x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2013 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Canada (State or other jurisdiction of incorporation or organization) | 98-0448205 (I.R.S. Employer Identification No.) |
2150 St. Elzéar Blvd. West, Laval, Quebec (Address of principal executive offices) | H7L 4A8 (Zip Code) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Part I. | Financial Information | |
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Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II. | Other Information | |
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
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• | our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors; |
• | the introduction of generic competitors of our brand products; |
• | the introduction of products that compete against our products that do not have patent or data exclusivity rights, which products represent a significant portion of our revenues; |
• | the challenges and difficulties associated with managing the rapid growth of our Company and a large, complex business; |
• | our ability to identify, acquire, close and integrate acquisition targets successfully and on a timely basis; |
• | factors relating to the integration of the companies, businesses and products acquired by the Company (including the integration relating to our recent acquisitions of Medicis and Obagi), such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations, and the achievement of the anticipated benefits from such integrations; |
• | our ability to secure and maintain third-party research, development, manufacturing, marketing or distribution arrangements; |
• | our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries; |
• | our substantial debt and debt service obligations and their impact on our financial condition and results of operations; |
• | our future cash flow, our ability to service and repay our existing debt and our ability to raise additional funds, if needed, in light of our current and projected levels of operations, acquisition activity and general economic conditions; |
• | interest rate risks associated with our floating debt borrowings; |
• | the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets; |
• | adverse global economic conditions and credit market and foreign currency exchange uncertainty in Central and Eastern Europe, Latin America, Southeast Asia, South Africa, and other countries in which we do business; |
• | economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins; |
• | our ability to retain, motivate and recruit executives and other key employees; |
• | the outcome of legal proceedings, investigations and regulatory proceedings; |
• | the risk that our products could cause, or be alleged to cause, personal injury, leading to potential lawsuits and/or withdrawals of products from the market; |
• | the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including, but not limited to, the U.S. Food and Drug Administration, Health Canada and European, Asian, Brazilian and Australian regulatory approvals, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others; |
• | the results of continuing safety and efficacy studies by industry and government agencies; |
• | the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products; |
• | the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith; |
• | the impact of price control restrictions on our products, including the risk of mandated price reductions; |
• | the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, which could lead to material impairment charges; |
• | the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges; |
• | the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing; |
• | our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and supply difficulties and delays; |
• | the disruption of delivery of our products and the routine flow of manufactured goods; |
• | the seasonality of sales of certain of our products; |
• | declines in the pricing and sales volume of certain of our products that are distributed by third parties, over which we have no or limited control; |
• | compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations; |
• | the impacts of the Patient Protection and Affordable Care Act and other legislative and regulatory healthcare reforms in the countries in which we operate; and |
• | other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing. |
As of March 31, 2013 | As of December 31, 2012 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 413,736 | $ | 916,091 | |||
Accounts receivable, net | 1,054,161 | 913,835 | |||||
Inventories, net | 509,676 | 531,256 | |||||
Prepaid expenses and other current assets | 136,747 | 130,279 | |||||
Assets held for sale | 56,930 | 90,983 | |||||
Deferred tax assets, net | 198,879 | 195,007 | |||||
Total current assets | 2,370,129 | 2,777,451 | |||||
Property, plant and equipment, net | 452,969 | 462,724 | |||||
Intangible assets, net | 9,227,321 | 9,308,669 | |||||
Goodwill | 5,165,247 | 5,141,366 | |||||
Deferred tax assets, net | 90,391 | 76,422 | |||||
Other long-term assets, net | 180,410 | 183,747 | |||||
Total assets | $ | 17,486,467 | $ | 17,950,379 | |||
Liabilities | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 183,021 | $ | 227,384 | |||
Accrued liabilities and other current liabilities | 1,071,623 | 1,008,224 | |||||
Acquisition-related contingent consideration | 97,517 | 102,559 | |||||
Current portion of long-term debt | 289,676 | 480,182 | |||||
Deferred tax liabilities, net | 4,291 | 4,403 | |||||
Total current liabilities | 1,646,128 | 1,822,752 | |||||
Acquisition-related contingent consideration | 391,908 | 352,523 | |||||
Long-term debt | 10,327,444 | 10,535,443 | |||||
Liabilities for uncertain tax positions | 107,020 | 103,658 | |||||
Deferred tax liabilities, net | 1,259,900 | 1,248,312 | |||||
Other long-term liabilities | 167,079 | 170,293 | |||||
Total liabilities | 13,899,479 | 14,232,981 | |||||
Shareholders’ Equity | |||||||
Common shares, no par value, unlimited shares authorized, 303,801,803 and | |||||||
303,861,272 issued and outstanding at March 31, 2013 and December 31, 2012, respectively | 5,942,536 | 5,940,652 | |||||
Additional paid-in capital | 264,982 | 267,118 | |||||
Accumulated deficit | (2,423,731 | ) | (2,370,976 | ) | |||
Accumulated other comprehensive loss | (196,799 | ) | (119,396 | ) | |||
Total shareholders’ equity | 3,586,988 | 3,717,398 | |||||
Total liabilities and shareholders’ equity | $ | 17,486,467 | $ | 17,950,379 | |||
Commitments and contingencies (note 17) |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenues | |||||||
Product sales | $ | 1,038,867 | $ | 750,880 | |||
Alliance and royalty | 9,258 | 79,231 | |||||
Service and other | 20,230 | 25,992 | |||||
1,068,355 | 856,103 | ||||||
Expenses | |||||||
Cost of goods sold (exclusive of amortization of | |||||||
intangible assets shown separately below) | 284,904 | 224,196 | |||||
Cost of alliance and service revenues | 15,429 | 87,640 | |||||
Selling, general and administrative | 241,899 | 177,286 | |||||
Research and development | 23,795 | 22,006 | |||||
Amortization of intangible assets | 326,175 | 200,643 | |||||
Restructuring, integration and other costs | 48,985 | 62,337 | |||||
Acquisition-related costs | 7,899 | 7,505 | |||||
Legal settlements and related fees | 4,448 | 3,155 | |||||
Acquisition-related contingent consideration | (2,185 | ) | 9,839 | ||||
951,349 | 794,607 | ||||||
Operating income | 117,006 | 61,496 | |||||
Interest income | 1,596 | 1,123 | |||||
Interest expense | (155,315 | ) | (102,025 | ) | |||
Loss on extinguishment of debt | (21,379 | ) | (133 | ) | |||
Foreign exchange and other | 1,439 | 24,299 | |||||
Gain on investments, net | 1,859 | 2,059 | |||||
Loss before recovery of income taxes | (54,794 | ) | (13,181 | ) | |||
Recovery of income taxes | (27,264 | ) | (260 | ) | |||
Net loss | $ | (27,530 | ) | $ | (12,921 | ) | |
Basic and diluted loss per share | $ | (0.09 | ) | $ | (0.04 | ) | |
Weighted-average common shares (000’s) | |||||||
Basic and diluted | 305,763 | 307,776 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Net loss | $ | (27,530 | ) | $ | (12,921 | ) | |
Other comprehensive (loss) income | |||||||
Foreign currency translation adjustment | (83,068 | ) | 196,045 | ||||
Unrealized holding gain on auction rate securities: | |||||||
Reclassification to net loss | (1 | ) | — | ||||
Net unrealized holding gain (loss) on available-for-sale equity securities: | |||||||
Arising in period | 5,678 | — | |||||
Reclassification to net loss | — | (1,634 | ) | ||||
Net unrealized holding loss on available-for-sale debt securities: | |||||||
Arising in period | — | (13 | ) | ||||
Pension adjustment | (12 | ) | (123 | ) | |||
Other comprehensive (loss) income | (77,403 | ) | 194,275 | ||||
Comprehensive (loss) income | $ | (104,933 | ) | $ | 181,354 |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Cash Flows From Operating Activities | |||||||
Net loss | $ | (27,530 | ) | $ | (12,921 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 341,445 | 215,582 | |||||
Amortization of debt discounts and debt issuance costs | 9,647 | 5,747 | |||||
Acquisition accounting adjustment on inventory sold | 43,241 | 33,098 | |||||
Loss on disposal of assets | — | 9,527 | |||||
Acquisition-related contingent consideration | (2,185 | ) | 9,839 | ||||
Allowances for losses on accounts receivable and inventories | 8,994 | 4,383 | |||||
Deferred income taxes | (37,355 | ) | (14,859 | ) | |||
Additions to accrued legal settlements | 4,448 | 3,155 | |||||
Payments of accrued legal settlements | (2,820 | ) | (60 | ) | |||
Share-based compensation | 9,095 | 19,152 | |||||
Tax benefits from stock options exercised | (4,604 | ) | (593 | ) | |||
Foreign exchange gain | (1,770 | ) | (25,564 | ) | |||
Gain on sale of marketable securities | (1,859 | ) | (2,059 | ) | |||
Payment of accreted interest on contingent consideration | (638 | ) | — | ||||
Loss on extinguishment of debt | 21,379 | 133 | |||||
Other | 965 | (7,613 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (89,227 | ) | (14,786 | ) | |||
Inventories | (24,948 | ) | (35,080 | ) | |||
Prepaid expenses and other current assets | (122 | ) | (4,266 | ) | |||
Accounts payable, accrued liabilities and other liabilities | 9,193 | (15,585 | ) | ||||
Net cash provided by operating activities | 255,349 | 167,230 | |||||
Cash Flows From Investing Activities | |||||||
Acquisition of businesses, net of cash acquired | (237,603 | ) | (272,812 | ) | |||
Acquisition of intangible assets and other assets | (707 | ) | (1,865 | ) | |||
Purchases of property, plant and equipment | (14,042 | ) | (11,116 | ) | |||
Proceeds from sales and maturities of marketable securities | 9,027 | 8,364 | |||||
Purchases of marketable securities and other investments | — | (7,200 | ) | ||||
Proceeds from sale of assets | 8,429 | 66,250 | |||||
Net cash used in investing activities | (234,896 | ) | (218,379 | ) | |||
Cash Flows From Financing Activities | |||||||
Issuance of long-term debt, net of discount | — | 645,643 | |||||
Repayments of long-term debt | (430,036 | ) | (302,812 | ) | |||
Short-term debt borrowings | 4,471 | 7,364 | |||||
Short-term debt repayments | (1,417 | ) | — | ||||
Repurchases of convertible debt | — | (3,975 | ) | ||||
Repurchases of common shares | (35,005 | ) | (108,724 | ) | |||
Proceeds from exercise of stock options | 2,677 | 5,108 | |||||
Tax benefits from stock options exercised | 4,604 | 593 | |||||
Payments of employee withholding tax upon vesting of share-based awards | (6,848 | ) | (3,824 | ) | |||
Payments of contingent consideration | (21,054 | ) | (27,500 | ) | |||
Payments of debt issuance costs | (33,311 | ) | (1,435 | ) | |||
Net cash (used in) provided by financing activities | (515,919 | ) | 210,438 | ||||
Effect of exchange rate changes on cash and cash equivalents | (6,889 | ) | 7,079 | ||||
Net (decrease) increase in cash and cash equivalents | (502,355 | ) | 166,368 | ||||
Cash and cash equivalents, beginning of period | 916,091 | 164,111 | |||||
Cash and cash equivalents, end of period | $ | 413,736 | $ | 330,479 | |||
Non-Cash Investing and Financing Activities | |||||||
Acquisition of businesses, contingent consideration obligations at fair value | $ | (59,064 | ) | $ | (17,744 | ) | |
Acquisition of businesses, debt assumed | (37,554 | ) | — |
1. | DESCRIPTION OF BUSINESS |
2. | SIGNIFICANT ACCOUNTING POLICIES |
3. | BUSINESS COMBINATIONS |
• | On February 20, 2013, the Company acquired certain assets from Eisai Inc. (“Eisai”) relating to the U.S. rights to Targretin®, which is indicated for the treatment of Cutaneous T-Cell Lymphoma. The consideration includes up-front payments of $66.5 million and the Company may pay up to an additional $60.0 million of contingent consideration based on the occurrence of potential future events. The fair value of the contingent consideration was determined to be $50.8 million as of the acquisition date. As of March 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. |
• | On February 1, 2013, the Company acquired Natur Produkt International, JSC (“Natur Produkt”), a specialty pharmaceutical company in Russia, for a purchase price of $137.0 million, including a $20.0 million contingent refund of purchase price relating to the outcome of litigation involving AntiGrippin™ that commenced prior to the acquisition. Subsequent to the acquisition, during the three-month period ended March 31, 2013, the litigation was resolved, and the $20.0 million was refunded back to the Company. Natur Produkt’s key brand products include AntiGrippin™, Anti-Angin®, Sage™ and Eucalyptus MA™. |
• | During the three-month period ended March 31, 2013, the Company completed another smaller acquisition which is not material. This acquisition is included in the aggregated amounts presented below. |
Amounts Recognized as of Acquisition Dates | |||
Cash | $ | 5,128 | |
Accounts receivable(a) | 39,612 | ||
Inventories | 15,717 | ||
Other current assets | 1,820 | ||
Property, plant and equipment | 3,474 | ||
Identifiable intangible assets, excluding acquired IPR&D(b) | 263,320 | ||
Acquired IPR&D(c) | 2,628 | ||
Indemnification assets | 3,201 | ||
Current liabilities | (13,387 | ) | |
Short-term borrowings(d) | (30,855 | ) | |
Long-term debt(d) | (6,699 | ) | |
Deferred tax liability, net | (8,016 | ) | |
Other non-current liabilities | (479 | ) | |
Total identifiable net assets | 275,464 | ||
Goodwill(e) | 35,651 | ||
Total fair value of consideration transferred | $ | 311,115 |
(a) | The fair value of trade accounts receivable acquired was $39.6 million, with the gross contractual amount being $40.3 million, of which the Company expects that $0.7 million will be uncollectible. |
(b) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: |
Weighted- Average Useful Lives (Years) | Amounts Recognized as of Acquisition Date | |||||
Product brands | 7 | $ | 179,687 | |||
Corporate brand | 13 | 11,957 | ||||
Patents | 3 | 71,676 | ||||
Total identifiable intangible assets acquired | 7 | $ | 263,320 |
(c) | The acquired in-process research and development (“IPR&D”) assets relate to the Natur Produkt acquisition, including a product indicated for the prevention of viral diseases, specifically cold and flu, and a product indicated for the treatment of inflammation and muscular disorders. |
(d) | Short-term borrowings and long-term debt relates to the Natur Produkt acquisition. In March 2013, the Company settled all of the outstanding short-term borrowings and long-term debt. |
(e) | The goodwill relates primarily to the Natur Produkt acquisition. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. None of Natur Produkt’s goodwill is expected to be deductible for tax purposes.The goodwill recorded from the Natur Produkt acquisition represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. |
(Number of shares, stock options and restricted share units in thousands) | Conversion Calculation | Fair Value | ||||||
Number of common shares of Medicis outstanding as of acquisition date | 57,135 | |||||||
Multiplied by Per Share Consideration | $ | 44.00 | $ | 2,513,946 | ||||
Number of stock options of Medicis cancelled and exchanged for cash(a) | 3,152 | 33,052 | ||||||
Number of outstanding restricted shares cancelled and exchanged for cash(a) | 1,974 | 31,881 | ||||||
Total fair value of consideration transferred | $ | 2,578,879 |
(a) | The cash consideration paid for Medicis stock options and restricted shares attributable to pre-combination services has been included as a component of purchase price. The remaining $77.3 million balance related to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control was recognized as a post-combination expense within Restructuring, integration and other costs in the fourth quarter of 2012. |
• | amounts for intangible assets, property and equipment, inventories and current liabilities pending finalization of the valuation; |
• | amounts for income tax assets and liabilities, pending finalization of estimates and assumptions in respect of certain tax aspects of the transaction; and |
• | amount of goodwill pending the completion of the valuation of the assets acquired and liabilities assumed. |
Amounts Recognized as of Acquisition Date (as previously reported)(a) | Measurement Period Adjustments(b) | Amounts Recognized as of March 31, 2013 (as adjusted) | ||||||||||
Cash and cash equivalents | $ | 169,583 | $ | — | $ | 169,583 | ||||||
Accounts receivable(c) | 81,092 | (125 | ) | 80,967 | ||||||||
Inventories(d) | 145,157 | (6,123 | ) | 139,034 | ||||||||
Short-term and long-term investments(e) | 626,559 | — | 626,559 | |||||||||
Income taxes receivable | 40,416 | — | 40,416 | |||||||||
Other current assets(f) | 74,622 | — | 74,622 | |||||||||
Property and equipment, net | 8,239 | (5,625 | ) | 2,614 | ||||||||
Identifiable intangible assets, excluding acquired IPR&D(g) | 1,390,724 | (21,843 | ) | 1,368,881 | ||||||||
Acquired IPR&D(h) | 153,817 | 5,992 | 159,809 | |||||||||
Other non-current assets | 616 | — | 616 | |||||||||
Current liabilities(i) | (453,909 | ) | (5,076 | ) | (458,985 | ) | ||||||
Long-term debt, including current portion(j) | (777,985 | ) | — | (777,985 | ) | |||||||
Deferred income taxes, net | (205,009 | ) | 10,239 | (194,770 | ) | |||||||
Other non-current liabilities | (8,841 | ) | — | (8,841 | ) | |||||||
Total identifiable net assets | 1,245,081 | (22,561 | ) | 1,222,520 | ||||||||
Goodwill(k) | 1,333,798 | 22,561 | 1,356,359 | |||||||||
Total fair value of consideration transferred | $ | 2,578,879 | $ | — | $ | 2,578,879 |
(a) | As previously reported in the 2012 Form 10-K. |
(b) | The measurement period adjustments primarily reflect: (i) reductions in the estimated fair value of a product brand intangible asset and property and equipment; (ii) changes in estimated inventory reserves; (iii) changes in certain assumptions impacting the fair value of acquired IPR&D; (iv) additional information obtained with respect to the valuation of certain pre-acquisition milestone obligations; and (v) the tax impact of pre-tax measurement period adjustments. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. |
(c) | The fair value of trade accounts receivable acquired was $81.0 million, with the gross contractual amount being $81.1 million, of which the Company expects that $0.1 million will be uncollectible. |
(d) | Includes $104.6 million to record Medicis’ inventory at its estimated fair value. |
(e) | Short-term and long-term investments consist of corporate and various government agency and municipal debt securities, investments in auction rate floating securities (student loans), and investments in equity securities. Subsequent to the acquisition date, the Company liquidated the majority of the investments for proceeds of $615.4 million and $9.0 million in the fourth quarter of 2012 and the first quarter of 2013, respectively, with the investment in equity securities outstanding as of March 31, 2013. |
(f) | Includes prepaid expenses and an asset related to a supplemental executive retirement program. The supplemental executive retirement program was settled as of December 31, 2012. |
(g) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: |
Weighted- Average Useful Lives (Years) | Amounts Recognized as of Acquisition Date (as previously reported) | Measurement Period Adjustments | Amounts Recognized as of March 31, 2013 (as adjusted) | |||||||||||
In-licensed products | 11 | $ | 633,429 | $ | 2,283 | $ | 635,712 | |||||||
Product brands | 8 | 491,627 | (24,877 | ) | 466,750 | |||||||||
Patents | 5 | 224,985 | 1,148 | 226,133 | ||||||||||
Corporate brands | 14 | 40,683 | (397 | ) | 40,286 | |||||||||
Total identifiable intangible assets acquired | 9 | $ | 1,390,724 | $ | (21,843 | ) | $ | 1,368,881 |
(h) | The significant components of the acquired IPR&D assets primarily relate to the development of dermatology products, such as Luliconazole, a new imidazole, antimycotic cream for the treatment of tinea cruris, pedis and corporis, and Metronidazole 1.3%, a topical antibiotic for the treatment of bacterial vaginosis ($136.9 million, in the aggregate), and the development of aesthetics programs ($22.9 million). A New Drug Application (“NDA”) for Luliconazole was submitted to the U.S. Food and Drug Administration (“FDA”) on December 11, 2012. A multi-period excess earnings methodology (income approach) was primarily used to determine the estimated fair values of the acquired IPR&D assets. The projected cash flows from these assets were adjusted for the probabilities of successful development and commercialization of each project. Risk-adjusted discount rates of 10% - 11% were used to present value the projected cash flows. |
(i) | Includes accounts payable, a liability for a supplemental executive retirement program, a liability for stock appreciation rights, deferred revenue, accrued liabilities, and reserves for sales returns, rebates, managed care and Medicaid. The supplemental executive retirement program was settled as of December 31, 2012. |
(j) | The following table summarizes the fair value of long-term debt assumed as of the acquisition date: |
Amounts Recognized as of Acquisition Date | ||||
1.375% Convertible Senior Notes(1) | $ | 546,668 | ||
2.50% Contingent Convertible Senior Notes(1) | 231,111 | |||
1.50% Contingent Convertible Senior Notes(1) | 206 | |||
Total long-term debt assumed | $ | 777,985 |
(1) | During the period from the acquisition date to March 31, 2013, the Company redeemed the 2.50% Contingent Convertible Senior Notes, the 1.50% Contingent Convertible Senior Notes and a portion of the 1.375% Convertible Senior Notes. For further details, see note 10 titled “LONG-TERM DEBT”. |
(k) | Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the provisional values assigned to the assets acquired and liabilities assumed. None of the goodwill is expected to be deductible for tax purposes. The goodwill recorded represents the following: |
• | cost savings, operating synergies and other benefits expected to result from combining the operations of Medicis with those of the Company; |
• | the value of the continuing operations of Medicis’ existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and |
• | intangible assets that do not qualify for separate recognition (for instance, Medicis’ assembled workforce). |
• | On October 2, 2012, the Company acquired certain assets from Johnson & Johnson Consumer Companies, Inc. (“J&J ROW”) for a purchase price of $41.7 million, relating to the rights in various ex-North American territories to the over-the-counter (“OTC”) consumer brands Caladryl® and Shower to Shower®. |
• | On September 28, 2012, the Company acquired certain assets from Johnson & Johnson Consumer Companies, Inc. (“J&J North America”) for a purchase price of $107.3 million, relating to the U.S. and Canadian rights to the OTC consumer brands Ambi®, Caladryl®, Corn Huskers®, Cortaid®, Purpose® and Shower to Shower®. |
• | On September 24, 2012, the Company acquired certain assets from QLT Inc. and QLT Ophthalmics, Inc. (collectively, “QLT”) relating to Visudyne®, which is used to treat abnormal growth of leaky blood vessels in the eye caused by wet age-related macular degeneration. The consideration paid included up-front payments of $62.5 million for the assets related to the rights to the product in the U.S. and $50.0 million for the assets related to the rights to the product outside the U.S. The Company may pay a series of contingent payments of up to $20.0 million relating to non-U.S. royalties and development milestones for QLT’s laser program in the U.S. In addition, the Company will pay royalties on sales of potential new indications for Visudyne® in the U.S. The fair value of the contingent consideration was determined to be $7.9 million as of the acquisition date. As of March 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. |
• | On May 23, 2012, the Company acquired certain assets from University Medical Pharmaceuticals Corp. (“University Medical”), a specialty pharmaceutical company located in the U.S. focused on skincare products, including the rights to University Medical’s main brand AcneFree™, a retail OTC acne treatment. The consideration includes up-front payments of $65.0 million, and the Company may pay a series of contingent consideration payments of up to $40.0 million if certain net sales milestones are achieved. The fair value of the contingent consideration was determined to be $1.5 million as of the acquisition date. As of March 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. |
• | On May 2, 2012, the Company acquired certain assets from Atlantis Pharma (“Atlantis”), a branded generics pharmaceutical company located in Mexico, for up-front payments of $65.5 million (MXN$847.3 million), and the Company placed an additional $8.9 million (MXN$114.7 million) into an escrow account. The amounts in escrow will be paid to the sellers only if certain regulatory milestones are achieved and therefore such amounts were treated as contingent consideration. The fair value of the contingent consideration was determined to be $7.6 million as of the acquisition date. As of March 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. Since the acquisition date, certain amounts have been released from escrow to the sellers, reducing the escrow balance to $8.0 million as of March 31, 2013. The escrow balance is treated as restricted cash and is included in Prepaid expenses and other current assets and Other long-term assets, net in the Company’s consolidated balance sheets. Atlantis has a broad product portfolio, including products in gastro, analgesics and anti-inflammatory therapeutic categories. |
• | On March 13, 2012, the Company acquired certain assets from Gerot Lannach, a branded generics pharmaceutical company based in Austria. The Company made an up-front payment of $164.0 million (€125.0 million), and the Company may pay a series of contingent consideration payments of up to $19.7 million (€15.0 million) if certain net sales milestones are achieved. The fair value of the contingent consideration was determined to be $16.8 million as of the acquisition date. As of March 31, 2013, the assumptions used for determining fair value of the contingent consideration have not changed significantly from those used at the acquisition date. As part of the transaction, the Company also entered into a ten-year exclusive supply agreement with Gerot Lannach for the acquired products. Approximately 90% of sales relating to the acquired assets are in Russia, with sales also made in certain Commonwealth of Independent States (CIS) countries including Kazakhstan and Uzbekistan. Gerot Lannach’s largest product is acetylsalicylic acid, a low dose aspirin. |
• | On February 1, 2012, the Company acquired Probiotica Laboratorios Ltda. (“Probiotica”), which markets OTC sports nutrition products and other food supplements in Brazil, for a purchase price of $90.5 million (R$158.0 million). |
• | During the year ended December 31, 2012, the Company completed other smaller acquisitions which are not material individually or in the aggregate. These acquisitions are included in the aggregated amounts presented below. |
Amounts Recognized as of Acquisition Dates | Measurement Period Adjustments(a) | Amounts Recognized as of March 31, 2013 (as adjusted) | ||||||||||
Cash and cash equivalents | $ | 7,255 | $ | (258 | ) | $ | 6,997 | |||||
Accounts receivable(b) | 29,846 | (17 | ) | 29,829 | ||||||||
Assets held for sale(c) | 15,566 | — | 15,566 | |||||||||
Inventories | 64,819 | (8,091 | ) | 56,728 | ||||||||
Other current assets | 2,524 | — | 2,524 | |||||||||
Property, plant and equipment | 9,027 | — | 9,027 | |||||||||
Identifiable intangible assets, excluding acquired IPR&D(d) | 666,619 | 1,527 | 668,146 | |||||||||
Acquired IPR&D | 1,234 | — | 1,234 | |||||||||
Indemnification assets(e) | 27,901 | — | 27,901 | |||||||||
Other non-current assets | 21 | — | 21 | |||||||||
Current liabilities | (32,146 | ) | (350 | ) | (32,496 | ) | ||||||
Long-term debt | (920 | ) | — | (920 | ) | |||||||
Liability for uncertain tax position | (6,682 | ) | 6,682 | — | ||||||||
Other non-current liabilities(e) | (28,523 | ) | — | (28,523 | ) | |||||||
Deferred income taxes, net | (10,933 | ) | 373 | (10,560 | ) | |||||||
Total identifiable net assets | 745,608 | (134 | ) | 745,474 | ||||||||
Goodwill(f) | 70,600 | (8,587 | ) | 62,013 | ||||||||
Total fair value of consideration transferred | $ | 816,208 | $ | (8,721 | ) | $ | 807,487 |
(a) | The measurement period adjustments primarily relate to the Probiotica acquisition and primarily reflect: (i) the elimination of the liability for uncertain tax positions; (ii) the changes in the estimated fair value of the corporate brand intangible asset; and (iii) a decrease in the total fair value of consideration transferred due to a working capital adjustment. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date, and did not result from intervening events subsequent to the acquisition date. These adjustments did not have a significant impact on the Company’s previously reported consolidated financial statements and, therefore, the Company has not retrospectively adjusted those financial statements. |
(b) | The fair value of trade accounts receivable acquired was $29.8 million, with the gross contractual amount being $31.1 million, of which the Company expects that $1.3 million will be uncollectible. |
(c) | Assets held for sale relate to a product brand acquired in the Atlantis acquisition. Subsequent to that acquisition, the plan of sale changed, and the Company no longer intends to sell the asset. Consequently, the product brand is not classified as an asset held for sale as of March 31, 2013. |
(d) | The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets: |
Weighted- Average Useful Lives (Years) | Amounts Recognized as of Acquisition Date (as previously reported) | Measurement Period Adjustments | Amounts Recognized as of March 31, 2013 (as adjusted) | |||||||||||
Product brands | 10 | $ | 456,720 | $ | (1,325 | ) | $ | 455,395 | ||||||
Corporate brands | 12 | 31,934 | 3,725 | 35,659 | ||||||||||
Product rights | 10 | 109,274 | (873 | ) | 108,401 | |||||||||
Royalty agreement | 9 | 36,277 | — | 36,277 | ||||||||||
Partner relationships | 5 | 32,414 | — | 32,414 | ||||||||||
Total identifiable intangible assets acquired | 10 | $ | 666,619 | $ | 1,527 | $ | 668,146 |
(e) | Other non-current liabilities, and the corresponding indemnification assets, primarily relate to certain asserted and unasserted claims against Probiotica, which include potential tax-related obligations that existed at the acquisition date. The Company is indemnified by the sellers in accordance with indemnification provisions under its contractual arrangements. Indemnification assets and contingent liabilities were recorded at the same amount and classified in the same manner, as components of the purchase price, representing our best estimates of these amounts at the acquisition date, in accordance with guidance for loss contingencies and uncertain tax positions. Under the Company’s contractual arrangement with Probiotica, there is no limitation on the amount or value of indemnity claims that can be made by the Company; however there is a time restriction of either two or five years, depending on the nature of the claim. Approximately $12.9 million (R$22.5 million) of the purchase price for the Probiotica transaction from the date of acquisition had been placed in escrow in accordance with the indemnification provisions. The escrow account will be maintained for two years, of which 50% was released to the sellers in February 2013 and the remaining balance will be released after the second year. The Company expects the total amount of such indemnification assets to be collectible from the sellers. |
(f) | The goodwill relates primarily to the Probiotica acquisition. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. The Company expects that the Probiotica’s goodwill will be deductible for tax purposes. The goodwill recorded from the J&J ROW, J&J North America, QLT, University Medical, Atlantis and Gerot Lannach acquisitions represents primarily the cost savings, operating synergies and other benefits expected to result from combining the operations with those of the Company. Probiotica’s goodwill recorded represents the following: |
• | the Company’s expectation to develop and market new product brands and product lines in the future; |
• | the value associated with the Company’s ability to develop relationships with new customers; |
• | the value of the continuing operations of Probiotica’s existing business (that is, the higher rate of return on the assembled net assets versus if the Company had acquired all of the net assets separately); and |
• | intangible assets that do not qualify for separate recognition (for instance, Probiotica’s assembled workforce). |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenues | $ | 1,083,582 | $ | 1,167,234 | |||
Net income (loss) | 5,017 | (40,663 | ) | ||||
Basic and diluted earnings (loss) per share | $ | 0.02 | $ | (0.13 | ) |
• | elimination of the historical intangible asset amortization expense of these acquisitions; |
• | additional amortization expense related to the provisional fair value of identifiable intangible assets acquired; |
• | additional depreciation expense related to fair value adjustment to property, plant and equipment acquired; |
• | additional interest expense associated with the financing obtained by the Company in connection with the various acquisitions; and |
• | the exclusion from pro forma earnings in the three-month period ended March 31, 2013 of the acquisition accounting adjustments on these acquisitions’ inventories that were sold subsequent to the acquisition date of $43.2 million, in the aggregate, and the exclusion of $4.4 million of acquisition-related costs, in the aggregate, incurred primarily for these acquisitions in the three-month period ended March 31, 2013, and the inclusion of those amounts in pro forma earnings for the corresponding comparative periods. |
4. | ACQUISITIONS AND DISPOSITIONS |
5. | RESTRUCTURING, INTEGRATION AND OTHER COSTS |
• | workforce reductions across the Company and other organizational changes; |
• | closing of duplicative facilities and other site rationalization actions company-wide, including research and development facilities, sales offices and corporate facilities; |
• | leveraging research and development spend; and |
• | procurement savings. |
Employee Termination Costs | IPR&D Termination Costs | Contract Termination, Facility Closure and Other Costs | ||||||||||||||||||
Severance and Related Benefits | Share-Based Compensation(1) | Total | ||||||||||||||||||
Balance, January 1, 2012 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Costs incurred and charged to expense | 85,253 | 77,329 | — | 370 | 162,952 | |||||||||||||||
Cash payments | (77,975 | ) | (77,329 | ) | — | (5 | ) | (155,309 | ) | |||||||||||
Non-cash adjustments | 4,073 | — | — | (162 | ) | 3,911 | ||||||||||||||
Balance, December 31, 2012 | 11,351 | — | — | 203 | 11,554 | |||||||||||||||
Costs incurred and charged to expense | 12,902 | — | — | 2,870 | 15,772 | |||||||||||||||
Cash payments | (21,573 | ) | — | — | (2,758 | ) | (24,331 | ) | ||||||||||||
Non-cash adjustments | 151 | — | — | (177 | ) | (26 | ) | |||||||||||||
Balance, March 31, 2013 | $ | 2,831 | $ | — | $ | — | $ | 138 | $ | 2,969 |
(1) | Relates to the acceleration of unvested stock options, restricted stock awards, and share appreciation rights for Medicis employees that was triggered by the change in control. |
6. | FAIR VALUE MEASUREMENTS |
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||||||||
Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Carrying Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Money market funds | $ | 78,184 | $ | 78,184 | $ | — | $ | — | $ | 306,604 | $ | 306,604 | $ | — | $ | — | ||||||||||||||||
Available-for-sale equity securities | 10,092 | 10,092 | — | — | 4,410 | 4,410 | — | — | ||||||||||||||||||||||||
Available-for-sale debt securities: | ||||||||||||||||||||||||||||||||
Auction rate floating securities | — | — | — | — | 7,167 | — | — | 7,167 | ||||||||||||||||||||||||
Total financial assets | $ | 88,276 | $ | 88,276 | $ | — | $ | — | $ | 318,181 | $ | 311,014 | $ | — | $ | 7,167 | ||||||||||||||||
Cash equivalents | $ | 78,184 | $ | 78,184 | $ | — | $ | — | $ | 306,604 | $ | 306,604 | $ | — | $ | — | ||||||||||||||||
Marketable securities | 10,092 | 10,092 | — | — | 11,577 | 4,410 | — | 7,167 | ||||||||||||||||||||||||
Total financial assets | $ | 88,276 | $ | 88,276 | $ | — | $ | — | $ | 318,181 | $ | 311,014 | $ | — | $ | 7,167 | ||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||
Acquisition-related contingent consideration | $ | (489,425 | ) | $ | — | $ | — | $ | (489,425 | ) | $ | (455,082 | ) | $ | — | $ | — | $ | (455,082 | ) |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using discounted cash flow methodologies, pricing models, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. |
Balance, January 1, 2013 | Issuances(a) | Payments(b) | Net unrealized Gain(c) | Foreign Exchange(d) | Transfers Into Level 3 | Transfers Out of Level 3 | Balance, March 31, 2013 | ||||||||||||||||||||||||
Acquisition-related contingent consideration | $ | (455,082 | ) | $ | (59,064 | ) | $ | 21,692 | $ | 2,185 | $ | 844 | $ | — | $ | — | $ | (489,425 | ) |
(a) | Relates primarily to the Eisai acquisition as described in note 3. |
(b) | Relates primarily to payments of acquisition-related contingent consideration related to the Elidel®/Xerese®/Zovirax® agreement entered into in June 2011. |
(c) | For the three-months ended March 31, 2013, a net gain of $2.2 million was recognized as Acquisition-related contingent consideration in the consolidated statements of loss. The Acquisition-related contingent consideration net gain was primarily driven by a net gain related to the Elidel®/Xerese®/Zovirax® agreement entered into with Meda Pharma SARL (“Meda”) in June 2011. In April 2013, Mylan Inc. launched a generic Zovirax® ointment, which was earlier than previously anticipated by the Company. Also, in April 2013, the Company entered into an agreement with Actavis, Inc. (“Actavis”) to launch the authorized generic ointment for Zovirax®. See note 19 titled “SUBSEQUENT EVENTS” for further information regarding the agreements with Actavis. As a result of these events, the projected revenue forecast was adjusted, resulting in an Acquisition-related contingent consideration net gain of $3.1 million. This net gain was partially offset by fair value adjustments related to other acquisitions, including accretion for the time value of money. |
(d) | Included in other comprehensive (loss) income. |
7. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Cash equivalents | $ | 78,184 | $ | 78,184 | $ | 306,604 | $ | 306,604 | ||||||||
Marketable securities(1) | 10,092 | 10,092 | 11,577 | 11,577 | ||||||||||||
Long-term debt (as described in note 10)(2) | (10,617,120 | ) | (11,211,776 | ) | (11,015,625 | ) | (11,691,338 | ) |
(1) | Marketable securities are classified within Prepaid expenses and other current assets and Other long-term assets, net in the consolidated balance sheets. |
(2) | Fair value measurement of long-term debt was estimated using the quoted market prices for the Company’s debt issuances. |
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||||||||||||||||||||
Cost Basis | Fair Value | Gross Unrealized | Cost Basis | Fair Value | Gross Unrealized | |||||||||||||||||||||||||||
Gains | Losses | Gains | Losses | |||||||||||||||||||||||||||||
Auction rate floating securities | $ | — | $ | — | $ | — | $ | — | $ | 7,166 | $ | 7,167 | $ | 1 | $ | — | ||||||||||||||||
Equity securities | 4,414 | 10,092 | 5,678 | — | 4,031 | 4,410 | 379 | — | ||||||||||||||||||||||||
$ | 4,414 | $ | 10,092 | $ | 5,678 | $ | — | $ | 11,197 | $ | 11,577 | $ | 380 | $ | — |
8. | INVENTORIES |
As of March 31, 2013 | As of December 31, 2012 | |||||||
Raw materials | $ | 135,606 | $ | 120,885 | ||||
Work in process | 67,129 | 60,384 | ||||||
Finished goods | 366,453 | 406,018 | ||||||
569,188 | 587,287 | |||||||
Less allowance for obsolescence | (59,512 | ) | (56,031 | ) | ||||
$ | 509,676 | $ | 531,256 |
9. | INTANGIBLE ASSETS AND GOODWILL |
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||
Product brands | $ | 8,106,401 | $ | (1,525,134 | ) | $ | 6,581,267 | $ | 7,968,318 | $ | (1,345,367 | ) | $ | 6,622,951 | ||||||||||
Corporate brands | 293,681 | (27,702 | ) | 265,979 | 284,287 | (25,336 | ) | 258,951 | ||||||||||||||||
Product rights | 2,148,178 | (599,639 | ) | 1,548,539 | 2,110,350 | (525,186 | ) | 1,585,164 | ||||||||||||||||
Partner relationships | 182,249 | (52,184 | ) | 130,065 | 187,012 | (44,230 | ) | 142,782 | ||||||||||||||||
Out-licensed technology and other | 206,076 | (59,991 | ) | 146,085 | 209,452 | (57,507 | ) | 151,945 | ||||||||||||||||
Total finite-lived intangible assets(1) | 10,936,585 | (2,264,650 | ) | 8,671,935 | 10,759,419 | (1,997,626 | ) | 8,761,793 | ||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
Acquired IPR&D | 555,386 | — | 555,386 | 546,876 | — | 546,876 | ||||||||||||||||||
$ | 11,491,971 | $ | (2,264,650 | ) | $ | 9,227,321 | $ | 11,306,295 | $ | (1,997,626 | ) | $ | 9,308,669 |
(1) | In the first quarter of 2013, the Company recognized a write-off of $22.2 million related to Opana®, a pain relief medication approved in Canada, due to production issues arising in the first quarter of 2013. These production issues resulted in higher spending projections and delayed commercialization timelines which, in turn, triggered the Company’s decision to suspend its launch plans. The Company does not believe this program has value to a market participant. This write-off was recognized in Amortization of intangible assets in the consolidated statements of loss. |
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Cost of goods sold | $ | — | $ | 2,026 | ||||
Amortization expense | 326,175 | 200,643 | ||||||
$ | 326,175 | $ | 202,669 |
2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||
Amortization expense | $ | 1,156,545 | $ | 1,088,490 | $ | 1,058,227 | $ | 1,005,899 | $ | 976,289 |
Developed Markets | Emerging Markets | Total | ||||||||||
Balance, January 1, 2013(a) | $ | 3,988,795 | $ | 1,152,571 | $ | 5,141,366 | ||||||
Additions(b) | 256 | 35,395 | 35,651 | |||||||||
Adjustments(c) | 22,562 | (316 | ) | 22,246 | ||||||||
Foreign exchange and other | (6,820 | ) | (27,196 | ) | (34,016 | ) | ||||||
Balance, March 31, 2013 | $ | 4,004,793 | $ | 1,160,454 | $ | 5,165,247 |
(a) | Effective in the first quarter of 2013, the Company has two reportable segments: Developed Markets and Emerging Markets. Accordingly, the Company has restated prior period segment information to conform to the current period presentation. For further details, see note 18 titled “SEGMENT INFORMATION”. |
(b) | Primarily relates to the Natur Produkt acquisition (as described in note 3). |
(c) | Primarily reflects the impact of measurement period adjustments related to the Medicis acquisition (as described in note 3). |
10. | LONG-TERM DEBT |
Maturity Date | As of March 31, 2013 | As of December 31, 2012 | ||||||||
New Revolving Credit Facility(1) | April 2016 | $ | — | $ | — | |||||
New Term Loan A Facility(1) | April 2016 | 1,926,577 | 2,083,462 | |||||||
New Term Loan B Facility(1)(2) | February 2019 | 1,265,726 | 1,275,167 | |||||||
New Incremental Term Loan B Facility(1)(2) | December 2019 | 973,765 | 973,988 | |||||||
Senior Notes: | ||||||||||
6.50% | July 2016 | 915,500 | 915,500 | |||||||
6.75% | October 2017 | 498,394 | 498,305 | |||||||
6.875% | December 2018 | 939,502 | 939,277 | |||||||
7.00% | October 2020 | 686,768 | 686,660 | |||||||
6.75% | August 2021 | 650,000 | 650,000 | |||||||
7.25% | July 2022 | 541,562 | 541,335 | |||||||
6.375%(3) | October 2020 | 1,725,325 | 1,724,520 | |||||||
6.375%(3) | October 2020 | 492,950 | 492,720 | |||||||
Convertible Notes: | ||||||||||
1.375% Convertible Notes(4) | June 2017 | 209 | 228,576 | |||||||
2.50% Convertible Notes(4) | June 2032 | — | 5,133 | |||||||
1.50% Convertible Notes(4) | June 2033 | — | 84 | |||||||
Other | 842 | 898 | ||||||||
10,617,120 | 11,015,625 | |||||||||
Less current portion | (289,676 | ) | (480,182 | ) | ||||||
Total long-term debt | $ | 10,327,444 | $ | 10,535,443 |
(1) | Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement (the “Credit Agreement”). |
(2) | On February 21, 2013, the Company and certain of its subsidiaries, as guarantors, entered into an amendment to the Credit Agreement to effectuate a repricing of its existing senior secured term loan B facility (the “Term Loan B Facility”) and its existing incremental term B loans (the “Incremental Term Loan B Facility”) by the issuance of $1.3 billion and $1.0 billion in new incremental term loans (the “New Term Loan B Facility” and the “New Incremental Term Loan B Facility”, respectively, and together, the “Repriced Term Loan B Facilities”). |
(3) | On March 29, 2013, the Company announced that its wholly owned subsidiary Valeant commenced an offer to exchange (the “Exchange Offer”) any and all of its outstanding $500.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “Existing Notes”) into the current outstanding $1.75 billion 6.375% senior notes due 2020. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Existing Notes with the anticipated result being that some or all of such notes will be part of a single series of 6.375% senior notes under one indenture. The Exchange Offer, which did not result in any changes to existing terms or to the total amount of the Company’s debt outstanding, expired on April 26, 2013. $497.7 million of aggregate principal amount of the Existing Notes was exchanged as of such date. |
(4) | Represents obligations assumed from Medicis. |
11. | SECURITIES REPURCHASE PROGRAM |
12. | SHARE-BASED COMPENSATION |
Three Months Ended March 31, | ||||||||
2013 | 2012 | |||||||
Stock options | $ | 3,438 | $ | 6,711 | ||||
RSUs | 5,657 | 12,441 | ||||||
Share-based compensation expense | $ | 9,095 | $ | 19,152 | ||||
Cost of goods sold | $ | — | $ | 230 | ||||
Research and development expenses | — | 230 | ||||||
Selling, general and administrative expenses | 9,095 | 18,692 | ||||||
Share-based compensation expense | $ | 9,095 | $ | 19,152 |
13. | SHAREHOLDERS’ EQUITY |
Shareholders | ||||||||||||||||||||||
Common Shares | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total Shareholders' equity | ||||||||||||||||||
Shares (000s) | Amount | |||||||||||||||||||||
Balance, January 1, 2012 | 306,371 | $ | 5,963,621 | $ | 276,117 | $ | (2,030,292 | ) | $ | (279,616 | ) | $ | 3,929,830 | |||||||||
Repurchase of equity component of 5.375% Convertible Notes | — | — | (180 | ) | (2,682 | ) | — | (2,862 | ) | |||||||||||||
Common shares issued under share-based compensation plans | 518 | 12,181 | (7,082 | ) | — | — | 5,099 | |||||||||||||||
Repurchase of common shares | (2,005 | ) | (39,027 | ) | — | (69,697 | ) | — | (108,724 | ) | ||||||||||||
Share-based compensation | — | — | 19,152 | — | — | 19,152 | ||||||||||||||||
Employee withholding taxes related to share-based awards | — | — | (3,824 | ) | — | — | (3,824 | ) | ||||||||||||||
Tax benefits from stock options exercised | — | — | 593 | — | — | 593 | ||||||||||||||||
304,884 | 5,936,775 | 284,776 | (2,102,671 | ) | (279,616 | ) | 3,839,264 | |||||||||||||||
Comprehensive income: | ||||||||||||||||||||||
Net loss | — | — | — | (12,921 | ) | — | (12,921 | ) | ||||||||||||||
Other comprehensive income | — | — | — | — | 194,275 | 194,275 | ||||||||||||||||
Total comprehensive income | 181,354 | |||||||||||||||||||||
Balance, March 31, 2012 | 304,884 | $ | 5,936,775 | $ | 284,776 | $ | (2,115,592 | ) | $ | (85,341 | ) | $ | 4,020,618 | |||||||||
Balance, January 1, 2013 | 303,861 | $ | 5,940,652 | $ | 267,118 | $ | (2,370,976 | ) | $ | (119,396 | ) | $ | 3,717,398 | |||||||||
Common shares issued under share-based compensation plans | 441 | 11,664 | (8,987 | ) | — | — | 2,677 | |||||||||||||||
Repurchase of common shares | (500 | ) | (9,780 | ) | — | (25,225 | ) | — | (35,005 | ) | ||||||||||||
Share-based compensation | — | — | 9,095 | — | — | 9,095 | ||||||||||||||||
Employee withholding taxes related to share-based awards | — | — | (6,848 | ) | — | — | (6,848 | ) | ||||||||||||||
Tax benefits from stock options exercised | — | — | 4,604 | — | — | 4,604 | ||||||||||||||||
303,802 | 5,942,536 | 264,982 | (2,396,201 | ) | (119,396 | ) | 3,691,921 | |||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||
Net loss | — | — | — | (27,530 | ) | — | (27,530 | ) | ||||||||||||||
Other comprehensive loss | — | — | — | — | (77,403 | ) | (77,403 | ) | ||||||||||||||
Total comprehensive loss | (104,933 | ) | ||||||||||||||||||||
Balance, March 31, 2013 | 303,802 | $ | 5,942,536 | $ | 264,982 | $ | (2,423,731 | ) | $ | (196,799 | ) | $ | 3,586,988 |
14. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
Foreign Currency Translation Adjustment | Unrealized Holding Gain (Loss) on Auction Rate Securities | Net Unrealized Holding Gain (Loss) on Available- For-Sale Equity Securities | Acquisition of Noncontrolling Interest | Pension Adjustment | Total | |||||||||||||||||||
Balance, January 1, 2013 | $ | (121,696 | ) | $ | 1 | $ | 379 | $ | 2,206 | $ | (286 | ) | $ | (119,396 | ) | |||||||||
Foreign currency translation adjustment | (83,068 | ) | — | — | — | — | (83,068 | ) | ||||||||||||||||
Reclassification to net loss(1) | — | (1 | ) | — | — | — | (1 | ) | ||||||||||||||||
Net unrealized holding gain on available-for-sale equity securities | — | — | 5,678 | — | — | 5,678 | ||||||||||||||||||
Pension adjustment(2) | — | — | — | — | (12 | ) | (12 | ) | ||||||||||||||||
Balance, March 31, 2013 | $ | (204,764 | ) | $ | — | $ | 6,057 | $ | 2,206 | $ | (298 | ) | $ | (196,799 | ) |
(1) | Included in gain on investments, net. |
(2) | Reflects changes in defined benefit obligations and related plan assets of legacy Valeant defined benefit pension plans. |
15. | INCOME TAXES |
16. | LOSS PER SHARE |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Net loss | $ | (27,530 | ) | $ | (12,921 | ) | |
Basic weighted-average number of common shares outstanding (000s) | 305,763 | 307,776 | |||||
Diluted effect of stock options and RSUs (000s)(a) | — | — | |||||
Diluted effect of convertible debt (000s)(a) | — | — | |||||
Diluted weighted-average number of common shares outstanding (000s) | 305,763 | 307,776 | |||||
Basic and diluted loss per share | $ | (0.09 | ) | $ | (0.04 | ) |
(a) | In the three-month periods ended March 31, 2013 and 2012, all potential common shares issuable for stock options, RSUs and convertible debt were excluded from the calculation of diluted loss per share, as the effect of including them would have been anti-dilutive. The dilutive effect of potential common shares issuable for stock options, RSUs and convertible debt on the weighted-average number of common shares outstanding would have been as follows: |
Three Months Ended March 31, | |||||
2013 | 2012 | ||||
Basic weighted-average number of common shares outstanding (000s) | 305,763 | 307,776 | |||
Dilutive effect of stock options and RSUs (000s) | 6,587 | 7,725 | |||
Dilutive effect of Convertible Notes (000s) | — | 896 | |||
Diluted weighted-average number of common shares outstanding (000s) | 312,350 | 316,397 |
17. | LEGAL PROCEEDINGS |
18. | SEGMENT INFORMATION |
• | Developed Markets consists of (i) sales in the U.S. of pharmaceutical and OTC products, and alliance and contract service revenues, in the areas of dermatology and topical medication, aesthetics (including medical devices), dentistry, ophthalmology and podiatry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products the Company developed or acquired and (iii) pharmaceutical and OTC products sold in Canada, Australia and New Zealand. |
• | Emerging Markets consists of branded generic pharmaceutical products, as well as OTC products and agency/in-licensing arrangements with other research-based pharmaceutical companies (where the Company distributes and markets branded, patented products under long-term, renewable contracts). Products are sold primarily in Central and Eastern Europe (primarily Poland, Serbia, and Russia), Latin America (Mexico, Brazil and exports out of Mexico to other Latin American markets), Southeast Asia and South Africa. |
Three Months Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenues: | |||||||
Developed Markets(1) | $ | 771,144 | $ | 618,888 | |||
Emerging Markets(2) | 297,211 | 237,215 | |||||
Total revenues | 1,068,355 | 856,103 | |||||
Segment profit: | |||||||
Developed Markets(3) | 185,253 | 155,719 | |||||
Emerging Markets(4) | 28,557 | 22,971 | |||||
Total segment profit | 213,810 | 178,690 | |||||
Corporate(5) | (37,657 | ) | (34,358 | ) | |||
Restructuring, integration and other costs | (48,985 | ) | (62,337 | ) | |||
Acquisition-related costs | (7,899 | ) | (7,505 | ) | |||
Legal settlements and related fees | (4,448 | ) | (3,155 | ) | |||
Acquisition-related contingent consideration | 2,185 | (9,839 | ) | ||||
Operating income | 117,006 | 61,496 | |||||
Interest income | 1,596 | 1,123 | |||||
Interest expense | (155,315 | ) | (102,025 | ) | |||
Loss on extinguishment of debt | (21,379 | ) | (133 | ) | |||
Foreign exchange and other | 1,439 | 24,299 | |||||
Gain on investments, net | 1,859 | 2,059 | |||||
Loss before recovery of income taxes | $ | (54,794 | ) | $ | (13,181 | ) |
(1) | Developed Markets segment revenues reflect incremental product sales revenue of $256.5 million in the three-month period ended March 31, 2013, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, primarily from the Medicis, OraPharma, Eisai, J&J North America and University Medical acquisitions. |
(2) | Emerging Markets segment revenues reflect incremental product sales revenue of $48.0 million in the three-month period ended March 31, 2013, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, primarily from the Natur Produkt, Gerot Lannach and Atlantis acquisitions. |
(3) | Developed Markets segment profit reflects the addition of operations from all 2012 acquisitions and all 2013 acquisitions, including the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $203.5 million in the three-month period ended March 31, 2013, in the aggregate, primarily from Medicis and legacy Valeant operations. |
(4) | Emerging Markets segment profit reflects the addition of operations from all 2012 acquisitions and all 2013 acquisitions, including the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets of $56.5 million in the three-month period ended March 31, 2013, in the aggregate, primarily from legacy Valeant operations. |
(5) | Corporate reflects non-restructuring-related share-based compensation expense of $9.1 million and $19.2 million in the three-month periods ended March 31, 2013 and 2012, respectively. |
As of March 31, 2013 | As of December 31, 2012 | ||||||
Assets: | |||||||
Developed Markets(1) | $ | 12,521,653 | $ | 12,859,099 | |||
Emerging Markets(2) | 4,187,783 | 4,056,666 | |||||
16,709,436 | 16,915,765 | ||||||
Corporate | 777,031 | 1,034,614 | |||||
Total assets | $ | 17,486,467 | $ | 17,950,379 |
(1) | Developed Markets segment assets as of March 31, 2013 reflect the provisional amounts of identifiable intangible assets acquired from Eisai of $112.0 million. |
(2) | Emerging Markets segment assets as of March 31, 2013 reflect the provisional amounts of identifiable intangible assets and goodwill of Natur Produkt of $98.8 million and $34.7 million, respectively. |
19. | SUBSEQUENT EVENTS |
Acquisition Date | ||
Acquisitions of businesses and product rights | ||
Obagi Medical Products, Inc. (“Obagi”) | April 25, 2013 | |
Certain assets of Eisai Inc. (“Eisai”) | February 20, 2013 | |
Natur Produkt International, JSC (“Natur Produkt”) | February 1, 2013 |
Three Months Ended March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
($ in 000s, except per share data) | $ | $ | $ | % | ||||||
Revenues | 1,068,355 | 856,103 | 212,252 | 25 | ||||||
Operating expenses | 951,349 | 794,607 | 156,742 | 20 | ||||||
Net loss | (27,530 | ) | (12,921 | ) | (14,609 | ) | 113 | |||
Basic and diluted loss per share | (0.09 | ) | (0.04 | ) | (0.05 | ) | 125 |
As of March 31, 2013 | As of December 31, 2012 | Change | ||||||||
($ in 000s) | $ | $ | $ | % | ||||||
Total assets | 17,486,467 | 17,950,379 | (463,912 | ) | (3) | |||||
Long-term debt, including current portion | 10,617,120 | 11,015,625 | (398,505 | ) | (4) |
• | incremental product sales revenue of $269.3 million, in the aggregate, from all 2012 acquisitions in the first quarter of 2013, primarily from the Medicis, OraPharma Topco Holdings, Inc. (“OraPharma”), Gerot Lannach, Johnson & Johnson Consumer Companies, Inc (“J&J North America”), University Medical Pharmaceuticals Corp. (“University Medical”) and Atlantis Pharma (“Atlantis”) acquisitions. We also recognized incremental product sales revenue of $35.2 million, in the aggregate, from all 2013 acquisitions in the first quarter of 2013, primarily from the Eisai and Natur Produkt acquisitions; and |
• | incremental product sales revenue of $38.5 million in the first quarter of 2013, related to growth from the existing business primarily from the impact of pricing actions, excluding the decline in Developed Markets described below. |
• | alliance revenue of $66.3 million on the sale of 1% clindamycin and 5% benzoyl peroxide gel (“IDP-111”) and 5% fluorouracil cream (“5-FU”) products in the first quarter of 2012 that did not similarly occur in the first quarter of 2013; |
• | decrease in product sales in the Developed Markets segment of $29.4 million, in the aggregate, due to (i) generic competition, primarily related to a continuing decline in sales of Cesamet® and BenzaClin®, and (ii) a decline in product sales of certain suncare and skincare brands sold primarily in Australia and Canada that are classified as assets held for sale; |
• | a negative impact from divestitures, discontinuations and supply interruptions of $24.9 million in the first quarter of 2013, including a decrease of $4.4 million related to IDP-111 royalty revenue as a result of the sale of IDP-111 in February 2012; and |
• | a negative foreign currency exchange impact on the existing business of $5.2 million in the first quarter of 2013. |
• | an increase of $125.5 million in amortization expense, as described below under “Results of Operations — Operating Expenses — Amortization of Intangible Assets”; |
• | an increase of $64.6 million in selling, general and administrative expense, as described below under “Results of Operations — Operating Expenses — Selling, General and Administrative Expenses”; |
• | an increase of $53.3 million in interest expense, as described below under “Results of Operations — Non-Operating Income (Expense) — Interest Expense”; |
• | a decrease of $22.9 million in foreign exchange and other, as described below under “Results of Operations — Non-Operating Income (Expense) — Foreign Exchange and Other”; and |
• | an increase of $21.2 million in loss on extinguishment of debt, as described below under “Results of Operations — Non-Operating Income (Expense) — Loss on Extinguishment of Debt”. |
• | an increase in contribution (product sales revenue less cost of goods sold, exclusive of amortization of intangible assets) of $227.3 million, mainly related to the incremental contribution of Medicis, OraPharma, Eisai, Natur Produkt and Gerot Lannach; |
• | an increase of $27.0 million in recovery of income taxes, as described below under “Results of Operations — Income Taxes”; and |
• | a decrease of $13.4 million in restructuring, integration and other costs, as described below under “Results of Operations — Operating Expenses — Restructuring, Integration and Other Costs”. |
• | Developed Markets consists of (i) sales in the U.S. of pharmaceutical and OTC products, and alliance and contract service revenues, in the areas of dermatology and topical medication, aesthetics (including medical devices), dentistry, ophthalmology and podiatry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products we developed or acquired and (iii) pharmaceutical and OTC products sold in Canada, Australia and New Zealand. |
• | Emerging Markets consists of branded generic pharmaceutical products, as well as OTC products and agency/in-licensing arrangements with other research-based pharmaceutical companies (where the Company distributes and markets branded, patented products under long-term, renewable contracts). Products are sold primarily in Central and Eastern Europe (primarily Poland, Serbia, and Russia), Latin America (Mexico, Brazil and exports out of Mexico to other Latin American markets), Southeast Asia and South Africa. |
Three Months Ended March 31, | ||||||||||||||
2013 | 2012 | Change | ||||||||||||
($ in 000s) | $ | % | $ | % | $ | % | ||||||||
Developed Markets | 771,144 | 72 | 618,888 | 72 | 152,256 | 25 | ||||||||
Emerging Markets | 297,211 | 28 | 237,215 | 28 | 59,996 | 25 | ||||||||
Total revenues | 1,068,355 | 100 | 856,103 | 100 | 212,252 | 25 |
• | in the Developed Markets segment: |
• | the incremental product sales revenue of $256.5 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, primarily from (i) the 2012 acquisitions of Medicis (mainly driven by Solodyn®, Restylane®, Dysport®, Ziana®, Vanos® and Perlane® product sales), OraPharma (mainly driven by Arestin® product sales), certain assets of J&J North America (mainly driven by Ambi®, Shower to Shower® and Caladryl® product sales) and certain assets of University Medical (mainly driven by AcneFree™ product line sales); and (ii) the 2013 acquisition of certain assets of Eisai (Targretin® product sales); and |
• | an increase in product sales from the existing business (excluding the decline described below) of $13.7 million, or 3%, driven by growth of the core dermatology brands, including Retin-A Micro®, Acanya®, CeraVe® and Zovirax®. As a result of the approval of a generic Zovirax® ointment in April 2013, we will likely experience declining Zovirax® ointment revenues in the future, and such declines could be material. Refer to note 19 of notes to unaudited consolidated financial statements for details regarding Zovirax® agreements entered into in April 2013 with Actavis. |
• | alliance revenue of $66.3 million on the sale of the IDP-111 and 5-FU products in the first quarter of 2012 that did not similarly occur in the first quarter of 2013; |
• | decrease in product sales of $29.4 million, in the aggregate, due to (i) generic competition, primarily related to a continuing decline in sales of Cesamet® and BenzaClin®, and (ii) a decline in product sales of certain suncare and skincare brands sold primarily in Australia and Canada that are classified as assets held for sale. We anticipate a continuing decline in sales of Cesamet® and BenzaClin® due to continued generic erosion, however the rate of decline is expected to decrease in the future, and these brands are expected to represent a declining percentage of total revenues primarily due to anticipated growth in other parts of our business and recent acquisitions; |
• | a negative impact from divestitures, discontinuations and supply interruptions of $15.7 million in the first quarter of 2013, including a decrease of $4.4 million related to IDP-111 royalty revenue as a result of the sale of IDP-111 in February 2012; and |
• | a negative foreign currency exchange impact on the existing business of $1.1 million in the first quarter of 2013. |
• | in the Emerging Markets segment: |
• | the incremental product sales revenue of $48.0 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, primarily from (i) the 2012 acquisitions of certain assets of Gerot Lannach and Atlantis and (ii) the 2013 acquisition of Natur Produkt; and |
• | an increase in product sales from the existing business of $25.0 million, or 11%, in the first quarter of 2013. |
• | a negative impact from divestitures, discontinuations and supply interruptions of $9.2 million in the first quarter of 2013; and |
• | a negative foreign currency exchange impact on the existing business of $4.1 million in the first quarter of 2013. |
Three Months Ended March 31, | ||||||||||||||
2013 | 2012 | Change | ||||||||||||
($ in 000s) | $ | %(1) | $ | %(1) | $ | % | ||||||||
Developed Markets | 185,253 | 24 | 155,719 | 25 | 29,534 | 19 | ||||||||
Emerging Markets | 28,557 | 10 | 22,971 | 10 | 5,586 | 24 | ||||||||
Total segment profit | 213,810 | 20 | 178,690 | 21 | 35,120 | 20 |
• | in the Developed Markets segment: |
• | an increase in contribution of $181.8 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, primarily from the product sales of Medicis, OraPharma and Eisai, including expenses for acquisition accounting adjustments related to inventory of $41.1 million, in the aggregate; |
• | an increase in contribution from product sales from the existing business (excluding the favorable impact related to the acquisition accounting adjustments related to inventory in the first quarter of 2012 that did not similarly occur in the first quarter of 2013 and the declines described below) of $14.8 million, driven by growth of the core dermatology brands, including Retin-A Micro®, Acanya®, CeraVe® and Zovirax®; and |
• | a favorable impact of $32.9 million related to the existing business acquisition accounting adjustments related to inventory in the first quarter of 2012 that did not similarly occur in the first quarter of 2013. |
• | an increase in operating expenses (including amortization expense) of $156.5 million in the first quarter of 2013, primarily associated with the acquisitions of new businesses within the segment; |
• | a decrease in contribution of $26.8 million in the first quarter of 2013, primarily related to the lower sales of Cesamet® and BenzaClin® as a result of generic competition; and |
• | a decrease in contribution of $14.4 million in the first quarter of 2013, primarily related to divestitures, discontinuations and supply interruptions. The largest contributor to the decrease was a reduction in IDP-111 royalty revenue of $4.4 million as a result of the sale of IDP-111 in February 2012. |
• | in the Emerging Markets segment: |
• | an increase in contribution of $30.8 million, in the aggregate, from all 2012 acquisitions and all 2013 acquisitions, in the first quarter of 2013, primarily from the sale of Natur Produkt and Gerot Lannach products, including expenses for acquisition accounting adjustments related to inventory of $2.2 million, in the aggregate, in the first quarter of 2013; |
• | an increase in contribution from product sales from the existing business of $12.9 million in the first quarter of 2013; and |
• | an increase in alliance contribution of $2.5 million in the first quarter of 2013. |
• | an increase in operating expenses (including amortization expense) of $32.0 million in the first quarter of 2013, primarily associated with the acquisitions of new businesses within the segment; |
• | a decrease in contribution of $4.9 million in the first quarter of 2013 related to divestitures, discontinuations and supply interruptions; and |
• | a negative foreign currency exchange impact on the existing business contribution of $3.8 million in the first quarter of 2013. |
Three Months Ended March 31, | |||||||||||||||||
2013 | 2012 | Change | |||||||||||||||
($ in 000s) | $ | %(1) | $ | %(1) | $ | % | |||||||||||
Cost of goods sold (exclusive of amortization of intangible assets shown separately below) | 284,904 | 27 | 224,196 | 26 | 60,708 | 27 | |||||||||||
Cost of alliance and service revenues | 15,429 | 1 | 87,640 | 10 | (72,211 | ) | (82 | ) | |||||||||
Selling, general and administrative | 241,899 | 23 | 177,286 | 21 | 64,613 | 36 | |||||||||||
Research and development | 23,795 | 2 | 22,006 | 3 | 1,789 | 8 | |||||||||||
Amortization of intangible assets | 326,175 | 31 | 200,643 | 23 | 125,532 | 63 | |||||||||||
Restructuring, integration and other costs | 48,985 | 5 | 62,337 | 7 | (13,352 | ) | (21 | ) | |||||||||
Acquisition-related costs | 7,899 | 1 | 7,505 | 1 | 394 | NM | |||||||||||
Legal settlements and related fees | 4,448 | — | 3,155 | — | 1,293 | 41 | |||||||||||
Acquisition-related contingent consideration | (2,185 | ) | — | 9,839 | 1 | (12,024 | ) | (122 | ) | ||||||||
Total operating expenses | 951,349 | 90 | 794,607 | 93 | 156,742 | 20 |
• | a favorable impact from product mix primarily related to the Medicis product portfolio; and |
• | the benefits realized from worldwide manufacturing rationalization initiatives. |
• | decreased sales of Cesamet® and BenzaClin® which have a higher gross profit margin than our overall margin; and |
• | the impact of higher acquisition accounting adjustments of $10.2 million, to $43.2 million in the first quarter of 2013, compared with $33.0 million in the first quarter of 2012, related to acquired inventories that were subsequently sold in the first quarter of 2013. |
• | increased expenses in our Developed Markets segment ($41.0 million) primarily driven by the acquisitions of new businesses within the segment, including the Medicis acquisition; and |
• | increased expenses in our Emerging Markets segment ($19.9 million), primarily driven by the acquisitions of new businesses within this segment. |
Three Months Ended March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
($ in 000s; Income (Expense)) | $ | $ | $ | % | ||||||
Interest income | 1,596 | 1,123 | 473 | 42 | ||||||
Interest expense | (155,315 | ) | (102,025 | ) | (53,290 | ) | 52 | |||
Loss on extinguishment of debt | (21,379 | ) | (133 | ) | (21,246 | ) | NM | |||
Foreign exchange and other | 1,439 | 24,299 | (22,860 | ) | (94) | |||||
Gain on investments, net | 1,859 | 2,059 | (200 | ) | (10) | |||||
Total non-operating expense | (171,800 | ) | (74,677 | ) | (97,123 | ) | 130 |
Three Months Ended March 31, | ||||||||||
2013 | 2012 | Change | ||||||||
($ in 000s; (Income) Expense) | $ | $ | $ | % | ||||||
Current income tax expense | 10,100 | 14,600 | (4,500 | ) | (31) | |||||
Deferred income tax benefit | (37,364 | ) | (14,860 | ) | (22,504 | ) | 151 | |||
Total recovery of income taxes | (27,264 | ) | (260 | ) | (27,004 | ) | NM |
As of March 31, 2013 | As of December 31, 2012 | Change | ||||||||
($ in 000s; Asset (Liability)) | $ | $ | $ | % | ||||||
Cash and cash equivalents | 413,736 | 916,091 | (502,355 | ) | (55) | |||||
Long-lived assets(1) | 14,845,537 | 14,912,759 | (67,222 | ) | — | |||||
Long-term debt, including current portion | (10,617,120 | ) | (11,015,625 | ) | 398,505 | (4) | ||||
Shareholders’ equity | 3,586,988 | 3,717,398 | (130,410 | ) | (4) |
(1) | Long-lived assets comprise property, plant and equipment, intangible assets and goodwill. |
• | $238.3 million paid, in the aggregate, in connection with the purchases of businesses and intangible assets, mainly in respect of the Natur Produkt and Eisai acquisitions in the first quarter of 2013; |
• | $233.6 million repayment of long-term debt assumed in connection with the Medicis acquisition in December 2012; |
• | $153.1 million repayment under our senior secured term loan A facility (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”); |
• | $37.6 million repayment of short-term borrowings and long-term debt, in the aggregate, assumed in connection with the Natur Produkt acquisition; |
• | $35.0 million related to the repurchase of our common shares (as described below under “Financial Condition, Liquidity and Capital Resources — 2012 Securities Repurchase Program”); |
• | $33.3 million related to debt issue costs paid primarily due to the repricing of our senior secured term loan A facility, our senior secured term loan B facility and our incremental term loan B facility, in the aggregate (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”); |
• | contingent consideration payments within financing activities of $21.1 million primarily related to the Elidel®/Xerese®/Zovirax® agreement entered into in June 2011; |
• | purchases of property, plant and equipment of $14.0 million; and |
• | $5.8 million repayments under our senior secured term loan B facility and our incremental term loan B facility, in the aggregate, (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”). |
• | $255.3 million in operating cash flows; and |
• | the proceeds of $9.0 million on the sale of marketable securities assumed in connection with the Medicis acquisition. |
• | the depreciation of property, plant and equipment and amortization of intangible assets of $315.3 million in the aggregate; and |
• | a decrease from foreign currency exchange of $63.4 million. |
• | the inclusion of the identifiable intangible assets, goodwill and property, plant and equipment from the 2013 acquisitions of $305.1 million, in the aggregate, primarily related to the Natur Produkt and Eisai acquisitions; and |
• | purchases of property, plant and equipment of $14.0 million. |
• | $233.6 million repayment of long-term debt assumed in connection with the Medicis acquisition in December 2012; |
• | $153.1 million repayment under our senior secured term loan A facility (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”); and |
• | $5.8 million repayments under our senior secured term loan B facility and our incremental term loan B facility, in the aggregate (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”). |
• | a negative foreign currency translation adjustment of $83.1 million to other comprehensive income, mainly due to the impact of a strengthening of the U.S. dollar relative to a number of other currencies, including the Polish zloty and Canadian dollar, which decreased the reported value of our net assets denominated in those currencies, partially offset by the impact of a weakening of the U.S. dollar relative to the Mexican peso and Brazilian real; |
• | a decrease of $35.0 million related to the repurchase of our common shares in the first quarter of 2013; and |
• | a net loss of $27.5 million. |
• | $9.1 million of share-based compensation recorded in additional paid-in capital. |
Three Months Ended March 31, | |||||||||||
2013 | 2012 | Change | |||||||||
($ in 000s) | $ | $ | $ | % | |||||||
Net cash provided by operating activities | 255,349 | 167,230 | 88,119 | 53 | |||||||
Net cash used in investing activities | (234,896 | ) | (218,379 | ) | (16,517 | ) | 8 | ||||
Net cash (used in) provided by financing activities | (515,919 | ) | 210,438 | (726,357 | ) | NM | |||||
Effect of exchange rate changes on cash and cash equivalents | (6,889 | ) | 7,079 | (13,968 | ) | (197 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (502,355 | ) | 166,368 | (668,723 | ) | NM | |||||
Cash and cash equivalents, beginning of period | 916,091 | 164,111 | 751,980 | NM | |||||||
Cash and cash equivalents, end of period | 413,736 | 330,479 | 83,257 | 25 |
• | the inclusion of cash flows in the first quarter of 2013 from all 2012 acquisitions, primarily Medicis, OraPharma, University Medical and Atlantis, as well as all 2013 acquisitions, primarily Natur Produkt; |
• | an increase in cash flows from operations of Probiotica and Gerot Lannach due to the full quarter impact in the first quarter of 2013; |
• | incremental cash flows from continued growth in the existing business; and |
• | lower payments of $8.2 million related to restructuring, integration and other costs in the first quarter of 2013. |
• | an increased investment in working capital of $35.4 million primarily related to an increase of $74.4 million in accounts receivable, reflecting the growth of the business, including strong sales in March 2013, as well as higher receivables generated by Targretin® sales subsequent to the acquisition from Eisai. This decrease in cash was partially offset by the impact of changes related to timing of other receipts and payments in the ordinary course of business; and |
• | a decrease in contribution of $26.8 million in the first quarter of 2013, primarily related to the lower sales of Cesamet® and BenzaClin® as a result of generic competition. |
• | an increase of $57.8 million, related to lower proceeds from sales of assets, primarily attributable to the cash proceeds of $66.3 million for the sale of the IDP-111 and 5-FU products in the first quarter of 2012 that did not similarly occur in the first quarter of 2013; and |
• | an increase of $2.9 million in purchases of property, plant and equipment. |
• | a decrease of $36.4 million in the aggregate, related to the purchases of businesses (net of cash acquired) and intangible assets in the aggregate; and |
• | a decrease of $7.2 million related to purchases of marketable securities in the first quarter of 2012. |
• | a decrease of $600.2 million of net borrowings under our senior secured term loan B facility in the first quarter of 2013; |
• | $233.6 million in repayments of long-term debt assumed in connection with the Medicis acquisition; |
• | a decrease of $131.4 million related to the higher repayments under our senior secured term loan A facility; |
• | $37.6 million in repayments of short-term borrowings and long-term debt, in the aggregate, assumed in connection with the Natur Produkt acquisition; and |
• | a decrease of $31.9 million related to the higher debt issue costs paid primarily due to the repricing of our senior secured term loan A facility, our senior secured term loan B facility and our incremental term loan B facility in the first quarter of 2013 (as described below under “Financial Condition, Liquidity and Capital Resources — Financial Assets (Liabilities)”). |
• | an increase of $220.0 million related to the repayment under our revolving credit facility in the first quarter of 2012 that did not similarly occur in the first quarter of 2013; |
• | an increase of $73.7 million related to lower repurchases of common shares in the first quarter of 2013; and |
• | an increase due to lower contingent consideration payments of $6.4 million primarily related to the Elidel®/Xerese®/Zovirax® agreement entered into in June 2011. |
Maturity Date | As of March 31, 2013 | As of December 31, 2012 | Change | ||||||||||
($ in 000s; Asset (Liability)) | $ | $ | $ | % | |||||||||
Financial assets: | |||||||||||||
Cash and cash equivalents | 413,736 | 916,091 | (502,355 | ) | (55 | ) | |||||||
Marketable securities | 10,092 | 11,577 | (1,485 | ) | (13 | ) | |||||||
Total financial assets | 423,828 | 927,668 | (503,840 | ) | (54 | ) | |||||||
Financial liabilities: | |||||||||||||
New Revolving Credit Facility(1) | April 2016 | — | — | — | — | ||||||||
New Term Loan A Facility(1) | April 2016 | (1,926,577 | ) | (2,083,462 | ) | 156,885 | (8 | ) | |||||
New Term Loan B Facility(1) | February 2019 | (1,265,726 | ) | (1,275,167 | ) | 9,441 | (1 | ) | |||||
New Incremental Term Loan B Facility(1) | December 2019 | (973,765 | ) | (973,988 | ) | 223 | — | ||||||
Senior Notes: | |||||||||||||
6.50% | July 2016 | (915,500 | ) | (915,500 | ) | — | — | ||||||
6.75% | October 2017 | (498,394 | ) | (498,305 | ) | (89 | ) | — | |||||
6.875% | December 2018 | (939,502 | ) | (939,277 | ) | (225 | ) | — | |||||
7.00% | October 2020 | (686,768 | ) | (686,660 | ) | (108 | ) | — | |||||
6.75% | August 2021 | (650,000 | ) | (650,000 | ) | — | — | ||||||
7.25% | July 2022 | (541,562 | ) | (541,335 | ) | (227 | ) | — | |||||
6.375%(2) | October 2020 | (1,725,325 | ) | (1,724,520 | ) | (805 | ) | — | |||||
6.375%(2) | October 2020 | (492,950 | ) | (492,720 | ) | (230 | ) | — | |||||
Convertible Notes: | |||||||||||||
1.375% Convertible Notes | June 2017 | (209 | ) | (228,576 | ) | 228,367 | (100 | ) | |||||
2.50% Convertible Notes | June 2032 | — | (5,133 | ) | 5,133 | (100 | ) | ||||||
1.50% Convertible Notes | June 2033 | — | (84 | ) | 84 | (100 | ) | ||||||
Other | (842 | ) | (898 | ) | 56 | (6 | ) | ||||||
Total financial liabilities | (10,617,120 | ) | (11,015,625 | ) | 398,505 | (4 | ) | ||||||
Net financial liabilities | (10,193,292 | ) | (10,087,957 | ) | (105,335 | ) | 1 |
(1) | Together, the “Senior Secured Credit Facilities” under our Credit Agreement. |
(2) | On March 29, 2013, we announced that our wholly owned subsidiary Valeant Pharmaceuticals International (“Valeant”) commenced an offer to exchange (the “Exchange Offer”) any and all of its outstanding $500.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “Existing Notes”) into the current outstanding $1.75 billion 6.375% senior notes due 2020. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Existing Notes with the anticipated result being that some or all of such notes will be part of a single series of 6.375% senior notes under one indenture. The Exchange Offer, which did not result in any changes to existing terms or to the total amount of our debt outstanding, expired on April 26, 2013. $497.7 million of aggregate principal amount of the Existing Notes was exchanged as of such date. |
Payments Due by Period | |||||||||||||||
Total | 2013 | 2014 and 2015 | 2016 and 2017 | Thereafter | |||||||||||
($ in 000s) | $ | $ | $ | $ | $ | ||||||||||
Long-term debt obligations, including interest(1) | 14,485,600 | 643,588 | 2,008,534 | 3,415,293 | 8,418,185 |
(1) | Expected interest payments assume repayment of the principal amount of the debt obligations at maturity. |
• | our ability to compete against companies that are larger and have greater financial, technical and human resources than we do, as well as other competitive factors, such as technological advances achieved, patents obtained and new products introduced by our competitors; |
• | the introduction of generic competitors of our brand products; |
• | the introduction of products that compete against our products that do not have patent or data exclusivity rights, which products represent a significant portion of our revenues; |
• | the challenges and difficulties associated with managing the rapid growth of our Company and a large, complex business; |
• | our ability to identify, acquire, close and integrate acquisition targets successfully and on a timely basis; |
• | factors relating to the integration of the companies, businesses and products acquired by the Company (including the integration relating to our recent acquisitions of Medicis and Obagi), such as the time and resources required to integrate such companies, businesses and products, the difficulties associated with such integrations, and the achievement of the anticipated benefits from such integrations; |
• | our ability to secure and maintain third-party research, development, manufacturing, marketing or distribution arrangements; |
• | our eligibility for benefits under tax treaties and the continued availability of low effective tax rates for the business profits of certain of our subsidiaries; |
• | our substantial debt and debt service obligations and their impact on our financial condition and results of operations; |
• | our future cash flow, our ability to service and repay our existing debt and our ability to raise additional funds, if needed, in light of our current and projected levels of operations, acquisition activity and general economic conditions; |
• | interest rate risks associated with our floating debt borrowings; |
• | the risks associated with the international scope of our operations, including our presence in emerging markets and the challenges we face when entering new geographic markets; |
• | adverse global economic conditions and credit market and foreign currency exchange uncertainty in Central and Eastern Europe, Latin America, Southeast Asia, South Africa, and other countries in which we do business; |
• | economic factors over which the Company has no control, including changes in inflation, interest rates, foreign currency rates, and the potential effect of such factors on revenues, expenses and resulting margins; |
• | our ability to retain, motivate and recruit executives and other key employees; |
• | the outcome of legal proceedings, investigations and regulatory proceedings; |
• | the risk that our products could cause, or be alleged to cause, personal injury, leading to potential lawsuits and/or withdrawals of products from the market; |
• | the difficulty in predicting the expense, timing and outcome within our legal and regulatory environment, including, but not limited to, the U.S. Food and Drug Administration, Health Canada and European, Asian, Brazilian and Australian regulatory approvals, legal and regulatory proceedings and settlements thereof, the protection afforded by our patents and other intellectual and proprietary property, successful generic challenges to our products and infringement or alleged infringement of the intellectual property of others; |
• | the results of continuing safety and efficacy studies by industry and government agencies; |
• | the availability and extent to which our products are reimbursed by government authorities and other third party payors, as well as the impact of obtaining or maintaining such reimbursement on the price of our products; |
• | the inclusion of our products on formularies or our ability to achieve favorable formulary status, as well as the impact on the price of our products in connection therewith; |
• | the impact of price control restrictions on our products, including the risk of mandated price reductions; |
• | the success of preclinical and clinical trials for our drug development pipeline or delays in clinical trials that adversely impact the timely commercialization of our pipeline products, as well as factors impacting the commercial success of our currently marketed products, which could lead to material impairment charges; |
• | the results of management reviews of our research and development portfolio, conducted periodically and in connection with certain acquisitions, the decisions from which could result in terminations of specific projects which, in turn, could lead to material impairment charges; |
• | the uncertainties associated with the acquisition and launch of new products, including, but not limited to, the acceptance and demand for new pharmaceutical products, and the impact of competitive products and pricing; |
• | our ability to obtain components, raw materials or finished products supplied by third parties and other manufacturing and supply difficulties and delays; |
• | the disruption of delivery of our products and the routine flow of manufactured goods; |
• | the seasonality of sales of certain of our products; |
• | declines in the pricing and sales volume of certain of our products that are distributed by third parties, over which we have no or limited control; |
• | compliance with, or the failure to comply with, health care “fraud and abuse” laws and other extensive regulation of our marketing, promotional and pricing practices, worldwide anti-bribery laws (including the U.S. Foreign Corrupt Practices Act), worldwide environmental laws and regulation and privacy and security regulations; |
• | the impacts of the Patient Protection and Affordable Care Act and other legislative and regulatory healthcare reforms in the countries in which we operate; and |
• | other risks detailed from time to time in our filings with the U.S. Securities and Exchange Commission (the “SEC”) and the Canadian Securities Administrators (the “CSA”), as well as our ability to anticipate and manage the risks associated with the foregoing. |
Period | Total Number of Shares (or Units) Purchased | Average Price Paid Per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plan | Approximate Dollar Value of Shares (or Units) That May Yet Be Purchased Under the Plan | |||||||||
(In thousands) | |||||||||||||
January 1, 2013 to January 31, 2013 | — | $ | — | — | $ | 1,500,000 | |||||||
February 1, 2013 to February 28, 2013 | — | $ | — | — | $ | 1,500,000 | |||||||
March 1, 2013 to March 31, 2013 | 500,251(1) | $ | 69.97 | 500,251(1) | $ | 1,464,995 |
2.1 | Agreement and Plan of Merger, dated as of March 19, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Valeant Pharmaceuticals International, Inc. and Obagi Medical Products, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on March 20, 2013, which is incorporated by reference herein. |
2.2 | Amendment to Agreement and Plan of Merger, dated as of April 3, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Obagi Medical Products, Inc. and Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on April 3, 2013, which is incorporated by reference herein. |
4.1* | Seventh Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of September 28, 2010, among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.2* | Sixth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of November 23, 2010, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.3* | Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of February 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.4* | Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of March 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.5* | Second Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee. |
4.6* | First Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee. |
10.1 | Amendment No. 3, dated January 24, 2013, to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, among the Company, certain subsidiaries of the Company as Guarantors, each of the lenders named therein, J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A. and Morgan Stanley, as Co-Syndication Agents, JPMorgan, as Issuing Bank, GSLP, as Administrative Agent and Collateral Agent, and the other agents party thereto (the ''Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc.''), originally filed as Exhibit 10.25 to the Company's Annual Report on Form 10-K filed on February 28, 2012, which is incorporated by reference herein. |
10.2 | Amendment No. 4, dated February 21, 2013, to the Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K filed on February 28, 2012, which is incorporated by reference herein. |
31.1* | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
*101.INS | XBRL Instance Document |
*101.SCH | XBRL Taxonomy Extension Schema |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
*101.LAB | XBRL Taxonomy Extension Label Linkbase |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
*101.DEF | XBRL Taxonomy Extension Definition Linkbase |
* | Filed herewith. |
Valeant Pharmaceuticals International, Inc. (Registrant) | |
Date: May 3, 2013 | /s/ J. MICHAEL PEARSON J. Michael Pearson Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
Date: May 3, 2013 | /s/ HOWARD B. SCHILLER Howard B. Schiller Executive Vice-President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director |
Exhibit Number | Exhibit Description |
2.1 | Agreement and Plan of Merger, dated as of March 19, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Valeant Pharmaceuticals International, Inc. and Obagi Medical Products, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on March 20, 2013, which is incorporated by reference herein. |
2.2 | Amendment to Agreement and Plan of Merger, dated as of April 3, 2013, by and among Valeant Pharmaceuticals International, Odysseus Acquisition Corp., Obagi Medical Products, Inc. and Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 2.1 to Obagi Medical Products, Inc.'s Current Report on Form 8-K filed on April 3, 2013, which is incorporated by reference herein. |
4.1* | Seventh Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of September 28, 2010, among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.2* | Sixth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of November 23, 2010, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.3* | Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of February 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.4* | Fifth Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of March 8, 2011, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee. |
4.5* | Second Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee. |
4.6* | First Supplemental Indenture, dated as of April 23, 2013, by and among Medicis Pharmaceutical Corporation, Valeant Pharmaceuticals International and The Bank of New York Mellon Trust Company, N.A., as trustee, to the Indenture, dated as of October 4, 2012, by and among Valeant Pharmaceuticals International, Valeant Pharmaceuticals International, Inc., the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee. |
10.1 | Amendment No. 3, dated January 24, 2013, to the Third Amended and Restated Credit and Guaranty Agreement, dated as of February 13, 2012, among the Company, certain subsidiaries of the Company as Guarantors, each of the lenders named therein, J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding, Inc., as Joint Lead Arrangers and Joint Bookrunners, JPMorgan Chase Bank, N.A. and Morgan Stanley, as Co-Syndication Agents, JPMorgan, as Issuing Bank, GSLP, as Administrative Agent and Collateral Agent, and the other agents party thereto (the ''Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc.''), originally filed as Exhibit 10.25 to the Company's Annual Report on Form 10-K filed on February 28, 2012, which is incorporated by reference herein. |
10.2 | Amendment No. 4, dated February 21, 2013, to the Third Amended and Restated Credit and Guaranty Agreement of Valeant Pharmaceuticals International, Inc., originally filed as Exhibit 10.26 to the Company's Annual Report on Form 10-K filed on February 28, 2012, which is incorporated by reference herein. |
31.1* | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* | Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* | Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
*101.INS | XBRL Instance Document |
*101.SCH | XBRL Taxonomy Extension Schema |
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
*101.LAB | XBRL Taxonomy Extension Label Linkbase |
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
*101.DEF | XBRL Taxonomy Extension Definition Linkbase |
* | Filed herewith. |
Company: | VALEANT PHARMACEUTICALS INTERNATIONAL | ||||
By: | /s/ Howard B. Schiller | ||||
Name: | Howard B. Schiller | ||||
Title: | Executive Vice President and Chief Financial Officer | ||||
Medicis: | MEDICIS PHARMACEUTICAL CORPORATION | |||||
By: | /s/ Howard B. Schiller | |||||
Name: | Howard B. Schiller | |||||
Title: | EVP, CFO and Treasurer | |||||
Trustee: | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||||
By: | /s/ Teresa Petta | ||||
Name: | Teresa Petta | ||||
Title: | Authorized Signatory | ||||
Company: | VALEANT PHARMACEUTICALS INTERNATIONAL | ||||
By: | /s/ Howard B. Schiller | ||||
Name: | Howard B. Schiller | ||||
Title: | Executive Vice President and Chief Financial Officer | ||||
Medicis: | MEDICIS PHARMACEUTICAL CORPORATION | |||||
By: | /s/ Howard B. Schiller | |||||
Name: | Howard B. Schiller | |||||
Title: | EVP, CFO and Treasurer | |||||
Trustee: | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||||
By: | /s/ Teresa Petta | ||||
Name: | Teresa Petta | ||||
Title: | Authorized Signatory | ||||
Company: | VALEANT PHARMACEUTICALS INTERNATIONAL | ||||
By: | /s/ Howard B. Schiller | ||||
Name: | Howard B. Schiller | ||||
Title: | Executive Vice President and Chief Financial Officer | ||||
Medicis: | MEDICIS PHARMACEUTICAL CORPORATION | |||||
By: | /s/ Howard B. Schiller | |||||
Name: | Howard B. Schiller | |||||
Title: | EVP, CFO and Treasurer | |||||
Trustee: | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||||
By: | /s/ Teresa Petta | ||||
Name: | Teresa Petta | ||||
Title: | Authorized Signatory | ||||
Company: | VALEANT PHARMACEUTICALS INTERNATIONAL | ||||
By: | /s/ Howard B. Schiller | ||||
Name: | Howard B. Schiller | ||||
Title: | Executive Vice President and Chief Financial Officer | ||||
Medicis: | MEDICIS PHARMACEUTICAL CORPORATION | |||||
By: | /s/ Howard B. Schiller | |||||
Name: | Howard B. Schiller | |||||
Title: | EVP, CFO and Treasurer | |||||
Trustee: | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||||
By: | /s/ Teresa Petta | ||||
Name: | Teresa Petta | ||||
Title: | Authorized Signatory | ||||
Company: | VALEANT PHARMACEUTICALS INTERNATIONAL | ||||
By: | /s/ Howard B. Schiller | ||||
Name: | Howard B. Schiller | ||||
Title: | Executive Vice President and Chief Financial Officer | ||||
Medicis: | MEDICIS PHARMACEUTICAL CORPORATION | |||||
By: | /s/ Howard B. Schiller | |||||
Name: | Howard B. Schiller | |||||
Title: | EVP, CFO and Treasurer | |||||
Trustee: | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||||
By: | /s/ Teresa Petta | ||||
Name: | Teresa Petta | ||||
Title: | Authorized Signatory | ||||
Company: | VALEANT PHARMACEUTICALS INTERNATIONAL | ||||
By: | /s/ Howard B. Schiller | ||||
Name: | Howard B. Schiller | ||||
Title: | Executive Vice President and Chief Financial Officer | ||||
Medicis: | MEDICIS PHARMACEUTICAL CORPORATION | |||||
By: | /s/ Howard B. Schiller | |||||
Name: | Howard B. Schiller | |||||
Title: | EVP, CFO and Treasurer | |||||
Trustee: | THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee | ||||
By: | /s/ Teresa Petta | ||||
Name: | Teresa Petta | ||||
Title: | Authorized Signatory | ||||
1. | I have reviewed this quarterly report on Form 10-Q of Valeant Pharmaceuticals International, Inc. (the “Company”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
5. | The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
Date: May 3, 2013 | ||
/s/ J. MICHAEL PEARSON | ||
J. Michael Pearson | ||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Valeant Pharmaceuticals International, Inc. (the “Company”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report; |
4. | The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and |
5. | The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting. |
Date: May 3, 2013 | |||
/s/ HOWARD B. SCHILLER | |||
Howard B. Schiller | |||
Executive Vice-President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
1. | The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 3, 2013 | ||
/s/ J. MICHAEL PEARSON | ||
J. Michael Pearson | ||
Chairman of the Board and Chief Executive Officer |
1. | The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 3, 2013 | |||
/s/ HOWARD B. SCHILLER | |||
Howard B. Schiller | |||
Executive Vice-President and Chief Financial Officer |
SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Mar. 31, 2013
|
Mar. 31, 2012
Revision
Foreign currency translation adjustment
|
|
Increase in goodwill and intangible assets, net | $ 21,400,000 | |
Increase in comprehensive income | $ (83,068,000) | $ 21,400,000 |
INTANGIBLE ASSETS AND GOODWILL (Details 3) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended |
---|---|
Mar. 31, 2013
item
|
|
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | $ 5,141,366 |
Additions | 35,651 |
Adjustments | 22,246 |
Foreign exchange and other | (34,016) |
Balance at the end of the period | 5,165,247 |
Number of reportable segments | 2 |
Developed Markets
|
|
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | 3,988,795 |
Additions | 256 |
Adjustments | 22,562 |
Foreign exchange and other | (6,820) |
Balance at the end of the period | 4,004,793 |
Emerging Markets
|
|
Change in the carrying amount of goodwill | |
Balance at the beginning of the period | 1,152,571 |
Additions | 35,395 |
Adjustments | (316) |
Foreign exchange and other | (27,196) |
Balance at the end of the period | $ 1,160,454 |
FAIR VALUE MEASUREMENTS (Details 3) (USD $)
|
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2013
Suncare and skincare brands
|
Mar. 31, 2013
Dermatology products
|
|
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis | ||||
Impairment charges on intangible assets | $ 26,100,000 | $ 5,700,000 | ||
Adjusted carrying value of intangible assets | $ 8,671,935,000 | $ 8,761,793,000 | $ 44,400,000 | $ 1,000,000 |
LONG-TERM DEBT (Details) (USD $)
|
0 Months Ended | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
Dec. 31, 2012
|
Mar. 31, 2013
New Term Loan A Facility
|
Dec. 31, 2012
New Term Loan A Facility
|
Mar. 31, 2013
New Term Loan B Facility
|
Dec. 31, 2012
New Term Loan B Facility
|
Mar. 31, 2013
Incremental Term Loan B Facility
|
Dec. 31, 2012
Incremental Term Loan B Facility
|
Mar. 31, 2013
6.50% Senior Notes due in July 2016
|
Dec. 31, 2012
6.50% Senior Notes due in July 2016
|
Mar. 31, 2013
6.75% Senior Notes due in October 2017
|
Dec. 31, 2012
6.75% Senior Notes due in October 2017
|
Mar. 31, 2013
6.875% Senior Notes due in December 2018
|
Dec. 31, 2012
6.875% Senior Notes due in December 2018
|
Mar. 31, 2013
7.00% Senior Notes due in October 2020
|
Dec. 31, 2012
7.00% Senior Notes due in October 2020
|
Mar. 31, 2013
6.75% Senior Notes due in August 2021
|
Dec. 31, 2012
6.75% Senior Notes due in August 2021
|
Mar. 31, 2013
7.25% Senior Notes due in July 2022
|
Dec. 31, 2012
7.25% Senior Notes due in July 2022
|
Apr. 25, 2013
6.375% Senior Notes due in October 2020
|
Mar. 29, 2013
6.375% Senior Notes due in October 2020
item
|
Mar. 31, 2013
6.375% Senior Notes due in October 2020
|
Dec. 31, 2012
6.375% Senior Notes due in October 2020
|
Mar. 31, 2013
6.375% Senior Notes due in October 2020
|
Mar. 29, 2013
6.375% Senior Notes due in October 2020
|
Dec. 31, 2012
6.375% Senior Notes due in October 2020
|
Mar. 31, 2013
1.375% Convertible Senior Notes due in 2017
|
Dec. 31, 2012
1.375% Convertible Senior Notes due in 2017
|
Dec. 11, 2012
1.375% Convertible Senior Notes due in 2017
|
Feb. 11, 2013
2.5% Contingent Convertible Senior Notes due in 2032
|
Dec. 31, 2012
2.5% Contingent Convertible Senior Notes due in 2032
|
Dec. 11, 2012
2.5% Contingent Convertible Senior Notes due in 2032
|
Feb. 11, 2013
1.5% Contingent Convertible Senior Notes due in 2033
|
Dec. 31, 2012
1.5% Contingent Convertible Senior Notes due in 2033
|
Dec. 11, 2012
1.5% Contingent Convertible Senior Notes due in 2033
|
Mar. 31, 2013
Other
|
Dec. 31, 2012
Other
|
|
Long-term debt, net of unamortized debt discount | ||||||||||||||||||||||||||||||||||||||
Long-term debt | $ 10,617,120,000 | $ 11,015,625,000 | $ 1,926,577,000 | $ 2,083,462,000 | $ 1,265,726,000 | $ 1,275,167,000 | $ 973,765,000 | $ 973,988,000 | $ 915,500,000 | $ 915,500,000 | $ 498,394,000 | $ 498,305,000 | $ 939,502,000 | $ 939,277,000 | $ 686,768,000 | $ 686,660,000 | $ 650,000,000 | $ 650,000,000 | $ 541,562,000 | $ 541,335,000 | $ 1,725,325,000 | $ 1,724,520,000 | $ 492,950,000 | $ 492,720,000 | $ 209,000 | $ 228,576,000 | $ 5,133,000 | $ 84,000 | $ 842,000 | $ 898,000 | ||||||||
Less current portion | (289,676,000) | (480,182,000) | ||||||||||||||||||||||||||||||||||||
Total long-term debt | 10,327,444,000 | 10,535,443,000 | ||||||||||||||||||||||||||||||||||||
Interest rate on debt (as a percent) | 6.50% | 6.75% | 6.875% | 7.00% | 6.75% | 7.25% | 6.375% | 6.375% | 6.375% | 6.375% | 1.375% | 1.375% | 2.50% | 2.50% | 1.50% | 1.50% | ||||||||||||||||||||||
Total fair value of long-term debt | 11,200,000,000 | 11,700,000,000 | ||||||||||||||||||||||||||||||||||||
Aggregate principal amount | 1,750,000,000 | 500,000 | ||||||||||||||||||||||||||||||||||||
Notes exchanged | $ 497,700,000 | |||||||||||||||||||||||||||||||||||||
Number of indenture | 1 |
FAIR VALUE MEASUREMENTS (Details) (USD $)
In Thousands, unless otherwise specified |
Mar. 31, 2013
|
Dec. 31, 2012
|
---|---|---|
Assets: | ||
Marketable securities | $ 10,092 | $ 11,577 |
Available-for-sale equity securities
|
||
Assets: | ||
Marketable securities | 10,092 | 4,410 |
Auction rate floating securities
|
||
Assets: | ||
Marketable securities | 7,167 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring basis
|
||
Assets: | ||
Money market funds | 78,184 | 306,604 |
Total financial assets | 88,276 | 311,014 |
Cash equivalents | 78,184 | 306,604 |
Marketable securities | 10,092 | 4,410 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Available-for-sale equity securities | Recurring basis
|
||
Assets: | ||
Total financial assets | 10,092 | 4,410 |
Significant Unobservable Inputs (Level 3) | Recurring basis
|
||
Assets: | ||
Total financial assets | 7,167 | |
Marketable securities | 7,167 | |
Liabilities: | ||
Acquisition-related contingent consideration | (489,425) | (455,082) |
Significant Unobservable Inputs (Level 3) | Auction rate floating securities | Recurring basis
|
||
Assets: | ||
Total financial assets | 7,167 | |
Carrying Value
|
||
Assets: | ||
Marketable securities | 10,092 | 11,577 |
Carrying Value | Recurring basis
|
||
Assets: | ||
Money market funds | 78,184 | 306,604 |
Total financial assets | 88,276 | 318,181 |
Cash equivalents | 78,184 | 306,604 |
Marketable securities | 10,092 | 11,577 |
Liabilities: | ||
Acquisition-related contingent consideration | (489,425) | (455,082) |
Carrying Value | Available-for-sale equity securities | Recurring basis
|
||
Assets: | ||
Total financial assets | 10,092 | 4,410 |
Carrying Value | Auction rate floating securities | Recurring basis
|
||
Assets: | ||
Total financial assets | $ 7,167 |
LONG-TERM DEBT (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2013
|
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LONG-TERM DEBT. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of short-term borrowings and long-term debt |
____________________________________
|
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