LAVAL, Quebec, Nov. 7, 2017 /PRNewswire/ --
- Strong Third-Quarter 2017 Financial Results
-
- Revenues of $2,219
million
- GAAP Net Income of $1,301
million
- Adjusted Net Income (non-GAAP) of $367 million
- GAAP Cash Flow From Operations of $490 million; Year-to-Date of $1,712 million
- Adjusted EBITDA (non-GAAP) of $951
million
- Delivered Strong Organic Growth1 (non-GAAP) in
Bausch + Lomb/International Segment and Salix Business
- Exceeds $5 Billion Debt
Reduction Commitment Early
- Updates 2017 Full-Year Revenue and Maintains Adjusted EBITDA
(non-GAAP) Guidance Range Despite Asset Divestitures
Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX:
VRX) ("Valeant" or the "Company" or "we") today announced its
third-quarter 2017 financial results.
"Our strong third-quarter performance demonstrates our continued
progress in the turnaround of Valeant. Driven by solid execution in
our Bausch + Lomb/International segment and our Salix business, we
delivered strong organic revenue growth1 across
approximately 77% of our business in the quarter," said
Joseph C. Papa, chairman and chief
executive officer, Valeant.
"Valeant is a very different company today than it was a year
ago. Under a new management team, we have strengthened our balance
sheet and stabilized the Company by simplifying our business and
allocating resources more efficiently," Mr. Papa continued. "We
realize there is more progress to be made, and we will continue to
hold ourselves accountable for delivering on our commitments to
best serve our shareholders, employees, customers, and most
importantly, patients."
Company Highlights
Executing on Core Businesses
- Increased revenue in the Bausch + Lomb/International segment by
1% compared to the third quarter of 2016; excluding foreign
exchange and divestitures, revenue grew organically1 in
the segment by 6% compared to the third quarter of 2016
-
- Global Consumer revenue decreased by 2% compared to the third
quarter of 2016; Consumer revenue grew organically1 by
6% compared to the third quarter of 2016, driven by strong growth
of PreserVision® vitamins
- Grew revenue in the Global Vision Care business by 5% compared
to the third quarter of 2016 and generated organic
growth1 of 8% compared to the third quarter of 2016
- Advanced Bausch + Lomb business
-
- Received approval from the U.S. Food and Drug Administration
(FDA) for VYZULTA™, a new treatment option for glaucoma
- Introduced Biotrue® ONEday for Astigmatism daily
disposable contact lenses in 20 European countries
- Received Voluntary Action Indicated inspection classification
from the FDA for the Bausch + Lomb manufacturing facility in
Tampa, Fla., eliminating
manufacturing uncertainties related to regulatory submissions for
products manufactured there
- Grew revenue in the Salix business by 3% compared to the third
quarter of 2016 and grew revenue organically1 by 6%
compared to the third quarter of 2016
-
- XIFAXAN® revenue increased by 5% compared to the
third quarter of 2016
- APRISO® prescriptions grew by 7% compared to the
third quarter of 2016
- Continued to focus on stabilizing the Ortho Dermatologics
business
-
- Launched SILIQ™ injection in July
2017 as the lowest-priced injectable biologic for
moderate-to-severe plaque psoriasis in the United States based on total annual cost;
early market access has been better than expected with 75% of
dispensed prescriptions covered
- Presented multiple data sets on the dermatology pipeline and
SILIQ™, including 2-year findings demonstrating the long-term
efficacy profile of SILIQ™, at the 2017 Fall Clinical Dermatology
Conference
- Received FDA filing acceptance for IDP-118 topical lotion for
the treatment of plaque psoriasis
- Received FDA 510(k) clearance for the Thermage FLX™ System to
non-invasively smooth skin on the face, eyes and body
Strengthening the Balance Sheet
- As of Nov. 7, 2017, reduced total
debt by approximately $6 billion
since the end of the first quarter of 2016
-
- Exceeded $5 billion commitment to
pay down debt from divestiture proceeds and free cash flow earlier
than the previously stated timing of February 2018
- Completed sale of iNova Pharmaceuticals business and used net
proceeds to pay down $923 million of
senior secured term loans on Oct. 5,
2017
- Utilized cash from operations to repay $100 million of amounts outstanding under the
Company's revolving credit facility during the quarter, and, on
Nov. 2, 2017, paid down $125 million of senior secured term loans
- Used net proceeds from sale of Dendreon Pharmaceuticals LLC to
pay down $811 million of senior
secured term loans in July 2017
- Expect to complete sale of Obagi Medical Products business
before the end of the year and will use net proceeds to pay down
senior secured term loans
- Redeemed remaining $500 million
aggregate principal amount of our outstanding 6.75% Senior Notes
due 2018, using cash on hand, on Aug. 15,
2017
- Issued $1 billion aggregate
principal amount of 5.500% senior secured notes due 2025 on
Oct. 17, 2017
-
- Used net proceeds, along with cash on hand, to repurchase
$1 billion aggregate principal amount
of outstanding 7.000% Senior Notes due 2020 and 6.375% Senior Notes
due 2020 and pay fees and expenses
- Eliminated all long-term debt maturities until 2020 and all
mandatory amortization requirements
- As of Nov. 7, 2017, approximately
80% of the Company's debt is fixed rate debt
- Delivered GAAP net income of $1,301
million and Adjusted EBITDA (non-GAAP) of $951 million
- Achieved dismissals or other positive outcomes in resolving and
managing litigation and investigations in 21 historical matters
since the end of second-quarter 2017
Third-Quarter Revenue Performance
Total revenues were
$2,219 million for the third quarter
of 2017, as compared to $2,479
million in the third quarter of 2016, a decrease of
$260 million, or 10%. The decrease
was primarily driven by decreases in volume in the U.S. Diversified
Products and Branded Rx segments attributed to the previously
reported loss of exclusivity for a basket of products and also
reflects the impact of divestitures and discontinuations and the
unfavorable impact of foreign exchange. The decline was partially
offset by increased sales in our Bausch + Lomb/International
segment and Salix business.
Revenues by segment for the third quarter of 2017 were as
follows:
(in
millions)
|
|
2017
|
|
2016
|
|
Reported
Change
|
|
Reported
Change
|
|
Change at
Constant
Currency2
|
|
Organic1
Change
|
|
Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
Bausch +
Lomb/International
|
|
$1,254
|
|
$1,243
|
|
$11
|
|
1%
|
|
2%
|
|
6%
|
Branded Rx
|
|
$633
|
|
$766
|
|
($133)
|
|
(17%)
|
|
(17%)
|
|
(7%)
|
U.S. Diversified
Products
|
|
$332
|
|
$470
|
|
($138)
|
|
(29%)
|
|
(29%)
|
|
(29%)
|
Total
Revenues
|
|
$2,219
|
|
$2,479
|
|
($260)
|
|
(10%)
|
|
(10%)
|
|
(4%)
|
Bausch + Lomb/International Segment
Bausch +
Lomb/International segment revenues were $1,254 million for the third quarter of 2017, as
compared to $1,243 million for third
quarter of 2016, an increase of $11
million, or 1%. Excluding the impact of divestitures and
discontinuations, primarily the skin care divestiture,3
and foreign exchange, the Bausch + Lomb/International segment
organically1 grew by approximately 6% compared to the
third quarter of 2016, driven by increased volumes in the Global
Consumer, International and Global Vision Care businesses.
Branded Rx Segment
Branded Rx segment revenues
were $633 million for the third
quarter of 2017, as compared to $766
million for third quarter of 2016, a decrease of
$133 million, or 17%. The decrease in
sales primarily reflects lower volumes in the Ortho Dermatologics
business and the loss of sales due to the divestiture of Dendreon
Pharmaceuticals LLC. The decline was partially offset by increased
sales in the Salix business, including XIFAXAN® and
APRISO®. Compared to the third quarter of 2016, the
Salix business grew revenue by 3% and experienced organic
growth1 of 6%.
U.S. Diversified Products Segment
U.S. Diversified
Products segment revenues were $332 million for the third quarter of 2017, as
compared to $470 million for third
quarter of 2016, a decrease of $138
million, or 29%. The decline was primarily driven by
decreases in volume and price attributed to the previously reported
loss of exclusivity for a basket of products.
Operating Income
Operating income was $38 million for the third quarter of 2017, as
compared to an operating loss of $863
million for the third quarter of 2016, an increase of
$901 million. The increase in
operating income primarily reflects the impact of goodwill
impairment charges of $1,049 million
recorded in the third quarter of 2016. Additionally, the increase
in operating income was partially attributed to a net increase of
$325 million in other income,
primarily due to the gain on the sale of the iNova Pharmaceuticals
business, offset by a goodwill impairment of $312 million related to a reporting unit in the
Branded Rx segment, as well as a net decrease of approximately
$100 million that includes (i) an
impairment of the Company's Sprout Pharmaceuticals (Sprout)
subsidiary upon its classification as held for sale and (ii) a fair
value adjustment associated with future royalty payments
(contingent consideration) related to Sprout.
Net income for the three months ended Sept. 30, 2017 was $1,301
million, as compared to a net loss of $1,218 million for the same period in 2016, an
improvement of $2,519 million. The
change in net income is mainly attributed to the increase in the
benefit of income taxes for the three months ended Sept. 30, 2017, which is primarily due to the
completion of the internal tax reorganization efforts we began in
the fourth quarter of 2016. The completion of these efforts
generated a tax benefit of $1,397 million in the quarter.
Cash provided by operating activities was $490 million for the third quarter of 2017.
Year-to-date GAAP cash flow was $1,712
million. Proactive management of working capital continued
to provide positive results on the quarter and year-to-date
performance.
GAAP Earnings Per Share (EPS) Diluted - for the third quarter of
2017 came in at $3.69 as compared to
($3.49) in the third quarter of
2016.
Adjusted EBITDA (non-GAAP)
Adjusted EBITDA
(non-GAAP) was $951 million
for the third quarter of 2017, as compared to $1,163 million for the third quarter of 2016, a
decrease of $212 million, primarily
due to revenue declines coming from the loss of exclusivity impact
on the U.S. Diversified Products segment, volume declines in the
Ortho Dermatologics business and the previously announced
divestitures, partially offset by lower Selling, General and
Administrative and Research and Development expenses.
2017 Guidance
Valeant has updated guidance for 2017,
as follows:
- Updates Full-Year Revenues in the range of $8.65 - $8.80 billion from $8.70 - $8.90 billion
- Maintains Full-Year Adjusted EBITDA (non-GAAP) in the range
of $3.60 - $3.75 billion despite
asset divestitures
This updated guidance reflects the impact of the sales of the
CeraVe®, AcneFree™ and AMBI® skin care
brands; the sale of Dendreon Pharmaceuticals LLC; the sale of the
iNova Pharmaceuticals business; and the sale of the Obagi Medical
Products business, which is expected to close before the end of
this year.
Other than with respect to GAAP Revenues, the Company only
provides guidance on a non-GAAP basis. The Company does not provide
a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to
GAAP net income (loss), due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliation. In periods where significant acquisitions or
divestitures are not expected, the Company believes it might have a
basis for forecasting the GAAP equivalent for certain costs, such
as amortization, which would otherwise be treated as non-GAAP to
calculate projected GAAP net income (loss). However, because other
deductions (such as restructuring, gain or loss on extinguishment
of debt and litigation and other matters) used to calculate
projected net income (loss) vary dramatically based on actual
events, the Company is not able to forecast on a GAAP basis with
reasonable certainty all deductions needed in order to provide a
GAAP calculation of projected net income (loss) at this time. The
amount of these deductions may be material and, therefore, could
result in projected GAAP net income (loss) being materially less
than projected Adjusted EBITDA (non-GAAP).
Additional Highlights
- Valeant's cash, cash equivalents and restricted cash (including
non-current) were $1,969 million at
Sept. 30, 2017
- The Company's availability under the Revolving Credit Facility
was approximately $980 million at
Sept. 30, 2017
- Valeant's corporate credit ratings remained unchanged during
the third quarter of 2017
Conference Call Details
Date:
|
Tuesday, Nov. 7,
2017
|
Time:
|
8:00 a.m.
EST
|
Web cast:
|
http://ir.valeant.com/events-and-presentations
|
Participant Event
Dial-in:
|
(844) 428-3520 (North
America)
|
|
(409) 767-8386
(International)
|
Participant
Passcode:
|
91700211
|
Replay
Dial-in:
|
(855) 859-2056 (North
America)
|
|
(404) 537-3406
(International)
|
Replay
Passcode:
|
91700211 (replay
available until Jan. 7, 2018)
|
About Valeant
Valeant Pharmaceuticals International,
Inc. (NYSE/TSX:VRX) is a multinational specialty pharmaceutical
company that develops, manufactures and markets a broad range of
pharmaceutical products primarily in the areas of dermatology,
gastrointestinal disorders, eye health, neurology and branded
generics. More information about Valeant can be found at
www.valeant.com.
Forward-looking Statements
This press release contains
forward-looking information and statements, within the meaning of
applicable securities laws (collectively, "forward-looking
statements"), including, but not limited to, statements regarding
Valeant's future prospects and performance including the Company's
updated 2017 full-year guidance, the Company's plans and
expectations for 2017 and the anticipated completion of, and use of
the proceeds from, the sale of the Obagi Medical Products business.
Forward-looking statements may generally be identified by the use
of the words "anticipates," "expects," "intends," "plans,"
"should," "could," "would," "may," "will," "believes," "estimates,"
"potential," "target," or "continue" and variations or similar
expressions. These forward-looking statements, including the
Company's updated full-year guidance, are based upon the current
expectations and beliefs of management and are provided for the
purpose of providing additional information about such expectations
and beliefs and readers are cautioned that these statements may not
be appropriate for other purposes. These forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results and events to differ materially from those described
in these forward-looking statements. These risks and uncertainties
include, but are not limited to, the risks and uncertainties
discussed in the Company's most recent annual and quarterly reports
and detailed from time to time in the Company's other filings with
the Securities and Exchange Commission and the Canadian Securities
Administrators, which risks and uncertainties are incorporated
herein by reference. In addition, certain material factors and
assumptions have been applied in making these forward-looking
statements (including the Company's 2017 full-year guidance),
including that the risks and uncertainties outlined above will not
cause actual results or events to differ materially from those
described in these forward-looking statements, and additional
information regarding certain of these material factors and
assumptions may also be found in the Company's filings described
above. The Company believes that the material factors and
assumptions reflected in these forward-looking statements are
reasonable, but readers are cautioned not to place undue reliance
on any of these forward-looking statements. These forward-looking
statements speak only as of the date hereof. Valeant undertakes no
obligation to update any of these forward-looking statements to
reflect events or circumstances after the date of this press
release or to reflect actual outcomes, unless required by law.
Non-GAAP Information
Recent Evaluation of
Financial Performance Measures
Recently, the Company's
new management team undertook an evaluation of how it would measure
the financial performance of the Company going forward. In
evaluating its financial performance measures, the Company
considered its recent changes to its strategy (which included a
transition away from growth by acquisition with a greater focus on
R&D activity, strengthening of the balance sheet through the
paydown of debt and rationalization of the product portfolio
through divestitures of non-core assets) and sought to identify
performance measures that best reflect the Company's current
business operations, strategy and goals. As a result of that
evaluation, new management identified the following primary
financial performance measures for the Company: GAAP Revenues
(measure for both guidance and actual results), GAAP Net Income
(measure for actual results), Adjusted EBITDA (non-GAAP) (measure
for both guidance and actual results) and GAAP Cash Flow from
Operations (measure for actual results). These measures were
selected as the Company believes that these measures most
appropriately reflect how the Company measures the business
internally and sets operational goals and incentives. For example,
the Company believes that Adjusted EBITDA (non-GAAP) focuses
management on the Company's underlying operational results and
business performance, while GAAP Revenue focuses management on the
overall growth of the business.
In addition, in connection with this evaluation of financial
performance measures, the Company assessed the methodology with
which it was calculating non-GAAP measures and made updates where
it deemed appropriate to better reflect the underlying business.
For example, commencing with the first quarter of 2017, Adjusted
EBITDA (non-GAAP) no longer includes adjustments for Foreign
exchange gain/loss arising from intercompany transactions.
The Company began to use these new non-GAAP measures, and the
new methodologies used to calculate these non-GAAP measures,
commencing with the first quarter of 2017. For the purposes of the
Company's actual results for the first nine months and third
quarter of 2016, the Company has calculated and presented the
non-GAAP measures using the historic methodologies in place as of
the applicable historic dates; however, the Company has also
provided a reconciliation that calculates the non-GAAP measures
using the new methodologies, to allow investors and readers to
evaluate the non-GAAP measures (such as Adjusted EBITDA) on the
same basis for the periods presented.
Use of Non-GAAP Generally
To supplement the
financial measures prepared in accordance with U.S. generally
accepted accounting principles (GAAP), the Company uses certain
non-GAAP financial measures including (i) Adjusted EBITDA
(non-GAAP), (ii) Adjusted Net Income (non-GAAP) and (iii) organic
growth. These measures do not have any standardized meaning under
GAAP and other companies may use similarly titled non-GAAP
financial measures that are calculated differently from the way we
calculate such measures. Accordingly, our non-GAAP financial
measures may not be comparable to similar non-GAAP measures. We
caution investors not to place undue reliance on such non-GAAP
measures, but instead to consider them with the most directly
comparable GAAP measures. Non-GAAP financial measures have
limitations as analytical tools and should not be considered in
isolation. They should be considered as a supplement to, not a
substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP.
The reconciliations of these historic non-GAAP measures to the
most directly comparable financial measures calculated and
presented in accordance with GAAP are shown in the tables below.
However, for guidance purposes, the Company does not provide
reconciliations of projected Adjusted EBITDA (non-GAAP) to
projected GAAP net income (loss), due to the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations. In periods where significant acquisitions or
divestitures are not expected, the Company believes it might have a
basis for forecasting the GAAP equivalent for certain costs, such
as amortization, that would otherwise be treated as a non-GAAP
adjustment to calculate projected GAAP net income (loss). However,
because other deductions (e.g., restructuring, gain or loss on
extinguishment of debt and litigation and other matters) used to
calculate projected net income (loss) may vary significantly based
on actual events, the Company is not able to forecast on a GAAP
basis with reasonable certainty all deductions needed in order to
provide a GAAP calculation of projected net income (loss) at this
time. The amounts of these deductions may be material and,
therefore, could result in GAAP net income (loss) being materially
different from (including materially less than) projected Adjusted
EBITDA (non-GAAP).
Management uses these non-GAAP measures as key metrics in the
evaluation of Company performance and the consolidated financial
results and, in part, in the determination of cash bonuses for its
executive officers. The Company believes these non-GAAP measures
are useful to investors in their assessment of our operating
performance and the valuation of our Company. In addition, these
non-GAAP measures address questions the Company routinely receives
from analysts and investors and, in order to assure that all
investors have access to similar data, the Company has determined
that it is appropriate to make this data available to all
investors. However, non-GAAP financial measures are not prepared in
accordance with GAAP, as they exclude certain items as described
herein. Therefore, the information is not necessarily comparable to
other companies and should be considered as a supplement to, not a
substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP.
Specific Non-GAAP Measures
Adjusted EBITDA
(non-GAAP)
Adjusted EBITDA (non-GAAP) is GAAP net income (its most directly
comparable GAAP financial measure) adjusted for certain items, as
further described below. The Company has historically used Adjusted
EBITDA (non-GAAP) to evaluate current performance. As indicated
above, following an evaluation of the Company's financial
performance measures, new management of the Company identified
certain new primary financial performance measures that it is now
using to evaluate the Company's financial performance. One of those
measures is Adjusted EBITDA (non-GAAP), which the Company uses for
both actual results and guidance purposes. As described above,
management of the Company believes that Adjusted EBITDA (non-GAAP),
along with the other new measures, most appropriately reflect how
the Company measures the business internally and sets operational
goals and incentives, especially in light of the Company's new
strategies. In particular, the Company believes that Adjusted
EBITDA (non-GAAP) focuses management on the Company's underlying
operational results and business performance. As a result, the
Company is now using Adjusted EBITDA (non-GAAP) both to assess the
actual financial performance of the Company and to forecast future
results as part of its guidance. Management believes Adjusted
EBITDA (non-GAAP) is a useful measure to evaluate current
performance. Adjusted EBITDA (non-GAAP) is intended to show our
unleveraged, pre-tax operating results and therefore reflects our
financial performance based on operational factors. In addition,
commencing in 2017, cash bonuses for the Company's executive
officers and other key employees will be based, in part, on the
achievement of certain Adjusted EBITDA (non-GAAP) targets.
Adjusted EBITDA (non-GAAP) reflect adjustments based on the
following items:
- Restructuring and integration costs: Prior to 2016, the Company
completed a number of acquisitions, which resulted in operating
expenses which varied significantly from period to period and which
would not otherwise have been incurred. The type, nature, size and
frequency of the Company's acquisitions have varied considerably
period to period. As a result, the type and amount of the
restructuring, integration and deal costs have also varied
significantly from acquisition to acquisition. In addition, the
costs associated with an acquisition varied significantly from
quarter to quarter, with most costs generally decreasing over time.
Consequently, given the variability and volatility of these costs
from acquisition to acquisition and period to period and because
these costs are incremental and directly related to the
acquisition, the Company does not view these costs as normal
operating expenses. Furthermore, due to the volatility of these
costs and due to the fact that they are directly related to the
acquisitions, the Company believes that such costs should be
excluded when assessing or estimating the long-term performance of
the acquired businesses or assets as part of the Company. Also, the
size, complexity and/or volume of past acquisitions, which often
drove the magnitude of such expenses, were not necessarily
indicative of the size, complexity and/or volume of any future
acquisitions. In addition, since 2016 and for the foreseeable
future, while the Company has undertaken fewer acquisitions, the
Company has incurred (and anticipates continuing to incur)
additional restructuring costs as it implements its new strategies,
which will involve, among other things, internal reorganizations
and divestiture of assets and businesses. The amount, size and
timing of these costs fluctuates, depending on the reorganization
or transaction and, as a result, the Company does not believe that
such costs (and their impact) are truly representative of the
underlying business. In each case, by excluding these expenses from
its non-GAAP measures, management believes it provided supplemental
information that assisted investors with their evaluation of the
Company's ability to utilize its existing assets and with its
estimation of the long-term value that acquired assets would
generate for the Company. Furthermore, the Company believes that
the adjustments of these items provided supplemental information
with regard to the sustainability of the Company's operating
performance, allowed for a comparison of the financial results to
historical operations and forward-looking guidance and, as a
result, provided useful supplemental information to investors.
- Acquired in-process research and development costs: The Company
has excluded expenses associated with acquired in-process research
and development, as these amounts are inconsistent in amount and
frequency and are significantly impacted by the timing, size and
nature of acquisitions. Furthermore, as these amounts are
associated with research and development acquired, they are not a
representation of the Company's research and development efforts
during the period.
- Asset Impairments: The Company has excluded the impact of
impairments of finite-lived and indefinite-lived intangibles, as
well as impairments of assets held for sale, as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions and divestitures. The
Company believes that the adjustments of these items correlate with
the sustainability of the Company's operating performance. Although
the Company excludes intangible impairments from its non-GAAP
expenses, the Company believes that it is important for investors
to understand that intangible assets contribute to revenue
generation.
- Share-based Compensation: The Company excludes the impact of
costs relating to share-based compensation. The Company believes
that the exclusion of share-based compensation expense assists
investors in the comparisons of operating results to peer
companies. Share-based compensation expense can vary significantly
based on the timing, size and nature of awards granted.
- Acquisition- related adjustments excluding amortization of
intangible assets and depreciation expense: The Company has
excluded the impact of acquisition-related contingent consideration
non-cash adjustments due to the inherent uncertainty and volatility
associated with such amounts based on changes in assumptions with
respect to fair value estimates, and the amount and frequency of
such adjustments is not consistent and is significantly impacted by
the timing and size of the Company's acquisitions, as well as the
nature of the agreed-upon consideration. In addition, the Company
has excluded the impact of fair value inventory step-up resulting
from acquisitions as the amount and frequency of such adjustments
are not consistent and are significantly impacted by the timing and
size of its acquisitions.
- Loss on extinguishment of debt: The Company has excluded loss
on extinguishment of debt as this represents a cost of refinancing
our existing debt and is not a reflection of our operations for the
period. Further, the amount and frequency of such charges are not
consistent and are significantly impacted by the timing and size of
debt financing transactions and other factors in the debt market
out of management's control.
- Other Non-GAAP Charges: The Company has excluded certain other
amounts including integration related inventory and technology
transfer costs, CEO termination costs, legal and other professional
fees incurred in connection with recent legal and governmental
proceedings, investigations and information requests respecting
certain of our distribution, marketing, pricing, disclosure and
accounting practices, litigation and other matters, net (gain)/loss
on sale of assets, acquisition-related transaction costs and
certain costs associated with the wind-down of the arrangements
with Philidor Rx Services, LLC ("Philidor"). In addition, the
Company has excluded certain other expenses that are the result of
other, non-comparable events to measure operating performance.
These events arise outside of the ordinary course of continuing
operations. Given the unique nature of the matters relating to
these costs, the Company believes these items are not normal
operating expenses. For example, legal settlements and judgments
vary significantly, in their nature, size and frequency, and, due
to this volatility, the Company believes the costs associated with
legal settlements and judgments are not normal operating expenses.
In addition, as opposed to more ordinary course matters, the
Company considers that each of the recent proceedings,
investigations and information requests, given their nature and
frequency, are outside of the ordinary course and relate to unique
circumstances. The Company believes that the exclusion of such
out-of-the-ordinary-course amounts provides supplemental
information to assist in the comparison of the financial results of
the Company from period to period and, therefore, provides useful
supplemental information to investors. However, investors should
understand that many of these costs could recur and that companies
in our industry often face litigation.
Finally, to the extent not already adjusted for above, Adjusted
EBITDA (non-GAAP) reflects adjustments for interest, taxes,
depreciation and amortization (EBITDA represents earnings before
interest, taxes, depreciation and amortization).
As indicated above, in addition to identifying new primary
financial performance measures, the Company also assessed the
methodology with which it was calculating these non-GAAP measures
and made updates where it deemed appropriate to better reflect the
underlying business. As a result, commencing with the first-quarter
actual results of 2017, there are certain differences in the
calculation of Adjusted EBITDA (non-GAAP) between the current
presentation and the historic presentation. In particular, Adjusted
EBITDA (non-GAAP) no longer includes adjustments for Foreign
exchange gain/loss arising from intercompany transactions. For the
purposes of the Company's actual results for the first nine months
and third quarter of 2016, the Company has calculated and presented
the non-GAAP measures using the historic methodologies in place as
of the applicable historic dates; however, the Company has also
provided a reconciliation that calculates the non-GAAP measure
using the new methodology, to allow investors and readers to
evaluate the non-GAAP measure (such as Adjusted EBITDA) on the same
basis for the periods presented.
Please also see the reconciliation tables below for further
information as to how these non-GAAP measures are calculated for
the periods presented.
Adjusted Net Income (Loss) (non-GAAP)
Historically, management has used adjusted net income (loss)
(non-GAAP) (the most directly comparable GAAP financial measure for
which is GAAP net income (loss)) for strategic decision making,
forecasting future results and evaluating current performance. This
non-GAAP measure excludes the impact of certain items (as further
described below) that may obscure trends in the Company's
underlying performance. By disclosing this non-GAAP measure, it was
management's intention to provide investors with a meaningful,
supplemental comparison of the Company's operating results and
trends for the periods presented. It was management belief that
this measure was also useful to investors as such measure allowed
investors to evaluate the Company's performance using the same
tools that management had used to evaluate past performance and
prospects for future performance. Accordingly, it was the Company's
belief that adjusted net income (loss) (non-GAAP) was useful to
investors in their assessment of the Company's operating
performance and the valuation of the Company. It is also noted
that, in recent periods, our GAAP net income was significantly
lower than our adjusted net income (non-GAAP). As indicated above,
following an assessment of the Company's financial performance
measures, new management of the Company identified certain new
primary financial performance measures that will be used to assess
Company financial performance going forward. As a result, the
Company no longer uses or relies on adjusted net income (loss)
(non-GAAP) in assessing the financial performance of the Company.
However, a reconciliation of GAAP net income (loss) to adjusted net
income (loss) (non-GAAP) is presented in the tables below for the
information of readers to provide readers comparable information
for prior periods.
Adjusted net income (non-GAAP) reflects adjustments based on the
following items:
- Acquisition- related adjustments excluding amortization of
intangible assets: The Company has excluded the impact of
acquisition-related contingent consideration non-cash adjustments
due to the inherent uncertainty and volatility associated with such
amounts based on changes in assumptions with respect to fair value
estimates, and the amount and frequency of such adjustments is not
consistent and is significantly impacted by the timing and size of
the Company's acquisitions, as well as the nature of the
agreed-upon consideration. In addition, the Company has excluded
the impact of fair value inventory step-up resulting from
acquisitions as the amount and frequency of such adjustments are
not consistent and are significantly impacted by the timing and
size of its acquisitions.
- Amortization of intangible assets: The Company has excluded the
impact of amortization of intangible assets, as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions. The Company believes
that the adjustments of these items correlate with the
sustainability of the Company's operating performance. Although the
Company excludes amortization of intangible assets from its
non-GAAP expenses, the Company believes that it is important for
investors to understand that such intangible assets contribute to
revenue generation. Amortization of intangible assets that relate
to past acquisitions will recur in future periods until such
intangible assets have been fully amortized. Any future
acquisitions may result in the amortization of additional
intangible assets.
- Restructuring and integration costs: Prior to 2016, the Company
completed a number of acquisitions, which resulted in operating
expenses which varied significantly from period to period and which
would not otherwise have been incurred. The type, nature, size and
frequency of the Company's acquisitions have varied considerably
period to period. As a result, the type and amount of the
restructuring, integration and deal costs have also varied
significantly from acquisition to acquisition. In addition, the
costs associated with an acquisition varied significantly from
quarter to quarter, with most costs generally decreasing over time.
Consequently, given the variability and volatility of these costs
from acquisition to acquisition and period to period and because
these costs are incremental and directly related to the
acquisition, the Company does not view these costs as normal
operating expenses. Furthermore, due to the volatility of these
costs and due to the fact that they are directly related to the
acquisitions, the Company believes that such costs should be
excluded when assessing or estimating the long-term performance of
the acquired businesses or assets as part of the Company. Also, the
size, complexity and/or volume of past acquisitions, which often
drove the magnitude of such expenses, were not necessarily
indicative of the size, complexity and/or volume of any future
acquisitions. In addition, since 2016 and for the foreseeable
future, while the Company has undertaken fewer acquisitions, the
Company has incurred (and anticipates continuing to incur)
additional restructuring costs as it implements its new strategies,
which will involve, among other things, internal reorganizations
and divestiture of assets and businesses. The amount, size and
timing of these costs fluctuates, depending on the reorganization
or transaction and, as a result, the Company does not believe that
such costs (and their impact) are truly representative of the
underlying business. In each case, by excluding these expenses from
its non-GAAP measures, management believes it provided supplemental
information that assisted investors with their evaluation of the
Company's ability to utilize its existing assets and with its
estimation of the long-term value that acquired assets would
generate for the Company. Furthermore, the Company believes that
the adjustments of these items provided supplemental information
with regard to the sustainability of the Company's operating
performance, allowed for a comparison of the financial results to
historical operations and forward-looking guidance and, as a
result, provided useful supplemental information to investors.
- Acquired in-process research and development costs: The Company
has excluded expenses associated with acquired in-process research
and development, as these amounts are inconsistent in amount and
frequency and are significantly impacted by the timing, size and
nature of acquisitions. Furthermore, as these amounts are
associated with research and development acquired, they are not a
representation of the Company's research and development efforts
during the period.
- Asset Impairments: The Company has excluded the impact of
impairments of finite-lived and indefinite-lived intangibles, as
well as impairments of assets held for sale, as such amounts are
inconsistent in amount and frequency and are significantly impacted
by the timing and/or size of acquisitions and divestitures. The
Company believes that the adjustments of these items correlate with
the sustainability of the Company's operating performance. Although
the Company excludes intangible impairments from its non-GAAP
expenses, the Company believes that it is important for investors
to understand that intangible assets contribute to revenue
generation.
- Other Non-GAAP Charges: The Company has excluded certain other
amounts including integration related inventory and technology
transfer costs, CEO termination costs, legal and other professional
fees incurred in connection with recent legal and governmental
proceedings, investigations and information requests respecting
certain of our distribution, marketing, pricing, disclosure and
accounting practices, litigation and other matters, net (gain)/loss
on sale of assets, acquisition-related transaction costs and
certain costs associated with the wind-down of the arrangements
with Philidor. In addition, the Company has excluded certain other
expenses that are the result of other, non-comparable events to
measure operating performance. These events arise outside of the
ordinary course of continuing operations. Given the unique nature
of the matters relating to these costs, the Company believes these
items are not normal operating expenses. For example, legal
settlements and judgments vary significantly, in their nature, size
and frequency, and, due to this volatility, the Company believes
the costs associated with legal settlements and judgments are not
normal operating expenses. In addition, as opposed to more ordinary
course matters, the Company considers that each of the recent
proceedings, investigations and information requests, given their
nature and frequency, are outside of the ordinary course and relate
to unique circumstances. The Company believes that the exclusion of
such out-of-the-ordinary-course amounts provides supplemental
information to assist in the comparison of the financial results of
the Company from period to period and, therefore, provides useful
supplemental information to investors. However, investors should
understand that many of these costs could recur and that companies
in our industry often face litigation.
- Loss on extinguishment of debt: The Company has excluded loss
on extinguishment of debt as this represents a cost of refinancing
our existing debt and is not a reflection of our operations for the
period. Further, the amount and frequency of such charges are not
consistent and are significantly impacted by the timing and size of
debt financing transactions and other factors in the debt market
out of management's control.
- Tax: The Company has included the tax impact of the non-GAAP
adjustments using an annualized effective tax rate.
As indicated above, in addition to identifying new primary
financial performance measures, the Company also assessed the
methodology with which it was calculating these non-GAAP measures
and made updates where it deemed appropriate to better reflect the
underlying business. As a result, commencing with the first-quarter
results of 2017, there are certain differences in the calculation
of adjusted net income (loss) (non-GAAP) between the current
presentation and the historic presentation. In particular, adjusted
net income (loss) (non-GAAP) no longer includes Foreign exchange
gain/loss arising from intercompany transactions and amortization
of deferred financing costs and debt discounts. In addition, as of
the third quarter of 2016, adjusted net income (loss) (non-GAAP) no
longer includes adjustments for the following items:
Depreciation resulting from a PP&E step-up resulting from
acquisitions and Previously accelerated vesting of certain
share-based equity adjustments. For the purposes of the Company's
actual results for the first nine months and third quarter of 2016,
the Company has calculated and presented the non-GAAP measures
using the historic methodologies in place as of the applicable
historic dates; however, the Company has also provided a
reconciliation that calculates the non-GAAP measure using the new
methodology, to allow investors and readers to evaluate the
non-GAAP measure (such as adjusted net income (loss)) on the same
basis for the periods presented.
Organic Growth
Organic Growth is growth in GAAP Revenue (its most directly
comparable GAAP financial measure) adjusted for certain items, as
further described below. Organic growth provides growth rates for
businesses that have been owned for one or more years. The Company
uses organic revenue and organic growth to assess performance of
its business units and operating and reportable segments, and the
Company in total, without the impact of foreign currency exchange
fluctuations and recent acquisitions, divestitures and product
discontinuations. The Company believes that such measures are
useful to investors as it provides a supplemental period-to-period
comparison.
Organic Growth reflects adjustments based on the following
items:
- Foreign Exchange: To assist investors in evaluating the
Company's performance, we have adjusted for changes in foreign
currency exchange rates. Change at constant currency is determined
by comparing 2017 reported amounts adjusted to exclude currency
impact, calculated using 2016 monthly average exchange rates, to
the actual 2016 reported amounts.
- Acquisitions, Divestitures and Discontinuations: The Company
has excluded revenue from businesses and products that have been
acquired within the last year and that have been sold or
discontinued.
Please also see the reconciliation tables below for further
information as to how these non-GAAP measures are calculated for
the periods presented.
1
|
Organic growth, a
non-GAAP metric, is defined as an increase on a year-over-year
basis in revenues on a constant currency basis (if applicable)
excluding the impact of divestitures and
discontinuations.
|
2
|
To assist investors
in evaluating the Company's performance, we have adjusted for
changes in foreign currency exchange rates. Change at constant
currency, a non-GAAP metric, is determined by comparing 2017
reported amounts adjusted to exclude currency impact, calculated
using 2016 monthly average exchange rates, to the actual 2016
reported amounts.
|
3
|
In March 2017,
Valeant sold the CeraVe® brand, which had been reported within the
Bausch + Lomb/International segment, as part of the skin care
divestiture to L'Oréal.
|
FINANCIAL TABLES FOLLOW
Valeant
Pharmaceuticals International, Inc.
|
|
|
|
|
|
|
|
Table
1
|
Condensed
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
For the Three and
Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(in
millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Product
sales
|
|
$
|
2,186
|
|
|
$
|
2,443
|
|
|
$
|
6,462
|
|
|
$
|
7,168
|
|
Other
revenues
|
|
33
|
|
|
36
|
|
|
99
|
|
|
103
|
|
Total
revenues
|
|
2,219
|
|
|
2,479
|
|
|
6,561
|
|
|
7,271
|
|
Cost of goods sold
(excluding amortization and impairments of intangible
assets)
|
|
650
|
|
|
649
|
|
|
1,869
|
|
|
1,917
|
|
Cost of other
revenues
|
|
9
|
|
|
9
|
|
|
32
|
|
|
29
|
|
Selling, general and
administrative
|
|
623
|
|
|
661
|
|
|
1,943
|
|
|
2,145
|
|
Research and
development
|
|
81
|
|
|
101
|
|
|
271
|
|
|
328
|
|
Amortization of
intangible assets
|
|
657
|
|
|
664
|
|
|
1,915
|
|
|
2,015
|
|
Goodwill
impairments
|
|
312
|
|
|
1,049
|
|
|
312
|
|
|
1,049
|
|
Asset
impairments
|
|
406
|
|
|
148
|
|
|
629
|
|
|
394
|
|
Restructuring and
integration costs
|
|
6
|
|
|
20
|
|
|
42
|
|
|
78
|
|
Acquired in-process
research and development costs
|
|
—
|
|
|
31
|
|
|
5
|
|
|
34
|
|
Acquisition-related
contingent consideration
|
|
(238)
|
|
|
9
|
|
|
(297)
|
|
|
18
|
|
Other (income)
expense, net
|
|
(325)
|
|
|
1
|
|
|
(584)
|
|
|
(20)
|
|
|
|
2,181
|
|
|
3,342
|
|
|
6,137
|
|
|
7,987
|
|
Operating income
(loss)
|
|
38
|
|
|
(863)
|
|
|
424
|
|
|
(716)
|
|
Interest
income
|
|
3
|
|
|
3
|
|
|
9
|
|
|
6
|
|
Interest
expense
|
|
(459)
|
|
|
(470)
|
|
|
(1,392)
|
|
|
(1,369)
|
|
Loss on
extinguishment of debt
|
|
(1)
|
|
|
—
|
|
|
(65)
|
|
|
—
|
|
Foreign exchange and
other
|
|
19
|
|
|
(2)
|
|
|
87
|
|
|
4
|
|
Loss before recovery
of income taxes
|
|
(400)
|
|
|
(1,332)
|
|
|
(937)
|
|
|
(2,075)
|
|
Recovery of income
taxes
|
|
(1,700)
|
|
|
(113)
|
|
|
(2,829)
|
|
|
(179)
|
|
Net income
(loss)
|
|
1,300
|
|
|
(1,219)
|
|
|
1,892
|
|
|
(1,896)
|
|
Less: Net (loss)
income attributable to noncontrolling interest
|
|
(1)
|
|
|
(1)
|
|
|
1
|
|
|
(2)
|
|
Net income (loss)
attributable to Valeant Pharmaceuticals International,
Inc.
|
|
$
|
1,301
|
|
|
$
|
(1,218)
|
|
|
$
|
1,891
|
|
|
$
|
(1,894)
|
|
Valeant
Pharmaceuticals International, Inc.
|
|
|
|
|
|
|
|
Table
2
|
Reconciliation of
GAAP Net (Loss) Income to Adjusted Net Income
(non-GAAP)
|
|
|
|
|
|
|
For the Three and
Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(in
millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income (loss)
attributable to Valeant Pharmaceuticals
International, Inc.
|
$
|
1,301
|
|
|
$
|
(1,218)
|
|
|
$
|
1,891
|
|
|
$
|
(1,894)
|
|
Non-GAAP adjustments:
(a)
|
|
|
|
|
|
|
|
|
Acquisition-related
adjustments excluding amortization of intangible assets
(b)(d)
|
|
(238)
|
|
|
11
|
|
|
(297)
|
|
|
64
|
|
Amortization of
intangible assets
|
|
657
|
|
|
664
|
|
|
1,915
|
|
|
2,015
|
|
Restructuring and
integration costs
|
|
6
|
|
|
20
|
|
|
42
|
|
|
78
|
|
Acquired in-process
research and development costs
|
|
—
|
|
|
31
|
|
|
5
|
|
|
34
|
|
Goodwill
impairments
|
|
312
|
|
|
1,049
|
|
|
312
|
|
|
1,049
|
|
Asset
impairments
|
|
406
|
|
|
148
|
|
|
629
|
|
|
394
|
|
Other non-GAAP
adjustments (c)(d)
|
|
(311)
|
|
|
23
|
|
|
(547)
|
|
|
108
|
|
Amortization of
deferred financing costs and debt discounts
|
|
—
|
|
|
32
|
|
|
—
|
|
|
89
|
|
Loss on
extinguishment of debt
|
|
1
|
|
|
—
|
|
|
65
|
|
|
—
|
|
Foreign
exchange and other (d)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(14)
|
|
Tax effect of
non-GAAP adjustments
|
|
(1,767)
|
|
|
(218)
|
|
|
(3,013)
|
|
|
(450)
|
|
Total non-GAAP
adjustments
|
|
(934)
|
|
|
1,761
|
|
|
(889)
|
|
|
3,367
|
|
Adjusted net
income (non-GAAP) (as reported) (d)
|
|
367
|
|
|
543
|
|
|
1,002
|
|
|
1,473
|
|
Depreciation
resulting from a PP&E step-up resulting from
acquisitions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8)
|
|
Previously
accelerated vesting of certain share-based equity
adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23)
|
|
Foreign exchange
loss/gain on intercompany transactions
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
14
|
|
Amortization of
deferred financing costs and debt discounts
|
|
—
|
|
|
(32)
|
|
|
—
|
|
|
(89)
|
|
Adjusted net
income (non-GAAP) (as revised) (e)
|
|
$
|
367
|
|
|
$
|
510
|
|
|
$
|
1,002
|
|
|
$
|
1,367
|
|
|
|
(a)
|
The components of
(and further details respecting) each of these non-GAAP adjustments
and the financial statement line item to which each
component relates can be found on Table 2a.
|
(b)
|
Due to the nature of
Acquisition-related adjustments excluding amortization of
intangible assets, the components of this non-GAAP adjustment are
reflected in the following financial statement line items: Cost of
goods sold, Selling, general and administrative, Research and
development, and Acquisition-related contingent
consideration.
|
(c)
|
Due to the nature of
Other non-GAAP adjustments, the components of this non-GAAP
adjustment are reflected in the following financial statement line
items: Product sales, Cost of goods sold, Selling, general and
administrative, Research and development, and Other (income)
expense, net.
|
(d)
|
Adjusted net income
(non-GAAP) for the three and nine months ended September 30, 2017
was determined using the methodology for calculating Adjusted net
income (non-GAAP) as of September 30, 2017.
|
(e)
|
As of the third
quarter of 2016, Adjusted net income (non-GAAP) no longer includes
adjustments for the following items: Depreciation resulting from a
PP&E step-up resulting from acquisitions and Previously
accelerated vesting of certain share-based equity instruments.
Depreciation resulting from a PP&E step-up resulting from
acquisitions was a component of Acquisition-related adjustments
excluding amortization of intangible assets. Previously accelerated
vesting of certain share-based equity instruments was a component
of Other non-GAAP adjustments. As of the first quarter of 2017,
Adjusted net income (non-GAAP) also no longer includes adjustments
for Foreign exchange loss/gain on intercompany transactions and
Amortization of deferred financing costs and debt discounts. For
the purpose of allowing investors to evaluate Adjusted net income
(non-GAAP) on the same basis for the periods presented, these
adjustments have been removed from the results for the three and
nine months ended September 30, 2016.
|
Valeant
Pharmaceuticals International, Inc.
|
|
|
|
|
|
Table
2a
|
Reconciliation of
GAAP to Non-GAAP Financial Information
|
|
|
|
|
|
|
|
|
For the Three and
Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(in
millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Total revenues
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Total
revenues
|
|
$
|
2,219
|
|
|
$
|
2,479
|
|
|
$
|
6,561
|
|
|
$
|
7,271
|
|
Philidor Rx Services,
LLC sales through deconsolidation as of January 31, 2016
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Adjusted total
revenues (non-GAAP)
|
|
$
|
2,219
|
|
|
$
|
2,479
|
|
|
$
|
6,561
|
|
|
$
|
7,269
|
|
Cost of goods sold
and Cost of other revenues reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Cost of goods
sold and Cost of other revenues
|
|
$
|
659
|
|
|
$
|
658
|
|
|
$
|
1,901
|
|
|
$
|
1,946
|
|
% of GAAP
Total revenues
|
|
30
|
%
|
|
27
|
%
|
|
29
|
%
|
|
27
|
%
|
Fair value inventory
step-up resulting from acquisitions (b)
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(38)
|
|
Depreciation
resulting from a PP&E step-up resulting from acquisitions
(b)(j)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6)
|
|
Integration related
inventory and technology transfer costs (a)
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(10)
|
|
Other cost of goods
sold (a)
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Adjusted cost of
goods sold and cost of other revenues (non-GAAP)
(j)
|
|
$
|
659
|
|
|
$
|
654
|
|
|
$
|
1,901
|
|
|
$
|
1,891
|
|
% of
Non-GAAP total revenues
|
|
30
|
%
|
|
26
|
%
|
|
29
|
%
|
|
26
|
%
|
Selling, general
and administrative reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Selling, general
and administrative
|
|
$
|
623
|
|
|
$
|
661
|
|
|
$
|
1,943
|
|
|
$
|
2,145
|
|
% of GAAP
Total revenues
|
|
28
|
%
|
|
27
|
%
|
|
30
|
%
|
|
30
|
%
|
Depreciation
resulting from a PP&E step-up resulting from acquisitions
(b)(j)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
CEO termination costs
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35)
|
|
Legal and other
professional fees (a)(k)
|
|
(14)
|
|
|
(19)
|
|
|
(37)
|
|
|
(57)
|
|
Accelerated
depreciation due to fixed assets write-offs acquired from Salix
Pharmaceuticals, Inc.
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7)
|
|
Philidor Rx Services,
LLC expenses through deconsolidation
as of January 31,
2016 (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
Previously
accelerated vesting of certain share-based equity instruments
(a)(j)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Other Selling,
general and administrative (a)
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Adjusted selling,
general and administrative (non-GAAP) (j)
|
|
$
|
609
|
|
|
$
|
641
|
|
|
$
|
1,906
|
|
|
$
|
2,041
|
|
% of
Non-GAAP total revenues
|
|
27
|
%
|
|
26
|
%
|
|
29
|
%
|
|
28
|
%
|
Research and
development reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Research and
development
|
|
$
|
81
|
|
|
$
|
101
|
|
|
$
|
271
|
|
|
$
|
328
|
|
% of GAAP
Total revenues
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
5
|
%
|
Depreciation
resulting from a PP&E step-up resulting from acquisitions
(b)(j)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
Settlement of certain
disputed invoices related to transition services
(a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16)
|
|
Adjusted research and
development (non-GAAP)
|
|
$
|
81
|
|
|
$
|
101
|
|
|
$
|
271
|
|
|
$
|
311
|
|
% of
Non-GAAP total revenues
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
4
|
%
|
|
|
|
|
|
Table 2a
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(in
millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Amortization of
intangible assets reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Amortization of
intangible assets
|
|
$
|
657
|
|
|
$
|
664
|
|
|
$
|
1,915
|
|
|
$
|
2,015
|
|
Amortization of
intangible assets (c)
|
|
(657)
|
|
|
(664)
|
|
|
(1,915)
|
|
|
(2,015)
|
|
Adjusted amortization
of intangible assets (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Goodwill
impairment reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Goodwill
impairment
|
|
$
|
312
|
|
|
$
|
1,049
|
|
|
$
|
312
|
|
|
$
|
1,049
|
|
Goodwill
impairment
|
|
(312)
|
|
|
(1,049)
|
|
|
(312)
|
|
|
(1,049)
|
|
Adjusted goodwill
impairment (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring and
integration costs reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Restructuring
and integration costs
|
|
$
|
6
|
|
|
$
|
20
|
|
|
$
|
42
|
|
|
$
|
78
|
|
Restructuring and
integration costs (d)
|
|
(6)
|
|
|
(20)
|
|
|
(42)
|
|
|
(78)
|
|
Adjusted
restructuring and integration costs (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquired
in-process research and development costs
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Acquired
in-process research and development costs
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
5
|
|
|
$
|
34
|
|
Acquired in-process
research and development costs (e)
|
|
—
|
|
|
(31)
|
|
|
(5)
|
|
|
(34)
|
|
Adjusted acquired
in-process research and development costs (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Asset impairments
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Asset
impairments
|
|
$
|
406
|
|
|
$
|
148
|
|
|
$
|
629
|
|
|
$
|
394
|
|
Asset
impairments
|
|
(406)
|
|
|
(148)
|
|
|
(629)
|
|
|
(394)
|
|
Adjusted asset
impairments (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acquisition-related contingent consideration
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP
Acquisition-related contingent consideration
|
|
$
|
(238)
|
|
|
$
|
9
|
|
|
$
|
(297)
|
|
|
$
|
18
|
|
Acquisition-related
contingent consideration (b)
|
|
238
|
|
|
(9)
|
|
|
297
|
|
|
(18)
|
|
Adjusted
acquisition-related contingent consideration (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Other (income)
expense, net reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Other (income)
expense, net
|
|
$
|
(325)
|
|
|
$
|
1
|
|
|
$
|
(584)
|
|
|
$
|
(20)
|
|
Litigation and other
matters (a)
|
|
(3)
|
|
|
(1)
|
|
|
(111)
|
|
|
32
|
|
Net gain/(loss) on
sale of assets (a)
|
|
328
|
|
|
—
|
|
|
695
|
|
|
9
|
|
Acquisition related
transaction costs (a) (j)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Deconsolidation of
Philidor
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19)
|
|
Adjusted other
(income) expense (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest expense
reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Interest
expense
|
|
$
|
(459)
|
|
|
$
|
(470)
|
|
|
$
|
(1,392)
|
|
|
$
|
(1,369)
|
|
Amortization of debt
discounts (f)(j)
|
|
—
|
|
|
27
|
|
|
—
|
|
|
75
|
|
Amortization of
deferred financing costs (f)(j)
|
|
—
|
|
|
5
|
|
|
—
|
|
|
11
|
|
Write-down of
deferred financing costs (f)(j)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Adjusted interest
expense (non-GAAP)
|
|
$
|
(459)
|
|
|
$
|
(438)
|
|
|
$
|
(1,392)
|
|
|
$
|
(1,280)
|
|
Loss on
extinguishment of debt reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Loss on
extinguishment of debt
|
|
$
|
(1)
|
|
|
$
|
—
|
|
|
$
|
(65)
|
|
|
$
|
—
|
|
Loss on
extinguishment of debt (g)
|
|
1
|
|
|
—
|
|
|
65
|
|
|
—
|
|
Adjusted loss on
extinguishment of debt (non-GAAP)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Table 2a
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
(in
millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Foreign exchange
and other reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Foreign exchange
and other
|
|
$
|
19
|
|
|
$
|
(2)
|
|
|
$
|
87
|
|
|
$
|
4
|
|
Foreign exchange
loss/gain on intercompany transactions (h)(j)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(14)
|
|
Adjusted foreign
exchange and other (non-GAAP)
|
|
$
|
19
|
|
|
$
|
(1)
|
|
|
$
|
87
|
|
|
$
|
(10)
|
|
Provision for
(recovery of) income taxes reconciliation:
|
|
|
|
|
|
|
|
|
GAAP Recovery of
income taxes
|
|
$
|
(1,700)
|
|
|
$
|
(113)
|
|
|
$
|
(2,829)
|
|
|
$
|
(179)
|
|
Tax effect of
non-GAAP adjustments (i)
|
|
1,767
|
|
|
218
|
|
|
3,013
|
|
|
450
|
|
Adjusted Provision
for income taxes (non-GAAP)
|
|
$
|
67
|
|
|
$
|
105
|
|
|
$
|
184
|
|
|
$
|
271
|
|
|
|
(a)
|
Represents a
component of the non-GAAP adjustment of "Other non-GAAP
adjustments" (see Table 2). The identified components, in the
aggregate,
represent all components of this non-GAAP adjustment.
|
(b)
|
Represents a
component of the non-GAAP adjustment of "Acquisition-related
adjustments excluding amortization of intangible assets" (see Table
2). The identified components, in the aggregate, represent all
components of this non-GAAP adjustment.
|
(c)
|
Represents the sole
component of the non-GAAP adjustment of "Amortization of intangible
assets" (see Table 2).
|
(d)
|
Represents the sole
component of the non-GAAP adjustment of "Restructuring and
integration costs" (see Table 2).
|
(e)
|
Represents the sole
component of the non-GAAP adjustment of "Acquired in-process
research and development costs" (see Table 2).
|
(f)
|
Represents a
component of the non-GAAP adjustment of "Amortization of deferred
financing costs and debt discounts" (see Table 2). The identified
components, in the aggregate, represent all components of this
non-GAAP adjustment.
|
(g)
|
Represents the sole
component of the non-GAAP adjustment of "Loss on extinguishment of
debt" (see Table 2).
|
(h)
|
Represents the sole
component of the non-GAAP adjustment of "Foreign exchange and
other" (see Table 2).
|
(i)
|
Represents the sole
component of the non-GAAP adjustment of "Tax effect of non-GAAP
adjustments" (see Table 2).
|
(j)
|
As of the third
quarter of 2016, Adjusted net income (loss) (non-GAAP) no longer
includes adjustments for the following items: Depreciation
resulting from a PP&E step-up resulting from acquisitions and
Previously accelerated vesting of certain share-based equity
adjustments. Depreciation resulting from a PP&E step-up
resulting from acquisitions was a component of Acquisition-related
adjustments excluding amortization of intangible assets. Previously
accelerated vesting of certain share-based equity adjustments was a
component of Other non-GAAP adjustments. As of the first quarter of
2017, Adjusted net income (loss) (non-GAAP) also no longer includes
adjustments for Foreign exchange loss/gain on intercompany
transactions and Amortization of deferred financing costs and debt
discounts. For the purpose of allowing investors to evaluate
Adjusted net income(loss) (non-GAAP) on the same basis for all
periods presented, these adjustments have been removed from the
results for the three and nine months ended September 30, 2016. See
reconciliation on Table 2.
|
(k)
|
Legal and other
professional fees incurred in connection with recent legal and
governmental proceedings, investigations and information requests
related to, among other matters, our distribution, marketing,
pricing, disclosure and accounting practices for the three and nine
months ended September 30, 2017 and 2016.
|
Valeant
Pharmaceuticals International, Inc.
|
|
|
|
|
|
Table
2b
|
Reconciliation of
GAAP Net (Loss) Income to Adjusted EBITDA (non-GAAP)
|
|
|
|
|
|
|
For the Three and
Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
September
30,
|
(in
millions)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net (loss) income
attributable to Valeant Pharmaceuticals
International, Inc.
|
|
$
|
1,301
|
|
|
$
|
(1,218)
|
|
|
$
|
1,891
|
|
|
$
|
(1,894)
|
|
|
Interest expense,
net
|
|
456
|
|
|
467
|
|
|
1,383
|
|
|
1,363
|
|
|
Recovery of income
taxes
|
|
(1,700)
|
|
|
(113)
|
|
|
(2,829)
|
|
|
(179)
|
|
|
Depreciation and
amortization
|
|
699
|
|
|
708
|
|
|
2,039
|
|
|
2,159
|
|
EBITDA
|
|
756
|
|
|
(156)
|
|
|
2,484
|
|
|
1,449
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Restructuring and
integration costs
|
|
6
|
|
|
20
|
|
|
42
|
|
|
78
|
|
|
Acquired in-process
research and development costs
|
|
—
|
|
|
31
|
|
|
5
|
|
|
34
|
|
|
Goodwill
impairments
|
|
312
|
|
|
1,049
|
|
|
312
|
|
|
1,049
|
|
|
Asset
impairments
|
|
406
|
|
|
148
|
|
|
629
|
|
|
394
|
|
|
Share-based
compensation
|
|
19
|
|
|
37
|
|
|
70
|
|
|
134
|
|
|
Acquisition-related
adjustments excluding amortization of
intangible
assets, net of depreciation expense (d)
|
|
(238)
|
|
|
11
|
|
|
(297)
|
|
|
56
|
|
|
Loss on
extinguishment of debt
|
|
1
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
Foreign exchange and
other
|
|
—
|
|
|
1
|
|
|
—
|
|
|
(14)
|
|
|
Other adjustments
(a)
|
|
(311)
|
|
|
22
|
|
|
(547)
|
|
|
78
|
|
Adjusted EBITDA
(non-GAAP) (as reported) (e)
|
|
951
|
|
|
1,163
|
|
|
2,763
|
|
|
3,258
|
|
|
Foreign exchange
loss/gain on intercompany transactions
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
14
|
|
Adjusted EBITDA
(non-GAAP) (as revised) (f)
|
|
$
|
951
|
|
|
$
|
1,162
|
|
|
$
|
2,763
|
|
|
$
|
3,272
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Other adjustments
include:
|
|
$
|
(311)
|
|
|
$
|
22
|
|
|
$
|
(547)
|
|
|
$
|
78
|
|
|
Integration related
inventory and technology transfer costs
|
|
—
|
|
|
1
|
|
|
—
|
|
|
10
|
|
|
CEO termination costs
(cash severance payment)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
Legal and other
professional fees (b)
|
|
14
|
|
|
19
|
|
|
37
|
|
|
57
|
|
|
Settlement of certain
disputed invoices related to transition services
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
Litigation and other
matters
|
|
3
|
|
|
1
|
|
|
111
|
|
|
(32)
|
|
|
Net gain on sale of
assets (c)
|
|
(328)
|
|
|
—
|
|
|
(695)
|
|
|
(9)
|
|
|
Acquisition related
transaction costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
Philidor Rx Services,
LLC net loss through deconsolidation as of January 31,
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
Other
|
|
—
|
|
|
1
|
|
|
—
|
|
|
21
|
|
|
|
(b)
|
Legal and other
professional fees incurred in connection with recent legal and
governmental proceedings, investigations and information requests
related to,
among other matters, our distribution, marketing, pricing,
disclosure and accounting practices.
|
(c)
|
For the nine months
ended September 30, 2017, Net gain on sale of assets includes the
$306 million gain on the iNova sale in September of 2017, the $98
million gain on the sale of Dendreon Pharmaceuticals in June of
2017, and the $316 million gain on the sale of CeraVe, AcneFree,
and AMBI skin care brands in March of 2017.
|
(d)
|
Adjustment to
Acquisition-related adjustments excluding amortization of
intangible assets, net of depreciation expense, includes
Acquisition-related contingent consideration of $247 million
primarily due to a fair vale adjustment of $259 million reflecting
a decrease in forecasted sales for a specific product line which
impacted the expected future royalty payments for the three and
nine months ended September 30, 2017.
|
(e)
|
Adjusted EBITDA
(non-GAAP) reported by the Company for the three and nine months
ended September 30, 2017 as determined using the methodology for
calculating Adjusted EBITDA (non-GAAP) as of September 30, 2017.
Adjusted EBITDA (non-GAAP) reported by the Company for the three
and nine months ended September 30, 2016 as determined using the
methodology for calculating Adjusted EBITDA (non-GAAP) as of
September 30, 2016.
|
(f)
|
As of the first
quarter of 2017, non-GAAP adjustments no longer include adjustments
for Foreign exchange gain/loss on intercompany transactions. For
the purpose of allowing investors to evaluate Adjusted EBITDA
(non-GAAP) on the same basis for all periods presented, this
adjustment has been removed from the results for the three and nine
months ended September 30, 2016.
|
Valeant
Pharmaceuticals International, Inc.
|
|
|
|
|
|
Table
3
|
Organic Growth
(non-GAAP) - by Segment
|
|
|
|
|
|
|
For the Three and
Nine Months Ended September 30, 2017 and 2016
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
(7)
|
|
2017
Revenue
|
|
2016
Revenue
|
|
Currency
Impact
(a)
|
|
2017 Revenues
Excluding
Currency Impact (b)
|
|
Impact
of
Divestitures
and
Discontinuations
|
|
Organic
Growth
(4-(2-
6))/(2-6)
(c)
|
(in
millions)
|
|
|
|
Amount
|
|
Percent
Change
|
|
|
Bausch+Lomb/International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Vision
Care
|
$
|
208
|
|
|
$
|
198
|
|
|
$
|
(2)
|
|
|
$
|
210
|
|
|
6
|
%
|
|
$
|
4
|
|
|
8%
|
Global Surgical
(d)
|
161
|
|
|
155
|
|
|
3
|
|
|
158
|
|
|
2
|
%
|
|
—
|
|
|
2%
|
Global Consumer
Products
|
392
|
|
|
401
|
|
|
8
|
|
|
384
|
|
|
(4)
|
%
|
|
38
|
|
|
6%
|
Global Ophthalmology
Rx
|
149
|
|
|
162
|
|
|
1
|
|
|
148
|
|
|
(9)
|
%
|
|
—
|
|
|
(9)%
|
International
(d)
|
344
|
|
|
327
|
|
|
(25)
|
|
|
369
|
|
|
13
|
%
|
|
9
|
|
|
16%
|
Other
revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—%
|
Total
Bausch+Lomb/International
|
1,254
|
|
|
1,243
|
|
|
(15)
|
|
|
1,269
|
|
|
2
|
%
|
|
51
|
|
|
6%
|
Branded
Rx
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salix (GI)
|
452
|
|
|
437
|
|
|
—
|
|
|
452
|
|
|
3
|
%
|
|
9
|
|
|
6%
|
Dermatology
|
148
|
|
|
223
|
|
|
—
|
|
|
148
|
|
|
(34)
|
%
|
|
—
|
|
|
(34)%
|
Dendreon
|
—
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
(100)
|
%
|
|
77
|
|
|
—%
|
Dentistry
|
32
|
|
|
29
|
|
|
—
|
|
|
32
|
|
|
10
|
%
|
|
—
|
|
|
10%
|
Other
revenues
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
100
|
%
|
|
—
|
|
|
—%
|
Total Branded
Rx
|
633
|
|
|
766
|
|
|
—
|
|
|
633
|
|
|
(17)
|
%
|
|
86
|
|
|
(7)%
|
U.S. Diversified
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuro
|
227
|
|
|
321
|
|
|
—
|
|
|
227
|
|
|
(29)
|
%
|
|
—
|
|
|
(29)%
|
Generics
|
82
|
|
|
120
|
|
|
—
|
|
|
82
|
|
|
(32)
|
%
|
|
—
|
|
|
(32)%
|
Solta
|
7
|
|
|
8
|
|
|
—
|
|
|
7
|
|
|
(13)
|
%
|
|
—
|
|
|
(13)%
|
Obagi
|
16
|
|
|
17
|
|
|
—
|
|
|
16
|
|
|
(6)
|
%
|
|
—
|
|
|
(6)%
|
Other
revenues
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
(100)
|
%
|
|
4
|
|
|
—%
|
Total U.S.
Diversified Products
|
332
|
|
|
470
|
|
|
—
|
|
|
332
|
|
|
(29)
|
%
|
|
4
|
|
|
(29)%
|
Total
revenues
|
$
|
2,219
|
|
|
$
|
2,479
|
|
|
$
|
(15)
|
|
|
$
|
2,234
|
|
|
(10)
|
%
|
|
$
|
141
|
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
(7)
|
|
2017
Revenue
|
|
2016
Revenue
|
|
Currency
Impact
(a)
|
|
2017 Revenues
Excluding
Currency Impact (b)
|
|
Impact
of
Divestitures
and
Discontinuations
|
|
Organic
Growth
(4-(2-
6))/(2-6)
(c)
|
(in
millions)
|
|
|
|
Amount
|
|
Percent
Change
|
|
|
Bausch+Lomb/International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Vision
Care
|
$
|
565
|
|
|
$
|
565
|
|
|
$
|
(6)
|
|
|
$
|
571
|
|
|
1
|
%
|
|
$
|
10
|
|
|
3%
|
Global Surgical
(d)
|
490
|
|
|
495
|
|
|
(4)
|
|
|
494
|
|
|
—
|
%
|
|
—
|
|
|
—%
|
Global Consumer
Products
|
1,147
|
|
|
1,180
|
|
|
10
|
|
|
1,137
|
|
|
(4)
|
%
|
|
93
|
|
|
5%
|
Global Ophthalmology
Rx
|
459
|
|
|
465
|
|
|
(3)
|
|
|
462
|
|
|
(1)
|
%
|
|
—
|
|
|
(1)%
|
International
(d)
|
984
|
|
|
961
|
|
|
(107)
|
|
|
1,091
|
|
|
14
|
%
|
|
21
|
|
|
16%
|
Other
revenues
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—%
|
Total
Bausch+Lomb/International
|
3,645
|
|
|
3,666
|
|
|
(110)
|
|
|
3,755
|
|
|
2
|
%
|
|
124
|
|
|
6%
|
Branded
Rx
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salix (GI)
|
1,141
|
|
|
1,117
|
|
|
—
|
|
|
1,141
|
|
|
2
|
%
|
|
23
|
|
|
4%
|
Dermatology
|
470
|
|
|
626
|
|
|
—
|
|
|
470
|
|
|
(25)
|
%
|
|
—
|
|
|
(25)%
|
Dendreon
|
164
|
|
|
226
|
|
|
—
|
|
|
164
|
|
|
(27)
|
%
|
|
82
|
|
|
14%
|
Dentistry
|
95
|
|
|
113
|
|
|
—
|
|
|
95
|
|
|
(16)
|
%
|
|
1
|
|
|
(15)%
|
Other
revenues
|
3
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
50
|
%
|
|
—
|
|
|
50%
|
Total Branded
Rx
|
1,873
|
|
|
2,084
|
|
|
—
|
|
|
1,873
|
|
|
(10)
|
%
|
|
106
|
|
|
(5)%
|
U.S. Diversified
Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuro
|
718
|
|
|
1,087
|
|
|
—
|
|
|
718
|
|
|
(34)
|
%
|
|
—
|
|
|
(34)%
|
Generics
|
249
|
|
|
362
|
|
|
—
|
|
|
249
|
|
|
(31)
|
%
|
|
—
|
|
|
(31)%
|
Solta
|
24
|
|
|
20
|
|
|
—
|
|
|
24
|
|
|
20
|
%
|
|
—
|
|
|
20%
|
Obagi
|
49
|
|
|
41
|
|
|
—
|
|
|
49
|
|
|
20
|
%
|
|
—
|
|
|
20%
|
Other
revenues
|
3
|
|
|
11
|
|
|
—
|
|
|
3
|
|
|
(73)
|
%
|
|
7
|
|
|
(25)%
|
Total U.S.
Diversified Products
|
1,043
|
|
|
1,521
|
|
|
—
|
|
|
1,043
|
|
|
(31)
|
%
|
|
7
|
|
|
(31)%
|
Total
revenues
|
$
|
6,561
|
|
|
$
|
7,271
|
|
|
$
|
(110)
|
|
|
$
|
6,671
|
|
|
(8)
|
%
|
|
$
|
237
|
|
|
(5)%
|
|
|
(a)
|
Currency impact for
constant currency sales is determined by comparing 2017 reported
amounts adjusted to exclude currency impact, calculated using
2016 monthly average exchange rates, to the actual 2016 reported
amounts.
|
(b)
|
To supplement the
financial measures prepared in accordance with U.S. generally
accepted accounting principles (GAAP), the Company uses certain
non-GAAP financial measures. For additional information about the
Company's use of such non-GAAP financial measures, refer to the
body of the press release to which these tables are
attached.
|
(c)
|
Organic Growth
provides growth rates for businesses that have been owned for one
year or more and is calculated as follows:
|
|
((Current Year Sales
– Currency Impact)-(Prior Year Total – Divestitures and
Discontinuations))/( Prior Year Sales – Divestitures and
Discontinuations)
|
(d)
|
As of the third
quarter of 2017, one product has been removed from the Global
surgical business unit and added to the International business
unit. This change has been made as management believes that the
product better aligns with the International business unit, as this
product, although acquired as part of the acquisition of certain
surgical assets, is an injectable product. For the purposes of
allowing investors to evaluate the results of these two business
units on the same basis for all periods presented, this change has
been made for the results of the three and nine months ended
September 30, 2016.
|
Valeant
Pharmaceuticals International, Inc.
|
|
|
|
Table
4
|
Consolidated
Balance Sheet and Other Financial Information
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
|
September 30,
2017
|
|
December 31,
2016
|
Cash
Balances
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
964
|
|
|
$
|
542
|
|
Restricted
cash
|
|
928
|
|
|
—
|
|
Restricted cash
included in Other non-current assets
|
|
77
|
|
|
—
|
|
Cash, cash
equivalents and restricted cash
|
|
$
|
1,969
|
|
|
$
|
542
|
|
|
|
|
|
|
Debt
Balances
|
|
|
|
|
Revolving Credit
Facility
|
|
$
|
425
|
|
|
$
|
875
|
|
Series A-3 Tranche A
Term Loan Facility
|
|
—
|
|
|
1,016
|
|
Series A-4 Tranche A
Term Loan Facility
|
|
—
|
|
|
658
|
|
Series D-2 Tranche B
Term Loan Facility
|
|
—
|
|
|
1,048
|
|
Series C-2 Tranche B
Term Loan Facility
|
|
—
|
|
|
805
|
|
Series E-1 Tranche B
Term Loan Facility
|
|
—
|
|
|
2,429
|
|
Series F Tranche B
Term Loan Facility
|
|
5,685
|
|
|
3,815
|
|
Senior
Notes
|
|
21,017
|
|
|
19,188
|
|
Other
|
|
14
|
|
|
12
|
|
Total long-term debt,
net of unamortized discounts and issuance costs
|
|
27,141
|
|
|
29,846
|
|
Plus: Unamortized
discounts and issuance costs
|
|
285
|
|
|
323
|
|
Maturities of
debt
|
|
$
|
27,426
|
|
|
$
|
30,169
|
|
|
|
|
|
|
Maturities of
Debt
|
|
|
|
|
|
October through
December 2017
|
|
$
|
923
|
|
|
$
|
—
|
|
2018
|
|
2
|
|
|
3,738
|
|
2019
|
|
—
|
|
|
2,122
|
|
2020
|
|
5,365
|
|
|
7,723
|
|
2021
|
|
3,175
|
|
|
3,215
|
|
2022
|
|
6,677
|
|
|
4,281
|
|
Thereafter
|
|
11,284
|
|
|
9,090
|
|
Maturities of
debt
|
|
$
|
27,426
|
|
|
$
|
30,169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4
(continued)
|
|
|
|
|
|
(in
millions)
|
|
2017
|
|
2016
|
Cash provided by
operating activities - Three months ended September
30
|
|
$
|
490
|
|
|
$
|
570
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
integration costs - Three months ended September 30,
2017
|
|
|
|
|
|
|
Cash
Paid
|
|
Expense
|
By project
type:
|
|
|
|
|
Restructuring
initiatives
|
|
$
|
6
|
|
|
$
|
4
|
|
Salix
Pharmaceuticals, Ltd.
|
|
8
|
|
|
—
|
|
Other
|
|
8
|
|
|
1
|
|
Total
|
|
$
|
22
|
|
|
$
|
5
|
|
|
|
|
|
|
By expense
type:
|
|
|
|
|
Consulting,
duplicative labor, transition services, and other
|
|
$
|
8
|
|
|
$
|
1
|
|
Severance
|
|
4
|
|
|
1
|
|
Facility
closures
|
|
10
|
|
|
3
|
|
Total
|
|
$
|
22
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
Investor
Contact:
|
Media
Contact:
|
Arthur
Shannon
|
Lainie
Keller
|
arthur.shannon@valeant.com
|
lainie.keller@valeant.com
|
(514)
856-3855
|
(908)
927-0617
|
(877) 281-6642 (toll
free)
|
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/valeant-announces-third-quarter-2017-results-300550608.html
SOURCE Valeant Pharmaceuticals International, Inc.