XML 67 R30.htm IDEA: XBRL DOCUMENT v2.4.1.9
SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT INFORMATION
Reportable Segments
The Company has two operating and reportable segments: (i) Developed Markets and (ii) Emerging Markets. The following is a brief description of the Company’s segments:
•
Developed Markets consists of (i) sales in the U.S. of pharmaceutical products, OTC products, and medical device products, as well as alliance and contract service revenues, in the areas of eye health, dermatology and podiatry, aesthetics, and dentistry, (ii) sales in the U.S. of pharmaceutical products indicated for the treatment of neurological and other diseases, as well as alliance revenue from the licensing of various products we developed or acquired, and (iii) pharmaceutical products, OTC products, and medical device products sold in Canada, Australia, New Zealand, Western Europe and Japan.
•
Emerging Markets consists of branded generic pharmaceutical products and branded pharmaceuticals, OTC products, and medical device products. Products are sold primarily in Central and Eastern Europe (primarily Poland and Russia), Asia, Latin America (Mexico, Brazil, and Argentina and exports out of Mexico to other Latin American markets), Africa and the Middle East.
Segment profit is based on operating income after the elimination of intercompany transactions. Certain costs, such as restructuring and acquisition-related costs, other (income) expense, and in-process research and development impairments and other charges, are not included in the measure of segment profit, as management excludes these items in assessing financial performance.
Corporate includes the finance, treasury, tax and legal operations of the Company’s businesses and maintains and/or incurs certain assets, liabilities, expenses, gains and losses related to the overall management of the Company, which are not allocated to the other business segments. In addition, a portion of share-based compensation is considered a corporate cost, since the amount of such expense depends on Company-wide performance rather than the operating performance of any single segment.
Segment Revenues and Profit
Segment revenues and profit for the years ended December 31, 2014, 2013 and 2012 were as follows:
 
 
2014
 
2013
 
2012
Revenues:
 
 
 
 
 
 
Developed Markets(1)
 
$
6,167.1

 
$
4,293.2

 
$
2,502.3

Emerging Markets(1)
 
2,096.4

 
1,476.4

 
978.1

Total revenues
 
8,263.5

 
5,769.6

 
3,480.4

Segment profit:
 
 
 
 
 
 
Developed Markets(2)
 
2,019.7

 
573.2

 
815.9

Emerging Markets(3)
 
337.3

 
93.0

 
69.0

Total segment profit
 
2,357.0

 
666.2

 
884.9

Corporate(4)
 
(171.1
)
 
(165.7
)
 
(138.3
)
Restructuring, integration and other costs
 
(381.7
)
 
(462.0
)
 
(267.1
)
In-process research and development impairments and other charges
 
(41.0
)
 
(153.6
)
 
(189.9
)
Acquisition-related costs
 
(6.3
)
 
(36.4
)
 
(78.6
)
Acquisition-related contingent consideration
 
14.1

 
29.2

 
5.3

Other income (expense)
 
268.7

 
(287.2
)
 
(136.6
)
Operating income (loss)
 
2,039.7

 
(409.5
)
 
79.7

Interest income
 
5.0

 
8.0

 
6.0

Interest expense
 
(971.0
)
 
(844.3
)
 
(481.6
)
Loss on extinguishment of debt
 
(129.6
)
 
(65.0
)
 
(20.1
)
Foreign exchange and other
 
(144.1
)
 
(9.4
)
 
19.7

Gain on investments, net
 
292.6

 
5.8

 
2.1

Income (loss) before provision for (recovery of) income taxes
 
$
1,092.6

 
$
(1,314.4
)
 
$
(394.2
)
____________________________________
(1)
Developed Markets and Emerging Markets segment revenues reflect (i) incremental product sales revenue in 2014 from all 2013 and all 2014 acquisitions and (ii) incremental product sales revenue in 2013 from all 2012 and all 2013 acquisitions. For further information, see Item 7 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Revenues by Segment” of this Form 10-K.
(2)
Developed Markets segment profit in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets as follows: (i) $906.4 million in 2014, in the aggregate, (ii) $1,080.4 million in 2013, in the aggregate, and (iii) $506.4 million in 2012, in the aggregate.
Developed Markets segment profit in 2013 also reflects an impairment charge of $551.6 million related to ezogabine/retigabine in the third quarter of 2013 (see note 6 titled “FAIR VALUE MEASUREMENTS”).
(3)
Emerging Markets segment profit in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustments to inventory and identifiable intangible assets as follows: (i) $323.9 million in 2014, in the aggregate, (ii) $320.5 million in 2013, in the aggregate, and (iii) $180.5 million in 2012, in the aggregate.
(4)
Corporate reflects non-restructuring-related share-based compensation expense of $40.3 million, $45.5 million and $66.2 million in 2014, 2013 and 2012, respectively.
Segment Assets
Total assets by segment as of December 31, 2014, 2013 and 2012 were as follows:
 
 
2014
 
2013
 
2012
Assets(1):
 
 
 
 
 
 
Developed Markets(2)
 
$
19,093.4

 
$
20,007.2

 
$
12,893.7

Emerging Markets(3)
 
6,332.9

 
6,907.8

 
4,022.1

 
 
25,426.3

 
26,915.0

 
16,915.8

Corporate
 
926.7

 
1,055.8

 
1,034.6

Total assets
 
$
26,353.0

 
$
27,970.8

 
$
17,950.4

____________________________________
(1)
The segment assets as of December 31, 2013 and December 31, 2012 contain reclassifications between segments to conform to the current year presentation.
(2)
Developed Markets segment assets as of December 31, 2014 reflect (i) the divestiture of facial aesthetic fillers and toxins in July 2014 with the carrying values of the related assets of $1.0 billion, in the aggregate, (see note 4 titled “DIVESTITURES” for further information), (ii) the provisional amounts of identifiable intangible assets and goodwill of the PreCision acquisition of $257.7 million and $170.5 million, respectively, and (iii) the amounts of identifiable intangible assets and goodwill of the Solta Medical acquisition of $103.5 million and $56.4 million, respectively. Developed Markets segment assets as of December 31, 2013 reflect (i) the provisional amounts of identifiable intangible assets and goodwill of B&L of $3,977.9 million and $3,226.7 million, respectively, and (ii) the amounts of identifiable intangible assets and goodwill of Obagi of $335.5 million and $158.5 million, respectively.
(3)
Emerging Markets segment assets as of December 31, 2014 reflect the amounts of identifiable intangible assets and goodwill of the Solta Medical acquisition of $69.4 million and $37.8 million, respectively. Emerging Markets segment assets as of December 31, 2013 reflect (i) the provisional amounts of identifiable intangible assets and goodwill of B&L of $782.7 million and $1,135.7 million, respectively, and (ii) the amounts of identifiable intangible assets and goodwill of Natur Produkt of $104.8 million and $40.9 million, respectively.
Capital Expenditures, and Depreciation and Amortization, including Impairments of Finite-Lived Intangible Assets
Capital expenditures, and depreciation and amortization, including impairments of finite-lived intangible assets by segment for the years ended December 31, 2014, 2013 and 2012 were as follows:
 
 
2014

2013

2012
Capital expenditures:
 
 
 
 
 
 
Developed Markets
 
$
152.7

 
$
54.1

 
$
12.3

Emerging Markets
 
29.3

 
51.9

 
61.6

 
 
182.0

 
106.0

 
73.9

Corporate
 
109.6

 
9.3

 
33.7

Total capital expenditures
 
$
291.6

 
$
115.3

 
$
107.6

Depreciation and amortization, including impairments of finite-lived intangible assets(1):
 
 
 
 
 
 
Developed Markets
 
$
1,336.9

 
$
1,687.7

 
$
755.1

Emerging Markets
 
385.7

 
313.7

 
224.6

 
 
1,722.6

 
2,001.4

 
979.7

Corporate
 
15.0

 
14.4

 
6.5

Total depreciation and amortization, including impairments of finite-lived intangible assets
 
$
1,737.6

 
$
2,015.8

 
$
986.2

____________________________________
(1)
Depreciation and amortization, including impairments of finite-lived intangible assets in 2014, 2013 and 2012 reflects the impact of acquisition accounting adjustments related to the fair value adjustment to identifiable intangible assets as follows: (i) in 2014 - Developed Markets — $877.6 million; and Emerging Markets — $325.3 million, (ii) in 2013 - Developed Markets — $773.0 million; and Emerging Markets — $255.4 million, and (iii) in 2012 - Developed Markets — $430.5 million; and Emerging Markets — $177.5 million.
Depreciation and amortization, including impairments of finite-lived intangible assets in 2014, 2013 and 2012 also reflects the impairment charges and write-offs related to finite-lived intangible assets. For more information regarding asset impairment charges see note 10 titled “INTANGIBLE ASSETS AND GOODWILL”.
Revenues by Product Category
Revenues by product category for the years ended December 31, 2014, 2013 and 2012 were as follows:
 
 
2014
 
2013
 
2012
Pharmaceuticals
 
$
3,559.8

 
$
2,707.8

 
$
2,054.5

Devices
 
1,629.4

 
845.3

 
77.0

OTC
 
1,711.4

 
1,086.6

 
475.7

Branded and Other Generics
 
1,203.0

 
1,000.6

 
681.4

Other revenues
 
159.9

 
129.3

 
191.8

 
 
$
8,263.5

 
$
5,769.6

 
$
3,480.4


Geographic Information
Revenues and long-lived assets by geographic region for the years ended and as of December 31, 2014, 2013 and 2012 were as follows:
 
 
Revenues(1)
 
Long-Lived Assets(2)
 
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
U.S. and Puerto Rico
 
$
4,473.0

 
$
3,194.5

 
$
1,885.8

 
$
718.2

 
$
592.0

 
$
60.4

Canada
 
375.1

 
387.4

 
349.1

 
83.7

 
87.7

 
109.7

Poland
 
276.2

 
268.8

 
199.3

 
99.4

 
110.0

 
110.9

Russia
 
275.1

 
202.8

 
71.2

 
4.6

 
7.0

 
0.2

Japan
 
248.7

 
104.9

 
12.2

 
1.2

 
1.3

 
—

China
 
232.0

 
91.0

 
0.6

 
39.6

 
44.3

 
—

Mexico
 
221.6

 
200.9

 
167.4

 
73.8

 
82.5

 
73.9

France
 
204.7

 
86.9

 
2.5

 
36.0

 
40.5

 
—

Germany
 
204.4

 
130.9

 
1.9

 
73.5

 
83.8

 
—

Australia
 
196.3

 
178.2

 
184.1

 
4.4

 
3.4

 
4.4

Brazil
 
161.0

 
155.6

 
135.1

 
31.4

 
41.4

 
46.0

U.K.
 
114.2

 
47.0

 
19.2

 
11.0

 
12.2

 
—

Italy
 
98.0

 
37.2

 
2.3

 
23.1

 
25.3

 
—

Other (3)
 
1,183.2

 
683.5

 
449.7

 
110.6

 
102.8

 
57.2

 
 
$
8,263.5

 
$
5,769.6

 
$
3,480.4

 
$
1,310.5

 
$
1,234.2

 
$
462.7

____________________________________
(1)
Revenues are attributed to countries based on the location of the customer.
(2)
Long-lived assets consist of property, plant and equipment, net of accumulated depreciation, which is attributed to countries based on the physical location of the assets.
(3)
Other consists primarily of countries in Europe, Asia, the Middle East, and Africa.
Major Customers
External customers that accounted for 10% or more of the Company’s total revenues for the years ended December 31, 2014, 2013 and 2012 were as follows:
 
 
2014
 
2013
 
2012
McKesson Corporation
 
17%
 
19%
 
20%
AmerisourceBergen Corporation
 
10%
 
7%
 
8%
Cardinal Health, Inc.
 
9%
 
13%
 
20%