Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Actavis, Inc. | d301509d8k.htm |
| EX-99.1 - PRESS RELEASE - Actavis, Inc. | d301509dex991.htm |
| EX-99.2 - RECONCILIATION TABLE - FOURTH QUARTER ENDED DECEMBER 31, 2011 - Actavis, Inc. | d301509dex992.htm |
Exhibit 99.3
Watson Pharmaceuticals, Inc.
Non-GAAP Reconciliation Table - Twelve Months Ended December 31, 2011
(in millions, except per share amounts)
| NON-GAAP ADJUSTMENTS | ||||||||||||||||||||||||||||||||||||
| GAAP Results | Amortization Expense (1) |
Proposed Legal Settlements (2) |
Acquisition & Licensing (3) |
Accretion Expense (4) |
Global Supply Chain (5) |
Impairments / Asset Sales (6) |
All Other (7) | Non-GAAP Results |
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| Net revenues |
$ | 4,584.4 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (9.8 | ) | $ | 4,574.6 | |||||||||||||||||
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| Operating Expenses: |
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| Cost of Goods Sold (excludes amortization, presented below) |
2,564.9 | — | — | (2.8 | ) | — | (9.4 | ) | — | — | 2,552.7 | |||||||||||||||||||||||||
| Research and development |
295.4 | — | — | 6.2 | — | (4.8 | ) | — | — | 296.8 | ||||||||||||||||||||||||||
| Selling and marketing |
401.8 | — | — | — | — | (1.4 | ) | — | — | 400.4 | ||||||||||||||||||||||||||
| General and administrative |
353.1 | — | (5.0 | ) | (6.8 | ) | — | (0.7 | ) | — | — | 340.5 | ||||||||||||||||||||||||
| Amortization |
354.3 | (354.3 | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Loss (gain) on asset sales and impairments, net |
78.7 | — | — | (34.4 | ) | — | — | (44.3 | ) | — | — | |||||||||||||||||||||||||
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| Total operating expenses |
4,048.2 | (354.3 | ) | (5.0 | ) | (37.8 | ) | — | (16.3 | ) | (44.3 | ) | — | 3,590.4 | ||||||||||||||||||||||
| Operating Income |
536.2 | 354.3 | 5.0 | 37.8 | — | 16.3 | 44.3 | (9.8 | ) | 984.2 | ||||||||||||||||||||||||||
| Other (expense) income: |
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| Interest income |
2.1 | — | — | — | — | — | — | — | 2.1 | |||||||||||||||||||||||||||
| Interest expense |
(81.8 | ) | — | — | (8.3 | ) | 37.8 | — | — | — | (52.2 | ) | ||||||||||||||||||||||||
| Other income |
(0.5 | ) | 1.2 | — | — | (0.3 | ) | — | — | (3.4 | ) | (3.0 | ) | |||||||||||||||||||||||
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| Total other (expense) income, net |
(80.2 | ) | 1.2 | — | (8.3 | ) | 37.5 | — | — | (3.4 | ) | (53.1 | ) | |||||||||||||||||||||||
| Income before income taxes and noncontrolling interest |
456.0 | 355.5 | 5.0 | 29.5 | 37.5 | 16.3 | 44.3 | (13.2 | ) | 931.0 | ||||||||||||||||||||||||||
| Provision for income taxes |
196.9 | 108.3 | 2.2 | 7.9 | 2.3 | 4.2 | 8.8 | (1.6 | ) | 329.0 | ||||||||||||||||||||||||||
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| Net Income |
259.1 | 247.2 | 2.8 | 21.6 | 35.2 | 12.1 | 35.5 | (11.6 | ) | 602.0 | ||||||||||||||||||||||||||
| Loss attributable to noncontrolling Interest |
1.8 | — | — | — | — | — | — | — | 1.8 | |||||||||||||||||||||||||||
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| Net income attributable to common shareholders |
$ | 260.9 | $ | 247.2 | $ | 2.8 | $ | 21.6 | $ | 35.2 | $ | 12.1 | $ | 35.5 | $ | (11.6 | ) | $ | 603.8 | |||||||||||||||||
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| Diluted earnings per share |
$ | 2.06 | $ | 4.77 | ||||||||||||||||||||||||||||||||
| Diluited weighted average shares outstanding |
126.5 | 126.5 | ||||||||||||||||||||||||||||||||||
Explanation of reconciling items to arrive at non-GAAP financial results:
| 1. | Includes amortization expense of acquired intangible assets, such as product rights, and amortization of the excess purchase price of an equity method investments recorded in other income. |
| 2. | Includes $5.0 associated with the proposed legal settlement in the Quinine Sulfate litigation matter. |
| 3. | Amount in cost of goods sold includes $10.0 amortization of inventory step-up related to the Specifar acquisition and $0.6 fair value adjustments of certain contingent obligations relating to the acquisition of our progesterone gel business from Columbia Labs, offset by $7.8 fair value adjustment of certain contingent obligations due to the Arrow Group selling shareholders based on the after-tax gross profits (as defined under the agreement) on expected future sales of atorvastatin. Amount in research and development includes $7.7 fair value adjustment of certain contingent oblgations relating to the acquisition of our progesterone business from Columbia Labs, offset by a $1.5 milestone payment made in connection with Rapaflo(R) territory expansion in Latin America. Amount in general and administrative includes $6.5 related to Specifar acquisition costs and $0.3 other acquisition and licensing expenses. Amount in loss (gain) on asset sales and impairments includes $75.8 non-cash impairment charge of in-process research and development intangible assets relating to the progesterone gel business and a $7.6 other-than-temporary impairment charge related to our Columbia Labs equity-method investment, offset by $49.0 fair value adjustment of certain contingent oblgations relating to the acquisition of our progesterone business from Columbia Labs. Amount in interest expense includes $8.3 reversal of previously recorded interest accretion on contingent oblgations relating to our progesterone gel business. |
| 4. | Amount in interest expense represents a non-cash fair value adjustment related to the Company’s preferred stock of $16.7 and an adjustment to the fair value of contingent liabilities associated with the acquisitions of Arrow Group, the progesterone business from Columbia Labs and Specifar of $13.2, $6.1 and $1.8, respectively. These adjustments are based upon the passage of time and are classified as interest expense. Amount in other income represents a non-cash adjustment to the fair value of a contingent asset associated with the acquisition of Specifar. |
| 5. | Represents amounts attributable to our global supply chain initiative to improve efficiencies primarily within our Generics segment. The costs relate to the closures of our Carmel, NY manufacturing facility; Groveport, OH distribution center; manufacturing operations in Canada, India and Corona, CA; R&D facilities in Canada, Australia and Corona, CA. Amounts in cost of goods sold include: $3.8 accelerated depreciation; $2.3 severance and retention; $2.2 product transfer costs; and $1.1 facility decommission costs. Amounts in research and development include: $2.6 severance and retention; $1.0 accelerated depreciation; and a $1.2 inventory charge associated with the transfer of products in develpoment. Amounts in selling and marketing include $1.4 severance and retention. Amounts in general and administrative include $0.4 accelerated depreciation and $0.3 severance and retention. |
| 6. | Includes non-cash impairment charges of $27.0 related to in-process research and development intangible assets and impairment charges related to the sale of our Australia R&D facility and two buildings at our Copiague, New York manufacturing facility of $14.4, loss on sale of an equity method investment of $2.4 and an impairment of an equity method investment of $1.8, offset by gains on asset sales, |
| 7. | Amount in net revenues includes $7.4 gain from the settlement of a contingent asset acquired in connection with a prior business combination and $2.4 payment received relating to a divested business. Amount in other income includes $2.1 gain from the reversal of a reserve established in connection with an acquisition that is no longer required, $1.0 received under the terms of a contract manufacturing agreement in connection with a product divestiture as part of a previous acquisition and $0.6 gain from the sale of securities offset by $0.3 charge relating to the revaluation of securities issued by an equity method investee. |