.7 million
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
7.6
|
|
|
|
|
(7.6
|
)
|
|
|
(u)
|
|
|
|
-
|
|
Loss on sale of discontinued operations, net of income tax benefit
of $0.3 million and $87.2 million, respectively
|
|
|
|
(0.6
|
)
|
|
|
|
0.6
|
|
|
|
(l)
|
|
|
|
-
|
|
|
|
|
(259.0
|
)
|
|
|
|
259.0
|
|
|
|
(v)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations
|
|
|
|
(0.6
|
)
|
|
|
|
0.6
|
|
|
|
|
|
|
|
-
|
|
|
|
|
(251.4
|
)
|
|
|
|
251.4
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
676.3
|
|
|
|
|
142.9
|
|
|
|
|
|
|
|
819.2
|
|
|
|
|
375.6
|
|
|
|
|
292.4
|
|
|
|
|
|
|
|
668.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling interest
|
|
|
|
1.8
|
|
|
|
|
-
|
|
|
|
|
|
|
|
1.8
|
|
|
|
|
3.2
|
|
|
|
|
-
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to Allergan, Inc.
|
|
|
$
|
674.5
|
|
|
|
$
|
142.9
|
|
|
|
|
|
|
$
|
817.4
|
|
|
|
$
|
372.4
|
|
|
|
$
|
292.4
|
|
|
|
|
|
|
$
|
664.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to Allergan, Inc.
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
2.27
|
|
|
|
|
|
|
|
|
|
$
|
2.75
|
|
|
|
$
|
2.10
|
|
|
|
|
|
|
|
|
|
$
|
2.24
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
(0.85
|
)
|
|
|
|
|
|
|
|
|
|
-
|
|
Net basic earnings per share attributable to Allergan, Inc.
stockholders
|
|
|
$
|
2.27
|
|
|
|
|
|
|
|
|
|
$
|
2.75
|
|
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
$
|
2.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Allergan, Inc.
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
$
|
2.22
|
|
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
|
$
|
2.06
|
|
|
|
|
|
|
|
|
|
$
|
2.20
|
|
Discontinued operations
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
(0.83
|
)
|
|
|
|
|
|
|
|
|
|
-
|
|
Net diluted earnings per share attributable to Allergan, Inc.
stockholders
|
|
|
$
|
2.22
|
|
|
|
|
|
|
|
|
|
$
|
2.69
|
|
|
|
$
|
1.23
|
|
|
|
|
|
|
|
|
|
$
|
2.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
297.7
|
|
|
|
|
|
|
|
|
|
|
297.7
|
|
|
|
|
296.9
|
|
|
|
|
|
|
|
|
|
|
296.9
|
|
Diluted
|
|
|
|
303.7
|
|
|
|
|
|
|
|
|
|
|
303.7
|
|
|
|
|
302.5
|
|
|
|
|
|
|
|
|
|
|
302.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected ratio as a percentage of product
net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales (excludes amortization of intangible assets)
|
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
12.3
|
%
|
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|
|
|
13.0
|
%
|
Selling, general and administrative
|
|
|
|
40.0
|
%
|
|
|
|
|
|
|
|
|
|
38.8
|
%
|
|
|
|
40.4
|
%
|
|
|
|
|
|
|
|
|
|
39.6
|
%
|
Research and development
|
|
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
|
16.2
|
%
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
17.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
Sales milestone revenue associated with a license agreement with
Senju
|
(b)
|
|
|
Expenses related to the realignment of various business functions of
$9.4 million, consisting of cost of sales of $1.7 million, selling,
general and administrative expenses of $5.3 million and research and
development expenses of $2.4 million
|
(c)
|
|
|
Costs of $30.2 million associated with the Allergan Board of
Directors' consideration and rejection of an unsolicited proposal
from Valeant to acquire all of the outstanding shares of Allergan,
consisting primarily of investment banker fees, legal fees, public
relation costs, accounting services and other costs
|
(d)
|
|
|
Expenses from changes in fair value of contingent consideration of
$3.4 million included in selling, general and administrative
expenses and integration and transaction costs of $0.4 million
included in research and development expenses associated with
business combinations
|
(e)
|
|
|
Upfront licensing fee of $65.0 million included in research and
development expenses associated with a license agreement with
Medytox, Inc. for technology that has not achieved regulatory
approval and related transaction costs of $0.4 million included in
selling, general and administrative expenses
|
(f)
|
|
|
Acquired in-process research and development asset of $10.0 million
included in research and development expenses for technology that
has not achieved regulatory approval and related transaction costs
of $0.6 million included in selling, general and administrative
expenses
|
(g)
|
|
|
Amortization of certain intangible assets related to business
combinations, asset acquisitions and product licenses
|
(h)
|
|
|
Net restructuring charges
|
(i)
|
|
|
Interest income (expense) associated with changes in estimated taxes
related to uncertain tax positions included in prior year filings
|
(j)
|
|
|
Unrealized loss on the mark-to-market adjustment to derivative
instruments
|
(k)
|
|
|
Total tax effect for non-GAAP pre-tax adjustments and other income
tax adjustments, consisting of the following amounts (in millions):
|
|
|
|
|
Tax effect
|
Non-GAAP pre-tax adjustments of $198.8 million
|
|
|
|
$
|
(42.9
|
)
|
Change in estimated taxes related to tax positions included in prior
year filings
|
|
|
|
|
(13.6
|
)
|
|
|
|
|
$
|
(56.5
|
)
|
(l)
|
|
|
Loss on the sale of discontinued operations
|
(m)
|
|
|
Fair market value inventory adjustment rollout of $8.9 million
associated with the acquisition of SkinMedica, Inc.
|
(n)
|
|
|
Expenses from changes in fair value of contingent consideration of
$3.3 million included in selling, general and administrative
expenses and integration and transaction costs of $15.2 million
associated with business combinations, consisting of cost of sales
of $0.1 million and selling, general and administrative expenses of
$15.1 million
|
(o)
|
|
|
Aggregate charges of $3.5 million for external costs for stockholder
derivative litigation costs associated with the DOJ settlement
announced in September 2010 and other legal contingency expenses
|
(p)
|
|
|
Expenses related to the realignment of various business functions of
$0.9 million, consisting of selling, general and administrative
expenses of $0.2 million and research and development expenses of
$0.7 million
|
(q)
|
|
|
Unrealized gain of $11.9 million on the mark-to-market adjustment to
derivative instruments
|
(r)
|
|
|
Gain on sale of investments of $0.7 million
|
(s)
|
|
|
Impairment of a non-marketable equity investment of $3.7 million
|
(t)
|
|
|
Total tax effect for non-GAAP pre-tax adjustments and other income
tax adjustments, consisting of the following amounts (in millions):
|
|
|
|
|
Tax effect
|
Non-GAAP pre-tax adjustments of $80.1 million
|
|
|
|
$
|
(21.7
|
)
|
Estimated impact of the retroactive U.S. Research and Development
tax credit for 2012
|
|
|
|
|
(17.4
|
)
|
|
|
|
|
$
|
(39.1
|
)
|
(u)
|
|
|
Earnings from discontinued operations associated with the sale of
the obesity intervention business unit
|
(v)
|
|
|
Expected loss on the sale of discontinued operations
|
|
|
|
|
|
ALLERGAN, INC.
|
Condensed Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
June 30,
|
|
|
|
December 31,
|
in millions
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
|
$
|
3,189.9
|
|
|
|
|
$
|
3,046.1
|
|
Short-term investments
|
|
|
|
|
525.6
|
|
|
|
|
|
603.0
|
|
Trade receivables, net
|
|
|
|
|
1,055.0
|
|
|
|
|
|
883.3
|
|
Inventories
|
|
|
|
|
299.9
|
|
|
|
|
|
285.3
|
|
Other current assets
|
|
|
|
|
631.3
|
|
|
|
|
|
493.0
|
|
Assets of discontinued operations
|
|
|
|
|
1.2
|
|
|
|
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
5,702.9
|
|
|
|
|
|
5,319.7
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
977.9
|
|
|
|
|
|
923.2
|
|
Intangible assets, net
|
|
|
|
|
1,609.2
|
|
|
|
|
|
1,650.0
|
|
Goodwill
|
|
|
|
|
2,340.6
|
|
|
|
|
|
2,339.4
|
|
Other noncurrent assets
|
|
|
|
|
360.2
|
|
|
|
|
|
342.0
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
10,990.8
|
|
|
|
|
$
|
10,574.3
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable
|
|
|
|
$
|
60.9
|
|
|
|
|
$
|
55.6
|
|
Accounts payable
|
|
|
|
|
300.0
|
|
|
|
|
|
283.2
|
|
Other accrued expenses and income taxes
|
|
|
|
|
1,045.5
|
|
|
|
|
|
905.5
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
|
1,406.4
|
|
|
|
|
|
1,244.3
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
|
2,091.8
|
|
|
|
|
|
2,098.3
|
|
Other liabilities
|
|
|
|
|
698.3
|
|
|
|
|
|
762.2
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Allergan, Inc. stockholders' equity
|
|
|
|
|
6,786.0
|
|
|
|
|
|
6,463.2
|
|
Noncontrolling interest
|
|
|
|
|
8.3
|
|
|
|
|
|
6.3
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
|
|
6,794.3
|
|
|
|
|
|
6,469.5
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
|
$
|
10,990.8
|
|
|
|
|
$
|
10,574.3
|
|
|
|
|
|
|
|
|
|
|
DSO
|
|
|
|
|
53
|
|
|
|
|
|
49
|
|
DOH
|
|
|
|
|
123
|
|
|
|
|
|
127
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents and short-term investments
|
|
|
|
$
|
3,715.5
|
|
|
|
|
$
|
3,649.1
|
|
Total notes payable and long-term debt
|
|
|
|
|
(2,152.7
|
)
|
|
|
|
|
(2,153.9
|
)
|
|
|
|
|
|
|
|
|
|
Cash and equivalents and short-term investments, net of debt
|
|
|
|
$
|
1,562.8
|
|
|
|
|
$
|
1,495.2
|
|
|
|
|
|
|
|
|
|
|
Debt-to-capital percentage
|
|
|
|
|
24.1
|
%
|
|
|
|
|
25.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLERGAN, INC.
|
Reconciliation of Non-GAAP Earnings and Diluted Earnings Per Share
from Continuing Operations
|
(Unaudited)
|
|
In millions, except per share amounts
|
|
|
Three months ended
|
|
|
|
June 30,
|
|
|
|
|
|
June 30,
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
418.4
|
|
|
|
|
|
|
$
|
354.0
|
|
Less net earnings attributable to noncontrolling interest
|
|
|
|
1.2
|
|
|
|
|
|
|
|
1.3
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations attributable to Allergan, Inc.
|
|
|
|
417.2
|
|
|
|
|
|
|
|
352.7
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Sales milestone revenue associated with a license agreement with
Senju
|
|
|
|
(9.7
|
)
|
|
|
|
|
|
|
-
|
|
Expenses related to the realignment of various business functions
|
|
|
|
2.5
|
|
|
|
|
|
|
|
0.8
|
|
Costs associated with the Allergan Board of Directors'
consideration and rejection of an unsolicited proposal from
Valeant to acquire all of the outstanding shares of Allergan
|
|
|
|
30.2
|
|
|
|
|
|
|
|
-
|
|
Expenses from changes in fair value of contingent consideration
and integration and transaction costs associated with business
combinations
|
|
|
|
3.6
|
|
|
|
|
|
|
|
1.3
|
|
Transaction costs associated with a license agreement for
technology that has not achieved regulatory approval
|
|
|
|
0.2
|
|
|
|
|
|
|
|
-
|
|
Transaction costs associated with an acquired in-process research
and development asset for technology that has not achieved
regulatory approval
|
|
|
|
0.1
|
|
|
|
|
|
|
|
-
|
|
Amortization of intangible assets
|
|
|
|
26.4
|
|
|
|
|
|
|
|
27.6
|
|
Net restructuring charge reversal
|
|
|
|
(1.5
|
)
|
|
|
|
|
|
|
-
|
|
Interest expense associated with changes in estimated taxes
related to uncertain tax positions included in prior year filings
|
|
|
|
0.4
|
|
|
|
|
|
|
|
0.1
|
|
Unrealized loss (gain) on derivative instruments
|
|
|
|
10.9
|
|
|
|
|
|
|
|
(10.6
|
)
|
Aggregate charges for external costs for stockholder derivative
litigation associated with the DOJ settlement and other legal
contingency expenses
|
|
|
|
-
|
|
|
|
|
|
|
|
2.9
|
|
Gain on sale of investments
|
|
|
|
-
|
|
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
|
480.3
|
|
|
|
|
|
|
|
374.1
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect for above items
|
|
|
|
(21.2
|
)
|
|
|
|
|
|
|
(5.4
|
)
|
Estimated impact of the retroactive U.S. Research and Development
tax credit for 2012
|
|
|
|
-
|
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings from continuing operations
|
|
|
$
|
459.1
|
|
|
|
|
|
|
$
|
368.6
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
|
297.6
|
|
|
|
|
|
|
|
296.0
|
|
Net shares assumed issued using the treasury stock method for
options and non-vested equity shares and share units outstanding
during each period based on average market price
|
|
|
|
6.3
|
|
|
|
|
|
|
|
5.3
|
|
|
|
|
|
303.9
|
|
|
|
|
|
|
|
301.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations
|
|
|
$
|
1.37
|
|
|
|
|
|
|
$
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per share adjustments:
|
|
|
|
|
|
|
|
|
|
Sales milestone revenue associated with a license agreement with
Senju
|
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
-
|
|
Expenses related to the realignment of various business functions
|
|
|
|
0.01
|
|
|
|
|
|
|
|
-
|
|
Costs associated with the Allergan Board of Directors'
consideration and rejection of an unsolicited proposal from
Valeant to acquire all of the outstanding shares of Allergan
|
|
|
|
0.07
|
|
|
|
|
|
|
|
-
|
|
Expenses from changes in fair value of contingent consideration
and integration and transaction costs associated with business
combinations
|
|
|
|
0.01
|
|
|
|
|
|
|
|
-
|
|
Amortization of intangible assets
|
|
|
|
0.06
|
|
|
|
|
|
|
|
0.06
|
|
Net restructuring charge reversal
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
-
|
|
Unrealized loss (gain) on derivative instruments
|
|
|
|
0.02
|
|
|
|
|
|
|
|
(0.02
|
)
|
Aggregate charges for external costs for stockholder derivative
litigation associated with the DOJ settlement and other legal
contingency expenses
|
|
|
|
-
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earnings per share from continuing operations
|
|
|
$
|
1.51
|
|
|
|
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
Year over year change
|
|
|
|
|
|
23.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLERGAN, INC.
|
Reconciliation of Non-GAAP Earnings and Diluted Earnings Per Share
from Continuing Operations
|
(Unaudited)
|
|
In millions, except per share amounts
|
|
|
Six months ended
|
|
|
|
June 30,
|
|
|
|
|
|
June 30,
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
676.9
|
|
|
|
|
|
|
$
|
627.0
|
|
Less net earnings attributable to noncontrolling interest
|
|
|
|
1.8
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations attributable to Allergan, Inc.
|
|
|
|
675.1
|
|
|
|
|
|
|
|
623.8
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP pre-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Sales milestone revenue associated with a license agreement with
Senju
|
|
|
|
(9.7
|
)
|
|
|
|
|
|
|
-
|
|
Expenses related to the realignment of various business functions
|
|
|
|
9.4
|
|
|
|
|
|
|
|
0.9
|
|
Costs associated with the Allergan Board of Directors'
consideration and rejection of an unsolicited proposal from
Valeant to acquire all of the outstanding shares of Allergan
|
|
|
|
30.2
|
|
|
|
|
|
|
|
-
|
|
Expenses from changes in fair value of contingent consideration
and integration and transaction costs associated with business
combinations
|
|
|
|
3.8
|
|
|
|
|
|
|
|
18.5
|
|
Research and development expenses related to an upfront licensing
fee associated with a license agreement for technology that has
not achieved regulatory approval and related transaction costs
|
|
|
|
65.4
|
|
|
|
|
|
|
|
-
|
|
Acquired in-process research and development asset included in
research and development expenses for technology that has not
achieved regulatory approval and related transaction costs
|
|
|
|
10.6
|
|
|
|
|
|
|
|
-
|
|
Amortization of intangible assets
|
|
|
|
53.0
|
|
|
|
|
|
|
|
52.7
|
|
Net restructuring charges
|
|
|
|
22.8
|
|
|
|
|
|
|
|
4.3
|
|
Interest (income) expense associated with changes in estimated
taxes related to uncertain tax positions included in prior year
filings
|
|
|
|
(1.8
|
)
|
|
|
|
|
|
|
0.2
|
|
Unrealized loss (gain) on derivative instruments
|
|
|
|
15.1
|
|
|
|
|
|
|
|
(11.9
|
)
|
Fair market value inventory adjustment rollout associated with the
acquisition of SkinMedica, Inc.
|
|
|
|
-
|
|
|
|
|
|
|
|
8.9
|
|
Aggregate charges for external costs for stockholder derivative
litigation associated with the DOJ settlement and other legal
contingency expenses
|
|
|
|
-
|
|
|
|
|
|
|
|
3.5
|
|
Gain on sale of investments
|
|
|
|
-
|
|
|
|
|
|
|
|
(0.7
|
)
|
Impairment of a non-marketable equity investment
|
|
|
|
-
|
|
|
|
|
|
|
|
3.7
|
|
|
|
|
|
873.9
|
|
|
|
|
|
|
|
703.9
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect for above items
|
|
|
|
(42.9
|
)
|
|
|
|
|
|
|
(21.7
|
)
|
Change in estimated taxes related to tax positions included in prior
year filings
|
|
|
|
(13.6
|
)
|
|
|
|
|
|
|
-
|
|
Estimated impact of the retroactive U.S. Research and Development
tax credit for 2012
|
|
|
|
-
|
|
|
|
|
|
|
|
(17.4
|
)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings from continuing operations
|
|
|
$
|
817.4
|
|
|
|
|
|
|
$
|
664.8
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
|
297.7
|
|
|
|
|
|
|
|
296.9
|
|
Net shares assumed issued using the treasury stock method for
options and non-vested equity shares and share units outstanding
during each period based on average market price
|
|
|
|
6.0
|
|
|
|
|
|
|
|
5.6
|
|
|
|
|
|
303.7
|
|
|
|
|
|
|
|
302.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing operations
|
|
|
$
|
2.22
|
|
|
|
|
|
|
$
|
2.06
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per share adjustments:
|
|
|
|
|
|
|
|
|
|
Sales milestone revenue associated with a license agreement with
Senju
|
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
-
|
|
Expenses related to the realignment of various business functions
|
|
|
|
0.02
|
|
|
|
|
|
|
|
-
|
|
Costs associated with the Allergan Board of Directors'
consideration and rejection of an unsolicited proposal from
Valeant to acquire all of the outstanding shares of Allergan
|
|
|
|
0.07
|
|
|
|
|
|
|
|
-
|
|
Expenses from changes in fair value of contingent consideration
and integration and transaction costs associated with business
combinations
|
|
|
|
0.01
|
|
|
|
|
|
|
|
0.05
|
|
Research and development expenses related to an upfront licensing
fee associated with a license agreement for technology that has
not achieved regulatory approval and related transaction costs
|
|
|
|
0.21
|
|
|
|
|
|
|
|
-
|
|
Acquired in-process research and development asset included in
research and development expenses for technology that has not
achieved regulatory approval and related transaction costs
|
|
|
|
0.02
|
|
|
|
|
|
|
|
-
|
|
Amortization of intangible assets
|
|
|
|
0.12
|
|
|
|
|
|
|
|
0.12
|
|
Net restructuring charges
|
|
|
|
0.05
|
|
|
|
|
|
|
|
0.01
|
|
Unrealized loss (gain) on derivative instruments
|
|
|
|
0.03
|
|
|
|
|
|
|
|
(0.02
|
)
|
Change in estimated taxes related to tax positions included in prior
year filings
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
-
|
|
Fair market value inventory adjustment rollout associated with the
acquisition of SkinMedica, Inc.
|
|
|
|
-
|
|
|
|
|
|
|
|
0.02
|
|
Aggregate charges for external costs for stockholder derivative
litigation associated with the DOJ settlement and other legal
contingency expenses
|
|
|
|
-
|
|
|
|
|
|
|
|
0.01
|
|
Impairment of a non-marketable equity investment
|
|
|
|
-
|
|
|
|
|
|
|
|
0.01
|
|
Estimated impact of the retroactive U.S. Research and Development
tax credit for 2012
|
|
|
|
-
|
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted earnings per share from continuing operations
|
|
|
$
|
2.69
|
|
|
|
|
|
|
$
|
2.20
|
|
|
|
|
|
|
|
|
|
|
|
Year over year change
|
|
|
|
|
|
22.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALLERGAN, INC.
|
Supplemental Non-GAAP Information
|
(Unaudited)
|
|
|
|
|
Three months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
$ change in net sales
|
|
|
Percent change in net sales
|
in millions
|
|
|
2014
|
|
|
2013
|
|
|
Total
|
|
|
Performance
|
|
|
Currency
|
|
|
Total
|
|
|
Performance
|
|
|
Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eye Care Pharmaceuticals
|
|
|
$
|
827.0
|
|
|
|
$
|
722.4
|
|
|
|
$
|
104.6
|
|
|
|
$
|
107.2
|
|
|
|
$
|
(2.6
|
)
|
|
|
14.5
|
%
|
|
|
14.8
|
%
|
|
|
(0.3
|
)%
|
Botox/Neuromodulators
|
|
|
|
579.4
|
|
|
|
|
513.0
|
|
|
|
|
66.4
|
|
|
|
|
70.3
|
|
|
|
|
(3.9
|
)
|
|
|
12.9
|
%
|
|
|
13.7
|
%
|
|
|
(0.8
|
)%
|
Skin Care and Other
|
|
|
|
119.7
|
|
|
|
|
112.3
|
|
|
|
|
7.4
|
|
|
|
|
7.6
|
|
|
|
|
(0.2
|
)
|
|
|
6.6
|
%
|
|
|
6.8
|
%
|
|
|
(0.2
|
)%
|
Total Specialty Pharmaceuticals
|
|
|
|
1,526.1
|
|
|
|
|
1,347.7
|
|
|
|
|
178.4
|
|
|
|
|
185.1
|
|
|
|
|
(6.7
|
)
|
|
|
13.2
|
%
|
|
|
13.7
|
%
|
|
|
(0.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breast Aesthetics
|
|
|
|
110.2
|
|
|
|
|
106.8
|
|
|
|
|
3.4
|
|
|
|
|
3.1
|
|
|
|
|
0.3
|
|
|
|
3.2
|
%
|
|
|
2.9
|
%
|
|
|
0.3
|
%
|
Facial Aesthetics
|
|
|
|
178.3
|
|
|
|
|
122.5
|
|
|
|
|
55.8
|
|
|
|
|
56.7
|
|
|
|
|
(0.9
|
)
|
|
|
45.6
|
%
|
|
|
46.3
|
%
|
|
|
(0.7
|
)%
|
Core Medical Devices
|
|
|
|
288.5
|
|
|
|
|
229.3
|
|
|
|
|
59.2
|
|
|
|
|
59.8
|
|
|
|
|
(0.6
|
)
|
|
|
25.8
|
%
|
|
|
26.1
|
%
|
|
|
(0.3
|
)%
|
Other (a)
|
|
|
|
12.7
|
|
|
|
|
-
|
|
|
|
|
12.7
|
|
|
|
|
12.7
|
|
|
|
|
-
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Total Medical Devices
|
|
|
|
301.2
|
|
|
|
|
229.3
|
|
|
|
|
71.9
|
|
|
|
|
72.5
|
|
|
|
|
(0.6
|
)
|
|
|
31.4
|
%
|
|
|
31.6
|
%
|
|
|
(0.2
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product net sales
|
|
|
$
|
1,827.3
|
|
|
|
$
|
1,577.0
|
|
|
|
$
|
250.3
|
|
|
|
$
|
257.6
|
|
|
|
$
|
(7.3
|
)
|
|
|
15.9
|
%
|
|
|
16.3
|
%
|
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
|
61.9
|
%
|
|
|
|
61.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
38.1
|
%
|
|
|
|
38.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Product Net Sales (b):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alphagan P, Alphagan, and Combigan
|
|
|
$
|
125.4
|
|
|
|
$
|
120.1
|
|
|
|
$
|
5.3
|
|
|
|
$
|
6.4
|
|
|
|
$
|
(1.1
|
)
|
|
|
4.5
|
%
|
|
|
5.3
|
%
|
|
|
(0.8
|
)%
|
Lumigan Franchise
|
|
|
|
174.7
|
|
|
|
|
158.0
|
|
|
|
|
16.7
|
|
|
|
|
14.6
|
|
|
|
|
2.1
|
|
|
|
10.5
|
%
|
|
|
9.3
|
%
|
|
|
1.2
|
%
|
Total Glaucoma Products
|
|
|
|
302.5
|
|
|
|
|
280.4
|
|
|
|
|
22.1
|
|
|
|
|
21.1
|
|
|
|
|
1.0
|
|
|
|
7.9
|
%
|
|
|
7.5
|
%
|
|
|
0.4
|
%
|
Restasis
|
|
|
|
269.3
|
|
|
|
|
216.4
|
|
|
|
|
52.9
|
|
|
|
|
54.5
|
|
|
|
|
(1.6
|
)
|
|
|
24.4
|
%
|
|
|
25.2
|
%
|
|
|
(0.8
|
)%
|
Latisse
|
|
|
|
25.1
|
|
|
|
|
27.6
|
|
|
|
|
(2.5
|
)
|
|
|
|
(2.4
|
)
|
|
|
|
(0.1
|
)
|
|
|
(9.4
|
)%
|
|
|
(8.7
|
)%
|
|
|
(0.7
|
)%
|
Total Specialty Pharmaceuticals and Core Medical Devices
|
|
|
|
1,814.6
|
|
|
|
|
1,577.0
|
|
|
|
|
237.6
|
|
|
|
|
244.9
|
|
|
|
|
(7.3
|
)
|
|
|
15.1
|
%
|
|
|
15.5
|
%
|
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
$ change in net sales
|
|
|
Percent change in net sales
|
in millions
|
|
|
2014
|
|
|
2013
|
|
|
Total
|
|
|
Performance
|
|
|
Currency
|
|
|
Total
|
|
|
Performance
|
|
|
Currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eye Care Pharmaceuticals
|
|
|
$
|
1,557.4
|
|
|
|
$
|
1,391.0
|
|
|
|
$
|
166.4
|
|
|
|
$
|
180.3
|
|
|
|
$
|
(13.9
|
)
|
|
|
12.0
|
%
|
|
|
13.0
|
%
|
|
|
(1.0
|
)%
|
Botox/Neuromodulators
|
|
|
|
1,081.2
|
|
|
|
|
970.9
|
|
|
|
|
110.3
|
|
|
|
|
123.0
|
|
|
|
|
(12.7
|
)
|
|
|
11.4
|
%
|
|
|
12.7
|
%
|
|
|
(1.3
|
)%
|
Skin Care and Other
|
|
|
|
246.8
|
|
|
|
|
217.6
|
|
|
|
|
29.2
|
|
|
|
|
29.7
|
|
|
|
|
(0.5
|
)
|
|
|
13.4
|
%
|
|
|
13.6
|
%
|
|
|
(0.2
|
)%
|
Total Specialty Pharmaceuticals
|
|
|
|
2,885.4
|
|
|
|
|
2,579.5
|
|
|
|
|
305.9
|
|
|
|
|
333.0
|
|
|
|
|
(27.1
|
)
|
|
|
11.9
|
%
|
|
|
12.9
|
%
|
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Breast Aesthetics
|
|
|
|
209.7
|
|
|
|
|
196.4
|
|
|
|
|
13.3
|
|
|
|
|
14.1
|
|
|
|
|
(0.8
|
)
|
|
|
6.8
|
%
|
|
|
7.2
|
%
|
|
|
(0.4
|
)%
|
Facial Aesthetics
|
|
|
|
326.2
|
|
|
|
|
233.6
|
|
|
|
|
92.6
|
|
|
|
|
96.3
|
|
|
|
|
(3.7
|
)
|
|
|
39.6
|
%
|
|
|
41.2
|
%
|
|
|
(1.6
|
)%
|
Core Medical Devices
|
|
|
|
535.9
|
|
|
|
|
430.0
|
|
|
|
|
105.9
|
|
|
|
|
110.4
|
|
|
|
|
(4.5
|
)
|
|
|
24.6
|
%
|
|
|
25.7
|
%
|
|
|
(1.1
|
)%
|
Other (a)
|
|
|
|
25.1
|
|
|
|
|
-
|
|
|
|
|
25.1
|
|
|
|
|
25.1
|
|
|
|
|
-
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Total Medical Devices
|
|
|
|
561.0
|
|
|
|
|
430.0
|
|
|
|
|
131.0
|
|
|
|
|
135.5
|
|
|
|
|
(4.5
|
)
|
|
|
30.5
|
%
|
|
|
31.5
|
%
|
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product net sales
|
|
|
$
|
3,446.4
|
|
|
|
$
|
3,009.5
|
|
|
|
$
|
436.9
|
|
|
|
$
|
468.5
|
|
|
|
$
|
(31.6
|
)
|
|
|
14.5
|
%
|
|
|
15.6
|
%
|
|
|
(1.1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
|
62.1
|
%
|
|
|
|
61.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
37.9
|
%
|
|
|
|
39.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Product Net Sales (b):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alphagan P, Alphagan, and Combigan
|
|
|
$
|
246.7
|
|
|
|
$
|
236.8
|
|
|
|
$
|
9.9
|
|
|
|
$
|
13.4
|
|
|
|
$
|
(3.5
|
)
|
|
|
4.2
|
%
|
|
|
5.6
|
%
|
|
|
(1.4
|
)%
|
Lumigan Franchise
|
|
|
|
319.7
|
|
|
|
|
299.2
|
|
|
|
|
20.5
|
|
|
|
|
18.3
|
|
|
|
|
2.2
|
|
|
|
6.8
|
%
|
|
|
6.1
|
%
|
|
|
0.7
|
%
|
Total Glaucoma Products
|
|
|
|
571.0
|
|
|
|
|
540.8
|
|
|
|
|
30.2
|
|
|
|
|
31.6
|
|
|
|
|
(1.4
|
)
|
|
|
5.6
|
%
|
|
|
5.8
|
%
|
|
|
(0.2
|
)%
|
Restasis
|
|
|
|
501.0
|
|
|
|
|
423.1
|
|
|
|
|
77.9
|
|
|
|
|
81.8
|
|
|
|
|
(3.9
|
)
|
|
|
18.4
|
%
|
|
|
19.3
|
%
|
|
|
(0.9
|
)%
|
Latisse
|
|
|
|
48.8
|
|
|
|
|
52.2
|
|
|
|
|
(3.4
|
)
|
|
|
|
(3.0
|
)
|
|
|
|
(0.4
|
)
|
|
|
(6.6
|
)%
|
|
|
(5.8
|
)%
|
|
|
(0.8
|
)%
|
Total Specialty Pharmaceuticals and Core Medical Devices
|
|
|
|
3,421.3
|
|
|
|
|
3,009.5
|
|
|
|
|
411.8
|
|
|
|
|
443.4
|
|
|
|
|
(31.6
|
)
|
|
|
13.7
|
%
|
|
|
14.7
|
%
|
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
Other medical devices product net sales consist of sales made
pursuant to transition services agreements with Apollo Endosurgery,
Inc. related to the sale of the obesity intervention business unit.
|
(b)
|
|
|
Percentage change in selected product net sales is calculated on
amounts reported to the nearest whole dollar. Total glaucoma
products include the Alphagan and Lumigan franchises.
|
|
ALLERGAN, INC.
|
Reconciliation of GAAP Diluted Earnings Per Share Expectations
|
To Non-GAAP Diluted Earnings Per Share Expectations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2014
|
|
|
|
Low
|
|
|
High
|
|
|
|
|
|
|
|
GAAP diluted earnings per share attributable to Allergan, Inc.
stockholders from continuing operations expectations (a)
|
|
|
$
|
1.38
|
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
|
0.06
|
|
|
|
|
0.06
|
|
Non-GAAP diluted earnings per share from continuing operations
expectations
|
|
|
$
|
1.44
|
|
|
|
$
|
1.47
|
|
|
|
|
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Full Year 2014
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Low
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High
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GAAP diluted earnings per share attributable to Allergan, Inc.
stockholders from continuing operations expectations (a)
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$
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5.16
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$
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5.22
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Sales milestone revenue associated with a license agreement with
Senju
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(0.02
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)
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(0.02
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)
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Expenses related to the realignment of various business functions
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0.02
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0.02
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Costs associated with the Allergan Board of Directors'
consideration and rejection of an unsolicited proposal from
Valeant to acquire all of the outstanding shares of Allergan
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0.07
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0.07
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Expenses from changes in fair value of contingent consideration
and integration and transaction costs associated with business
combinations
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0.01
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0.01
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Research and development expenses related to an upfront licensing
fee associated with a license agreement for technology that has
not achieved regulatory approval and related transaction costs
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0.21
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0.21
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Acquired in-process research and development asset included in
research and development expenses for technology that has not
achieved regulatory approval and related transaction costs
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0.02
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0.02
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Amortization of intangible assets
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0.23
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0.23
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Net restructuring charges
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0.05
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0.05
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Unrealized loss on derivative instruments
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0.03
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0.03
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Change in estimated taxes related to tax positions included in prior
year filings
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(0.04
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)
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(0.04
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)
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Non-GAAP diluted earnings per share from continuing operations
expectations
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$
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5.74
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$
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5.80
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(a)
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GAAP diluted earnings per share from continuing operations
expectations exclude any potential impact of future unrealized gains
or losses on derivative instruments, changes in contingent
consideration, integration and transaction costs associated with
business combinations, expenses related to the realignment of
various business functions, costs associated with the Allergan
Board's consideration and rejection of an unsolicited proposal from
Valeant to acquire all of the outstanding shares of Allergan and
restructuring charges that may occur but that are not currently
known or determinable.
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