Pennsylvania | 1-9114 | 25-1211621 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
1500 Corporate Drive Canonsburg, PA | 15317 |
(Address of Principal Executive Offices) | (Zip Code) |
• | Item II, Part 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, attached hereto as Exhibit 99.1 and incorporated herein by reference; |
• | Part II, Item 8. Financial Statements and Supplementary Data, attached hereto as Exhibit 99.2 and incorporated herein by reference; and |
• | Schedule II - Valuation and Qualifying Accounts, attached hereto as Exhibit 99.3 and incorporated herein by reference. |
(d) | Exhibits. | |
Exhibit No. | Description | |
23.1 | Consent of Deloitte & Touche LLP | |
99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations (superseding Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2012). | |
99.2 | Financial Statements and Supplementary Data (superseding Part II, Item 8 of the Annual Report for the year ended December 31, 2012). | |
99.3 | Schedule II - Valuation and Qualifying Accounts | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
MYLAN INC. | |||||||
Date: | May 28, 2013 | By: | /s/ John D. Sheehan | ||||
John D. Sheehan Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
23.1 | Consent of Deloitte & Touche LLP | |
99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations (superseding Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2012). | |
99.2 | Financial Statements and Supplementary Data (superseding Part II, Item 8 of the Annual Report for the year ended December 31, 2012). | |
99.3 | Schedule II - Valuation and Qualifying Accounts | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
ITEM 7. | Management’s Discussion and Analysis of Financial Condition And Results of Operations |
• | Exit costs associated with facilities to be closed or divested, including employee separation costs, impairment charges, accelerated depreciation, incremental manufacturing variances, equipment relocation costs and other exit costs; |
• | Certain acquisition related integration costs, as well as other costs associated with acquisitions and other optimization initiatives, which are not part of a formal restructuring program, including employee separation and post-employment costs; |
• | Certain transition and other costs associated with the ratification of a new collective bargaining agreement in 2012 governing certain employees at our Morgantown, WV manufacturing facility, including the estimated withdrawal obligation from a multi-employer pension plan; |
• | The pre-tax loss of the Company’s investment in a clean energy partnership, whose activities qualify for income tax credits under Section 45 of the U.S. Internal Revenue Code; only included in Adjusted Earnings and Adjusted EPS is the net tax effect of the entity’s activities; |
• | Certain costs to further develop and optimize our global enterprise resource planning systems, operations and supply chain; and |
• | Certain costs related to new operations and significant new alliances/business partnerships. |
Year Ended December 31, | |||||||||||||||||||||||
(In millions, except per share amounts) | 2012 | 2011 | 2010 | ||||||||||||||||||||
GAAP net earnings attributable to Mylan Inc. and diluted GAAP EPS | $ | 640.9 | $ | 1.52 | $ | 536.8 | $ | 1.22 | $ | 223.6 | $ | 0.68 | |||||||||||
Purchase accounting related amortization (included in cost of sales) (a) | 391.1 | 364.8 | 309.2 | ||||||||||||||||||||
Litigation settlements, net | (3.0 | ) | 48.6 | 127.1 | |||||||||||||||||||
Interest expense, primarily amortization of convertible debt discount | 35.6 | 49.8 | 60.0 | ||||||||||||||||||||
Non-cash accretion and fair value adjustments of contingent consideration liability | 38.7 | — | — | ||||||||||||||||||||
Clean energy investment subsidiary pre-tax loss (b) | 16.8 | — | — | ||||||||||||||||||||
Financing related costs (included in other income (expense), net) | — | 34.0 | 37.4 | ||||||||||||||||||||
Restructuring and other special items included in: | |||||||||||||||||||||||
Cost of sales | 65.7 | 8.4 | 6.7 | ||||||||||||||||||||
Research and development expense | 12.4 | 3.6 | 9.9 | ||||||||||||||||||||
Selling, general and administrative expense | 104.9 | 44.9 | 63.5 | ||||||||||||||||||||
Other income, net | (0.7 | ) | 0.2 | 1.1 | |||||||||||||||||||
Tax effect of the above items and other income tax related items | (215.7 | ) | (198.1 | ) | (252.8 | ) | |||||||||||||||||
Preferred dividend | — | — | 121.6 | ||||||||||||||||||||
Adjusted net earnings attributable to Mylan Inc. and adjusted diluted EPS | $ | 1,086.7 | $ | 2.59 | $ | 893.0 | $ | 2.04 | $ | 707.3 | $ | 1.61 | |||||||||||
Weighted average diluted common shares outstanding | 420.2 | 438.8 | 438.4 |
(a) | Purchase accounting related amortization expense for the years ended December 31, 2012 and 2011 includes in-process research and development asset impairment charges of $41.6 million and $16.2 million, respectively. |
(b) | Adjustment represents exclusion of the pre-tax loss related to our investment in a clean energy partnership, the activities of which qualify for income tax credits under section 45 of the Internal Revenue Code. Amount is included in other income (expense), net. |
• | an increase in net earnings, combined with a net increase in the amount of non-cash expenses, totaling $265.0 million as a result of increased expenses for depreciation and amortization, post employment programs, |
• | a net increase in operating cash flow resulting from less cash used for accounts receivable, including estimated sales allowances, of $232.7 million reflecting the timing of sales and cash collections; and |
• | a net decrease of $48.6 million in the amount of cash used through changes in inventory balances. |
• | a net decrease in the amount of cash provided through changes in trade accounts payable of $52.3 million as a result of the timing of cash payments; |
• | a net increase in the amount of cash used through changes in income taxes of $146.9 million as a result of the level of estimated tax payments made during the current year; |
• | a net decrease in deferred revenues of $18.8 million; and |
• | a net decrease in legal and professional accruals of $110.6 million ($232.7 million at December 31, 2011, as compared to $122.1 million at December 31, 2012), primarily as a result of litigation payments. |
• | a net increase in the amount of cash used by changes in accounts receivable of $340.7 million, as a result of higher receivable balances at December 31, 2011, due principally to the increase in sales in the fourth quarter of 2011, and cash received for deferred revenue in 2010; |
• | the receipt of an income tax refund in the first quarter of 2010 of approximately $99 million and lower income taxes paid as a result of anticipated tax benefits on indemnified litigation; |
• | a net increase of $125.9 million in the amount of cash used by changes in inventory balances. At December 31, 2011, inventories increased to support an expected increase in future demand combined with new product launches in 2012; |
• | a payment, during 2011, of $60.4 million to Merck KGaA related to the income tax benefits on indemnified litigation; and |
• | payments for existing litigation matters totaling $80.8 million. |
(In thousands) | U.S. Term Loans | Cash Convertible Notes | 2017 Senior Notes | 2018 Senior Notes | 2020 Senior Notes | 2023 Senior Notes | Total | ||||||||||||||||||||
2013 | $ | 93,750 | $ | 1,002 | $ | — | $ | — | $ | — | $ | — | $ | 94,752 | |||||||||||||
2014 | 125,000 | — | — | — | — | — | 125,000 | ||||||||||||||||||||
2015 | 187,500 | 573,998 | — | — | — | — | 761,498 | ||||||||||||||||||||
2016 | 750,000 | — | — | — | — | — | 750,000 | ||||||||||||||||||||
2017 | — | — | 550,000 | — | — | — | 550,000 | ||||||||||||||||||||
Thereafter | — | — | — | 800,000 | 1,000,000 | 750,000 | 2,550,000 | ||||||||||||||||||||
Total | $ | 1,156,250 | $ | 575,000 | $ | 550,000 | $ | 800,000 | $ | 1,000,000 | $ | 750,000 | $ | 4,831,250 |
(In thousands) | Total | Less than One Year | One- Three Years | Three- Five Years | Thereafter | ||||||||||||||
Operating leases | $ | 115,274 | $ | 38,720 | $ | 52,056 | $ | 13,287 | $ | 11,211 | |||||||||
Long-term debt | 4,831,382 | 94,752 | 886,630 | 2,100,000 | 1,750,000 | ||||||||||||||
Scheduled interest payments | 1,447,352 | 218,801 | 456,129 | 509,453 | 262,969 | ||||||||||||||
Other Commitments (1) | 1,653,955 | 417,433 | 322,443 | 336,189 | 577,890 | ||||||||||||||
$ | 8,047,963 | $ | 769,706 | $ | 1,717,258 | $ | 2,958,929 | $ | 2,602,070 |
(1) | Other commitments include agreements to purchase third-party manufactured products and open purchase orders at December 31, 2012. |
(In thousands) | Balance at | Checks/ Credits Issued to Third Parties | Current Provision Related to Sales Made in the Current Period | Effects of Foreign Exchange | Balance at | ||||||||||||||
December 31, 2011 | December 31, 2012 | ||||||||||||||||||
Chargebacks | $ | 246,673 | $ | (2,323,889 | ) | $ | 2,345,398 | $ | 289 | $ | 268,471 | ||||||||
Incentives offered to direct customers | $ | 334,709 | $ | (1,518,914 | ) | $ | 1,671,260 | $ | 607 | $ | 487,662 | ||||||||
Returns | $ | 128,633 | $ | (133,038 | ) | $ | 161,064 | $ | 328 | $ | 156,987 |
ITEM 8. | Financial Statements And Supplementary Data |
Page | |
December 31, 2012 | December 31, 2011 | ||||||
ASSETS | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 349,969 | $ | 375,056 | |||
Accounts receivable, net | 1,554,342 | 1,426,438 | |||||
Inventories | 1,525,242 | 1,396,742 | |||||
Deferred income tax benefit | 229,348 | 202,899 | |||||
Prepaid expenses and other current assets | 243,816 | 167,709 | |||||
Total current assets | 3,902,717 | 3,568,844 | |||||
Property, plant and equipment, net | 1,397,216 | 1,298,034 | |||||
Intangible assets, net | 2,224,457 | 2,630,747 | |||||
Goodwill | 3,515,655 | 3,517,935 | |||||
Deferred income tax benefit | 87,655 | 39,376 | |||||
Other assets | 804,197 | 543,207 | |||||
Total assets | $ | 11,931,897 | $ | 11,598,143 | |||
LIABILITIES AND EQUITY | |||||||
Liabilities | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 777,908 | $ | 703,235 | |||
Short-term borrowings | 298,987 | 128,054 | |||||
Income taxes payable | 33,731 | 42,880 | |||||
Current portion of long-term debt and other long-term obligations | 98,048 | 691,614 | |||||
Deferred income tax liability | 1,283 | 1,215 | |||||
Other current liabilities | 983,546 | 996,158 | |||||
Total current liabilities | 2,193,503 | 2,563,156 | |||||
Long-term debt | 5,337,196 | 4,479,080 | |||||
Other long-term obligations | 771,111 | 742,210 | |||||
Deferred income tax liability | 274,259 | 308,915 | |||||
Total liabilities | 8,576,069 | 8,093,361 | |||||
Equity | |||||||
Mylan Inc. shareholders’ equity | |||||||
Common stock — par value $0.50 per share | |||||||
Shares authorized: 1,500,000,000 | |||||||
Shares issued: 539,664,386 and 530,315,453 as of December 31, 2012 and December 31, 2011 | 269,832 | 265,158 | |||||
Additional paid-in capital | 3,986,746 | 3,795,373 | |||||
Retained earnings | 2,061,370 | 1,420,520 | |||||
Accumulated other comprehensive loss | (86,498 | ) | (87,839 | ) | |||
6,231,450 | 5,393,212 | ||||||
Noncontrolling interest | 15,110 | 13,007 | |||||
Less: treasury stock — at cost | |||||||
Shares: 144,459,210 and 103,637,016 as of December 31, 2012 and December 31, 2011 | 2,890,732 | 1,901,437 | |||||
Total equity | 3,355,828 | 3,504,782 | |||||
Total liabilities and equity | $ | 11,931,897 | $ | 11,598,143 |
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Revenues: | |||||||||||
Net revenues | $ | 6,750,246 | $ | 6,106,277 | $ | 5,404,266 | |||||
Other revenues | 45,864 | 23,548 | 46,256 | ||||||||
Total revenues | 6,796,110 | 6,129,825 | 5,450,522 | ||||||||
Cost of sales | 3,887,806 | 3,566,461 | 3,233,125 | ||||||||
Gross profit | 2,908,304 | 2,563,364 | 2,217,397 | ||||||||
Operating expenses: | |||||||||||
Research and development | 401,341 | 294,728 | 282,146 | ||||||||
Selling, general and administrative | 1,400,747 | 1,214,631 | 1,086,609 | ||||||||
Litigation settlements, net | (3,133 | ) | 48,556 | 127,058 | |||||||
Total operating expenses | 1,798,955 | 1,557,915 | 1,495,813 | ||||||||
Earnings from operations | 1,109,349 | 1,005,449 | 721,584 | ||||||||
Interest expense | 308,699 | 335,944 | 331,462 | ||||||||
Other income (expense), net | 3,429 | (14,869 | ) | (34,178 | ) | ||||||
Earnings before income taxes and noncontrolling interest | 804,079 | 654,636 | 355,944 | ||||||||
Income tax provision | 161,145 | 115,833 | 10,402 | ||||||||
Net earnings | 642,934 | 538,803 | 345,542 | ||||||||
Net earnings attributable to the noncontrolling interest | (2,084 | ) | (1,993 | ) | (427 | ) | |||||
Net earnings attributable to Mylan Inc. before preferred dividends | 640,850 | 536,810 | 345,115 | ||||||||
Preferred dividends | — | — | 121,535 | ||||||||
Net earnings attributable to Mylan Inc. common shareholders | $ | 640,850 | $ | 536,810 | $ | 223,580 | |||||
Earnings per common share attributable to Mylan Inc. common shareholders: | |||||||||||
Basic | $ | 1.54 | $ | 1.25 | $ | 0.69 | |||||
Diluted | $ | 1.52 | $ | 1.22 | $ | 0.68 | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 415,210 | 430,839 | 324,453 | ||||||||
Diluted | 420,236 | 438,785 | 328,979 |
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Net earnings | $ | 642,934 | $ | 538,803 | $ | 345,542 | |||||
Other comprehensive earnings (loss), before tax: | |||||||||||
Foreign currency translation adjustment | (3,461 | ) | (224,424 | ) | 131,438 | ||||||
Change in unrecognized loss and prior service cost related to defined benefit plans | (10,930 | ) | (2,015 | ) | (2,112 | ) | |||||
Net unrecognized gain (loss) on derivatives | 18,487 | (49,062 | ) | 46,910 | |||||||
Net unrealized (loss) gain on marketable securities | (72 | ) | 50 | 77 | |||||||
Other comprehensive earnings (loss), before tax | 4,024 | (275,451 | ) | 176,313 | |||||||
Income tax related to items of other comprehensive earnings (loss) | 2,683 | (15,745 | ) | 16,253 | |||||||
Other comprehensive earnings (loss), net of tax | 1,341 | (259,706 | ) | 160,060 | |||||||
Comprehensive earnings | 644,275 | 279,097 | 505,602 | ||||||||
Comprehensive earnings attributable to the noncontrolling interest | (2,084 | ) | (1,993 | ) | (427 | ) | |||||
Comprehensive earnings attributable to Mylan Inc. common shareholders | $ | 642,191 | $ | 277,104 | $ | 505,175 |
MYLAN INC. AND SUBSIDIARIES Consolidated Statements of Equity (In thousands, except share amounts) | ||||||||||||||||||||||||||||||||||||||||
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Loss) | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Shares | Cost | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2009 | 2,139,000 | $ | 1,070 | 396,683,892 | $ | 198,342 | $ | 3,834,674 | $ | 660,130 | (90,199,152 | ) | $ | (1,574,877 | ) | $ | 11,807 | $ | 14,052 | $ | 3,145,198 | |||||||||||||||||||
Net earnings | — | — | — | — | — | 345,115 | — | — | — | 427 | 345,542 | |||||||||||||||||||||||||||||
Other comprehensive earnings, net of tax | — | — | — | — | — | — | — | — | 160,060 | — | 160,060 | |||||||||||||||||||||||||||||
Stock options exercised, net of shares tendered for payment | — | — | 3,899,484 | 1,950 | 52,703 | — | — | — | — | — | 54,653 | |||||||||||||||||||||||||||||
Preferred stock conversion | (2,139,000 | ) | (1,070 | ) | 125,234,173 | 62,617 | (61,547 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 31,385 | — | — | — | — | — | 31,385 | |||||||||||||||||||||||||||||
Issuance of restricted stock, net of shares withheld | — | — | — | — | (11,923 | ) | — | 492,065 | 8,588 | — | — | (3,335 | ) | |||||||||||||||||||||||||||
Tax benefit of stock option plans | — | — | — | — | 7,253 | — | — | — | — | — | 7,253 | |||||||||||||||||||||||||||||
Dividends on preferred shares | — | — | — | — | — | (121,535 | ) | — | — | — | — | (121,535 | ) | |||||||||||||||||||||||||||
Purchase of subsidiary shares from noncontrolling interest | — | — | — | — | (4,622 | ) | — | — | — | — | (830 | ) | (5,452 | ) | ||||||||||||||||||||||||||
Other | — | — | — | — | 1,759 | — | — | — | — | (127 | ) | 1,632 | ||||||||||||||||||||||||||||
Balance at December 31, 2010 | — | $ | — | 525,817,549 | $ | 262,909 | $ | 3,849,682 | $ | 883,710 | (89,707,087 | ) | $ | (1,566,289 | ) | $ | 171,867 | $ | 13,522 | $ | 3,615,401 |
MYLAN INC. AND SUBSIDIARIES Consolidated Statements of Equity (Continued) (In thousands, except share amounts) | ||||||||||||||||||||||||||||||||||||||||
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Loss) | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Shares | Cost | |||||||||||||||||||||||||||||||||||
Net earnings | — | $ | — | — | $ | — | $ | — | $ | 536,810 | — | $ | — | $ | — | $ | 1,993 | $ | 538,803 | |||||||||||||||||||||
Other comprehensive loss. net of tax | — | — | — | — | — | — | — | — | (259,706 | ) | — | (259,706 | ) | |||||||||||||||||||||||||||
Common stock share repurchase | — | — | — | — | — | — | (14,773,006 | ) | (349,998 | ) | — | — | (349,998 | ) | ||||||||||||||||||||||||||
Warrant amendment and exchange | — | — | — | — | (149,947 | ) | — | — | — | — | — | (149,947 | ) | |||||||||||||||||||||||||||
Stock options exercised, net of shares tendered for payment | — | — | 4,497,904 | 2,249 | 65,489 | — | — | — | — | — | 67,738 | |||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 42,576 | — | — | — | — | — | 42,576 | |||||||||||||||||||||||||||||
Issuance of restricted stock, net of shares withheld | — | — | — | — | (20,973 | ) | — | 843,077 | 14,850 | — | — | (6,123 | ) | |||||||||||||||||||||||||||
Tax benefit of stock option plans | — | — | — | — | 11,153 | — | — | — | — | — | 11,153 | |||||||||||||||||||||||||||||
Purchase of subsidiary shares from noncontrolling interest | — | — | — | — | (2,607 | ) | — | — | — | — | (2,385 | ) | (4,992 | ) | ||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | — | (123 | ) | (123 | ) | |||||||||||||||||||||||||||
Balance at December 31, 2011 | — | $ | — | 530,315,453 | $ | 265,158 | $ | 3,795,373 | $ | 1,420,520 | (103,637,016 | ) | $ | (1,901,437 | ) | $ | (87,839 | ) | $ | 13,007 | $ | 3,504,782 | ||||||||||||||||||
MYLAN INC. AND SUBSIDIARIES Consolidated Statements of Equity (Continued) (In thousands, except share amounts) | ||||||||||||||||||||||||||||||||||||||||
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Earnings (Loss) | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | Shares | Cost | |||||||||||||||||||||||||||||||||||
Net earnings | — | $ | — | — | $ | — | $ | — | $ | 640,850 | — | $ | — | $ | — | $ | 2,084 | $ | 642,934 | |||||||||||||||||||||
Other comprehensive earnings, net of tax | — | — | — | — | — | — | — | — | 1,341 | — | 1,341 | |||||||||||||||||||||||||||||
Common stock share repurchase | — | — | — | — | — | — | (41,398,647 | ) | (999,893 | ) | — | — | (999,893 | ) | ||||||||||||||||||||||||||
Stock options exercised, net of shares tendered for payment | — | — | 9,348,933 | 4,674 | 139,209 | — | — | — | — | — | 143,883 | |||||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 42,579 | — | — | — | — | — | 42,579 | |||||||||||||||||||||||||||||
Issuance of restricted stock, net of shares withheld | — | — | — | — | (15,638 | ) | — | 576,454 | 10,598 | — | — | (5,040 | ) | |||||||||||||||||||||||||||
Tax benefit of stock option plans | — | — | — | — | 25,232 | — | — | — | — | — | 25,232 | |||||||||||||||||||||||||||||
Purchase of subsidiary shares from noncontrolling interest | — | — | — | — | (9 | ) | — | — | — | — | (25 | ) | (34 | ) | ||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | — | 44 | 44 | |||||||||||||||||||||||||||||
Balance at December 31, 2012 | — | $ | — | 539,664,386 | $ | 269,832 | $ | 3,986,746 | $ | 2,061,370 | (144,459,209 | ) | $ | (2,890,732 | ) | $ | (86,498 | ) | $ | 15,110 | $ | 3,355,828 |
Year Ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | 642,934 | $ | 538,803 | $ | 345,542 | |||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 546,604 | 510,688 | 422,788 | ||||||||
Stock-based compensation expense | 42,579 | 42,576 | 31,385 | ||||||||
Change in estimated sales allowances | 265,532 | (3,540 | ) | 42,608 | |||||||
Deferred income tax (benefit) expense | (108,930 | ) | (57,405 | ) | 11,287 | ||||||
Other non-cash items | 235,985 | 111,018 | 93,175 | ||||||||
Litigation settlements, net | (3,133 | ) | 48,556 | 127,058 | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (354,844 | ) | (318,870 | ) | 21,865 | ||||||
Inventories | (172,020 | ) | (220,600 | ) | (94,728 | ) | |||||
Trade accounts payable | 81,429 | 133,666 | 23,021 | ||||||||
Income taxes | (49,989 | ) | 96,935 | 20,247 | |||||||
Deferred revenue | (19,765 | ) | (996 | ) | 23,626 | ||||||
Other operating assets and liabilities, net | (157,364 | ) | (160,407 | ) | (136,470 | ) | |||||
Net cash provided by operating activities | 949,018 | 720,424 | 931,404 | ||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (305,325 | ) | (279,848 | ) | (192,792 | ) | |||||
Change in restricted cash | 6,972 | 15,030 | 24,875 | ||||||||
Cash paid for acquisitions, net | — | (80,510 | ) | (562,765 | ) | ||||||
Proceeds from sale of property, plant and equipment | 16,338 | — | 4,947 | ||||||||
Purchase of marketable securities | (9,884 | ) | (10,024 | ) | (7,520 | ) | |||||
Proceeds from sale of marketable securities | 8,061 | 6,893 | 4,566 | ||||||||
Other items, net | (80,404 | ) | 16,418 | 3,279 | |||||||
Net cash used in investing activities | (364,242 | ) | (332,041 | ) | (725,410 | ) | |||||
Cash flows from financing activities: | |||||||||||
Cash dividends paid | — | — | (139,035 | ) | |||||||
Payment of financing fees | (7,691 | ) | (17,246 | ) | (29,084 | ) | |||||
Cash paid for warrant amendment and exchange | — | (149,947 | ) | — | |||||||
Purchase of common stock | (999,893 | ) | (349,998 | ) | — | ||||||
Change in short-term borrowings, net | 174,335 | (15,614 | ) | (27,415 | ) | ||||||
Proceeds from issuance of long-term debt | 2,043,448 | 1,458,000 | 2,356,633 | ||||||||
Payment of long-term debt | (1,990,796 | ) | (1,644,198 | ) | (2,115,402 | ) | |||||
Proceeds from exercise of stock options | 143,883 | 67,738 | 54,653 | ||||||||
Other items, net | 25,198 | 6,269 | — | ||||||||
Net cash (used in) provided by financing activities | (611,516 | ) | (644,996 | ) | 100,350 | ||||||
Effect on cash of changes in exchange rates | 1,653 | (30,383 | ) | (24,808 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (25,087 | ) | (286,996 | ) | 281,536 | ||||||
Cash and cash equivalents — beginning of period | 375,056 | 662,052 | 380,516 | ||||||||
Cash and cash equivalents — end of period | $ | 349,969 | $ | 375,056 | $ | 662,052 | |||||
Supplemental disclosures of cash flow information — | |||||||||||
Non-cash transactions: | |||||||||||
Other long-term obligations | $ | — | $ | 376,110 | $ | — | |||||
Cash paid during the period for: | |||||||||||
Income taxes | $ | 308,544 | $ | 124,123 | $ | 114,809 | |||||
Interest | $ | 246,762 | $ | 284,637 | $ | 144,176 |
1. | Nature of Operations |
2. | Summary of Significant Accounting Policies |
Year Ended December 31, | |||||||||||
(In thousands, except per share amounts) | 2012 | 2011 | 2010 | ||||||||
Basic earnings attributable to Mylan Inc. common shareholders (numerator): | |||||||||||
Net earnings attributable to Mylan Inc. before preferred dividends | $ | 640,850 | $ | 536,810 | $ | 345,115 | |||||
Less: Preferred dividends | — | — | 121,535 | ||||||||
Net earnings attributable to Mylan Inc. common shareholders | $ | 640,850 | $ | 536,810 | $ | 223,580 | |||||
Shares (denominator): | |||||||||||
Weighted average common shares outstanding | 415,210 | 430,839 | 324,453 | ||||||||
Basic earnings per common share attributable to Mylan Inc. common shareholders | $ | 1.54 | $ | 1.25 | $ | 0.69 | |||||
Diluted earnings attributable to Mylan Inc. common shareholders (numerator): | |||||||||||
Net earnings attributable to Mylan Inc. common shareholders | $ | 640,850 | $ | 536,810 | $ | 223,580 | |||||
Shares (denominator): | |||||||||||
Weighted average shares outstanding | 415,210 | 430,839 | 324,453 | ||||||||
Stock-based awards and warrants | 5,026 | 7,946 | 4,526 | ||||||||
Total dilutive shares outstanding | 420,236 | 438,785 | 328,979 | ||||||||
Diluted earnings per common share attributable to Mylan Inc. | $ | 1.52 | $ | 1.22 | $ | 0.68 |
3. | Acquisitions and Other Transactions |
(In thousands) | |||
Current assets (excluding inventories) | $ | 41,680 | |
Inventories | 28,500 | ||
Property, plant and equipment, net | 16,211 | ||
Identified intangible assets | 186,000 | ||
In-process research and development | 143,000 | ||
Goodwill | 207,390 | ||
Total assets acquired | 622,781 | ||
Current liabilities | (37,389 | ) | |
Deferred tax liabilities | (36,910 | ) | |
Other non-current liabilities | (4,746 | ) | |
Net assets acquired | $ | 543,736 |
Year Ended December 31, 2010 | |||
(In thousands, except per share amounts) | (Unaudited) | ||
Total revenues | $ | 5,561,801 | |
Net earnings attributable to Mylan Inc. before preferred dividends | 355,626 | ||
Preferred dividends | 121,535 | ||
Net earnings attributable to Mylan Inc. common shareholders | $ | 234,091 | |
Earnings per common share attributable to Mylan Inc. common shareholders | |||
Basic | $ | 0.72 | |
Diluted | $ | 0.71 | |
Weighted average common shares outstanding: | |||
Basic | 324,453 | ||
Diluted | 328,979 |
4. | Balance Sheet Components |
(In thousands) | December 31, 2012 | December 31, 2011 | |||||
Inventories: | |||||||
Raw materials | $ | 455,958 | $ | 370,423 | |||
Work in process | 268,191 | 253,492 | |||||
Finished goods | 801,093 | 772,827 | |||||
$ | 1,525,242 | $ | 1,396,742 |
Property, plant and equipment: | |||||||
Land and improvements | $ | 73,857 | $ | 72,945 | |||
Buildings and improvements | 665,058 | 676,028 | |||||
Machinery and equipment | 1,436,904 | 1,358,163 | |||||
Construction in progress | 308,192 | 263,948 | |||||
2,484,011 | 2,371,084 | ||||||
Less accumulated depreciation | 1,086,795 | 1,073,050 | |||||
$ | 1,397,216 | $ | 1,298,034 |
Other current liabilities: | |||||||
Legal and professional accruals, including litigation accruals | $ | 122,083 | $ | 232,670 | |||
Payroll and employee benefit plan accruals | 266,650 | 221,458 | |||||
Accrued sales allowances | 202,891 | 147,938 | |||||
Accrued interest | 72,590 | 74,754 | |||||
Fair value of financial instruments | 29,051 | 69,493 | |||||
Other | 290,281 | 249,845 | |||||
$ | 983,546 | $ | 996,158 |
5. | Goodwill and Other Intangible Assets |
(In thousands) | Generics Segment | Specialty Segment | Total | ||||||||
Balance at December 31, 2010: | |||||||||||
Goodwill | $ | 3,277,827 | $ | 706,507 | $ | 3,984,334 | |||||
Accumulated impairment losses | — | (385,000 | ) | (385,000 | ) | ||||||
3,277,827 | 321,507 | 3,599,334 | |||||||||
Goodwill acquired (1) | 1,138 | — | 1,138 | ||||||||
Foreign currency translation | (82,537 | ) | — | (82,537 | ) | ||||||
3,196,428 | 321,507 | 3,517,935 | |||||||||
Balance at December 31, 2011: | |||||||||||
Goodwill | 3,196,428 | 706,507 | 3,902,935 | ||||||||
Accumulated impairment losses | — | (385,000 | ) | (385,000 | ) | ||||||
3,196,428 | 321,507 | 3,517,935 | |||||||||
Foreign currency translation | (2,280 | ) | — | (2,280 | ) | ||||||
3,194,148 | 321,507 | 3,515,655 | |||||||||
Balance at December 31, 2012: | |||||||||||
Goodwill | 3,194,148 | 706,507 | 3,900,655 | ||||||||
Accumulated impairment losses | — | (385,000 | ) | (385,000 | ) | ||||||
$ | 3,194,148 | $ | 321,507 | $ | 3,515,655 |
(1) | Goodwill acquired primarily through the acquisition of Bioniche Pharma (see Note 3). |
(In thousands) | Weighted Average Life (Years) | Original Cost | Accumulated Amortization | Net Book Value | |||||||||
December 31, 2012 | |||||||||||||
Amortized intangible assets: | |||||||||||||
Patents and technologies | 20 | $ | 116,631 | $ | 88,288 | $ | 28,343 | ||||||
Product rights and licenses | 10 | 3,459,980 | 1,749,424 | 1,710,556 | |||||||||
Other (1) | 8 | 111,033 | 51,384 | 59,649 | |||||||||
3,687,644 | 1,889,096 | 1,798,548 | |||||||||||
IPR&D (2) | 425,909 | — | 425,909 | ||||||||||
$ | 4,113,553 | $ | 1,889,096 | $ | 2,224,457 | ||||||||
December 31, 2011 | |||||||||||||
Amortized intangible assets: | |||||||||||||
Patents and technologies | 20 | $ | 116,631 | $ | 82,815 | $ | 33,816 | ||||||
Product rights and licenses | 10 | 3,364,263 | 1,418,492 | 1,945,771 | |||||||||
Other (1) | 8 | 200,663 | 45,604 | 155,059 | |||||||||
3,681,557 | 1,546,911 | 2,134,646 | |||||||||||
IPR&D (2) | 496,101 | — | 496,101 | ||||||||||
$ | 4,177,658 | $ | 1,546,911 | $ | 2,630,747 |
(1) | Other intangibles consist principally of customer lists and contracts. |
(2) | See Note 3. |
(In thousands) | December 31, 2012 | December 31, 2011 | |||||
Allergy | $ | 111,386 | $ | 127,096 | |||
Anti-infectives | 145,109 | 179,386 | |||||
Cardiovascular | 309,062 | 353,026 | |||||
Central Nervous System | 273,102 | 293,106 | |||||
Dermatological | 93,644 | 32,710 | |||||
Endocrine and Metabolic | 80,702 | 92,482 | |||||
Gastrointestinal | 121,823 | 144,672 | |||||
Respiratory System | 218,658 | 282,803 | |||||
Other (1) | 357,070 | 440,490 | |||||
$ | 1,710,556 | $ | 1,945,771 |
(1) | Other consists of numerous therapeutic classes, none of which individually exceeds 5% of total product rights and licenses. |
6. | Financial Instruments and Risk Management |
Asset Derivatives | |||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||
(In thousands) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Interest rate swaps | Prepaid expenses and other current assets | $ | 36,647 | Prepaid expenses and other current assets | $ | 29,773 | |||||
Total | $ | 36,647 | $ | 29,773 |
Liability Derivatives | |||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||
(In thousands) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Interest rate swaps | Other current liabilities | $ | 9,823 | Other current liabilities | $ | 658 | |||||
Foreign currency forward contracts | Other current liabilities | 15,863 | Other current liabilities | 57,075 | |||||||
Total | $ | 25,686 | $ | 57,733 |
Asset Derivatives | |||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||
(In thousands) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Foreign currency forward contracts | Prepaid expenses and other current assets | $ | 5,818 | Prepaid expenses and other current assets | $ | 3,802 | |||||
Purchased cash convertible note hedge | Other assets | 636,300 | Other assets | 460,000 | |||||||
Total | $ | 642,118 | $ | 463,802 |
Liability Derivatives | |||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||
(In thousands) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||
Foreign currency forward contracts | Other current liabilities | $ | 3,365 | Other current liabilities | $ | 11,760 | |||||
Cash conversion feature of Cash Convertible Notes | Long-term debt | 636,300 | Long-term debt | 460,000 | |||||||
Total | $ | 639,665 | $ | 471,760 |
Location of Gain Recognized in Earnings on Derivatives | Amount of Gain Recognized in Earnings on Derivatives | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||||
Interest rate swaps | Interest expense | $ | 19,562 | $ | 42,648 | $ | — | ||||||
Total | $ | 19,562 | $ | 42,648 | $ | — |
Location of Loss Recognized in Earnings on Hedged Items | Amount of Loss Recognized in Earnings on Hedging Items | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||||
2018 Senior Notes | Interest expense | $ | (6,873 | ) | $ | (29,773 | ) | $ | — | ||||
Total | $ | (6,873 | ) | $ | (29,773 | ) | $ | — |
Amount of Gain or (Loss) Recognized in AOCE (Net of Tax) on Derivative (Effective Portion) | ||||||||||||
Year Ended December 31, | ||||||||||||
(In thousands) | 2012 | 2011 | 2010 | |||||||||
Foreign currency forward contracts | $ | (25,536 | ) | $ | (55,453 | ) | $ | 6,657 | ||||
Interest rate swaps | (8,168 | ) | 15,836 | 23,030 | ||||||||
Total | $ | (33,704 | ) | $ | (39,617 | ) | $ | 29,687 |
Location of Gain or (Loss) Reclassified from AOCE into Earnings (Effective Portion) | Amount of Gain or (Loss) Reclassified from AOCE into Earnings (Effective Portion) | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||||
Foreign currency forward contracts | Net revenues | $ | (44,217 | ) | $ | (5,492 | ) | $ | 2,301 | ||||
Interest rate swaps | Interest expense | (2,386 | ) | (15,719 | ) | (53,499 | ) | ||||||
Total | $ | (46,603 | ) | $ | (21,211 | ) | $ | (51,198 | ) |
Location of Gain Excluded from the Assessment of Hedge Effectiveness | Amount of Gain or (Loss) Excluded from the Assessment of Hedge Effectiveness | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||||
Foreign currency forward contracts | Other income (expense), net | $ | 58,024 | $ | 13,432 | $ | (2,958 | ) | |||||
Total | $ | 58,024 | $ | 13,432 | $ | (2,958 | ) |
Amount of Gain or (Loss) Recognized in AOCE (Net of Tax) on Derivative (Effective Portion) | ||||||||||||
Year Ended December 31, | ||||||||||||
(In thousands) | 2012 | 2011 | 2010 | |||||||||
Foreign currency borrowings | $ | — | $ | (11,596 | ) | $ | 42,236 | |||||
Total | $ | — | $ | (11,596 | ) | $ | 42,236 |
Location of Gain or (Loss) Recognized in Earnings on Derivatives | Amount of Gain or (Loss) Recognized in Earnings on Derivatives | ||||||||||||
Year Ended December 31, | |||||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||||
Foreign currency forward contracts | Other income (expense), net | $ | (8,429 | ) | $ | 20,740 | $ | (29,215 | ) | ||||
Cash conversion feature of Cash Convertible Notes | Other income (expense), net | (176,300 | ) | $ | 12,400 | $ | (61,800 | ) | |||||
Purchased cash convertible note hedge | Other income (expense), net | 176,300 | $ | (12,400 | ) | $ | 61,800 | ||||||
Total | $ | (8,429 | ) | $ | 20,740 | $ | (29,215 | ) |
Level 1: | Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. |
Level 2: | Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities. |
Level 3: | Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
December 31, 2012 | |||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial Assets | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 135,209 | $ | — | $ | — | $ | 135,209 | |||||||
Total cash equivalents | 135,209 | — | — | 135,209 | |||||||||||
Trading securities: | |||||||||||||||
Equity securities — exchange traded funds | 10,913 | — | — | 10,913 | |||||||||||
Total trading securities | 10,913 | — | — | 10,913 | |||||||||||
Available-for-sale fixed income investments: | |||||||||||||||
U.S. Treasuries | — | 11,085 | — | 11,085 | |||||||||||
Corporate bonds | — | 8,189 | — | 8,189 | |||||||||||
Agency mortgage-backed securities | — | 1,050 | — | 1,050 | |||||||||||
Other | — | 2,502 | — | 2,502 | |||||||||||
Total available-for-sale fixed income investments | — | 22,826 | — | 22,826 | |||||||||||
Available-for-sale equity securities: | |||||||||||||||
Biosciences industry | 102 | — | — | 102 | |||||||||||
Total available-for-sale equity securities | 102 | — | — | 102 | |||||||||||
Foreign exchange derivative assets | — | 5,818 | — | 5,818 | |||||||||||
Interest rate swap derivative assets | — | 36,647 | — | 36,647 | |||||||||||
Purchased cash convertible note hedge | — | 636,300 | — | 636,300 | |||||||||||
Total assets at fair value | $ | 146,224 | $ | 701,591 | $ | — | $ | 847,815 | |||||||
Financial Liabilities | |||||||||||||||
Foreign exchange derivative liabilities | $ | — | $ | 19,228 | $ | — | $ | 19,228 | |||||||
Interest rate swap derivative liabilities | — | 9,823 | — | 9,823 | |||||||||||
Cash conversion feature of Cash Convertible Notes | — | 636,300 | — | 636,300 | |||||||||||
Contingent consideration | — | — | 379,197 | 379,197 | |||||||||||
Total liabilities at fair value | $ | — | $ | 665,351 | $ | 379,197 | $ | 1,044,548 |
December 31, 2011 | |||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Financial Assets | |||||||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 152,331 | $ | — | $ | — | $ | 152,331 | |||||||
Total cash equivalents | 152,331 | — | — | 152,331 | |||||||||||
Trading securities: | |||||||||||||||
Equity securities — exchange traded funds | 6,760 | — | — | 6,760 | |||||||||||
Total trading securities | 6,760 | — | — | 6,760 | |||||||||||
Available-for-sale fixed income investments: | |||||||||||||||
U.S. Treasuries | — | 1,519 | — | 1,519 | |||||||||||
Corporate bonds | — | 7,192 | — | 7,192 | |||||||||||
Agency mortgage-backed securities | — | 12,346 | — | 12,346 | |||||||||||
Other | — | 2,697 | — | 2,697 | |||||||||||
Total available-for-sale fixed income investments | — | 23,754 | — | 23,754 | |||||||||||
Available-for-sale equity securities: | |||||||||||||||
Biosciences industry | 172 | — | — | 172 | |||||||||||
Total available-for-sale equity securities | 172 | — | — | 172 | |||||||||||
Foreign exchange derivative assets | — | 3,802 | — | 3,802 | |||||||||||
Interest rate swap derivative assets | — | 29,773 | — | 29,773 | |||||||||||
Purchased cash convertible note hedge | — | 460,000 | — | 460,000 | |||||||||||
Total assets at fair value | $ | 159,263 | $ | 517,329 | $ | — | $ | 676,592 | |||||||
Financial Liabilities | |||||||||||||||
Foreign exchange derivative liabilities | $ | — | $ | 68,835 | $ | — | $ | 68,835 | |||||||
Interest rate swap derivative liabilities | — | 658 | — | 658 | |||||||||||
Cash conversion feature of Cash Convertible Notes | — | 460,000 | — | 460,000 | |||||||||||
Contingent consideration | — | — | 341,000 | 341,000 | |||||||||||
Total liabilities at fair value | $ | — | $ | 529,493 | $ | 341,000 | $ | 870,493 |
• | Cash equivalents — valued at observable net asset value prices. |
• | Trading securities — valued at the active quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date. |
• | Available-for-sale fixed income investments — valued at the quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date. |
• | Available-for-sale equity securities — valued using quoted stock prices from the London Exchange at the reporting date and translated to U.S. Dollars at prevailing spot exchange rates. |
• | Interest rate swap derivative assets and liabilities — valued using the LIBOR/EURIBOR yield curves at the reporting date. Counterparties to these contracts are highly rated financial institutions, none of which experienced any significant downgrades during the year ended December 31, 2012 that would reduce the receivable amount owed, if any, to the Company. |
• | Foreign exchange derivative assets and liabilities — valued using quoted forward foreign exchange prices at the reporting date. Counterparties to these contracts are highly rated financial institutions, none of which experienced any significant downgrades during the year ended December 31, 2011 that would reduce the receivable amount owed, if any, to the Company. |
• | Cash conversion feature of cash convertible notes and purchased convertible note hedge — valued using quoted prices for the Company’s cash convertible notes, its implied volatility and the quoted yield on the Company’s other long-term debt at the reporting date. Counterparties to the purchased convertible note hedge are highly rated financial institutions, none of which experienced any significant downgrades during the year ended December 31, 2012 that would reduce the receivable amount owed, if any, to the Company. |
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||
December 31, 2012 | |||||||||||||||
Debt securities | $ | 21,276 | $ | 1,550 | $ | — | $ | 22,826 | |||||||
Equity securities | — | 102 | — | 102 | |||||||||||
$ | 21,276 | $ | 1,652 | $ | — | $ | 22,928 | ||||||||
December 31, 2011 | |||||||||||||||
Debt securities | $ | 22,263 | $ | 1,561 | $ | (70 | ) | $ | 23,754 | ||||||
Equity securities | — | 172 | — | 172 | |||||||||||
$ | 22,263 | $ | 1,733 | $ | (70 | ) | $ | 23,926 |
(In thousands) | |||
Mature within one year | $ | 4,555 | |
Mature in one to five years | 8,288 | ||
Mature in five years and later | 9,983 | ||
$ | 22,826 |
7. | Debt |
(In thousands) | December 31, 2012 | December 31, 2011 | |||||
U.S. Term Loans | $ | 1,156,250 | $ | 1,250,000 | |||
2017 Senior Notes | 550,000 | 550,000 | |||||
2018 Senior Notes | 826,974 | 818,774 | |||||
2020 Senior Notes | 1,013,372 | 1,014,643 | |||||
2023 Senior Notes | 748,452 | — | |||||
Cash Convertible Notes | 1,136,768 | 937,160 | |||||
Senior Convertible Notes | — | 593,983 | |||||
Other | 132 | 3,666 | |||||
5,431,948 | 5,168,226 | ||||||
Less: Current portion | 94,752 | 689,146 | |||||
Total long-term debt | $ | 5,337,196 | $ | 4,479,080 |
December 31, 2012 | ||||||||
(In thousands) | Outstanding | Basis | Rate | |||||
U.S. Term Loans: | ||||||||
Swapped to Fixed Rate - January 2014 (1) | $ | 500,000 | Fixed | 2.35 | % | |||
Swapped to Fixed Rate - March 2014 (1) | 350,000 | Fixed | 2.20 | % | ||||
Floating Rate | 306,250 | LIBOR + 1.75% | 1.96 | % | ||||
Total U.S. Term Loans | $ | 1,156,250 |
December 31, 2011 | ||||||||
(In thousands) | Outstanding | Basis | Rate | |||||
U.S. Term Loans | $ | 1,250,000 | LIBOR + 2.00% | 2.34 | % |
(1) | Effective January 2012, $500 million of the U.S. Term Loans have been swapped to a fixed rate of 0.60% plus the specified spread under the Senior Credit Agreement through January 2014. Effective March 2012, an additional $350 million of the U.S. Term Loans have been swapped to a fixed rate of 0.45% plus the specified spread under the Senior Credit Agreement through March 2014. Effective June 2012, $750 million of the currently effective swaps have been extended to maturities ranging from March 2016 to November 2016, thereby fixing a rate of 0.91% plus the specified spread on the underlying U.S. Term Loans, for the extension period. As of December 31, 2012, the specified spread under the Senior Credit Agreement was 175 basis points. These swaps have been designated as cash flow hedges of the variability in interest expense related to our variable rate debt. |
(In thousands) | U.S. Term Loans | Cash Convertible Notes | 2017 Senior Notes | 2018 Senior Notes | 2020 Senior Notes | 2023 Senior Notes | Total | ||||||||||||||||||||
2013 | $ | 93,750 | $ | 1,002 | $ | — | $ | — | $ | — | $ | — | $ | 94,752 | |||||||||||||
2014 | 125,000 | — | — | — | — | — | 125,000 | ||||||||||||||||||||
2015 | 187,500 | 573,998 | — | — | — | — | 761,498 | ||||||||||||||||||||
2016 | 750,000 | — | — | — | — | — | 750,000 | ||||||||||||||||||||
2017 | — | — | 550,000 | — | — | — | 550,000 | ||||||||||||||||||||
Thereafter | — | — | — | 800,000 | 1,000,000 | 750,000 | 2,550,000 | ||||||||||||||||||||
Total | $ | 1,156,250 | $ | 575,000 | $ | 550,000 | $ | 800,000 | $ | 1,000,000 | $ | 750,000 | $ | 4,831,250 |
8. | Comprehensive Earnings |
Year Ended December 31, | |||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||
Defined benefit plans: | |||||||||||
Unrecognized loss and prior service cost arising during the period | $ | (13,293 | ) | $ | (2,998 | ) | $ | (3,054 | ) | ||
Less: Actuarial loss included in net earnings | (2,009 | ) | (877 | ) | (563 | ) | |||||
Less: Amortization of prior service cost included in net earnings | (354 | ) | (106 | ) | (379 | ) | |||||
Net change in unrecognized loss and prior service cost related to defined benefit plans | $ | (10,930 | ) | $ | (2,015 | ) | $ | (2,112 | ) | ||
Derivatives in cash flow hedging relationships: | |||||||||||
Amount of gain (loss) recognized in AOCE on derivatives (effective portion) | $ | (28,116 | ) | $ | (70,273 | ) | $ | (4,288 | ) | ||
Less: Reclassification of loss from AOCE into earnings (effective portion) | (46,603 | ) | (21,211 | ) | (51,198 | ) | |||||
Net unrecognized gain (loss) on derivatives | $ | 18,487 | $ | (49,062 | ) | $ | 46,910 | ||||
Net unrealized (loss) gain on marketable securities: | |||||||||||
Unrealized (loss) gain on marketable securities | $ | (1 | ) | $ | 228 | $ | (127 | ) | |||
Less: Reclassification for gain (loss) included in net earnings | 71 | 178 | (204 | ) | |||||||
Net unrealized (loss) gain on marketable securities | $ | (72 | ) | $ | 50 | $ | 77 |
(In thousands) | December 31, 2012 | December 31, 2011 | |||||
Accumulated other comprehensive loss: | |||||||
Net unrealized gains on marketable securities, net of tax | $ | 1,033 | $ | 1,080 | |||
Net unrecognized losses and prior service costs related to defined benefit plans, net of tax | (13,890 | ) | (5,840 | ) | |||
Net unrecognized losses on derivatives, net of tax | (30,820 | ) | (43,719 | ) | |||
Foreign currency translation adjustment | (42,821 | ) | (39,360 | ) | |||
$ | (86,498 | ) | $ | (87,839 | ) |
9. | Income Taxes |
Year Ended December 31, | |||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||
Federal: | |||||||||||
Current | $ | 167,172 | $ | 96,725 | $ | (72,518 | ) | ||||
Deferred | (30,111 | ) | 28,138 | 82,471 | |||||||
137,061 | 124,863 | 9,953 | |||||||||
State and Puerto Rico: | |||||||||||
Current | 27,805 | 8,111 | 4,295 | ||||||||
Deferred | (8,151 | ) | 1,819 | (3,629 | ) | ||||||
19,654 | 9,930 | 666 | |||||||||
Foreign: | |||||||||||
Current | 75,431 | 68,605 | 67,338 | ||||||||
Deferred | (71,001 | ) | (87,565 | ) | (67,555 | ) | |||||
4,430 | (18,960 | ) | (217 | ) | |||||||
Income tax provision | $ | 161,145 | $ | 115,833 | $ | 10,402 | |||||
Earnings (loss) before income taxes and noncontrolling interest: | |||||||||||
Domestic | $ | 690,545 | $ | 537,009 | $ | (273,699 | ) | ||||
Foreign | 113,534 | 117,627 | 629,643 | ||||||||
Total earnings before income taxes and noncontrolling interest | $ | 804,079 | $ | 654,636 | $ | 355,944 |
(In thousands) | December 31, 2012 | December 31, 2011 | |||||
Deferred tax assets: | |||||||
Employee benefits | $ | 119,434 | $ | 92,983 | |||
Legal matters | 30,683 | 68,398 | |||||
Accounts receivable allowances | 120,718 | 101,342 | |||||
Inventories | 31,791 | 30,004 | |||||
Other reserves | 15,882 | 28,230 | |||||
Tax credits | 14,676 | 17,707 | |||||
Net operating losses carryforward | 293,251 | 258,482 | |||||
Intangible assets | 62,584 | 49,151 | |||||
Capital loss carryforward | 18,645 | 19,324 | |||||
Convertible debt | 40,549 | 30,072 | |||||
Other | 82,201 | 133,959 | |||||
830,414 | 829,652 | ||||||
Less: Valuation allowance | (249,382 | ) | (231,436 | ) | |||
Total deferred tax assets | 581,032 | 598,216 | |||||
Deferred tax liabilities: | |||||||
Plant and equipment | 103,222 | 110,392 | |||||
Intangibles | 371,880 | 514,203 | |||||
Other | 64,469 | 41,476 | |||||
Total deferred tax liabilities | 539,571 | 666,071 | |||||
Deferred tax assets (liabilities), net | $ | 41,461 | $ | (67,855 | ) |
Year Ended December 31, | ||||||||
2012 | 2011 | 2010 | ||||||
Statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes and credits | 1.1 | % | 1.1 | % | (0.3 | )% | ||
Foreign rate differential | (7.5 | )% | (13.1 | )% | (18.2 | )% | ||
Other foreign items | (2.0 | )% | 2.6 | % | (0.6 | )% | ||
Uncertain tax positions | (3.4 | )% | (4.5 | )% | (13.1 | )% | ||
Foreign tax credits, net | (3.2 | )% | (5.7 | )% | (6.0 | )% | ||
Valuation allowance | 2.9 | % | (0.2 | )% | 9.1 | % | ||
Other | (2.9 | )% | 2.5 | % | (3.0 | )% | ||
Effective tax rate | 20.0 | % | 17.7 | % | 2.9 | % |
Year Ended December 31, | |||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||
Unrecognized tax benefit — beginning of year | $ | 162,885 | $ | 203,350 | $ | 237,541 | |||||
Additions for current year tax positions | 5,684 | 964 | 5,166 | ||||||||
Additions for prior year tax positions | — | 5,048 | 5,079 | ||||||||
Reductions for prior year tax positions | (5,849 | ) | (7,878 | ) | (11,432 | ) | |||||
Settlements | (764 | ) | (7,434 | ) | (24,868 | ) | |||||
Reductions due to expirations of statute of limitations | (29,620 | ) | (22,293 | ) | (21,508 | ) | |||||
Foreign currency translation | — | (8,872 | ) | 8,872 | |||||||
Addition due to acquisition | — | — | 4,500 | ||||||||
Unrecognized tax benefit — end of year | $ | 132,336 | $ | 162,885 | $ | 203,350 |
10. | Preferred and Common Stock |
11. | Stock-Based Incentive Plan |
Number of Shares Under Option | Weighted Average Exercise Price per Share | |||||
Outstanding at December 31, 2009 | 26,268,678 | $ | 15.22 | |||
Options granted | 2,575,039 | 20.47 | ||||
Options exercised | (3,900,514 | ) | 14.03 | |||
Options forfeited | (1,103,154 | ) | 15.09 | |||
Outstanding at December 31, 2010 | 23,840,049 | $ | 15.99 | |||
Options granted | 4,943,178 | 22.40 | ||||
Options exercised | (4,514,170 | ) | 15.09 | |||
Options forfeited | (669,801 | ) | 19.05 | |||
Outstanding at December 31, 2011 | 23,599,256 | $ | 17.42 | |||
Options granted | 3,130,843 | 23.37 | ||||
Options exercised | (9,360,396 | ) | 15.40 | |||
Options forfeited | (753,086 | ) | 20.24 | |||
Outstanding at December 31, 2012 | 16,616,617 | $ | 19.54 | |||
Vested and expected to vest at December 31, 2012 | 15,605,011 | $ | 19.40 | |||
Options exercisable at December 31, 2012 | 9,372,970 | $ | 17.57 |
Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value Per Share | |||||
Nonvested at December 31, 2011 | 2,520,487 | $ | 20.16 | |||
Granted | 936,512 | 23.27 | ||||
Released | (794,748 | ) | 16.15 | |||
Forfeited | (163,935 | ) | 22.23 | |||
Nonvested at December 31, 2012 | 2,498,316 | $ | 22.47 |
Year Ended | Year Ended | Year Ended | |||
December 31, 2012 | December 31, 2011 | December 31, 2010 | |||
Volatility | 29.7% | 33.0% | 30.8% | ||
Risk-free interest rate | 1.0% | 2.4% | 2.5% | ||
Expected term of options (in years) | 5.9 | 6.0 | 5.7 | ||
Forfeiture rate | 5.5% | 5.5% | 5.5% | ||
Weighted average grant date fair value per option | $7.00 | $8.13 | $6.89 |
12. | Employee Benefits |
13. | Segment Information |
(In thousands) | Generics Segment | Specialty Segment | Corporate / Other(1) | Consolidated | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||
Total revenues | |||||||||||||||
Third party | $ | 5,946,203 | $ | 849,907 | $ | — | $ | 6,796,110 | |||||||
Intersegment | 3,088 | 36,991 | (40,079 | ) | — | ||||||||||
Total | $ | 5,949,291 | $ | 886,898 | $ | (40,079 | ) | $ | 6,796,110 | ||||||
Segment profitability | $ | 1,706,783 | $ | 319,243 | $ | (916,677 | ) | $ | 1,109,349 |
(In thousands) | Generics Segment | Specialty Segment | Corporate / Other(1) | Consolidated | |||||||||||
Year Ended December 31, 2011 | |||||||||||||||
Total revenues | |||||||||||||||
Third party | $ | 5,544,975 | $ | 584,850 | $ | — | $ | 6,129,825 | |||||||
Intersegment | 2,480 | 70,005 | (72,485 | ) | — | ||||||||||
Total | $ | 5,547,455 | $ | 654,855 | $ | (72,485 | ) | $ | 6,129,825 | ||||||
Segment profitability | $ | 1,607,910 | $ | 240,440 | $ | (842,901 | ) | $ | 1,005,449 |
(In thousands) | Generics Segment | Specialty Segment | Corporate / Other(1) | Consolidated | |||||||||||
Year Ended December 31, 2010 | |||||||||||||||
Total revenues | |||||||||||||||
Third party | $ | 5,012,422 | $ | 438,100 | $ | — | $ | 5,450,522 | |||||||
Intersegment | 40,116 | 61,772 | (101,888 | ) | — | ||||||||||
Total | $ | 5,052,538 | $ | 499,872 | $ | (101,888 | ) | $ | 5,450,522 | ||||||
Segment profitability | $ | 1,388,736 | $ | 132,222 | $ | (799,374 | ) | $ | 721,584 |
(1) | Includes certain corporate general and administrative and research and development expenses; net charges for litigation settlements; certain intercompany transactions, including eliminations; amortization of intangible assets and certain purchase accounting items; impairment charges; and other expenses not directly attributable to segments. |
Year Ended December 31, | |||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||
Allergy | $ | 741,487 | $ | 476,990 | $ | 343,138 | |||||
Anti-infectives | 1,034,332 | 1,005,278 | 783,738 | ||||||||
Cardiovascular | 1,156,348 | 1,037,644 | 967,680 | ||||||||
Central Nervous System | 1,473,928 | 1,214,046 | 1,248,982 | ||||||||
Dermatological | 157,296 | 143,769 | 166,200 | ||||||||
Endocrine and Metabolic | 645,936 | 535,383 | 433,341 | ||||||||
Gastrointestinal | 418,934 | 492,683 | 462,088 | ||||||||
Respiratory System | 229,249 | 250,692 | 248,452 | ||||||||
Other (1) | 892,736 | 949,792 | 750,647 | ||||||||
$ | 6,750,246 | $ | 6,106,277 | $ | 5,404,266 |
(1) | Other consists of numerous therapeutic classes, none of which individually exceeds 5% of consolidated net revenues. |
Year Ended December 31, | |||||||||||
(In thousands) | 2012 | 2011 | 2010 | ||||||||
The Americas: | |||||||||||
United States | $ | 3,909,518 | $ | 3,242,985 | $ | 2,656,532 | |||||
Other Americas | 221,898 | 226,144 | 188,659 | ||||||||
Europe (1) | 1,694,236 | 1,781,184 | 1,790,901 | ||||||||
Asia | 924,594 | 855,964 | 768,174 | ||||||||
$ | 6,750,246 | $ | 6,106,277 | $ | 5,404,266 |
(1) | Net revenues in France consisted of approximately 9%, 11% and 13% of consolidated net revenues for the years ended December 31, 2012, 2011 and 2010, respectively. |
14. | Commitments |
(In thousands) | |||
December 31, | |||
2013 | $ | 38,720 | |
2014 | 31,695 | ||
2015 | 20,361 | ||
2016 | 10,986 | ||
2017 | 2,301 | ||
Thereafter | 11,211 | ||
$ | 115,274 |
15. | Contingencies |
16. | Subsequent Events |
Three-Month Period Ended | |||||||||||||||
March 31, 2012 | June 30, 2012(2) | September 30, 2012 | December 31, 2012 | ||||||||||||
Total revenues | $ | 1,583,655 | $ | 1,687,814 | $ | 1,801,786 | $ | 1,722,854 | |||||||
Gross profit | 670,229 | 702,637 | 793,122 | 742,316 | |||||||||||
Net earnings | 129,469 | 139,173 | 212,086 | 162,160 | |||||||||||
Net earnings attributable to Mylan Inc. common shareholders | 129,079 | 138,550 | 211,257 | 161,964 | |||||||||||
Earnings per share(3) : | |||||||||||||||
Basic | $ | 0.30 | $ | 0.33 | $ | 0.52 | $ | 0.40 | |||||||
Diluted | $ | 0.30 | $ | 0.33 | $ | 0.51 | $ | 0.39 | |||||||
Share prices(4): | |||||||||||||||
High | $ | 23.69 | $ | 23.54 | $ | 24.55 | $ | 28.30 | |||||||
Low | $ | 20.75 | $ | 20.64 | $ | 21.54 | $ | 23.44 |
Three-Month Period Ended | |||||||||||||||
March 31, 2011(5) | June 30, 2011 | September 30, 2011 | December 31, 2011(5) | ||||||||||||
Total revenues | $ | 1,448,958 | $ | 1,573,877 | $ | 1,575,756 | $ | 1,531,234 | |||||||
Gross profit | 590,946 | 669,429 | 658,391 | 644,598 | |||||||||||
Net earnings | 104,545 | 146,986 | 157,378 | 129,894 | |||||||||||
Net earnings attributable to Mylan Inc. common shareholders | 104,175 | 146,446 | 156,698 | 129,491 | |||||||||||
Earnings per share(3): | |||||||||||||||
Basic | $ | 0.24 | $ | 0.34 | $ | 0.37 | $ | 0.30 | |||||||
Diluted | $ | 0.23 | $ | 0.33 | $ | 0.36 | $ | 0.30 | |||||||
Share prices(4): | |||||||||||||||
High | $ | 23.83 | $ | 25.23 | $ | 24.97 | $ | 21.83 | |||||||
Low | $ | 21.14 | $ | 22.04 | $ | 16.99 | $ | 16.16 |
(1) | Certain insignificant amounts of revenue and gross profit previously included in the quarterly financial results for the first through third quarters of 2012 have been reclassified to other income (expense), net, as losses from an equity method affiliate. Accordingly, the unaudited quarterly financial data for the first through third quarters of 2012 has been revised with no impact on previously reported net earnings attributable to Mylan Inc. common shareholders. The revision had no impact on the 2011 Quarterly Financial Data. |
(2) | The results for the three months ended June 30, 2012 include $12.2 million of net earnings from litigation settlements. |
(3) | The sum of earnings per share for the quarters may not equal earnings per share for the total year due to changes in the average number of common shares outstanding. |
(4) | Closing prices are as reported on the NASDAQ Stock Market. |
(5) | The results for the three months ended March 31, 2011 and December 31, 2011 include $24.0 million and $20.1 million, respectively, of net charges related to litigation. |
Description | Beginning Balance | Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | Deductions | Ending Balance | ||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||||
Year ended December 31, 2012 | $ | 18,925 | $ | 7,921 | $ | 95 | $ | (3,904 | ) | $ | 23,037 | ||||||||
Year ended December 31, 2011 | $ | 23,900 | $ | 3,983 | $ | 370 | $ | (9,328 | ) | $ | 18,925 | ||||||||
Year ended December 31, 2010 | $ | 22,507 | $ | 3,505 | $ | 3,120 | $ | (5,232 | ) | $ | 23,900 | ||||||||
Valuation allowance for deferred tax assets: | |||||||||||||||||||
Year ended December 31, 2012 | $ | 231,436 | $ | 23,996 | $ | — | $ | (6,050 | ) | $ | 249,382 | ||||||||
Year ended December 31, 2011 | $ | 232,147 | $ | 14,845 | $ | — | $ | (15,556 | ) | $ | 231,436 | ||||||||
Year ended December 31, 2010 | $ | 166,083 | $ | 66,064 | $ | — | $ | — | $ | 232,147 |
Supplementary Financial Information (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data | Year Ended December 31, 2012(1)
Year Ended December 31, 2011
|
Financial Instruments And Risk Management (Narrative) (Details)
|
12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
USD ($)
|
Dec. 31, 2011
USD ($)
|
Dec. 31, 2010
USD ($)
|
Dec. 31, 2010
EUR (€)
|
Dec. 31, 2012
Purchased cash convertible note hedge
USD ($)
|
Dec. 31, 2012
Derivative instrument contracts with credit-risk-related contingent features
USD ($)
|
Dec. 31, 2012
Net Investment Hedging
USD ($)
|
Dec. 31, 2011
Net Investment Hedging
USD ($)
|
Dec. 31, 2010
Net Investment Hedging
USD ($)
|
Dec. 31, 2012
Interest rate swaps
Floating rate debt
USD ($)
|
Dec. 31, 2011
Interest rate swaps
Floating rate debt
USD ($)
|
Jun. 19, 2012
Interest rate swaps
Floating rate debt
Swapped To Fixed Rate 2016
USD ($)
|
Dec. 31, 2012
Interest rate swaps
Fixed rate debt
USD ($)
|
Dec. 31, 2012
Contingent consideration
Minimum
|
Dec. 31, 2012
Contingent consideration
Maximum
|
Dec. 31, 2012
Change During Period, Fair Value Disclosure
USD ($)
|
Dec. 31, 2012
Payment
USD ($)
|
|
Derivative [Line Items] | |||||||||||||||||
Notional amount of derivative instruments designated as net investment hedges | $ 909,300,000 | € 679,200,000 | |||||||||||||||
Notional amount of interest rate cash flow hedge derivatives | 850,000,000 | 500,000,000 | 750,000,000 | ||||||||||||||
Notional amount of interest rate fair value hedge derivatives | 500,000,000 | ||||||||||||||||
Interest rate cash flow hedge gain (loss) reclassified to earnings, net | 13,900,000 | ||||||||||||||||
Aggregate fair value of derivative contracts | 26,800,000 | ||||||||||||||||
Fair value of convertible note hedge | 636,300,000 | ||||||||||||||||
Pre-tax net losses on cash flow hedges to be reclassified from AOCE into earnings in next twelve months | 32,000,000 | ||||||||||||||||
Amount of gain recognized in earnings on derivatives | 0 | 0 | 0 | ||||||||||||||
Rate used to discount net cash inflows to present values | 1.60% | 10.50% | |||||||||||||||
Accretion expense | 30,700,000 | ||||||||||||||||
Adjustment to contingent consideration liability | $ 8,000,000 | $ (500,000) |
Balance Sheet Components (Property, Plant and Equipment) (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,484,011 | $ 2,371,084 |
Less accumulated depreciation | 1,086,795 | 1,073,050 |
Total property, plant and equipment, net | 1,397,216 | 1,298,034 |
Land and improvements
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 73,857 | 72,945 |
Buildings and improvements
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 665,058 | 676,028 |
Machinery and equipment
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,436,904 | 1,358,163 |
Construction in progress
|
||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 308,192 | $ 263,948 |
Debt (Senior Convertible Notes) (Narrative) (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Mar. 31, 2007
|
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term debt | $ 5,431,948,000 | $ 5,168,226,000 | |
Convertible Debt | Senior Convertible Notes
|
|||
Debt Instrument [Line Items] | |||
Face value | 600,000,000 | ||
Stated interest rate | 1.25% | ||
Long-term debt | 0 | 593,983,000 | |
Discount on debt | $ 6,000,000 | ||
Effective interest rate | 6.40% |
Financial Instruments And Risk Management (Derivatives Designated As Hedging Instruments Fair Values Of Derivative Instruments) (Details) (Designated as Hedging Instrument, USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | $ 36,647 | $ 29,773 |
Liability Derivatives, Fair Value | 25,686 | 57,733 |
Interest rate swaps | Prepaid expenses and other current assets
|
||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | 36,647 | 29,773 |
Interest rate swaps | Other current liabilities
|
||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | 9,823 | 658 |
Foreign currency forward contracts | Other current liabilities
|
||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | $ 15,863 | $ 57,075 |
Income Taxes (Statutory Tax Rate to Effective Tax Rate Reconciliation) (Details)
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 35.00% | 35.00% | 35.00% |
State income taxes and credits | 1.10% | 1.10% | (0.30%) |
Foreign rate differential | (7.50%) | (13.10%) | (18.20%) |
Other foreign items | (2.00%) | 2.60% | (0.60%) |
Uncertain tax positions | (3.40%) | (4.50%) | (13.10%) |
Foreign tax credits, net | (3.20%) | (5.70%) | (6.00%) |
Valuation allowance | 2.90% | (0.20%) | 9.10% |
Other | (2.90%) | 2.50% | (3.00%) |
Effective tax rate | 20.00% | 17.70% | 2.90% |
Balance Sheet Components (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Contingent consideration, value | $ 379.2 | $ 341.0 |
Debt (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Long-Term Debt | A summary of long-term debt is as follows:
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Interest Rates On Outstanding Borrowings Under Term Loans | Details of the interest rates in effect at December 31, 2012 and 2011 on the outstanding borrowings under the term loans are in the table below:
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Minimum Repayments On Outstanding Borrowings | Mandatory minimum repayments remaining on the outstanding borrowings under the term loans and notes at December 31, 2012, excluding the discounts, premium and conversion features, are as follows for each of the periods ending December 31:
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Income Taxes (Schedule of Unrecognized Tax Benefits) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Dec. 31, 2009
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Income Tax Disclosure [Abstract] | ||||
Unrecognized tax benefit — beginning of year | $ 132,336 | $ 162,885 | $ 203,350 | $ 237,541 |
Additions for current year tax positions | 5,684 | 964 | 5,166 | |
Additions for prior year tax positions | 0 | 5,048 | 5,079 | |
Reductions for prior year tax positions | (5,849) | (7,878) | (11,432) | |
Settlements | (764) | (7,434) | (24,868) | |
Reductions due to expirations of statute of limitations | (29,620) | (22,293) | (21,508) | |
Foreign currency translation | 0 | (8,872) | 8,872 | |
Addition due to acquisition | $ 0 | $ 0 | $ 4,500 |
Segment Information (Net Revenues Classified Based On Geographic Location Of Customers) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Net revenues | $ 6,750,246 | $ 6,106,277 | $ 5,404,266 | |||||
United States
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Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Net revenues | 3,909,518 | 3,242,985 | 2,656,532 | |||||
Other Americas
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Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Net revenues | 221,898 | 226,144 | 188,659 | |||||
Europe
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Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Net revenues | 1,694,236 | [1] | 1,781,184 | [1] | 1,790,901 | [1] | ||
Asia
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Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Net revenues | $ 924,594 | $ 855,964 | $ 768,174 | |||||
Net Revenues | France
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Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Concentration risk, percentage | 9.00% | 11.00% | 13.00% | |||||
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Financial Instruments And Risk Management (Effect Of Derivative Instruments On The Condensed Consolidated Statements Of Operations Derivatives In Fair Value Hedging Relationships) (Details) (Fair Value Hedging Relationships, USD $)
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12 Months Ended | ||
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain Recognized in Earnings on Derivatives | $ 19,562,000 | $ 42,648,000 | $ 0 |
Amount of Loss Recognized in Earnings on Hedging Items | (6,873,000) | (29,773,000) | 0 |
Interest rate swaps | Interest expense
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Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain Recognized in Earnings on Derivatives | 19,562,000 | 42,648,000 | 0 |
2018 Senior Notes | Interest expense
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Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Loss Recognized in Earnings on Hedging Items | $ (6,873,000) | $ (29,773,000) | $ 0 |
Segment Information (Narrative) (Details)
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12 Months Ended |
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Dec. 31, 2012
segments
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Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Segment Information (Reconciliation Of Segment Information To Total Consolidated Information) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Segment Reporting Information [Line Items] | ||||||||
Third party | $ 6,796,110 | $ 6,129,825 | $ 5,450,522 | |||||
Intersegment | 0 | 0 | 0 | |||||
Total | 6,796,110 | 6,129,825 | 5,450,522 | |||||
Segment profitability | 1,109,349 | 1,005,449 | 721,584 | |||||
Generics Segment
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Segment Reporting Information [Line Items] | ||||||||
Third party | 5,946,203 | 5,544,975 | 5,012,422 | |||||
Intersegment | 3,088 | 2,480 | 40,116 | |||||
Total | 5,949,291 | 5,547,455 | 5,052,538 | |||||
Segment profitability | 1,706,783 | 1,607,910 | 1,388,736 | |||||
Specialty Segment
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Segment Reporting Information [Line Items] | ||||||||
Third party | 849,907 | 584,850 | 438,100 | |||||
Intersegment | 36,991 | 70,005 | 61,772 | |||||
Total | 886,898 | 654,855 | 499,872 | |||||
Segment profitability | 319,243 | 240,440 | 132,222 | |||||
Corporate / Other
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Segment Reporting Information [Line Items] | ||||||||
Third party | 0 | [1] | 0 | [1] | 0 | [1] | ||
Intersegment | (40,079) | [1] | (72,485) | [1] | (101,888) | [1] | ||
Total | (40,079) | [1] | (72,485) | [1] | (101,888) | [1] | ||
Segment profitability | $ (916,677) | [1] | $ (842,901) | [1] | $ (799,374) | [1] | ||
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Debt (Fair Value) (Narrative) (Details) (USD $)
In Billions, unless otherwise specified |
Dec. 31, 2012
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Dec. 31, 2011
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Senior Notes
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Debt Instrument [Line Items] | ||
Fair value of long-term debt | $ 3.43 | |
Senior And Senior Convertible Notes | Convertible Debt
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Debt Instrument [Line Items] | ||
Fair value of long-term debt | 3.15 | |
Convertible Notes Payable | Convertible Debt
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Debt Instrument [Line Items] | ||
Fair value of long-term debt | $ 1.22 | $ 1.00 |
Valuation And Qualifying Accounts Valuation And Qualifying Accounts
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II - Valuation and Qualifying Accounts | MYLAN INC. AND SUBSIDIARIES SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS (In thousands)
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Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)
In Millions, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Business Acquisition [Line Items] | |||
Amortization expense | $ 386.4 | $ 357.8 | $ 290.3 |
Expected amortization expense, 2013 | 353 | ||
Expected amortization expense, 2014 | 345 | ||
Expected amortization expense, 2015 | 321 | ||
Expected amortization expense, 2016 | 227 | ||
Expected amortization expense, 2017 | 200 | ||
Acquired IPR&D assets reclassified to product rights and licenses | 33.0 | ||
Bioniche Pharma Holdings Limited
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Business Acquisition [Line Items] | |||
Impairment charge, IPR&D | 41.6 | 16.2 | |
Product rights and licenses
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Business Acquisition [Line Items] | |||
Payment to acquire intangible assets | $ 70.0 | ||
In-process research and development
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Business Acquisition [Line Items] | |||
Discount rate used in valuation of IPR&D | 10.00% | 10.00% | |
Dermatological | Product rights and licenses
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Business Acquisition [Line Items] | |||
Number of products acquired | 2 |
Summary Of Significant Accounting Policies (Basic And Diluted Earnings Per Common Share Attributable To Mylan Inc.) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 12 Months Ended | |||||||||
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Dec. 31, 2012
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Sep. 30, 2012
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Jun. 30, 2012
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Mar. 31, 2012
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Dec. 31, 2011
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Sep. 30, 2011
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Jun. 30, 2011
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Mar. 31, 2011
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items] | |||||||||||
Net earnings attributable to Mylan Inc. before preferred dividends | $ 640,850 | $ 536,810 | $ 345,115 | ||||||||
Preferred dividends | 0 | 0 | 121,535 | ||||||||
Net earnings attributable to Mylan Inc. common shareholders | $ 161,964 | $ 211,257 | $ 138,550 | $ 129,079 | $ 129,491 | $ 156,698 | $ 146,446 | $ 104,175 | $ 640,850 | $ 536,810 | $ 223,580 |
Weighted average common shares outstanding | 415,210 | 430,839 | 324,453 | ||||||||
Basic earnings per common share attributable to Mylan Inc. common shareholders | $ 0.40 | $ 0.52 | $ 0.33 | $ 0.30 | $ 0.30 | $ 0.37 | $ 0.34 | $ 0.24 | $ 1.54 | $ 1.25 | $ 0.69 |
Weighted average number diluted shares outstanding adjustment, stock-based awards and warrants | 5,026 | 7,946 | 4,526 | ||||||||
Total dilutive shares outstanding | 420,236 | 438,785 | 328,979 | ||||||||
Diluted earnings per common share attributable to Mylan Inc. | $ 0.39 | $ 0.51 | $ 0.33 | $ 0.30 | $ 0.30 | $ 0.36 | $ 0.33 | $ 0.23 | $ 1.52 | $ 1.22 | $ 0.68 |
Segment Information (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Segment Information To Total Consolidated Information | Presented in the table below is segment information for the periods identified and a reconciliation of segment information to total consolidated information.
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Net Revenues Classified Based On Therapeutic Product Categories | The Company’s net revenues are generated via the sale of products in the following therapeutic categories:
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Net Revenues Classified Based On Geographic Location Of Customers | The Company’s principal geographic markets are North America, EMEA, and Asia Pacific. Net revenues are classified based on the geographic location of the customers and are as follows:
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Goodwill And Other Intangible Assets (Components Of Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
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Dec. 31, 2012
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Dec. 31, 2011
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Intangible Assets Excluding Goodwill [Line Items] | ||||||||
Original Cost | $ 3,687,644 | $ 3,681,557 | ||||||
Accumulated Amortization | 1,889,096 | 1,546,911 | ||||||
Net Book Value | 1,798,548 | 2,134,646 | ||||||
IPR&D | 425,909 | [1] | 496,101 | [1] | ||||
Original Cost, Total intangible assets | 4,113,553 | 4,177,658 | ||||||
Net Book Value, Total intangible assets | 2,224,457 | 2,630,747 | ||||||
Patents and technologies
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Intangible Assets Excluding Goodwill [Line Items] | ||||||||
Weighted Average Life (Years) | 20 years | 20 years | ||||||
Original Cost | 116,631 | 116,631 | ||||||
Accumulated Amortization | 88,288 | 82,815 | ||||||
Net Book Value | 28,343 | 33,816 | ||||||
Product rights and licenses
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Intangible Assets Excluding Goodwill [Line Items] | ||||||||
Weighted Average Life (Years) | 10 years | 10 years | ||||||
Original Cost | 3,459,980 | 3,364,263 | ||||||
Accumulated Amortization | 1,749,424 | 1,418,492 | ||||||
Net Book Value | 1,710,556 | 1,945,771 | ||||||
Other
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Intangible Assets Excluding Goodwill [Line Items] | ||||||||
Weighted Average Life (Years) | 8 years | 8 years | ||||||
Original Cost | 111,033 | [2] | 200,663 | [2] | ||||
Accumulated Amortization | 51,384 | [2] | 45,604 | [2] | ||||
Net Book Value | $ 59,649 | [2] | $ 155,059 | [2] | ||||
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Debt (Interest Rates On Outstanding Borrowings Under Term Loans) (Details) (USD $)
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12 Months Ended | 12 Months Ended | |||||||||||||||||
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2011
Loans Payable
U.S. Term Loans
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Dec. 31, 2012
Loans Payable
U.S. Term Loans
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Nov. 14, 2011
Loans Payable
U.S. Term Loans
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Dec. 31, 2012
Swapped To Fixed Rate Through January 2014
U.S. Term Loans
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Jan. 17, 2012
Swapped To Fixed Rate Through January 2014
U.S. Term Loans
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Dec. 31, 2012
Swapped To Fixed Rate Through March 2014
U.S. Term Loans
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Mar. 19, 2012
Swapped To Fixed Rate Through March 2014
U.S. Term Loans
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Dec. 31, 2012
Swapped to Fixed Rate 2016
U.S. Term Loans
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Jun. 19, 2012
Swapped to Fixed Rate 2016
U.S. Term Loans
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Dec. 31, 2012
Floating Rate
U.S. Term Loans
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Dec. 31, 2012
Interest rate swaps
Floating Rate
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Dec. 31, 2011
Interest rate swaps
Floating Rate
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Jun. 19, 2012
Interest rate swaps
Swapped to Fixed Rate 2016
Floating Rate
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Debt Instrument [Line Items] | |||||||||||||||||||
Description of variable rate basis | LIBOR + 2.00% | LIBOR + 1.75% | |||||||||||||||||
Debt instrument, interest rate at period end | 2.34% | 2.35% | [1] | 2.20% | [1] | 1.96% | |||||||||||||
Long-term debt | $ 5,431,948,000 | $ 5,168,226,000 | $ 1,250,000,000 | $ 1,156,250,000 | $ 1,250,000,000 | $ 500,000,000 | [1] | $ 500,000,000 | $ 350,000,000 | [1] | $ 350,000,000 | $ 306,250,000 | |||||||
Derivative, fixed interest rate | 0.60% | 0.45% | 0.91% | ||||||||||||||||
Notional amount of interest rate cash flow hedge derivatives | $ 850,000,000 | $ 500,000,000 | $ 750,000,000 | ||||||||||||||||
Debt instrument, basis spread on fixed rate | 1.75% | 1.75% | 1.75% | ||||||||||||||||
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Balance Sheet Components (Inventories) (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
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Dec. 31, 2011
|
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Inventories [Line Items] | ||
Raw materials | $ 455,958 | $ 370,423 |
Work in process | 268,191 | 253,492 |
Finished goods | 801,093 | 772,827 |
Inventories | $ 1,525,242 | $ 1,396,742 |
Summary Of Significant Accounting Policies
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Dec. 31, 2012
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation. The Consolidated Financial Statements include the accounts of Mylan Inc. and those of its wholly owned and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Investments in equity method affiliates are recorded at cost and adjusted for the Company’s share of the affiliates’ cumulative results of operations, capital contributions and distributions. Noncontrolling interests in the Company’s subsidiaries are recorded net of tax as net earnings attributable to noncontrolling interests. Certain comparative figures have been reclassified to conform to the current year presentation. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America (“GAAP”), requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the uncertainty inherent in such estimates, actual results could differ from those estimates. Foreign Currencies. The Consolidated Financial Statements are presented in U.S. Dollars, the reporting currency of Mylan. Statements of Operations and Cash Flows of all of the Company’s subsidiaries that have functional currencies other than U.S. Dollars are translated at a weighted average exchange rate for the period for inclusion in the Consolidated Statements of Operations and Cash Flows, whereas assets and liabilities are translated at the end of the period exchange rates for inclusion in the Consolidated Balance Sheets. Translation differences are recorded directly in shareholders’ equity as foreign currency translation adjustments. Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency, which arise as a result of changes in foreign currency exchange rates, are recorded in the Consolidated Statements of Operations. Cash and Cash Equivalents. Cash and cash equivalents are comprised of highly liquid investments with an original maturity of three months or less at the date of purchase. Marketable Securities. Marketable equity and debt securities classified as available-for-sale are recorded at fair value, with net unrealized gains and losses, net of income taxes, reflected in accumulated other comprehensive loss as a component of shareholders’ equity. Net realized gains and losses on sales of available-for-sale securities are computed on a specific security basis and are included in other income (expense), net, in the Consolidated Statements of Operations. Marketable equity and debt securities classified as trading securities are valued at the quoted market price from broker or dealer quotations or transparent pricing sources at the reporting date, and realized and unrealized gains and losses are included in other income (expense), net, in the Consolidated Statements of Operations. Concentrations of Credit Risk. Financial instruments that potentially subject the Company to credit risk consist principally of interest-bearing investments, derivatives and accounts receivable. Mylan invests its excess cash in high-quality, liquid money market instruments, principally overnight deposits and highly rated money market funds. The Company maintains deposit balances at certain financial institutions in excess of federally insured amounts. Periodically, the Company reviews the creditworthiness of its counterparties to derivative transactions, and it does not expect to incur a loss from failure of any counterparties to perform under agreements it has with such counterparties. Mylan performs ongoing credit evaluations of its customers and generally does not require collateral. Approximately 38% and 40% of the accounts receivable balances represent amounts due from three customers at December 31, 2012 and December 31, 2011, respectively. Total allowances for doubtful accounts were $23.0 million and $18.9 million at December 31, 2012 and December 31, 2011, respectively. Inventories. Inventories are stated at the lower of cost or market, with cost determined by the first-in, first-out method. Provisions for potentially obsolete or slow-moving inventory, including pre-launch inventory, are made based on our analysis of inventory levels, historical obsolescence and future sales forecasts. Property, Plant and Equipment. Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed and recorded on a straight-line basis over the assets’ estimated service lives (three to 18 years for machinery and equipment and other fixed assets and 15 to 39 years for buildings and improvements). The Company periodically reviews the original estimated useful lives of assets and makes adjustments when appropriate. Depreciation expense was approximately $160.2 million, $152.8 million and $132.5 million for the years ended December 31, 2012, 2011 and 2010, respectively. Intangible Assets and Goodwill. Intangible assets are stated at cost less accumulated amortization. Amortization is generally recorded on a straight-line basis over estimated useful lives ranging from five to 20 years. The Company periodically reviews the original estimated useful lives of intangible assets and makes adjustments when events indicate that a shorter life is appropriate. The Company accounts for acquired businesses using the purchase method of accounting, which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values. The cost to acquire a business is allocated to the underlying net assets of the acquired business in proportion to their respective fair values. Amounts allocated to acquired in-process research and development (“IPR&D”) are capitalized at the date of an acquisition and, at the time, such IPR&D assets have indefinite lives. As products in development are approved for sale, amounts will be allocated to product rights and licenses and will be amortized over their estimated useful lives. Definite-lived intangible assets are amortized over the expected life of the asset. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. We review goodwill for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable based on management's assessment of the fair value of the Company's reporting units as compared to their related carrying value. Under the new authoritative guidance issued by the Financial Accounting Standards Board (“FASB”), we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. If we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the two-step goodwill impairment test is performed. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further step is required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the applied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. Fair values and useful lives are determined based on, among other factors, the expected future period of benefit of the asset, the various characteristics of the asset and projected cash flows. Contingent Consideration. Mylan records contingent consideration resulting from a business combination at its fair value on the acquisition date. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value as an adjustment to contingent consideration expense within the Consolidated Statements of Operations. Changes in the fair value of the contingent consideration obligations can result from adjustments to the discount rates, payment periods and adjustments in the probability of achieving future development steps, regulatory approvals, market launches, sales targets and profitability. These fair value measurements represent Level 3 measurements, as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the assumptions utilized as of the acquisition date and for each subsequent measurement period. Accordingly, changes in the assumptions described above could have a material impact on the Company’s consolidated results of operations. Impairment of Long-Lived Assets. The carrying values of long-lived assets, which include property, plant and equipment and intangible assets with finite lives, are evaluated periodically in relation to the expected future cash flows of the underlying assets and monitored for other potential triggering events. Adjustments are made in the event that estimated undiscounted net cash flows are less than the carrying value. Indefinite-lived intangibles, principally IPR&D, are tested at least annually for impairment or upon the occurrence of a triggering event. The impairment test for IPR&D consists of a comparison of the asset’s fair value with its carrying value. Impairment is determined to exist when the fair value is less than the carrying value of the assets being tested. Short-Term Borrowings. Mylan Laboratories Limited (formerly known as Matrix Laboratories Limited) has a financing arrangement for the sale of its accounts receivable with certain commercial banks. The commercial banks purchase the receivables at a discount and Mylan Laboratories Limited records the proceeds as short-term borrowings. Upon receipt of payment of the receivable, the short-term borrowings are reversed. As the banks have recourse to Mylan Laboratories Limited on the receivables sold, the receivables are included in accounts receivable, net, in the Consolidated Balance Sheets. Additionally, Mylan Laboratories Limited has working capital facilities with several banks which are secured by its current assets and property, plant and equipment. The working capital facilities have a weighted average interest rate of 4.7% at December 31, 2012. In February 2012, Mylan Pharmaceuticals Inc. (“MPI”), a wholly owned subsidiary of the Company, entered into a receivable securitization facility (the “Receivables Facility”) of up to $300 million, which was expanded to $400 million in July 2012. Pursuant to the terms of the Receivables Facility, MPI transfers certain of its domestic receivables, related assets and collections, on an ongoing basis, to Mylan Securitization LLC (“Mylan Securitization”), a wholly owned bankruptcy remote subsidiary. In turn, from time to time, Mylan Securitization sells its interests in such receivables, related assets and collections to certain conduit purchasers, committed purchasers and letter of credit issuers in exchange for cash or letters of credit. Mylan Securitization maintains a subordinated interest, in the form of over collateralization, in a portion of the receivables sold. The receivables underlying any borrowings are included in accounts receivable, net, in the Consolidated Balance Sheets. At December 31, 2012, there were $180 million of short-term borrowings outstanding under the Receivables Facility, which are recorded as a secured loan and included in short-term borrowings in the Consolidated Balance Sheets. Revenue Recognition. Mylan recognizes net revenue for product sales when title and risk of loss pass to its customers and when provisions for estimates, including discounts, sales allowances, price adjustments, returns, chargebacks and other promotional programs, are reasonably determinable. The following briefly describes the nature of each provision and how such provisions are estimated. Discounts are reductions to invoiced amounts offered to customers for payment within a specified period and are estimated upon sale utilizing historical customer payment experience. Volume-based sales allowances are offered to key customers to promote customer loyalty and encourage greater product sales. These programs provide that upon the attainment of pre-established volumes or the attainment of revenue milestones for a specified period, the customer receives credit against purchases. Other promotional programs are incentive programs periodically offered to our customers. The Company is able to estimate provisions for volume-based sales allowances and other promotional programs based on the specific terms in each agreement at the time of sale. Consistent with industry practice, Mylan maintains a return policy that allows customers to return product within a specified period prior and subsequent to the expiration date. The Company’s estimate of the provision for returns is generally based upon historical experience with actual returns. Price adjustments, which include shelf stock adjustments, are credits issued to reflect decreases in the selling prices of products. Shelf stock adjustments are based upon the amount of product which the customer has remaining in its inventory at the time of the price reduction. Decreases in selling prices are discretionary decisions made by the Company to reflect market conditions. Amounts recorded for estimated price adjustments are based upon specified terms with direct customers, estimated launch dates of competing products, estimated declines in market price and, in the case of shelf stock adjustments, estimates of inventory held by the customer. The Company has agreements with certain indirect customers, such as independent pharmacies, managed care organizations, hospitals, nursing homes, governmental agencies and pharmacy benefit management companies, which establish contract prices for certain products. The indirect customers then independently select a wholesaler from which to actually purchase the products at these contracted prices. Alternatively, certain wholesalers may enter into agreements with indirect customers that establish contract pricing for certain products, which the wholesalers provide. Under either arrangement, Mylan will provide credit to the wholesaler for any difference between the contracted price with the indirect party and the wholesaler’s invoice price. Such credits are called chargebacks. The provision for chargebacks is based on expected sell-through levels by our wholesaler customers to indirect customers, as well as estimated wholesaler inventory levels. Accounts receivable are presented net of allowances relating to the above provisions. No revisions were made to the methodology used in determining these provisions during the years ended December 31, 2012 and 2011. Such allowances were $977.0 million and $763.0 million at December 31, 2012 and 2011, respectively. Other current liabilities included $202.9 million and $147.9 million at December 31, 2012 and 2011, respectively, for certain sales allowances and other adjustments that are paid to indirect customers. In February 2012, MPI entered into the Receivables Facility. The receivables underlying any borrowings are included in accounts receivable, net, in the Consolidated Balance Sheets. There were $556.5 million of securitized accounts receivable at December 31, 2012. Non-refundable fees received upon entering into license and other collaborative agreements where the Company has continuing involvement are recorded as deferred revenue and recognized as other revenue over an appropriate period of time. Royalty or profit share revenue from licensees, which are based on third-party sales of licensed products and technology, is recorded in accordance with the contract terms, when third-party sales can be reliably measured and collection of the funds is reasonably assured. Royalty revenue is included in other revenue in the Consolidated Statements of Operations. The Company recognizes contract manufacturing and other service revenue when the service is performed or when the Company’s partners take ownership and title has passed, collectability is reasonably assured, the sales price is fixed or determinable, and there is persuasive evidence of an arrangement. During the years ended December 31, 2012, 2011 and 2010, sales to Cardinal Health, Inc. were 14%, 13%, and 11%, respectively, and sales to McKesson Corporation were 13%, 11% and 11%, respectively, of consolidated net revenues. Research and Development. Research and development expenses are charged to operations as incurred. Income Taxes. Income taxes have been provided for using an asset and liability approach in which deferred income taxes reflect the tax consequences on future years of events that the Company has already recognized in the financial statements or tax returns. Changes in enacted tax rates or laws may result in adjustments to the recorded tax assets or liabilities in the period that the new tax law is enacted. Earnings per Common Share. Basic earnings per common share is computed by dividing net earnings attributable to Mylan Inc. common shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per common share is computed by dividing net earnings attributable to Mylan Inc. common shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding related to potentially dilutive securities or instruments, if the impact is dilutive. With respect to the its convertible preferred stock, the Company considered the effect on diluted earnings per share of the preferred stock conversion feature using the if-converted method for all periods during which the preferred stock was outstanding. The preferred stock was convertible into between 125,234,172 shares and 152,785,775 shares of the Company’s common stock. On November 15, 2010, pursuant to its terms, the Company’s 6.50% mandatorily convertible preferred stock converted into 125,234,172 shares of Mylan’s common stock, and Mylan is no longer obligated to pay dividends. For the year ended December 31, 2010, the if-converted method was anti-dilutive; therefore, the preferred stock conversion was excluded in the computation of diluted earnings per share. On September 15, 2008, concurrent with the sale of $575 million aggregate principal amount of Cash Convertible Notes due 2015 (the “Cash Convertible Notes”), Mylan entered into a convertible note hedge and warrant transaction with certain counterparties. Pursuant to the warrant transactions, the Company sold to the counterparties warrants to purchase in the aggregate up to approximately 43.2 million shares of Mylan common stock, subject to anti-dilution adjustments substantially similar to the anti-dilution adjustments for the Cash Convertible Notes, which under most circumstances represents the maximum number of shares that underlie the conversion reference rate for the Cash Convertible Notes. The sold warrants had an exercise price of $20.00 and will be net share settled, meaning that Mylan will issue a number of shares per warrant corresponding to the difference between its share price at each warrant expiration date and the exercise price. The warrants meet the definition of derivatives under the guidance in the FASB Accounting Standards Codification (“ASC”) 815 Derivatives and Hedging (“ASC 815”); however, because these instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification under ASC 815-40 Contracts in Entity’s Own Equity (“ASC 815-40”), the warrants have been recorded in shareholders’ equity in the Consolidated Balance Sheets. In September 2011, the Company entered into amendments with the counterparties to exchange the original warrants with an exercise price of $20.00 (the “Old Warrants”) with new warrants with an exercise price of $30.00 (the “New Warrants”). Approximately 41.0 million of the Old Warrants were exchanged in the transaction. All other terms and settlement provisions of the Old Warrants remain unchanged in the New Warrants. The New Warrants meet the definition of derivatives under the guidance in ASC 815; however, because these instruments have been determined to be indexed to the Company’s own stock and meet the criteria for equity classification under ASC 815-40, the New Warrants have also been recorded in shareholders’ equity in the Consolidated Balance Sheets. On May 3, 2011, the Company announced that its Board of Directors had approved the repurchase of up to $350 million of the Company’s common stock and other equity securities, either in the open market or through privately-negotiated transactions. During the second quarter of 2011, the repurchase program was completed with approximately 14.8 million shares of common stock repurchased for approximately $350 million. On May 10, 2012, the Company announced that its Board of Directors had approved the repurchase of up to $500 million of the Company's common stock in the open market. During the second quarter of 2012, the repurchase program was completed with approximately 23.4 million shares of common stock repurchased for approximately $500 million. On November 20, 2012, the Company announced that its Board of Directors had approved the repurchase of up to $500 million of the Company’s common stock in the open market or through other methods. The repurchase was completed by December 31, 2012, with approximately 18.0 million shares of common stock repurchased for approximately $500 million. Basic and diluted earnings per common share attributable to Mylan Inc. are calculated as follows:
Additional stock options or restricted stock awards were outstanding during the years ended December 31, 2012, 2011 and 2010 but were not included in the computation of diluted earnings per share for each respective period, because the effect would be anti-dilutive. Such anti-dilutive stock options or restricted stock awards represented 4.8 million, 5.5 million and 3.5 million shares for the years ended December 31, 2012, 2011 and 2010, respectively. Stock-Based Compensation. The fair value of stock-based compensation is recognized as expense in the Consolidated Statements of Operations over the vesting period. Derivatives. From time to time the Company may enter into derivative financial instruments (mainly foreign currency exchange forward contracts, purchased currency options, interest rate swaps and purchased equity call options) designed to hedge the cash flows resulting from existing assets and liabilities and transactions expected to be entered into over the next twelve months, in currencies other than the functional currency, to hedge the variability in interest expense on floating rate debt, hedge the fair value of fixed-rate notes or to hedge cash or share payments required on conversion of issued convertible notes. When such instruments qualify for hedge accounting, they are recognized on the Consolidated Balance Sheets with the change in the fair value recorded as a component of other comprehensive earnings until the underlying hedged item is recognized in the Consolidated Statements of Operations. When such derivatives do not qualify for hedge accounting, they are recognized on the Consolidated Balance Sheets at their fair value, with changes in the fair value recorded in the Consolidated Statements of Operations within other income (expense), net. Financial Instruments. The Company’s financial instruments consist primarily of short-term and long-term debt, interest rate swaps, forward contracts, and option contracts. The Company’s financial instruments also include cash and cash equivalents as well as accounts and other receivables and accounts payable, the fair values of which approximate their carrying values. As a policy, the Company does not engage in speculative or leveraged transactions. The Company uses derivative financial instruments for the purpose of hedging foreign currency and interest rate exposures, which exist as part of ongoing business operations or to hedge cash or share payments required on conversion of issued convertible notes. The Company carries derivative instruments on the Consolidated Balance Sheets at fair value, determined by reference to market data such as forward rates for currencies, implied volatilities, and interest rate swap yield curves. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. Recent Accounting Pronouncements. In June and December 2011, the FASB issued revised accounting guidance for the presentation of comprehensive income. Under this guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The guidance eliminates the option to present the components of other comprehensive income as a part of the statement of changes in stockholders’ equity. The amended guidance is effective for fiscal years beginning after December 15, 2011, and it must be applied retrospectively. The Company adopted the guidance during the year ended December 31, 2012, with retrospective application to the years ended December 31, 2011 and 2010 by presenting the Consolidated Statements of Comprehensive Earnings. The adoption of the guidance did not have a material effect on our results of operations, financial position or cash flows. In December 2011 and January 2013, the FASB issued revised accounting guidance for an entity with particular financial instruments and derivative instruments that offset in accordance with ASC 210-20-45, Balance Sheet — Other Presentation Matters or ASC 815-10-45, Derivatives and Hedging — Other Presentation Matters. Under the amendments in this update, an entity with financial instruments that are offset in the financial statement or subject to enforceable master netting arrangements or similar agreements must disclose the gross amount recognized for the asset/liability, the offsetting amounts, the net amounts presented on the balance sheet and any amounts subject to enforceable master netting arrangements. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within the annual period, and it must be applied retrospectively. The Company adopted the guidance during the three months ended March 31, 2013 and has applied the guidance retrospectively to all periods presented. The adoption of the guidance did not have a material effect on the Company’s results of operations, financial position or cash flows for any period presented. |
Financial Instruments And Risk Management (Schedule of Available-for-sale Securities Reconciliation) (Details) (USD $)
In Thousands, unless otherwise specified |
Dec. 31, 2012
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Dec. 31, 2011
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Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 21,276 | $ 22,263 |
Gross Unrealized Gains | 1,652 | 1,733 |
Gross Unrealized Losses | 0 | (70) |
Fair Value | 22,928 | 23,926 |
Debt Securities
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Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 21,276 | 22,263 |
Gross Unrealized Gains | 1,550 | 1,561 |
Gross Unrealized Losses | 0 | (70) |
Fair Value | 22,826 | 23,754 |
Equity securities
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Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 0 | 0 |
Gross Unrealized Gains | 102 | 172 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 102 | $ 172 |