PITTSBURGH, Oct. 30, 2014
/PRNewswire/ -- Mylan Inc. (Nasdaq: MYL) today announced its
financial results for the three and nine months ended
September 30, 2014.
Third Quarter 2014 Highlights
- Total revenues of $2.08 billion,
up 18% versus the prior year period with positive growth across all
regions and businesses
- Generics segment third party net sales of $1.61 billion, up 15%
- Specialty segment third party net sales of $462.0 million, up 29%
- Adjusted gross profit of $1.13
billion, up 25%; U.S. GAAP ("GAAP") gross profit of
$1.01 billion, up 25%
- Adjusted gross margin of 54%, up from 51% in the prior year
period; GAAP gross margin of 49%, up from 46%
- Adjusted diluted earnings per share ("EPS") of $1.16, up 41%; GAAP diluted EPS of $1.26, up 215%
- 2014 full year adjusted diluted EPS guidance increased to
$3.54 to $3.60
- Potential opportunity to accelerate target of at least
$6.00 in adjusted diluted EPS in
2018(1)
Mylan CEO Heather Bresch
commented, "We delivered outstanding third quarter results, with
adjusted diluted EPS increasing 41%, and we have increased our
guidance range for our full year adjusted diluted EPS to
$3.54 to $3.60, representing
year-over-year growth of 24% at the midpoint of the range. These
strong results were delivered despite continued delays in approvals
at FDA for several products that we had anticipated launching in
2014, again highlighting the strength and diversity of our global
business, and the breadth and depth of our portfolio. During the
third quarter, we saw double-digit revenue growth in North America, Rest of World and our Specialty
segment, and we continued to execute against our growth drivers,
with strong contributions from our injectables and anti-retroviral
franchises, as well as from EpiPen® Auto-Injector. Further, our
results underscore the importance of our integrated, high quality
operating platform, which has again allowed us to maximize key
market opportunities when they present themselves.
"We continue to expect that we will complete the pending
acquisition of Abbott's non-U.S.
developed markets specialty and branded generics business in the
first quarter of 2015. We remain excited about the strategic and
financial benefits of this transaction, and our engagement with the
Abbott team on pre-integration
planning has only further underscored the significant potential of
this asset in Mylan's hands. While our teams are working diligently
to complete this transaction, we continue to actively pursue
additional opportunities, and we are eager to put our enhanced
financial flexibility and improved capital structure to use.
Finally, we continue to see potential to accelerate achievement of
our adjusted diluted EPS target of at least $6.00 in 2018."
Mylan CFO John Sheehan added,
"Mylan delivered yet another strong quarter, including generating
significant adjusted free cash flow, which year-to-date has been in
excess of $800 million, up more than
65% from the prior year period. Given this strong cash flow
generation, in combination with the enhanced financial flexibility
we will achieve through the Abbott
transaction, including anticipated post-close gross debt to EBITDA
leverage of 2.3 times, you can expect us to execute on additional
strategic opportunities."
Total Revenue
|
Three Months
Ended
|
|
|
|
|
September
30,
|
|
|
|
(Unaudited; in
millions)
|
2014
|
|
|
2013
|
|
|
Percent
Change
|
Total
Revenues
|
$
|
2,084.0
|
|
|
$
|
1,767.4
|
|
|
18
|
%
|
Generics Third Party
Net Sales
|
1,607.4
|
|
|
1,398.9
|
|
|
15
|
%
|
North
America
|
841.8
|
|
|
705.5
|
|
|
19
|
%
|
Europe
|
351.5
|
|
|
346.5
|
|
|
1
|
%
|
Rest of
World
|
414.1
|
|
|
346.9
|
|
|
19
|
%
|
Specialty Third Party
Net Sales
|
462.0
|
|
|
357.2
|
|
|
29
|
%
|
Other
Revenue
|
14.6
|
|
|
11.3
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Generics Segment Revenue
Generics segment third party net sales were
$1.61 billion for the quarter, an
increase of 15% when compared to the prior year period. The effect
of foreign currency translation on third party net sales was
insignificant in the Generics segment as well as within each region
of the Generics segment.
- Third party net sales from North America were $841.8 million for the quarter, an increase of
19% compared to the prior year period. The increase was primarily
driven by net sales from new products and maximization of key
market opportunities, partially offset by lower third party net
sales of existing products as a result of lower volumes. Our
high-quality operating platform continues to offer a strong
competitive advantage in the U.S. market.
- Third party net sales from Europe were $351.5
million for the quarter, an increase of 1% compared to the
prior year period. During the quarter, we benefited from increased
volumes in Italy and France as well as net sales from new products.
These increases were partially offset by lower pricing throughout
Europe as a result of pricing
reductions and competitive market conditions. We continue to
maintain market leadership and stable market share throughout key
markets in this region.
- Third party net sales from the Rest of
World were $414.1 million for the
quarter, an increase of 19% compared to the prior year period. This
increase was primarily driven by higher third party net sales
volumes from our operations in India, namely from strong growth in the
anti-retroviral ("ARV") franchise which manufactures products used
in the treatment of HIV/AIDS. In Japan, third party net sales were essentially
flat, on a constant currency basis, as a result of lower volumes
offset by new product introductions. We continue to see
Japan as a key region for future
sales growth as the market expands. In Australia, third party net sales increased as
a result of new product sales, partially offset by pricing
reductions from significant government-imposed pricing reform.
Specialty Segment Revenue
Specialty segment reported third party net sales
of $462.0 million for the quarter, an
increase of 29% when compared to the prior year period. The
increase was due to higher net sales of the EpiPen®
Auto-Injector driven by increased volume and favorable pricing.
The increased quarterly volume resulted from double-digit growth of
the epinephrine auto-injector market. The EpiPen® Auto-Injector
remains on track to become a billion dollar product in
2014.
Total Gross Profit
Adjusted gross profit was $1.13
billion and adjusted gross margins were 54% for the
quarter as compared to adjusted gross profit of $903.2 million and adjusted gross margins of 51%
in the comparable prior year period. Strong adjusted gross margins
were the result of new products and growth in the EpiPen®
Auto-Injector. GAAP gross profit for the quarter was
$1.01 billion and GAAP gross
margins were 49% as compared to GAAP gross profit of
$808.5 million and GAAP gross margins
of 46% in the comparable prior year period.
Total Profitability
Adjusted earnings from operations for the quarter were
$659.3 million, up 43% from the
comparable prior year period. SG&A expense increased
from the prior year period as a result of increased selling and
marketing investments related to the EpiPen® Auto-Injector
franchise as well as increased legal and marketing costs in the
North American region to support anticipated new product launches.
R&D expense also increased as we continued to invest in
our biologics and respiratory growth platforms. GAAP earnings
from operations were $495.0
million for the quarter, an increase of 46% from the
comparable prior year period.
Other Operating (Income) Expense, Net in the current
period recognized a gain of $80.0
million as a result of an agreement with Strides Arcolab
Limited to settle a component of contingent consideration related
to the Agila acquisition. Mylan recognized compensation, and the
resulting positive impact on cash, for lost revenues in 2014
arising from supply disruptions that resulted from ongoing
quality-enhancement activities initiated at certain Agila
facilities prior to Mylan's acquisition of Agila in 2013.
EBITDA, which is defined as net earnings (excluding the
non-controlling interest and losses from equity method investees)
plus income taxes, interest expense, depreciation and amortization,
was $652.7 million for the quarter
and $401.4 million for the comparable
prior year quarter. After adjusting for certain items as further
detailed in the reconciliation below, adjusted EBITDA was
$736.0 million for the quarter and
$534.2 million for the comparable
prior year period. GAAP net earnings attributable to
Mylan Inc. increased by $340.2
million to $499.1 million as
compared to $158.9 million for the
prior year comparable period. This increase was partly driven by a
year-over-year benefit to income tax expense. During the quarter,
we received approvals from the relevant Indian regulatory
authorities to legally merge our Agila Indian subsidiaries into
Mylan Laboratories Limited. This merger resulted in the recognition
of a deferred tax asset with a corresponding benefit to income tax
provision of $156 million.
Cash Flow
Adjusted cash provided by operating activities was
$1.03 billion for the nine months
ended September 30, 2014, compared to
$727 million for the comparable prior
year period. The increase in adjusted cash provided by operating
activities is the result of growth in adjusted earnings and more
efficient use of working capital. On a GAAP basis, net cash
provided by operating activities was $888 million for the nine months ended
September 30, 2014, compared to
$689 million for the comparable prior
year period. Capital expenditures were approximately
$220 million for the nine months
ended September 30, 2014 as compared
to approximately $239 million in the
comparable period in 2013. Adjusted free cash flow was
$818 million for the nine months
ended September 30, 2014, compared to
$488 million in the comparable period
in 2013.
Guidance
Given strong third quarter operational performance, Mylan is
increasing its 2014 full year guidance range for adjusted diluted
EPS to $3.54 to $3.60. This guidance
range excludes potential launches of generic Copaxone® and generic
Lidoderm®.
Mylan expects fourth quarter adjusted diluted EPS in the range
of $1.03 to $1.09, an increase from
adjusted diluted EPS in Q4 2013 of $0.78. The year-over-year increase is driven
primarily by new product introductions during 2014 in North America and our Arixtra® agreement,
combined with continued growth in the Specialty segment.
The following tables provide a summary of Mylan's 2014 fourth
quarter and full year guidance ranges on an adjusted basis.
Q4 2014 Financial Guidance
(In millions,
except EPS)
|
Q4 2014
Guidance*
|
EBITDA*
|
$660 -
$720
|
Net
Earnings*
|
$410 -
$450
|
Diluted
EPS*
|
$1.03 -
$1.09
|
* Adjusted metrics
Full Year 2014 Financial Guidance
|
Full Year
2014
|
|
Full Year
2014
|
(In millions,
except EPS and %'s)
|
Current
Guidance
|
|
Prior
Guidance**
|
Total
Revenue
|
$7,700 -
$7,800
|
|
$7,800 -
$8,000
|
Gross Profit
Margin*
|
52% - 53%
|
|
51% - 53%
|
SG&A as % of
Total Revenue*
|
18% - 20%
|
|
18% - 20%
|
R&D as % of Total
Revenue*
|
7% - 8%
|
|
7% - 8%
|
EBITDA*
|
$2,350 -
$2,410
|
|
$2,200 -
$2,400
|
Net
Earnings*
|
$1,400 -
$1,440
|
|
$1,265 -
$1,370
|
Diluted
EPS*
|
$3.54 -
$3.60
|
|
$3.44 -
$3.54
|
Operating Cash
Flow*
|
$1,200 -
$1,300
|
|
$1,200 -
$1,400
|
Capital
Expenditures
|
$300 -
$350
|
|
$350 -
$400
|
Tax Rate*
|
24% - 25%
|
|
24% - 26%
|
Average Diluted
Shares Outstanding
|
395 - 400
|
|
390 - 400
|
* Adjusted metrics
** Excluding adjusted diluted EPS guidance, which was
communicated via a press release on Oct. 3,
2014, prior guidance was communicated on Aug. 7, 2014 in Mylan's Q2 2014 earnings press
release.
Conference Call
Mylan will host a conference call and live webcast, today,
Oct. 30, 2014, at 4:30 p.m. ET, in conjunction with the release of
its financial results. The dial-in number to access the call is
800.514.4861 or 678.809.2405 for international callers. To access
the live webcast please log onto Mylan's website (www.mylan.com) at
least 15 minutes before the event is to begin to register and
download or install any necessary software. A replay of the webcast
will be available at www.mylan.com/investors for a limited
time.
Non-GAAP Financial Measures
This press release includes the presentation and discussion of
certain financial information that differs from what is reported
under accounting principles generally accepted in the United States ("U.S. GAAP"). These
non-GAAP financial measures, including, but not limited to,
adjusted diluted EPS, adjusted cash provided by operating
activities, adjusted gross profit, adjusted gross margins, adjusted
earnings from operations, adjusted interest expense, adjusted net
earnings, constant currency total revenue, constant currency third
party net sales, adjusted R&D, adjusted SG&A, adjusted tax
rate, EBITDA and adjusted EBITDA, are presented in order to
supplement investors' and other readers' understanding and
assessment of the Company's financial performance. Management uses
these measures internally for forecasting, budgeting and measuring
its operating performance. In addition, primarily due to
acquisitions, Mylan believes that an evaluation of its ongoing
operations (and comparisons of its current operations with
historical and future operations) would be difficult if the
disclosure of its financial results were limited to financial
measures prepared only in accordance with U.S. GAAP. In addition,
the Company believes that including EBITDA and supplemental
adjustments applied in presenting adjusted EBITDA pursuant to our
credit agreement is appropriate to provide additional information
to investors to demonstrate the Company's ability to comply with
financial debt covenants (which are calculated using a measure
similar to adjusted EBITDA) and assess the Company's ability to
incur additional indebtedness. Set forth below, Mylan has provided
reconciliations of such non-GAAP financial measures to the most
directly comparable U.S. GAAP financial measure. Investors and
other readers are encouraged to review the related U.S. GAAP
financial measures and the reconciliations of the non-GAAP measures
to their most directly comparable U.S. GAAP measures set forth
below, and investors and other readers should consider non-GAAP
measures only as supplements to, not as substitutes for or as
superior measures to, the measures of financial performance
prepared in accordance with U.S. GAAP.
Below is a reconciliation of GAAP net earnings attributable to
Mylan Inc. (the "Company") and GAAP diluted EPS to adjusted net
earnings attributable to Mylan Inc. and adjusted diluted EPS for
the quarter and nine months period compared to the respective prior
year period (in millions, except per share amounts):
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
GAAP net earnings
attributable to Mylan Inc. and GAAP diluted EPS
|
$
|
499.1
|
|
|
$
|
1.26
|
|
|
$
|
158.9
|
|
|
$
|
0.40
|
|
|
$
|
740.2
|
|
|
$
|
1.86
|
|
|
$
|
443.5
|
|
|
$
|
1.13
|
|
Purchase accounting
related amortization (primarily included in cost of sales)
(a)
|
95.3
|
|
|
|
|
|
85.1
|
|
|
|
|
|
289.8
|
|
|
|
|
|
262.7
|
|
|
|
|
Litigation
settlements, net
|
20.9
|
|
|
|
|
|
(5.4)
|
|
|
|
|
|
47.2
|
|
|
|
|
|
3.3
|
|
|
|
|
Interest expense,
primarily amortization of convertible debt discount
|
11.7
|
|
|
|
|
|
9.5
|
|
|
|
|
|
34.1
|
|
|
|
|
|
26.1
|
|
|
|
|
Non-cash accretion
and fair value adjustments of contingent consideration
liability
|
9.0
|
|
|
|
|
|
23.2
|
|
|
|
|
|
26.1
|
|
|
|
|
|
27.0
|
|
|
|
|
Clean energy
investments pre-tax loss (b)
|
19.8
|
|
|
|
|
|
5.2
|
|
|
|
|
|
56.4
|
|
|
|
|
|
13.1
|
|
|
|
|
Financing related
costs (included in other income, net)
|
—
|
|
|
|
|
|
63.9
|
|
|
|
|
|
—
|
|
|
|
|
|
72.6
|
|
|
|
|
Acquisition related
costs (primarily included in cost of sales and selling, general and
administrative expense)
|
31.5
|
|
|
|
|
|
5.3
|
|
|
|
|
|
81.0
|
|
|
|
|
|
29.9
|
|
|
|
|
Restructuring and other special items included
in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
11.8
|
|
|
|
|
|
9.6
|
|
|
|
|
|
32.0
|
|
|
|
|
|
26.8
|
|
|
|
|
Research and
development expense
|
1.0
|
|
|
|
|
|
1.3
|
|
|
|
|
|
17.9
|
|
|
|
|
|
25.5
|
|
|
|
|
Selling, general and
administrative expense
|
7.7
|
|
|
|
|
|
14.3
|
|
|
|
|
|
48.9
|
|
|
|
|
|
50.0
|
|
|
|
|
Other (expense)
income, net
|
(4.0)
|
|
|
|
|
|
16.8
|
|
|
|
|
|
(3.7)
|
|
|
|
|
|
20.7
|
|
|
|
|
Tax effect of the
above items and other income tax related items (c)
|
(241.0)
|
|
|
|
|
|
(63.4)
|
|
|
|
|
|
(373.4)
|
|
|
|
|
|
(169.4)
|
|
|
|
|
Adjusted net earnings
attributable to Mylan Inc. and adjusted diluted EPS
|
$
|
462.8
|
|
|
$
|
1.16
|
|
|
$
|
324.3
|
|
|
$
|
0.82
|
|
|
$
|
996.5
|
|
|
$
|
2.51
|
|
|
$
|
831.8
|
|
|
$
|
2.11
|
|
Weighted average
diluted common shares outstanding
|
397.3
|
|
|
|
|
|
395.5
|
|
|
|
|
|
397.1
|
|
|
|
|
|
393.9
|
|
|
|
|
(a) Adjustment for purchase accounting related
amortization expense for the nine months ended September 30, 2013, includes $5.1 million of in-process research and
development asset impairment charges.
(b) Adjustment represents exclusion of the
pre-tax loss related to Mylan's investments in clean energy
investments, the activities of which qualify for income tax credits
under section 45 of the U.S. Internal Revenue Code. The amount is
included in other (income) expense, net.
(c) Adjustment for other income tax related
items includes the exclusion from adjusted net earnings for the
three and nine months ended September 30,
2014 of the tax benefit of approximately $156 million related to the merger of the
Company's wholly owned subsidiaries, Agila Specialties Private
Limited and Onco Therapies Limited, into Mylan Laboratories
Limited.
Below is a reconciliation of GAAP net earnings attributable to
Mylan Inc. to EBITDA and adjusted EBITDA for the quarter and nine
months period compared to the respective prior year period (in
millions):
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP net earnings
attributable to Mylan Inc.
|
$
|
499.1
|
|
|
$
|
158.9
|
|
|
$
|
740.2
|
|
|
$
|
443.5
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Net contribution
attributable to the noncontrolling interest and equity method
investments
|
22.8
|
|
|
5.8
|
|
|
67.9
|
|
|
15.2
|
|
Income
taxes
|
(86.8)
|
|
|
35.9
|
|
|
(40.5)
|
|
|
108.6
|
|
Interest
expense
|
83.9
|
|
|
73.9
|
|
|
251.2
|
|
|
233.7
|
|
Depreciation and
amortization
|
133.7
|
|
|
126.9
|
|
|
398.1
|
|
|
373.9
|
|
EBITDA
|
$
|
652.7
|
|
|
$
|
401.4
|
|
|
$
|
1,416.9
|
|
|
$
|
1,174.9
|
|
Add
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
15.5
|
|
|
12.7
|
|
|
48.0
|
|
|
36.0
|
|
Litigation
settlements, net
|
20.9
|
|
|
(5.4)
|
|
|
47.2
|
|
|
3.3
|
|
Restructuring & other special
items
|
46.9
|
|
|
125.5
|
|
|
171.7
|
|
|
224.3
|
|
Adjusted
EBITDA
|
$
|
736.0
|
|
|
$
|
534.2
|
|
|
$
|
1,683.8
|
|
|
$
|
1,438.5
|
|
About Mylan
Mylan is a global pharmaceutical company committed to setting
new standards in health care. Working together around the world to
provide 7 billion people access to high quality medicine, we
innovate to satisfy unmet needs; make reliability and service
excellence a habit; do what's right, not what's easy; and impact
the future through passionate global leadership. We offer a growing
portfolio of more than 1,300 generic pharmaceuticals and several
brand medications. In addition, we offer a wide range of
antiretroviral therapies, upon which approximately 40% of HIV/AIDS
patients in developing countries depend. We also operate one of the
largest active pharmaceutical ingredient manufacturers and
currently market products in approximately 140 countries and
territories. Our workforce of more than 20,000 people is dedicated
to improving the customer experience and increasing pharmaceutical
access to consumers around the world. But don't take our word for
it. See for yourself. See inside. mylan.com
Forward-Looking Statements
This press release may contain "forward-looking statements."
These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include, without limitation,
statements about the proposed acquisition (the "Transaction") by
the Company of Abbott Laboratories ("Abbott") non-U.S. developed markets specialty
and branded generics business (the "Acquired Business"), the
expected timetable for completing the Transaction, benefits and
synergies of the Transaction, future opportunities for the combined
company and products and any other statements regarding the
combined company's, the Company's and the Acquired Business' future
operations, anticipated business levels, future earnings, planned
activities, anticipated growth, market opportunities, strategies,
competition, and other expectations and targets for future periods.
These often may be identified by the use of words such as "will",
"may," "could," "should," "would," "project," "believe,"
"anticipate," "expect," "plan," "estimate," "forecast,"
"potential," "intend," "continue," "target" and variations of these
words or comparable words. Because forward-looking statements
inherently involve risks and uncertainties, actual future results
may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause or contribute
to such differences include, but are not limited to: the ability to
meet expectations regarding the accounting and tax treatments and
the timing and consummation of the Transaction; changes in relevant
tax and other laws; the ability to consummate the Transaction; the
conditions to the consummation of the Transaction, including the
receipt of approval of the Company's shareholders; the regulatory
approvals required for the Transaction not being obtained on the
terms expected or on the anticipated schedule; the integration of
the Acquired Business being more difficult, time-consuming, or
costly than expected; operating costs, customer loss and business
disruption (including, without limitation, difficulties in
maintaining relationships with employees, customers, clients, or
suppliers) being greater than expected following the transaction;
the retention of certain key employees of the Acquired Business
being difficult; the possibility that the combined company may be
unable to achieve expected synergies and operating efficiencies in
connection with the transaction within the expected time-frames or
at all and to successfully integrate the Acquired Business;
expected or targeted future financial and operating performance and
results; the capacity (prior to or after consummation of the
Transaction) to bring new products to market, including but not
limited to where the Company or the combined company uses its
business judgment and decides to manufacture, market, and/or sell
products, directly or through third parties, notwithstanding the
fact that allegations of patent infringement(s) have not been
finally resolved by the courts (i.e., an "at-risk launch"); the
scope, timing, and outcome of any ongoing legal proceedings and the
impact of any such proceedings on financial condition, results of
operations and/or cash flows; the ability to protect intellectual
property and preserve intellectual property rights; the effect of
any changes in customer and supplier relationships and customer
purchasing patterns; the ability to attract and retain key
personnel; changes in third-party relationships; the impacts of
competition; changes in the economic and financial conditions of
the Company's business, the combined company, or the Acquired
Business; the inherent challenges, risks, and costs in identifying,
acquiring, and integrating complementary or strategic acquisitions
of other companies, products or assets and in achieving anticipated
synergies; uncertainties and matters beyond the control of
management; and inherent uncertainties involved in the estimates
and judgments used in the preparation of financial statements, and
the providing of estimates of financial measures, in accordance
with U.S. GAAP and related standards or on an adjusted basis. For
more detailed information on the risks and uncertainties associated
with the Company's business activities, see the risks described in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2013, as updated by the Company's Current Report
on Form 8-K filed on August 6, 2014,
and the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 2014, as well as its
other filings with the Securities and Exchange Commission ("SEC").
You can access the Company's filings with the SEC through the SEC
website at www.sec.gov, and the Company strongly encourages you to
do so. The Company undertakes no obligation to update any
statements herein for revisions or changes after the date of this
release. Further, uncertainties or other circumstances, or matters
outside of the Company's control between the date of this release
and the date that its Form 10-Q for the quarter ended
September 30, 2014 is filed with the SEC could potentially
result in adjustments to reported results. Long-term targets,
including, but not limited to, 2018 targets, do not reflect Company
guidance.
Additional Information and Where to Find It
In connection with the Transaction, New Moon B.V., a private
limited liability company (besloten vennootschap met beperkte
aansprakelijkheid) organized under the laws of the Netherlands ("New Mylan") and a
wholly-owned subsidiary of the Company and the Company intend to
file relevant materials with the SEC, including a New Mylan
registration statement on Form S-4 that will include a proxy
statement of the Company that also constitutes a prospectus of New
Mylan. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE COMPANY, NEW MYLAN, THE ACQUIRED BUSINESS AND THE
TRANSACTION. A definitive proxy statement will be sent to
shareholders of the Company seeking approval of the Transaction.
The proxy statement/prospectus and other documents relating to the
Transaction (when they are available) can be obtained free of
charge from the SEC website at www.sec.gov. These documents (when
they are available) can also be obtained free of charge from the
Company by accessing Mylan's website at www.mylan.com/investors or
upon request to the Company at 724-514-1813 or
investor.relations@mylan.com.
Participants in Solicitation
This communication is not a solicitation of a proxy from any
investor or shareholder. However, the Company, New Mylan and
certain of their directors and executive officers may be deemed to
be participants in the solicitation of proxies in connection with
the Transaction under the rules of the SEC. Information regarding
the Company's directors and executive officers may be found in its
definitive proxy statement relating to its 2014 Annual Meeting of
Shareholders filed with the SEC on March 10,
2014. This document can be obtained free of charge from the
sources indicated above. Additional information regarding the
interests of these participants will also be included in the proxy
statement/prospectus when it becomes available.
Non-Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Mylan Inc. and
Subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited; in
millions, except per share amounts)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
2,069.4
|
|
|
$
|
1,756.1
|
|
|
$
|
5,588.8
|
|
|
$
|
5,062.8
|
|
Other
revenues
|
14.6
|
|
|
11.3
|
|
|
48.1
|
|
|
37.8
|
|
Total
revenues
|
2,084.0
|
|
|
1,767.4
|
|
|
5,636.9
|
|
|
5,100.6
|
|
Cost of
sales
|
1,071.6
|
|
|
958.9
|
|
|
3,077.9
|
|
|
2,856.2
|
|
Gross
profit
|
1,012.4
|
|
|
808.5
|
|
|
2,559.0
|
|
|
2,244.4
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
158.2
|
|
|
114.0
|
|
|
431.6
|
|
|
351.9
|
|
Selling, general and
administrative
|
418.3
|
|
|
349.8
|
|
|
1,200.1
|
|
|
1,028.5
|
|
Litigation
settlements, net
|
20.9
|
|
|
(10.1)
|
|
|
47.2
|
|
|
(1.4)
|
|
Other operating
(income) expense, net
|
(80.0)
|
|
|
15.0
|
|
|
(80.0)
|
|
|
3.1
|
|
Total operating
expenses
|
517.4
|
|
|
468.7
|
|
|
1,598.9
|
|
|
1,382.1
|
|
Earnings from
operations
|
495.0
|
|
|
339.8
|
|
|
960.1
|
|
|
862.3
|
|
Interest
expense
|
83.9
|
|
|
73.9
|
|
|
251.2
|
|
|
233.7
|
|
Other (income)
expense, net
|
(1.5)
|
|
|
70.6
|
|
|
6.8
|
|
|
74.4
|
|
Earnings before
income taxes and noncontrolling interest
|
412.6
|
|
|
195.3
|
|
|
702.1
|
|
|
554.2
|
|
Income tax (benefit)
provision
|
(86.8)
|
|
|
35.9
|
|
|
(40.5)
|
|
|
108.6
|
|
Net
earnings
|
499.4
|
|
|
159.4
|
|
|
742.6
|
|
|
445.6
|
|
Net earnings
attributable to the noncontrolling interest
|
(0.3)
|
|
|
(0.5)
|
|
|
(2.4)
|
|
|
(2.1)
|
|
Net earnings
attributable to Mylan Inc. common shareholders
|
$
|
499.1
|
|
|
$
|
158.9
|
|
|
$
|
740.2
|
|
|
$
|
443.5
|
|
Earnings per common
share attributable to Mylan Inc. common shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.33
|
|
|
$
|
0.42
|
|
|
$
|
1.98
|
|
|
$
|
1.15
|
|
Diluted
|
$
|
1.26
|
|
|
$
|
0.40
|
|
|
$
|
1.86
|
|
|
$
|
1.13
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
374.1
|
|
|
382.1
|
|
|
373.4
|
|
|
385.5
|
|
Diluted
|
397.3
|
|
|
395.5
|
|
|
397.1
|
|
|
393.9
|
|
Mylan Inc. and
Subsidiaries
Condensed
Consolidated Balance Sheets
(Unaudited; in
millions)
|
|
|
|
|
|
September 30,
2014
|
|
December 31,
2013(1)
|
ASSETS
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
199.6
|
|
|
$
|
291.3
|
|
Accounts receivable,
net
|
1,733.3
|
|
|
1,820.0
|
|
Inventories
|
1,707.5
|
|
|
1,656.9
|
|
Other current
assets
|
2,177.4
|
|
|
703.0
|
|
Total current
assets
|
5,817.8
|
|
|
4,471.2
|
|
Intangible assets,
net
|
2,541.1
|
|
|
2,517.9
|
|
Goodwill
|
4,188.5
|
|
|
4,340.5
|
|
Other non-current
assets
|
2,626.7
|
|
|
3,965.2
|
|
Total
assets
|
$
|
15,174.1
|
|
|
$
|
15,294.8
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
$
|
4,473.9
|
|
|
$
|
2,964.0
|
|
Long-term
debt
|
5,723.5
|
|
|
7,586.5
|
|
Other non-current
liabilities
|
1,570.4
|
|
|
1,784.4
|
|
Total
liabilities
|
11,767.8
|
|
|
12,334.9
|
|
Noncontrolling
interest
|
18.8
|
|
|
18.1
|
|
Mylan Inc.
shareholders' equity
|
3,387.5
|
|
|
2,941.8
|
|
Total liabilities and
equity
|
$
|
15,174.1
|
|
|
$
|
15,294.8
|
|
|
|
(1) As
updated by the Form 8-K filed by the Company on August 6,
2014.
|
|
Mylan Inc. and Subsidiaries
Recast
of Geographical Regions
(Unaudited; in millions)
As previously disclosed, beginning in 2014, the regions within
the Generics segment have been revised to North America, Europe and Rest of World. The Rest of World
region includes the former Asia
Pacific region, Brazil and
the export sales to emerging markets, which were previously
included in the EMEA and North
America regions within the Generics segment. The following
table provides a summary of the Generics segment's 2013 total third
party net sales and total revenues recast for the change in its
geographic regions to conform to the presentation for the current
period. The recast had no impact on total third party sales or
total revenues for the Generics segment.
Recast for
Geographic Changes Within the Generics Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Year
Ended
|
|
March 31,
2013
|
|
June 30,
2013
|
|
September 30,
2013
|
|
December 31,
2013
|
|
September 30,
2013
|
|
December 31,
2013
|
Generics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
731.5
|
|
|
$
|
716.5
|
|
|
$
|
705.5
|
|
|
$
|
853.1
|
|
|
$
|
2,153.5
|
|
|
$
|
3,006.6
|
|
Europe
|
348.5
|
|
|
359.4
|
|
|
346.5
|
|
|
375.3
|
|
|
1,054.4
|
|
|
1,429.7
|
|
Rest of
World
|
327.8
|
|
|
374.5
|
|
|
346.9
|
|
|
389.4
|
|
|
1,049.2
|
|
|
1,438.6
|
|
Total third-party
net sales
|
1,407.8
|
|
|
1,450.4
|
|
|
1,398.9
|
|
|
1,617.8
|
|
|
4,257.1
|
|
|
5,874.9
|
|
Other third-party
revenues
|
5.0
|
|
|
7.8
|
|
|
5.5
|
|
|
7.5
|
|
|
18.3
|
|
|
25.8
|
|
Intersegment
sales
|
0.6
|
|
|
1.9
|
|
|
1.7
|
|
|
1.5
|
|
|
4.2
|
|
|
5.7
|
|
Generics total
revenues
|
$
|
1,413.4
|
|
|
$
|
1,460.1
|
|
|
$
|
1,406.1
|
|
|
$
|
1,626.8
|
|
|
$
|
4,279.6
|
|
|
$
|
5,906.4
|
|
Mylan Inc. and
Subsidiaries
Summary of
Revenues by Segment
(Unaudited; in
millions)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
Percent
Change
|
|
Percent
Change
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
Total
|
|
Constant
Currency(1)
|
|
Total
|
|
Constant
Currency(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third party net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
America
|
$
|
841.8
|
|
|
$
|
705.5
|
|
|
$
|
2,360.6
|
|
|
$
|
2,153.5
|
|
|
19
|
%
|
|
20
|
%
|
|
10
|
%
|
|
10
|
%
|
Europe
|
351.5
|
|
|
346.5
|
|
|
1,103.4
|
|
|
1,054.4
|
|
|
1
|
%
|
|
1
|
%
|
|
5
|
%
|
|
2
|
%
|
Rest of
World
|
414.1
|
|
|
346.9
|
|
|
1,180.3
|
|
|
1,049.2
|
|
|
19
|
%
|
|
18
|
%
|
|
13
|
%
|
|
18
|
%
|
Total third party net
sales
|
1,607.4
|
|
|
1,398.9
|
|
|
4,644.3
|
|
|
4,257.1
|
|
|
15
|
%
|
|
15
|
%
|
|
9
|
%
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other third party
revenues
|
9.5
|
|
|
5.5
|
|
|
31.6
|
|
|
18.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total third party
revenues
|
1,616.9
|
|
|
1,404.4
|
|
|
4,675.9
|
|
|
4,275.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment
sales
|
1.1
|
|
|
1.7
|
|
|
3.7
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Generics total
revenues
|
1,618.0
|
|
|
1,406.1
|
|
|
4,679.6
|
|
|
4,279.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third party net
sales
|
462.0
|
|
|
357.2
|
|
|
944.5
|
|
|
805.7
|
|
|
29
|
%
|
|
29
|
%
|
|
17
|
%
|
|
17
|
%
|
Other third party
revenues
|
5.1
|
|
|
5.8
|
|
|
16.5
|
|
|
19.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total third party
revenues
|
467.1
|
|
|
363.0
|
|
|
961.0
|
|
|
825.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment
sales
|
2.9
|
|
|
4.1
|
|
|
7.3
|
|
|
18.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specialty total
revenues
|
470.0
|
|
|
367.1
|
|
|
968.3
|
|
|
843.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elimination of
intersegment sales
|
(4.0)
|
|
|
(5.8)
|
|
|
(11.0)
|
|
|
(22.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total
revenues
|
$
|
2,084.0
|
|
|
$
|
1,767.4
|
|
|
$
|
5,636.9
|
|
|
$
|
5,100.6
|
|
|
18
|
%
|
|
18
|
%
|
|
11
|
%
|
|
11
|
%
|
|
|
|
|
|
(1) The
constant currency percent change is derived by translating third
party net sales for the current period at prior year comparative
period exchange rates.
|
|
|
|
|
Mylan Inc. and
Subsidiaries
Reconciliation of
Non-GAAP Financial Measures
(Unaudited; in
millions)
|
|
|
Q4 2013 Adjusted
Earnings
|
|
|
|
|
Three Months
Ended
|
|
December 31,
2013
|
GAAP net earnings
attributable to Mylan Inc. and diluted GAAP EPS
|
$
|
180.2
|
|
|
$
|
0.45
|
|
Purchase accounting
related amortization (primarily included in cost of
sales)
|
108.4
|
|
|
|
|
Litigation
settlements, net
|
(13.2)
|
|
|
|
|
Interest expense,
primarily amortization of convertible debt discount
|
11.9
|
|
|
|
|
Non-cash accretion
and fair value adjustments of contingent consideration
liability
|
8.4
|
|
|
|
|
Clean energy
investments pre-tax loss
|
9.3
|
|
|
|
|
Acquisition related
costs (primarily included in selling, general and administrative
expense)
|
19.9
|
|
|
|
|
Restructuring and other special items included
in:
|
|
|
|
|
|
Cost of
sales
|
22.5
|
|
|
|
|
Research and
development expense
|
26.1
|
|
|
|
|
Selling, general and
administrative expense
|
20.6
|
|
|
|
|
Other (expense)
income, net
|
4.5
|
|
|
|
|
Tax effect of the
above items and other income tax related items
|
(90.5)
|
|
|
|
|
Adjusted net earnings
attributable to Mylan Inc. and adjusted diluted EPS
|
$
|
308.1
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
396.2
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP cost of
sales
|
$
|
1,071.6
|
|
|
$
|
958.9
|
|
|
3,077.9
|
|
|
$
|
2,856.2
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
Purchase accounting
related amortization
|
(91.5)
|
|
|
(85.1)
|
|
|
(278.3)
|
|
|
(262.7)
|
|
Acquisition related
costs
|
(17.3)
|
|
|
—
|
|
|
(52.7)
|
|
|
—
|
|
Restructuring &
other special items
|
(11.8)
|
|
|
(9.6)
|
|
|
(32.0)
|
|
|
(26.8)
|
|
Adjusted cost of
sales
|
$
|
951.0
|
|
|
$
|
864.2
|
|
|
$
|
2,714.9
|
|
|
$
|
2,566.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross profit
(a)
|
$
|
1,133.0
|
|
|
$
|
903.2
|
|
|
$
|
2,922.0
|
|
|
$
|
2,533.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
(a)
|
54
|
%
|
|
51
|
%
|
|
52
|
%
|
|
50
|
%
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP
R&D
|
$
|
158.2
|
|
|
$
|
114.0
|
|
|
$
|
431.6
|
|
|
$
|
351.9
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring &
other special items
|
(1.0)
|
|
|
(1.3)
|
|
|
(17.9)
|
|
|
(25.5)
|
|
Adjusted
R&D
|
$
|
157.2
|
|
|
$
|
112.7
|
|
|
$
|
413.7
|
|
|
$
|
326.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted R&D as %
of total revenue
|
7.5
|
%
|
|
6.4
|
%
|
|
7.3
|
%
|
|
6.4
|
%
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP
SG&A
|
$
|
418.3
|
|
|
$
|
349.8
|
|
|
$
|
1,200.1
|
|
|
$
|
1,028.5
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
costs
|
(14.2)
|
|
|
(2.4)
|
|
|
(28.1)
|
|
|
(24.8)
|
|
Restructuring &
other special items
|
(7.7)
|
|
|
(14.3)
|
|
|
(48.9)
|
|
|
(50.0)
|
|
Adjusted
SG&A
|
$
|
396.4
|
|
|
$
|
333.1
|
|
|
$
|
1,123.1
|
|
|
$
|
953.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted SG&A as
% of total revenue
|
19.0
|
%
|
|
18.8
|
%
|
|
19.9
|
%
|
|
18.7
|
%
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP total
operating expenses
|
$
|
517.4
|
|
|
$
|
468.7
|
|
|
$
|
1,598.9
|
|
|
$
|
1,382.1
|
|
Add /
(Deduct):
|
|
|
|
|
|
|
|
|
|
|
|
Litigation
settlements, net
|
(20.9)
|
|
|
5.4
|
|
|
(47.2)
|
|
|
(3.3)
|
|
Acquisition related
costs
|
(14.3)
|
|
|
(6.3)
|
|
|
(28.2)
|
|
|
(24.8)
|
|
Other operating
(income) expense, net
|
—
|
|
|
(15.0)
|
|
|
—
|
|
|
(3.1)
|
|
Restructuring &
other special items
|
(8.5)
|
|
|
(11.3)
|
|
|
(66.7)
|
|
|
(75.6)
|
|
Adjusted total
operating expenses
|
$
|
473.7
|
|
|
$
|
441.5
|
|
|
$
|
1,456.8
|
|
|
$
|
1,275.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
from operations (b)
|
$
|
659.3
|
|
|
$
|
461.7
|
|
|
$
|
1,465.2
|
|
|
$
|
1,258.6
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP interest
expense
|
$
|
83.9
|
|
|
$
|
73.9
|
|
|
$
|
251.2
|
|
|
$
|
233.7
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
related to clean energy investments (c)
|
(3.9)
|
|
|
(1.9)
|
|
|
(11.7)
|
|
|
(6.0)
|
|
Non-cash accretion of
contingent consideration liability
|
(9.0)
|
|
|
(8.2)
|
|
|
(26.1)
|
|
|
(23.9)
|
|
Non-cash interest,
primarily amortization of convertible debt discount
|
(7.8)
|
|
|
(7.6)
|
|
|
(22.4)
|
|
|
(20.1)
|
|
Adjusted interest
expense
|
$
|
63.2
|
|
|
$
|
56.2
|
|
|
$
|
191.0
|
|
|
$
|
183.7
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
GAAP other
(income) expense, net
|
$
|
(1.5)
|
|
|
$
|
70.6
|
|
|
$
|
6.8
|
|
|
$
|
74.4
|
|
(Add) /
Deduct:
|
|
|
|
|
|
|
|
|
|
|
|
Equity method losses
from clean energy investments
|
(19.8)
|
|
|
(5.2)
|
|
|
(56.4)
|
|
|
(13.1)
|
|
Purchase accounting
related amortization
|
(3.8)
|
|
|
—
|
|
|
(11.5)
|
|
|
—
|
|
Acquisition related
costs
|
—
|
|
|
(3.4)
|
|
|
—
|
|
|
(5.1)
|
|
Financing related
costs
|
—
|
|
|
(63.9)
|
|
|
—
|
|
|
(72.6)
|
|
Restructuring &
other special items
|
4.0
|
|
|
(16.4)
|
|
|
3.7
|
|
|
(20.7)
|
|
Adjusted other
income
|
$
|
(21.1)
|
|
|
$
|
(18.3)
|
|
|
$
|
(57.4)
|
|
|
$
|
(37.1)
|
|
|
Nine Months Ended
September 30,
|
|
2014
|
|
|
2013
|
|
GAAP net cash
provided by operating activities
|
$
|
888
|
|
|
$
|
689
|
|
Add /
(Deduct):
|
|
|
|
|
|
Payment (receipt) of
litigation settlements
|
54
|
|
|
(12)
|
|
Payment of redemption
premium
|
—
|
|
|
59
|
|
Acquisition related
costs
|
63
|
|
|
11
|
|
R&D
expense
|
21
|
|
|
—
|
|
Income tax
items
|
—
|
|
|
(22)
|
|
Other
|
3
|
|
|
2
|
|
Adjusted cash
provided by operating activities
|
$
|
1,029
|
|
|
$
|
727
|
|
|
|
|
|
|
|
Add /
(Deduct):
|
|
|
|
|
|
Capital
expenditures
|
(220)
|
|
|
(239)
|
|
Proceeds from sale of
property, plant and equipment
|
9
|
|
|
—
|
|
Adjusted free cash
flow
|
$
|
818
|
|
|
$
|
488
|
|
(a) Adjusted gross profit is calculated as total revenues
less adjusted cost of sales. Adjusted gross margin is calculated as
adjusted gross profit divided by total revenue.
(b) Adjusted earnings from operations is calculated as
adjusted gross profit less adjusted total operating expenses.
(c) Adjustment represents exclusion of activity related to
Mylan's investments in clean energy investments, the activities of
which qualify for income tax credits under section 45 of the U.S.
Internal Revenue Code.
Reconciliation of forecasted guidance
The reconciliations below are based on management's estimate of
adjusted net earnings and adjusted diluted EPS, adjusted EBITDA and
adjusted cash provided by operating activities for the year ending
December 31, 2014. Mylan expects
certain known GAAP charges for 2014, as presented in the
reconciliation below. Other GAAP charges, including those related
to potential litigation, asset impairments and restructuring
programs that would be excluded from the adjusted results are
possible, but their amounts are dependent on numerous factors that
we currently cannot ascertain with sufficient certainty or are
presently unknown. These GAAP charges are dependent upon future
events and valuations that have not yet occurred or been performed.
The unaudited forecasted amounts presented below are stated in
millions, except for earnings per share data.
Reconciliation of forecasted net earnings and EPS to adjusted
net earnings
|
Twelve Months
Ended December 31, 2014
|
|
Lower
|
|
Upper
|
GAAP net earnings
attributable to Mylan Inc. and diluted GAAP EPS
|
$
|
1,047
|
|
|
$
|
2.65
|
|
|
$
|
1,077
|
|
|
$
|
2.69
|
|
Purchase accounting
related amortization
|
385
|
|
|
|
|
|
388
|
|
|
|
|
Interest expense,
primarily amortization of convertible debt discount
|
44
|
|
|
|
|
|
46
|
|
|
|
|
Non-cash accretion of
contingent consideration liability
|
35
|
|
|
|
|
|
37
|
|
|
|
|
Pre-tax loss of clean
energy investments
|
78
|
|
|
|
|
|
83
|
|
|
|
|
Litigation
settlements, net
|
47
|
|
|
|
|
|
47
|
|
|
|
|
Restructuring and other special items
|
246
|
|
|
|
|
|
251
|
|
|
|
|
Tax effect of the
above items and other income tax related items
|
(482)
|
|
|
|
|
|
(489)
|
|
|
|
|
Adjusted net earnings
attributable to Mylan Inc. and adjusted diluted EPS
|
$
|
1,400
|
|
|
$
|
3.54
|
|
|
$
|
1,440
|
|
|
$
|
3.60
|
|
|
Three Months Ended
December 31, 2014
|
|
Lower
|
|
Upper
|
GAAP net earnings
attributable to Mylan Inc. and diluted GAAP EPS
|
$
|
313
|
|
|
$
|
0.79
|
|
|
$
|
341
|
|
|
$
|
0.85
|
|
Purchase accounting
related amortization
|
95
|
|
|
|
|
|
98
|
|
|
|
|
Interest expense,
primarily amortization of convertible debt discount
|
10
|
|
|
|
|
|
12
|
|
|
|
|
Non-cash accretion of
contingent consideration liability
|
9
|
|
|
|
|
|
11
|
|
|
|
|
Pre-tax loss of clean
energy investment
|
22
|
|
|
|
|
|
27
|
|
|
|
|
Restructuring & other special
items
|
70
|
|
|
|
|
|
75
|
|
|
|
|
Tax effect of the
above items and other income tax related items
|
(109)
|
|
|
|
|
|
(114)
|
|
|
|
|
Adjusted net earnings
attributable to Mylan Inc. and adjusted diluted EPS
|
$
|
410
|
|
|
$
|
1.03
|
|
|
$
|
450
|
|
|
$
|
1.09
|
|
Reconciliation of forecasted net earnings to adjusted
EBITDA
|
Twelve Months
Ended
December 31, 2014
|
|
Lower
|
|
Upper
|
GAAP net earnings
attributable to Mylan Inc.
|
$
|
1,047
|
|
|
$
|
1,077
|
|
Add
adjustments:
|
|
|
|
|
|
Net contribution
attributable to the noncontrolling interest and equity method
investees
|
90
|
|
|
100
|
|
Income
taxes
|
23
|
|
|
3
|
|
Interest
expense
|
340
|
|
|
350
|
|
Depreciation and
amortization
|
525
|
|
|
530
|
|
EBITDA
|
$
|
2,025
|
|
|
$
|
2,060
|
|
Add
adjustments:
|
|
|
|
|
|
Stock-based
compensation expense
|
65
|
|
|
70
|
|
Restructuring & other special
items
|
260
|
|
|
280
|
|
Adjusted
EBITDA
|
$
|
2,350
|
|
|
$
|
2,410
|
|
|
Three Months
Ended
December 31, 2014
|
|
Lower
|
|
Upper
|
GAAP net earnings
attributable to Mylan Inc.
|
$
|
313
|
|
|
$
|
341
|
|
Add
adjustments:
|
|
|
|
|
|
Net contribution
attributable to the noncontrolling interest and equity method
investees
|
22
|
|
|
32
|
|
Income
taxes
|
64
|
|
|
44
|
|
Interest
expense
|
89
|
|
|
100
|
|
Depreciation and
amortization
|
127
|
|
|
132
|
|
EBITDA
|
$
|
615
|
|
|
$
|
649
|
|
Add
adjustments:
|
|
|
|
|
|
Stock-based
compensation expense
|
17
|
|
|
22
|
|
Restructuring & other special
items
|
28
|
|
|
49
|
|
Adjusted
EBITDA
|
$
|
660
|
|
|
$
|
720
|
|
Reconciliation of forecasted cash provided by operating
activities
|
Twelve Months
Ended
December 31, 2014
|
|
Lower
|
|
Upper
|
GAAP cash provided
by operating activities
|
$
|
1,055
|
|
|
$
|
1,115
|
|
Add:
|
|
|
|
|
|
Estimated payment of
legal settlements
|
55
|
|
|
55
|
|
R&D
Expense
|
20
|
|
|
40
|
|
Acquisition related
costs
|
40
|
|
|
60
|
|
Other
items
|
30
|
|
|
30
|
|
Adjusted cash
provided by operating activities
|
$
|
1,200
|
|
|
$
|
1,300
|
|
SOURCE Mylan Inc.