XML 53 R28.htm IDEA: XBRL DOCUMENT v2.4.0.8
Segment Results (Tables)
 9 Months Ended
Sep. 30, 2014
Segment Reporting [Abstract]  
Schedule of reportable segments information
The following represents selected information for the Company’s reportable segments for the three and nine months ended September 30, 2014 and 2013 (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Net revenues to external customers:
 
 
 
 
 
 
 
U.S. Branded Pharmaceuticals
$
240,931

 
$
366,136

 
$
723,643

 
$
1,139,372

U.S. Generic Pharmaceuticals
319,399

 
183,939

 
803,467

 
532,722

Devices (1)
109,822

 
111,244

 
359,425

 
359,867

International Pharmaceuticals (2)
93,786

 
—

 
190,696

 
—

Total net revenues to external customers
$
763,938

 
$
661,319

 
$
2,077,231

 
$
2,031,961

 
 
 
 
 
 
 
 
Adjusted income (loss) from continuing operations before income tax:
 
 
 
 
 
 
 
U.S. Branded Pharmaceuticals
$
130,613

 
$
224,747

 
$
395,446

 
$
635,168

U.S. Generic Pharmaceuticals
139,497

 
48,630

 
318,528

 
141,720

Devices
32,136

 
29,156

 
109,575

 
96,847

International Pharmaceuticals
27,234

 
—

 
59,131

 
—

__________
(1)
The following table displays our Devices segment revenue by geography for the three and nine months ended September 30, 2014 and 2013 (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Devices:
 
 
 
 
 
 
 
United States
$
73,429

 
$
75,484

 
$
230,530

 
$
233,091

International
36,393

 
35,760

 
128,895

 
126,776

Total Devices revenues
$
109,822

 
$
111,244

 
$
359,425

 
$
359,867


(2)
Revenues generated by our International Pharmaceuticals segment are primarily attributable to Canada, Mexico and South Africa.
Schedule of revenue by reportable segment
The following table displays our Devices segment revenue by geography for the three and nine months ended September 30, 2014 and 2013 (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Devices:
 
 
 
 
 
 
 
United States
$
73,429

 
$
75,484

 
$
230,530

 
$
233,091

International
36,393

 
35,760

 
128,895

 
126,776

Total Devices revenues
$
109,822

 
$
111,244

 
$
359,425

 
$
359,867


(2)
Revenues generated by our International Pharmaceuticals segment are primarily attributable to Canada, Mexico and South Africa.
Schedule of reconciliations of consolidated adjusted income before income tax
The table below provides reconciliations of our segment adjusted income from continuing operations before income tax to our consolidated (loss) income from continuing operations before income tax, which is determined in accordance with U.S. GAAP, for the three and nine months ended September 30, 2014 and 2013 (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Total segment adjusted income from continuing operations before income tax:
$
329,480

 
$
302,533

 
$
882,680

 
$
873,735

Corporate unallocated costs
(97,326
)
 
(81,975
)
 
(246,763
)
 
(238,641
)
Upfront and milestone payments to partners
(13,448
)
 
(3,092
)
 
(34,953
)
 
(11,064
)
Asset impairment charges
—

 
(807
)
 
—

 
(4,756
)
Acquisition-related and integration items (1)
(6,932
)
 
(1,493
)
 
(71,819
)
 
(3,876
)
Separation benefits and other cost reduction initiatives (2)
(8,230
)
 
(20,673
)
 
(19,970
)
 
(85,929
)
Excise tax (3)
1,000

 
—

 
(54,300
)
 
—

Amortization of intangible assets
(70,806
)
 
(44,987
)
 
(194,273
)
 
(143,326
)
Inventory step-up
(17,364
)
 
—

 
(40,089
)
 
—

Non-cash interest expense related to the 1.75% Convertible Senior Subordinated Notes
(1,992
)
 
(5,704
)
 
(11,307
)
 
(16,816
)
Loss on extinguishment of debt
(2,027
)
 
—

 
(31,712
)
 
(11,312
)
Watson litigation settlement income, net
—

 
14,628

 
—

 
50,400

Certain litigation-related charges, net (4)
(483,926
)
 
(44,600
)
 
(1,157,885
)
 
(193,969
)
Charge related to the non-recoverability of certain non-trade receivables
—

 
—

 
(10,000
)
 
—

Net gain on sale of certain early-stage drug discovery and development assets
150

 
—

 
4,000

 
—

Foreign currency impact related to the remeasurement of intercompany debt instruments
5,740

 
—

 
5,740

 
—

Charge for an additional year of the branded prescription drug fee in accordance with IRS regulations issued in the third quarter of 2014
(24,972
)
 
—

 
(24,972
)
 
—

Other, net
(161
)
 
—

 
(161
)
 
1,048

Total consolidated (loss) income from continuing operations before income tax
$
(390,814
)
 
$
113,830

 
$
(1,005,784
)
 
$
215,494

__________
(1)
Acquisition-related and integration-items include costs directly associated with the closing of certain acquisitions, changes in the fair value of contingent consideration and the costs of integration activities related to both current and prior period acquisitions.
(2)
Separation benefits and other cost reduction initiatives include employee separation costs of $1.5 million and $10.5 million during the three and nine months ended September 30, 2014, respectively, compared to $5.6 million and $46.8 million for the three and nine months ended September 30, 2013, respectively. Additionally, amounts during the three and nine months ended September 30, 2014 include costs associated with the sale of our HealthTronics business and changes in estimates related to certain cost reduction initiative accruals. Additionally, the amount of separation benefits and other cost reduction initiatives during the three and nine months ended September 30, 2013 includes an expense recorded upon the cease use date of our Chadds Ford, Pennsylvania and Westbury, New York properties in the first quarter of 2013, representing the liability for our remaining obligations under the respective lease agreements of $7.2 million. These expenses were primarily recorded as Selling, general and administrative and Research and development expense in our Condensed Consolidated Statements of Operations. Refer to Note 4. Restructuring for discussion of our material restructuring initiatives.
(3)
This amount represents charges related to the expense for the reimbursement of director's and certain employee's excise tax liabilities pursuant to Section 4985 of the Internal Revenue Code.
(4)
These amounts include charges for Litigation-related and other contingencies, net, consisting primarily of mesh-related product liability charges, as well as mesh litigation-related defense costs for the three and nine months ended September 30, 2014 and 2013.
Additional selected financial information for reportable segments
The following represents additional selected financial information for our reportable segments for the three and nine months ended September 30, 2014 and 2013 (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Depreciation expense:
 
 
 
 
 
 
 
U.S. Branded Pharmaceuticals
$
4,319

 
$
4,059

 
$
12,730

 
$
14,774

U.S. Generic Pharmaceuticals
4,514

 
3,402

 
12,392

 
9,841

Devices
1,776

 
2,221

 
6,304

 
7,876

International Pharmaceuticals
718

 
—

 
1,209

 
—

Corporate unallocated
2,091

 
2,180

 
6,104

 
6,374

Total depreciation expense
$
13,418

 
$
11,862

 
$
38,739

 
$
38,865

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Amortization expense:
 
 
 
 
 
 
 
U.S. Branded Pharmaceuticals
$
18,590

 
$
18,743

 
$
57,052

 
$
64,870

U.S. Generic Pharmaceuticals
24,818

 
10,881

 
63,588

 
32,643

Devices
15,438

 
15,512

 
46,475

 
46,263

International Pharmaceuticals
11,960

 
—

 
27,158

 
—

Total amortization expense
$
70,806

 
$
45,136

 
$
194,273

 
$
143,776