~~On January 1, 2018, the~~The Company ~~adopted Accounting Standards Codification (“ASC”) Topic 606~~ ~~Revenue from Contracts with Customers~~ (“ASC 606”) using the modified retrospective method applied to those contracts which were not completed as of the date of adoption. Results for reporting periods beginning on January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reportedrecognizes revenue in accordance with ASC Topic ~~605~~ 606, Revenue ~~Recognition~~from Contracts with Customers (“ASC ~~605”~~606”). ~~Under ASC 605, the Company recognized net sales when title and risk of loss passed to its customers and when provisions for estimates, as described below, were reasonably determinable.~~

Wholesaler and distributor inventory levels of our products can fluctuate throughout the year due to the seasonality of certain products, the timing of product demand and other factors. Such fluctuations may impact the comparability of our net sales between periods.

Consideration received from licenses of intellectual property is recorded as revenue. Royalty or profit share amounts, which are based on sales of licensed products or technology, are recorded when the customer’s subsequent sales or usages occur. Such consideration is included in other revenue in the ~~Consolidated Statements~~condensed consolidated statements of ~~Operations.~~operations.

In ~~August 2017,~~February 2016, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ~~2017-12,~~ ~~Derivatives~~ (“ASU”) 2016-02, Leases (Topic 842), which supersedes FASB Topic 840, Leases (Topic 840) and ~~Hedging (Topic 815):Targeted~~provides principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use (“ROU”) asset and a lease liability for all leases with a term of greater than twelve months regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for operating leases. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to ~~Accounting~~Topic 842 (Leases), and ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provide (i) narrow amendments to clarify how to apply certain aspects of the new lease standard, (ii) entities with an additional transition method to adopt the new standard, and (iii) lessors with a practical expedient for ~~Hedging Activities~~ separating components of a contract. In December 2018, the FASB issued ASU 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors, whichprovides certain narrow-scope improvements to Topic 842 as it relates to lessors. The Company adopted the provisions of Topic 842 as of January 1, 2019 on a modified retrospective basis applying the guidance to leases existing as of this effective date. We elected to apply the available package of transitional practical expedients which permitted us not to reassess under the new standard our prior conclusions regarding lease identification, lease classification and initial direct costs. We have also elected to apply the short-term lease recognition exemption which means we will not recognize ROU assets or lease liabilities for leases that qualify both at transition and on a go-forward basis. In addition, we have elected to apply the practical expedient to not separate lease and non-lease components for our leases except for those related to certain limited supply arrangements. The Company has determined that there was no cumulative-effect adjustment to beginning retained earnings on the condensed consolidated balance sheet. We will continue to report periods prior to January 1, 2019 in our financial statements under prior guidance as outlined in Topic 840. Refer to Note 8 Leases for additional information.

In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income, (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU ~~2017-12”~~2018-02”)., which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate under the comprehensive tax legislation enacted by the U.S. government on December 22, 2017 commonly referred to as the Tax Cuts and Jobs Act. The ~~objective~~amount of the reclassification would be the difference between the historical corporate income tax rate and the newly enacted 21% corporate income tax rate. The Company applied the provisions of ASU 2018-02 as of January 1, 2019. Upon adoption, the Company recorded a cumulative effect adjustment of $3.6 million to retained earnings and accumulated other comprehensive loss.

In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The changes took effect for the Company as of January 1, 2019. The impact of the adoption of this ~~update is~~guidance did not have a material impact on the Company’s condensed consolidated financial statements and disclosures.

On February 28, 2018, the Company and Revance Therapeutics, Inc. (“Revance”) entered into a collaboration agreement (the “Revance Collaboration Agreement”) pursuant to which the Company and Revance will collaborate exclusively, on a world-wide basis (excluding Japan), to develop, manufacture and commercialize a biosimilar to the branded biologic product (onabotulinumtoxinA) marketed as BOTOX®.

Under the Revance Collaboration Agreement, the Company will be primarily responsible for (a) clinical development activities outside of North America (excluding Japan) (the “ex-U.S. Mylan territories”), (b) regulatory activities, and (c) commercialization for any approved product. Revance will be primarily responsible for (a) non-clinical development activities, (b) clinical development activities in North America, and (c) manufacturing and supply of clinical drug substance and drug product; Revance will be solely responsible for an initial portion of non-clinical development costs. The remaining portion of any non-clinical development costs and clinical development costs for obtaining approval in the U.S. and Europe

On August 31, 2018, the Company completed an agreement (the “purchase agreement”) with certain subsidiaries of Novartis AG (“Novartis”) to purchase the worldwide rights to their global cystic fibrosis products consisting of the TOBI Podhaler® and TOBI® solution. Tobramycin is the standard of care for treatment of pseudomonas aeruginosa, a leading driver of infection in cystic fibrosis. These products further strengthen our existing presence in cystic fibrosis, especially with our Creon Franchise in Europe, Australia, Japan and Canada. The asset acquisition allows us to further extend our respiratory franchise into rare/orphan disease indications and broaden our portfolio into dry powdered inhalers and nebulized products. Tobi Podhaler™ is manufactured using a proprietary Pulmosphere technology for which we have acquired exclusive rights for use, hence we expect a high barrier for generic entry.

In conjunction with the purchase agreement, Mylan and Novartis entered into an option agreement pursuant to which Novartis granted Mylan an exclusive option to acquire certain equipment and employees relating to the Novartis TOBI Podhaler® production facility in San Carlos, California (the “Facility”). The option also includes the transfer of certain agreements to Mylan. On May 28, 2019, Mylan notified Novartis of its election to exercise the purchase option. As a result of the option exercise Novartis is no longer eligible to receive the contingent payment and during the second quarter of 2019 the Company reversed the accrual for the $20.0 million contingent payment with the offset being a reduction in the value of the intangible ~~asset~~asset.

During the ~~nine months~~year ended ~~September 30,~~December 31, 2018, the Company completed four agreements to acquire certain intellectual property rights and marketing authorizations for products that were in the development stage, including agreements with Fujifilm Kyowa Kirin Biologics Co., Ltd. (“FKB”), Mapi Pharma Ltd., and Lupin Limited. The Company also completed the acquisition of intellectual property rights and marketing authorizations related to a commercialized product in certain rest of world markets for $220.0 million, of which $160.0 million was paid at closing, ~~with~~$20.0 million was paid in the fourth quarter of 2018 and the remaining amount ~~due within twelve months~~was paid in the second quarter of ~~the closing of the transaction and included in other current liabilities.~~2019. The Company is accounting for these transactions as asset acquisitions and a useful life of five years is being used to amortize the asset related to the commercialized product. The Company recorded expense of approximately $53.7 million as a component of R&D expense related to non-refundable upfront payments for agreements for products in development during the ~~nine months~~year ended ~~September 30,~~December 31, 2018. Certain of the agreements include additional development and commercial milestones.

On February 22, 2018, the Company in-licensed European rights to Hulio™, a biosimilar to AbbVie Inc.'s (“AbbVie”) Humira® (adalimumab), including a sub-license to certain of AbbVie’s European patents, from FKB. On February 27, 2019, the Company updated its arrangements with FKB for the commercialization of Hulio™. Under the updated arrangements, Mylan has in-licensed exclusive global commercialization rights for Hulio™. The Company accounted for this transaction as an asset acquisition of IPR&D and a net non-contingent amount due to FKB of approximately $23.3 million was expensed as a component of R&D expense during the three months ended March 31, 2019.

On December 1, 2018, the Company and certain subsidiaries of Aspen Pharmacare Holdings Limited entered into an agreement for Mylan to distribute a portfolio of prescription and over-the-counter (“OTC”) products in Australia and New Zealand. The agreement includes an option for Mylan to purchase the rights to the portfolio. In March 2019, the Company exercised the option, and acquired the product rights in the second quarter of 2019 for approximately $130.9 million. The purchase consideration of approximately $130.9 million includes a payment made at closing of approximately $64.3 million and amounts payable in 2020 totaling approximately $66.6 million.

The Company accounted for this transaction as an asset acquisition and recognized an intangible asset for the product rights of approximately $130.9 million. The intangible asset is being amortized over a useful life of five years.

On January 30, 2015, the Company entered into a development and commercialization collaboration with Theravance Biopharma, Inc. (“Theravance Biopharma”) for the development and, subject to U.S. Food and Drug Administration (“FDA”) approval, commercialization of Revefenacin. During the second quarter of 2019, the Company and Theravance Biopharma announced the expansion of this agreement to include China and certain adjacent territories (the “Territory”). Revefenacin, marketed as YUPELRI® in the U.S., is a long-acting muscarinic antagonist, which is the first and only once-daily, nebulized bronchodilator approved for the treatment of chronic obstructive pulmonary disease in the U.S. and is currently under development in the Territory. The Company accounted for this transaction as an asset acquisition of IPR&D and the total upfront payment of $18.5 million was expensed as a component of R&D expense.

In February 2014, Mylan’s Compensation Committee and the independent members of the Board of Directors adopted the One-Time Special Performance-Based Five-Year Realizable Value Incentive Program (the “2014 Program”) under the 2003 Plan. Under the 2014 Program, certain key employees received a one-time, performance-based incentive award (the “Awards”) either in the form of a grant of SARs or PSUs. The initial Awards were granted in February 2014 and ~~contain~~contained a five-year cliff-vesting feature based on the achievement of various performance targets, external market conditions and the employee’s continued services. Additional Awards were granted in 2016 and 2017, ~~and are~~ subject to the same performance ~~conditions as the Awards granted in February 2014 and with a service vesting condition of between two and six years.~~condition. The ~~market~~performance condition was ~~met on June 10, 2015~~not achieved by December 31, 2018 and is therefore no longer applicable to any of the Awards. During the three months ended June 30, 2018, the Company revised its estimates for the amount of Awards that it expects will ultimately vest under the 2014 Program and recognized a reduction in share-based compensation expense of approximately $23.5 million. During the three months ended September 30, 2018, the Company determined that it was no longer probable that the minimum performance condition would be met and therefore reversed all of the remaining cumulative expense related to the Awards resulting in a reduction in share-based compensation expense of approximately $47.1 million. In addition, during the three months ended September 30, 2018, the Company recorded $20.0 million of compensation expense as an additional discretionary bonus for a certain group of employees. None of the employees who will receive this bonus are named executive officers. As of September 30, 2018, there are approximately 2.6 million Awards outstanding under the 2014 ~~Program. Each Award is equal~~Program were canceled in the first quarter of 2019, and approximately 1.1 million ordinary shares of restricted stock were canceled and returned to ~~one ordinary~~treasury stock in the second quarter of 2019. There was no impact to share ~~with~~based compensation expense during the ~~maximum value~~three and six months ended June 30, 2019 as all of ~~each Award upon vesting subject~~the cumulative expense related to ~~varying limitations.~~the Awards was reversed during the year ended December 31, 2018.

The Company sponsors various defined benefit pension plans in several countries. Benefits provided generally depend on length of service, pay grade and remuneration levels. The Company maintains two fully frozen defined benefit pension plans in the U.S., and employees in the U.S. and Puerto Rico are generally provided retirement benefits through defined contribution plans.

The Company also sponsors other postretirement benefit plans including plans that provide for postretirement supplemental medical coverage. Benefits from these plans are provided to employees and their spouses and dependents who meet various minimum age and service requirements. In addition, the Company sponsors other plans that provide for life insurance benefits and postretirement medical coverage for certain officers and management employees.

The Company is making the minimum mandatory contributions to its U.S. defined benefit pension plans in the ~~2018~~2019 plan year. The Company expects to make total benefit payments of approximately ~~$31.1~~$33.7 million from pension and other postretirement benefit plans in ~~2018.~~2019. The Company anticipates making contributions to pension and other postretirement benefit plans of approximately ~~$29.9~~$29.3 million in ~~2018.~~2019.

As of June 30, 2019, the Company recognized an ROU asset of $250.8 million and a total lease liability of $249.7 million. The Company’s ROU assets are recorded in other assets. The related lease liability balances are recorded in other current liabilities and other long-term obligations on the condensed consolidated balance sheet. Refer to Note 7 Balance Sheet Components for additional information. Operating lease costs for the three and six months ended June 30, 2019 were approximately $22.4 million and $46.6 million, respectively, and are classified primarily as selling, general and administrative expenses and cost of sales.

ROU assets and liabilities are recognized at the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use an applicable incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Options to extend or terminate the ROU assets are reviewed at lease inception and these options are accounted for when they are reasonably certain of being exercised.

As of June 30, 2019, we have additional operating leases, primarily for production and distribution facilities, that have not yet commenced totaling approximately $28.6 million. These leases are expected to commence in 2019 and 2020 and have lease terms of 5 years to 12 years.

The Company currently has three equity method investments in limited liability companies that own refined coal production plants (the “clean energy investments”) whose activities qualify for income tax credits under Section 45 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). ~~The Company does not consolidate these entities as we have determined that we are not the primary beneficiary~~

The Company’s net losses from its equity method investments include amortization expense related to the excess of the cost basis of the Company’s investment over the underlying assets of each individual investee. For the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, the Company recognized net losses from equity method investments of ~~$12.6~~$16.2 million and ~~$22.4~~$22.9 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, the Company recognized net losses from equity method investments of ~~$58.6~~$33.2 million and ~~$77.2~~$46.0 million, respectively, which were recognized as a component of other expense, net in the ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations.~~operations. The Company recognizes the income tax credits and benefits from the clean energy investments as part of its provision for income taxes.

Additional stock awards and restricted stock awards were outstanding during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, but were not included in the computation of diluted (loss) earnings per ordinary share for each respective period because the effect would be anti-dilutive. Excluded shares at ~~September~~June 30, ~~2018~~2019 include certain share-based compensation awards and restricted ordinary shares whose performance conditions had not been fully met. Such excluded shares and anti-dilutive awards represented ~~9.3~~10.6 million shares and ~~8.9~~9.7 million shares for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, respectively and ~~8.9~~9.2 million shares and ~~8.6~~8.7 million shares for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, respectively.

In December 2011, the Company completed the acquisition of the exclusive worldwide rights to develop, manufacture and commercialize a generic equivalent to GlaxoSmithKline’s Advair® Diskus and Seretide® Diskus incorporating Pfizer Inc.’s proprietary dry powder inhaler delivery platform (the “respiratory delivery platform”). The Company accounted for this transaction as a purchase of a business and utilized the acquisition method of accounting. ~~As of September~~On January 30, ~~2018,~~2019, the Company ~~has an~~received FDA approval of Wixela^TM Inhub^TM (fluticasone propionate and salmeterol inhalation powder, USP) and the commercial launch occurred in February 2019. The Company reclassified the IPR&D asset of $347.2 million to product rights and licenses during the three months ended March 31, 2019 and began amortizing the asset over its estimated useful life.

As of June 30, 2019, the Company has a related contingent consideration liability of ~~$326.6~~$247.9 million. During the six months ended June 30, 2019, the Company made $67.5 million in milestone payments. The Company performed an analysis and valuation of the ~~IPR&D asset and the fair value of the related~~ contingent consideration liability using a discounted cash flow model. The model ~~contained~~contains certain key assumptions including: ~~the expected product launch date,~~market share, the number of competitors, the timing of competition and a discount factor based on an industry specific weighted average cost of capital. Based on the analysis performed, the Company ~~determined that the fair value of the IPR&D asset was substantially in excess of its carrying value, and the asset was not impaired at September 30, 2018. Additionally,~~recorded fair value adjustments of ~~$19.3~~$24.8 million and ~~$49.3~~$28.9 million, ~~were recorded for~~respectively, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018, respectively,~~2019 to reduce the

As of April 1, 2019, the date of our most recent annual impairment test, the allocation of the Company’s total goodwill was as follows: North America Generics $2.67 billion, North America Brands $0.65 billion, Europe $4.56 billion and Rest of World $1.72 billion.

As of April 1, 2019, the Company determined that the fair value of the North America Generics, North America Brands and Rest of World reporting units was substantially in excess of the respective unit’s carrying value. However, when compared to the prior year, the fair value of our overall business declined because of our recent operating results, future forecasts and the decline in our share price, including activity subsequent to April 1, 2019.

For the Europe reporting unit, the estimated fair value exceeded its carrying value by approximately $900.0 million or 7.0%. The excess fair value for the Europe reporting unit is consistent with the result of the Company’s 2018 annual impairment test. As it relates to the income approach for the Europe reporting unit at April 1, 2019, the Company forecasted cash flows for the next 5 years. During the forecast period, the revenue compound annual growth rate was approximately 6.5%. A terminal value year was calculated with a 2.0% revenue growth rate applied. The discount rate utilized was 10.5% and the estimated tax rate was 24.0%. Under the market-based approach, we utilized an estimated range of market multiples of 8.0 to 9.5 times EBITDA plus a control premium of 15.0%. If all other assumptions are held constant, a reduction in the terminal value growth rate by 2.0% or an increase in discount rate by 1.5% would result in an impairment charge for the Europe reporting unit.

The determination of the fair value of the reporting units requires us to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions primarily include, but are not limited to, market multiples, control premiums, the discount rate, terminal growth rates, operating income before depreciation and amortization, and capital expenditures forecasts. Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates. In addition, changes in underlying assumptions, especially as it relates to the key assumptions detailed, could have a significant impact on the fair value of the reporting units.

Although the Company has not elected the fair value option for other financial assets and liabilities, any future transacted financial asset or liability will be evaluated for the fair value election.

The Company uses net proceeds from its Commercial Paper Program, Receivables Facility and ~~the Receivables~~Note Securitization Facility as a source of liquidity for general corporate purposes, including for business development transactions, working capital and share repurchases. Borrowings under the Commercial ~~paper borrowings~~Paper Program, Receivables Facility and the ~~Receivables~~Note Securitization Facility may vary during a particular period, as a result of fluctuations in working capital requirements and timing of cash receipts.

For additional information, see Note 8 9 Debt in Mylan N.V.’s ~~2017~~2018 Form 10-K.

On November 22, 2016, the Company entered into a revolving credit facility among the Company, as borrower, Mylan Inc., as a guarantor, certain lenders and issuing banks and Bank of America, N.A., as the administrative agent, pursuant to which the Company may obtain extensions of credit in an aggregate principal amount not to exceed $2.0 billion (the “2016 Revolving Facility”). On the same day, the Company entered into a term credit facility among the Company, as borrower, Mylan Inc., as a guarantor, certain lenders and Goldman Sachs Bank USA, as administrative agent, pursuant to which the

The Company’s 2016 Term Facility and 2018 Revolving Facility each contains customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in our lines of business.

The 2016 Term Facility and ~~2016~~2018 Revolving Facility contain a maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of 3.75 to 1.00 for consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four quarters as defined in the related credit agreements (“leverage ratio”).

Mylan reports segment information on a geographic basis. This approach reflects the company’s focus on bringing its broad and diversified portfolio of generic, branded generic, brand-name and ~~over-the-counter~~OTC products to people in markets everywhere. Our North America segment comprises our operations in the U.S. and Canada. Our Europe segment ~~comprises~~encompasses our operations in ~~more than~~ 35 countries, including France, Italy, Germany, the United Kingdom (“U.K.”) and Spain. Our Rest of World segment reflects our operations in more than 120 countries, including Japan, Australia, China, Brazil, Russia, India, South Africa and certain markets in the Middle East and Southeast Asia.

The following tables present condensed consolidating financial information for (a) Mylan N.V., the issuer of the 2.500% Senior Notes due 2019, 3.750% Senior Notes due 2020, 3.150% Senior Notes due 2021, 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 (collectively, the “Mylan N.V. Senior Notes”), which are guaranteed on a senior unsecured basis by Mylan Inc.; (b) Mylan Inc., the issuer of the 3.125% Senior Notes due 2023, 4.200% Senior Notes due 2023, 4.550% Senior Notes due 2028, 5.400% Senior Notes due 2043 and 5.200% Senior Notes due 2048 (collectively, the “Mylan Inc. Senior Notes”), which are guaranteed on a senior unsecured basis by Mylan N.V.; and (c) all other subsidiaries of the Company on a combined basis, none of which guarantee the Mylan N.V. Senior Notes or guarantee the Mylan Inc. Senior Notes (“Non-Guarantor Subsidiaries”). The consolidating adjustments primarily relate to eliminations of investments in subsidiaries and intercompany balances and transactions. The condensed consolidating financial statements present investments in subsidiaries using the equity method of accounting.

The following financial information presents the unaudited ~~Condensed Consolidating Statements~~condensed consolidating statements of ~~Operations~~operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, the unaudited ~~Condensed Consolidating Statements~~condensed consolidating statements of ~~Comprehensive Earnings~~comprehensive earnings for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, the unaudited ~~Condensed Consolidating Balance Sheets~~condensed consolidating balance sheets as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018 and the unaudited ~~Condensed Consolidating Statements~~condensed consolidating statements of ~~Cash Flows~~cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017.~~2018. This unaudited condensed consolidating financial information has been prepared and

On December 5, 2016, the Company announced a restructuring ~~programs in certain locations~~program representing ~~initial steps in~~ a series of actions in certain locations that are anticipated to further streamline its operations globally. Since 2015, the Company has made a number of significant acquisitions, and as part of the holistic, global integration of these acquisitions, the Company is focused on how to best optimize and maximize all of its assets across the organization and across all geographies.

Charges for restructuring and ongoing cost reduction initiatives are recorded in the period the Company commits to a restructuring or cost reduction plan, or executes specific actions contemplated by the plan and all criteria for liability recognition have been met.

The Company continues to develop the details of the cost reduction initiatives, including workforce actions and other potential restructuring activities beyond the programs announced, including potential shutdown or consolidation of certain operations. During the second quarter of 2018, the Company commenced acomprehensive restructuring and remediation ~~program~~activities, which are aimed at ~~its~~reducing the complexity at the Morgantown, West Virginia plant and include the discontinuation and transfer to other manufacturing sites of a number of products, a reduction of the workforce and extensive process and facility ~~for which activities and initiatives are ongoing.~~remediation. The ~~continued~~ restructuring actions other than for this ~~facility are expected to be implemented through fiscal year~~plant were substantially complete as of December 31, 2018. ~~The Company anticipates~~We have incurred total ~~aggregate pre-tax charges for committed~~ restructuring activities ranging between $500.0 million and $600.0 million, inclusive of all restructuring charges incurred through September 30, 2018. As additional restructuring activities are undertaken, the Company expects to incur additional costs including employee related costs ~~such as severance and continuation~~ of ~~healthcare and other benefits;~~approximately $655.4 million through June 30, 2019. During 2019, we have incurred approximately $54.4 million in restructuring expenses for non-cash asset ~~impairments; accelerated depreciation; costs associated with contract terminations; and other closure costs.~~write-offs at the Morgantown plant. At this time, the expenses related to the additional restructuring activities at the Morgantown, West Virginia plant cannot be reasonably estimated.

We periodically enter into collaboration and licensing agreements with other pharmaceutical companies for the development, manufacture, marketing and/or sale of pharmaceutical products. Our significant collaboration agreements are primarily focused on the development, manufacturing, supply and commercialization of multiple, high-value generic biologic compounds, insulin analog products and respiratory products, among other complex products. Under these agreements, we have future potential milestone payments and co-development expenses payable to third parties as part of our licensing, development and co-development programs. Payments under these agreements generally become due and are payable upon the satisfaction or achievement of certain developmental, regulatory or commercial milestones or as development expenses are incurred on defined projects. Milestone payment obligations are uncertain, including the prediction of timing and the occurrence of events triggering a future obligation and are not reflected as liabilities in the ~~Condensed Consolidated Balance Sheets,~~condensed consolidated balance sheets, except for milestone and royalty obligations reflected as acquisition related contingent consideration. Refer to Note 11 12 Financial Instruments and Risk Management for ~~contingent consideration amounts recorded.~~additional information. Our potential maximum development milestones not accrued for at ~~September~~June 30, ~~2018~~2019 totaled approximately ~~$430~~$476.0 million, which includes the new agreements entered into as described in Note 4 Acquisitions and Other ~~Transactions,~~ ~~and excludes potential milestone payments to Momenta Pharmaceuticals, Inc. (“Momenta”).~~ Transactions. We estimate the amounts that may be paid ~~within~~through the ~~next year~~end of 2019 to be approximately ~~$70~~$79.0 million. These agreements may also include potential sales-based milestones and call for us to pay a percentage of amounts earned from the sale of the product as a royalty or a profit share. The amounts disclosed do not include sales-based milestones or royalty obligations on future sales of product as the timing and amount of future sales levels and costs to produce products subject to these obligations is not reasonably estimable. These sales-based milestones or royalty obligations may be significant depending upon the level of commercial sales for each product.

There have been no other significant changes to our collaboration and licensing agreements as disclosed in our ~~2017~~2018 Form 10-K.

The Company is subject to income taxes and tax audits in many jurisdictions. A certain degree of estimation is thus required in recording the assets and liabilities related to income taxes. Tax audits and examinations can involve complex issues, interpretations, and judgments and the resolution of matters that may span multiple years, particularly if subject to litigation or negotiation.

Although the Company believes that adequate provisions have been made for these uncertain tax positions, the Company’s assessment of uncertain tax positions is based on estimates and assumptions that the Company believes are reasonable but the estimates for unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variations from such estimates could materially affect the Company’s financial condition, results of operations or cash flows in the period of resolution, settlement or when the statutes of limitations expire.

Mylan is subject to ongoing U.S. Internal Revenue Service (“IRS”) examinations and is a voluntary participant in the IRS Compliance Assurance Process (“CAP”), which allows Mylan to work collaboratively with the IRS to identify and review tax matters on an ongoing basis. The years 2015, 2016 and 2017 are open years under examination. The years 2012, 2013 and 2014 have one matter open, and a Tax Court petition has been filed regarding the matter and a trial ~~has tentatively been scheduled for~~was held in December ~~2018.~~2018 and is discussed further below. On February 27, 2015, Mylan N.V. acquired Mylan Inc. and Abbott Laboratories’ (“Abbott”) non-U.S. developed markets specialty and branded generics business (collectively, the “EPD Business Acquisition”). In connection with the EPD Business Acquisition, we entered into intercompany transactions with our affiliates that affect our U.S. tax liability. Mylan N.V. is not incorporated in the U.S. and expects to be treated as a non-U.S. corporation for U.S. federal income tax purposes. As part of our ongoing participation and cooperation in the CAP, we have received and responded to various IRS requests for information about, among other matters, the EPD Business Acquisition, including the interest rates used for intercompany loans and our status as a non-U.S. corporation for U.S. federal income tax purposes, and we have been meeting with the IRS to discuss our respective positions on these matters and potential resolution of them.

The Company's U.S. federal income tax returns for 2007 through 2011 had been subject to proceedings in U.S. Tax Court involving a dispute with the IRS regarding whether the proceeds received by the Company in connection with the 2008 sale of its rights in nebivolol constituted a capital gain or ordinary income. The Company and the IRS filed a joint stipulation of settled issues with the Tax Court that resolved all issues in this dispute and the Tax Court issued the final order closing the case during the three months ended March 31, 2018.

The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained.

During the ~~nine~~six months ended ~~September~~June 30, 2019, primarily due to the settlement in principle reached with the IRS and the expiration of federal and foreign statutes of limitations expirations, the Company increased its net liability for unrecognized tax benefits by approximately $46.1 million. During the six months ended June 30, 2018, as a result of federal and state audits and settlements and expirations of certain state, federal, and foreign statutes of limitations, the Company reduced its liability for unrecognized tax benefits by approximately ~~$85.3~~$86.0 million, which resulted in a net benefit to the income tax provision of approximately ~~$52.3~~$53.0 million.

The Company is involved in various disputes, governmental and/or regulatory inquiries, investigations and proceedings, tax proceedings and litigation matters, both in the U.S. and abroad, that arise from time to time, some of which could result in losses, including damages, fines and/or civil penalties, and/or criminal charges against the Company. These matters are often complex and have outcomes that are difficult to predict. The Company is also party to certain proceedings and litigation matters for which it may be entitled to indemnification under the respective sale and purchase agreements relating to the acquisitions of the former Merck Generics business, Agila ~~Abbott Laboratories’ (“Abbott”)~~Specialties Private Limited, Abbott’s non-U.S. developed markets specialty and branded generics business, and certain other acquisitions.

While the Company believes that it has meritorious defenses with respect to the claims asserted against it and intends to vigorously defend its position, the process of resolving these matters is inherently uncertain and may develop over a long period of time, and so it is not possible to predict the ultimate resolution of any such matter. It is possible that an unfavorable resolution of any of the ongoing matters or the inability or denial of Merck KGaA, Strides Arcolab, Abbott, or another indemnitor or insurer to pay an indemnified claim, could have a material effect on the Company’s business, financial condition, results of operations, cash flows and/or ordinary share price.

Some of these governmental inquiries, investigations, proceedings and litigation matters with which the Company is involved are described below, and unless otherwise disclosed, the Company is unable to predict the outcome of the matter or to provide an estimate of the range of reasonably possible material losses. The Company records accruals for loss contingencies to the extent we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company is also involved in other pending proceedings for which, in the opinion of the Company based upon facts and circumstances known at the time, either the likelihood of loss is remote or any reasonably possible loss associated with the

Legal costs are recorded as incurred and are classified in SG&A in the Company’s ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Operations.~~

The Company believes that it has strong defenses to these remaining cases. Although it is reasonably possible that the Company may incur additional losses from these matters, any amount cannot be reasonably estimated at this time.

Beginning in December 2013, Mylan, Takeda, and several other drug manufacturers have been named as defendants in civil lawsuits consolidated in the U.S. District Court for the Southern District of New York by plaintiffs which purport to represent direct and indirect purchasers of branded or generic Actos® and Actoplus Met®. These actions allege violations of state and federal competition laws in connection with the defendants’ settlements of patent litigation in 2010 related to Actos® and Actoplus Met®. Mylan’s motion to dismiss the indirect purchasers’ complaint was granted and no appeal was filed as to Mylan. Following the appellate decision relating to other defendants, the direct purchasers filed an amended complaint against Mylan and the other manufacturers. Mylan’s motion to dismiss the amended complaint is pending.

On April 9, 2018, a subsidiary of Mylan N.V. received a civil investigative demand from the Commercial Litigation Branch of the U.S. Department of Justice (“DOJ”) concerning its TAA compliance for certain products. The company fully

On June 30, 2017, the Company responded to a request for information from the Department of Veterans Affairs (“VA”) (acting on behalf of itself and other government agencies) requesting certain historical pricing data related to the EpiPen® Auto-Injector. The Company and the VA are engaged in a continuing dialogue regarding the classification of the EpiPen® Auto-Injector as a covered drug under Section 603 of the Veterans Health Care Act of 1992, Public Law 102-585. The EpiPen® Auto-Injector has been classified as a non covered drug with the VA based upon long standing written guidance from the federal government. The Company is fully cooperating with the VA.

On November 18, 2016, Mylan received a request from the U.S. Federal Trade Commission (“FTC”) Bureau of Competition seeking documents and information relating to its preliminary investigation into potential anticompetitive practices relating to epinephrine auto-injectors. Mylan is fully cooperating with the FTC.

Mylan Specialty and other Mylan-affiliated entities have been named as defendants in putative class actions relating to the pricing and/or marketing of the EpiPen® Auto-Injector. The plaintiffs in these cases assert violations of various federal and state antitrust and consumer protection laws, the Racketeer Influenced and Corrupt Organizations Act, as well as common law claims. Plaintiffs’ claims include purported challenges to the prices charged for the EpiPen® Auto-Injector and/or the marketing of the product in packages containing two auto-injectors, as well as allegedly anti-competitive conduct. A Mylan officer and other non-Mylan affiliated companies were also named as defendants in some of the class actions. These lawsuits were filed in the various federal and state courts and have either been dismissed or transferred into a multidistrict litigation (“MDL”) in the U.S. District Court for the District of Kansas and have been consolidated. Mylan filed a motion to dismiss the consolidated amended complaint, which was granted in part and denied in part. On December 7, 2018, the Plaintiffs filed a motion for class certification. This motion remains pending. A trial date has been scheduled for ~~July~~November 2020. We believe that the remaining claims in these lawsuits are without merit and intend to defend against them vigorously.

On April 24, 2017, Sanofi-Aventis U.S., LLC (“Sanofi”) filed a lawsuit against Mylan Inc. and Mylan Specialty in the U.S. District Court for the District of New Jersey. This lawsuit has been transferred into the aforementioned MDL. In this

Mylan received several requests for information and documents from various Committees of the U.S. Congress and federal and state lawmakers concerning the marketing, distribution and sales of Mylan products. Mylan cooperated with federal and state lawmakers as appropriate in response to their requests.

On July 27, 2017, Mylan N.V. received a subpoena from the DOJ seeking information relating to opioids manufactured, marketed or sold by Mylan during the period from January 1, 2013 to December 31, 2016. On August 29, 2017, Mylan N.V. received a civil investigative demand from the Attorney General of the State of Missouri seeking information relating to opioids manufactured, marketed or sold by Mylan during the period from January 1, 2010 to the present and related subject matter. Mylan is fully cooperating with these subpoena requests.

Mylan also has responded to a letter from the ranking member of the U.S. Senate Committee on Homeland Security and Governmental Affairs seeking information relating to sales, marketing and educational strategies for opioid products manufactured by Mylan. In connection with this matter, Senator Claire McCaskill issued a report on February 15, 2018 relating to payments by five drug manufacturers to third-party advocacy groups and professional societies. This report positively differentiated Mylan, finding that Mylan is “[a]t the other end of the spectrum” from the other companies whose payments were examined because Mylan made only de minimis payments, and to only one of the fourteen third-parties cited in the report.

On December 3, 2015, a subsidiary of Mylan N.V. received a subpoena from the Antitrust Division of the DOJ seeking information relating to the marketing, pricing, and sale of our generic Doxycycline products and any communications with competitors about such products.

On September 8, 2016, a subsidiary of Mylan N.V., as well as certain employees and a member of senior management, received subpoenas from the DOJ seeking additional information relating to the marketing, pricing and sale of our generic Cidofovir, Glipizide-metformin, Propranolol and Verapamil products and any communications with competitors about such products. Related search warrants also were executed.

On May 10, 2018, a subsidiary of Mylan N.V. received a civil investigative demand from the Civil Division of the DOJ seeking information relating to the pricing and sale of its generic drug products.

The Company is fully cooperating with the DOJ.

We believe that the claims in ~~this lawsuit~~these lawsuits are without merit and intend to defend against them vigorously.

Mylan N.V., and certain of its subsidiaries, along with numerous other manufacturers, retailers and others, have been named (or plaintiffs are seeking to name certain Mylan entities) as defendants in lawsuits in the United States, Canada and other countries stemming from recalls of valsartan-containing medications. The United States litigation, which is taking place in an

On July 9, 2014, the European Commission (the “Commission”) issued a decision finding that Mylan Laboratories Limited and Mylan, as well as several other companies, had violated European Union (“EU”) competition rules relating to the product Perindopril and fined Mylan Laboratories Limited approximately €17.2 million, including approximately €8.0 million jointly and severally with Mylan Inc. The Company paid approximately $21.7 million related to this matter during the fourth quarter of 2014. In September 2014, the Company filed an appeal of the Commission’s decision to the General Court of the EU. A hearing on the appeal before the General Court of the EU was held in June 2017 and the Commission’s decision was affirmed. Mylan has appealed the decision to the European Court of Justice (“CJEU”). Mylan has received a ~~decision is pending.~~

On April 18, 2018, certain employees of Mylan S.p.A. were served with search warrants issued by the Public Prosecutor’s Office in Milan, Italy seeking information concerning interactions with an Italian hospital and sales of certain reimbursable Mylan S.p.A. drugs. The Company is assisting its employees in their cooperation with the investigation.

On October 19, 2017, Teva Pharmaceutical Industries Ltd. (“Teva”) commenced an action with the Irish High Court against Mylan Teoranta alleging that Mylan’s glatiramer acetate 40mg/mL product, which is manufactured in Ireland, approved by the FDA and is currently being sold in the U.S., infringes two European patents, EP (IE) 2 949 335 and EP (IE) 3 050 556. Teva subsequently dropped its infringement allegation related to the EP (IE) 3 050 556 patent. ~~Teva is seeking damages and/or an account of profits from~~The matter has now been resolved and Mylan ~~for~~will continue its production activities with respect to the ~~alleged infringement. Teva has also requested the Irish High Court to enjoin Mylan Teoranta from making, offering, putting on the market and/or using its glatiramer acetate~~U.S. 40mg/mL product in ~~Ireland pending final determination of the action. On June 5, 2018, the Irish High Court refused Teva’s request for an injunction pending final determination. Teva is appealing the decision.~~Ireland.

~~On June 4, 2018, the FDA approved Mylan’s Fulphila® (pegfilgrastim-jmdb), a biosimilar to Neulasta® (pegfilgrastim), co-developed with Biocon. In July 2018, Mylan began selling Fulphila®.~~ On September 22, 2017, Amgen Inc. and Amgen Manufacturing Limited (“Amgen”) sued Mylan Inc., Mylan N.V., Mylan GMBH, and MPI in the Western District of Pennsylvania asserting that Mylan’s Fulphila® infringes U.S. patent numbers 8,273,707 and 9,643,997. On June 4, 2018, the FDA approved Mylan’s Fulphila® (pegfilgrastim-jmdb), a biosimilar to Neulasta® (pegfilgrastim), co-developed with Biocon. In July 2018, Mylan began selling Fulphila®. Amgen is seeking monetary damages, injunctive relief, attorneys’ fees, costs and other relief. ~~No trial date is currently scheduled.~~

~~With respect~~On July 31, 2015, BTG International Ltd., Janssen Biotech, Inc., Janssen Oncology, Inc., and Janssen Research & Development, LLC (“Janssen”) sued Mylan Inc. and MPI, along with numerous other abbreviated new drug application (“ANDA”) applicants, in the District of New Jersey and asserted that Mylan’s and the other ANDA applicants’ abiraterone acetate ANDA products infringe U.S. Patent number 8,822,438 (“’438”).

Mylan and others filed Inter Partes Review (“IPR”) petitions challenging the validity of the ’438 patents’ claims. On January 17, 2018, the U.S. Patent and Trademark Appeal Board (“PTAB”) issued Final Written Decisions in the IPR proceedings finding all claims of the ’438 patent unpatentable as obvious. On October 26, 2018, the district court issued an opinion similarly finding the ’438 patents’ claims invalid as obvious. On October 31, 2018, the FDA approved Mylan’s abiraterone acetate ANDA. Mylan, along with certain other ANDA applicants, began selling their abiraterone acetate ANDA products in November 2018.

Janssen appealed both the district court and IPR decisions to the ~~Copaxone 40mg and Fulphila® litigations,~~Federal Circuit. On May 14, 2019, the ~~Company believes~~Federal Circuit affirmed the PTAB’s decision that all claims of the ~~asserted patents are invalid and that its products do~~‘438 patent were unpatentable as obvious. As a result of this finding, the Federal Circuit did not ~~infringe.~~need to consider Janssen’s appeal of the district court decision. Janssen did not seek a further appeal of the decision with the Federal Circuit, but the deadline to request review by the Supreme Court has not passed.

Mylan filed suit in 2014 against Celgene Corporation (“Celgene”) alleging monopolization and restraint of trade in the markets for thalidomide and lenalidomide. Following discovery and summary judgment, the District Court scheduled a trial on Mylan’s claims that had survived pre-trial motion practice for October 2019. In July 2019, the parties resolved the litigation, whereby Mylan will receive $62 million and the case will be dismissed.

The Company is involved in various other legal proceedings that are considered normal to its business. The Company has approximately ~~$4.6~~$7.1 million accrued related to these various other legal proceedings at ~~September~~June 30, ~~2018.~~2019.

Mylan is a global pharmaceutical company committed to setting new standards in healthcare and providing 7 billion people access to high quality medicine. We offer a growing portfolio of more than 7,500 products, including prescription generic, branded generic, ~~and~~ brand-name drugs and over-the-counter (“OTC”) remedies. We market our products in more than 165 countries and territories. Every member of our approximately 35,000-strong global workforce is dedicated to delivering better health for a better world.

Over the last several years, Mylan has transformed itself through a clear, consistent and differentiated strategy into a company that is built to last. Fueling that durability is a business model anchored in providing access, Mylan’s core purpose.

Providing access requires that we satisfy the needs of an incredibly diverse global marketplace whose economic and political systems, approaches to delivering and paying for healthcare, languages and traditions, and customer and patient requirements vary by location and over time.

With these considerations in mind, we ~~have~~built and scaled our commercial, operational and scientific platforms to meet customers’ evolving needs in ways that are globally consistent and locally sensitive. As a result, not only are we succeeding in expanding people’s access to medicine, we are continually diversifying our business.

~~That~~This diversification is what drives our durability. Durability allows us to withstand and overcome competitive pressures while continuing to innovate. It also allows us to generate consistent financial results, including reliable cash flows capable of supporting ongoing investments in long-term growth.

For branded products, the majority of the product’s commercial value is usually realized during the period in which the product has market exclusivity. In the U.S. and some other countries, when market exclusivity expires and generic versions of a product are approved and marketed, there can often be very substantial and rapid declines in the branded product’s sales. OTC products also participate in a competitive environment that includes both branded and private label products. In the OTC space, value is realized through innovation, access and consumer activation.

Certain markets in which we do business outside of the U.S. have undergone government-imposed price reductions, and further government-imposed price reductions are expected in the future. Such measures, along with the tender systems discussed below, are likely to have a negative impact on sales and gross profit in these markets. However, government initiatives in certain markets that appear to favor generic products could help to mitigate this unfavorable effect by increasing rates of generic substitution and penetration.

Additionally, a number of markets in which we operate outside of the U.S. have implemented, or may implement, tender systems for generic pharmaceuticals in an effort to lower prices. Generally speaking, tender systems can have an unfavorable impact on sales and profitability. Under such tender systems, manufacturers submit bids that establish prices for generic pharmaceutical products. Upon winning the tender, the winning company will receive priority placement for a period of time. The tender system often results in companies underbidding one another by proposing low pricing in order to win the tender. The loss of a tender by a third party to whom we supply active pharmaceutical ingredient ~~(“API”)~~ can also have a negative

On July 29, 2019, the Company, Pfizer, Inc. ("Pfizer”), Upjohn Inc., a wholly-owned subsidiary of Pfizer ("Upjohn"), and certain other affiliated entities entered into a Business Combination Agreement (the "Business Combination Agreement") pursuant to which the Company will combine with Upjohn in a Reverse Morris Trust transaction (the "Combination"). Upjohn is a global, primarily off-patent branded and generic established medicines business, which includes 20 primarily off-patent solid oral dose legacy brands, such as Lyrica, Lipitor, Celebrex and Viagra, as well as certain generic medicines.

Restructuring Activities

The Company previously announced a restructuring ~~programs in certain locations~~program representing ~~initial steps in~~ a series of actions in certain locations that are anticipated to further streamline our operations globally. The ~~Company continues to develop the details of the cost reduction initiatives, including workforce actions and other potential~~ restructuring activities beyond the programs already announced. During the three and nine months ended September 30, 2018, the Company recorded pre-tax charges of $80.8 million and $202.3 million, respectively. Included within the charges during the nine months ended September 30, 2018 were $108.6 million for non-cash asset impairment charges with the remaining charges primarily related to severance and employee benefits. The continued restructuring actions,program, other than the additional restructuring and remediation activities at the Morgantown, West Virginia ~~facility~~plant described below, ~~are expected to be implemented~~was substantially complete as of December 31, 2018. We have incurred total restructuring related costs of approximately $655.4 million through ~~fiscal year 2018. The Company anticipates total aggregate pre-tax charges~~June 30, 2019. During 2019, we have incurred approximately $54.4 million in restructuring expenses for ~~committed restructuring activities ranging between $500.0 million and $600.0 million, inclusive of all restructuring charges incurred through~~non-cash asset write-offs at the ~~third quarter of 2018. In addition, as~~Morgantown plant. As a result of the overall actions taken under the restructuring ~~activities that have been undertaken to date,~~program through June 30, 2019, management believes the potential annual savings will be between approximately $400.0 million and $475.0 million once fully ~~implemented,~~realized, with the majority of these savings improving operating cash flow. ~~At this time, the expenses related to the additional restructuring activities cannot be reasonably estimated.~~

In April 2018, the State of New York passed a budget which included the Opioid Stewardship Fund (the “Fund”). The Fund created an aggregate $100 million annual assessment on all manufacturers and distributors licensed to sell or distribute opioids in New York. Each licensed manufacturer and distributor will be required to pay a portion of the assessment based on its ratable share, as determined by the state, of the total morphine milligram equivalents sold or distributed in New York during the applicable calendar year. The initial payment is due on January 1, 2019 for opioids sold or distributed during calendar year 2017. Based upon initial correspondence received from the State of New York, the Company believes its amount related to the Fund for calendar year 2017 will be immaterial.

The Morgantown plant continues to supply products for the U.S. market while we execute on and assess the restructuring and remediation activities. ~~These actions~~However, these activities have led to a temporary disruption in supply of certain products.

~~The~~For the three and six months ended June 30, 2019, the Company ~~has~~ incurred expenses amounting to approximately ~~$97.7~~$93.7 million and ~~$184.2~~$163.4 million, ~~for the three and nine months ended September 30, 2018,~~ respectively for incremental manufacturing variances, site remediation and restructuring ~~charges.~~ charges related to the Morgantown plant. At this time, the total expenses related to the additional restructuring and remediation activities at the Morgantown plant cannot be reasonably estimated.

Mylan remains committed to maintaining the highest quality manufacturing standards at its facilities around the world and to continuous assessment and improvement in a time of evolving industry dynamics and regulatory expectations.

During the six months ended June 30, 2019, the Company recognized litigation related charges of approximately $50.5 million primarily related to the matters settled during the second quarter of 2019. Litigation settlements for the six months ended June 30, 2018, consisted primarily of a gain of approximately $14.7 million related to a favorable litigation settlement, which was partially offset by litigation related charges of approximately $13.3 million related to an anti-trust and a patent infringement matter.

Whenever the Company uses non-GAAP financial measures, we provide a reconciliation of the non-GAAP financial measures to their 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 reconciliation of non-GAAP measures to their most directly comparable U.S. GAAP measure and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with U.S. GAAP. Additionally, since these are not measures determined in accordance with U.S. GAAP, non-GAAP financial measures have no standardized meaning across companies, or as prescribed by U.S. GAAP and, therefore, may not be comparable to the calculation of similar measures or measures with the same title used by other companies.

Management uses these measures internally for forecasting, budgeting, measuring its operating performance, and incentive-based awards. ~~In addition, primarily~~Primarily due to acquisitions and other significant events which may impact comparability of our periodic operating results, we believe that an evaluation of our ongoing operations (and comparisons of our current operations with historical and future operations) would be difficult if the disclosure of our financial results was limited to financial measures prepared only in accordance with U.S. GAAP. We believe that non-GAAP financial measures are useful supplemental information for our investors and when considered together with our U.S. GAAP financial measures and the reconciliation to the most directly comparable U.S. GAAP financial measure, provide a more complete understanding of the factors and trends affecting our operations. The financial performance of the Company is measured by senior management, in part, using adjusted metrics as described below, along with other performance metrics. Management’s annual incentive compensation is derived, in part, based on the adjusted EPS (as defined below) metric.

We use the non-GAAP financial measure “adjusted cost of sales” and the corresponding non-GAAP financial measure “adjusted gross margin.” The principal items excluded from adjusted cost of sales include restructuring, acquisition related and other special items and purchase accounting amortization and other related items, which are described in greater detail below.

Adjusted net earnings is a non-GAAP financial measure and provides an alternative view of performance used by management. Management believes that, primarily due to acquisition activity and other significant events, an evaluation of the Company’s 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. Management believes that adjusted net earnings and adjusted net earnings per diluted share (“adjusted EPS”) are two of the most important internal financial metrics related to the ongoing operating performance of the Company, and are therefore useful to investors and that their understanding of our performance is enhanced by these adjusted measures. Actual internal and forecasted operating results and annual budgets used by management include adjusted net earnings and adjusted EPS.

The ongoing impact of certain amounts recorded in connection with acquisitions of both businesses and assets is excluded from adjusted cost of sales, adjusted net earnings and adjusted EPS. These amounts include the amortization of intangible assets, inventory step-up and intangible asset impairment charges, including ~~IPR&D.~~in-process research and development. For the acquisition of businesses accounted for under the provisions of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 805, these purchase accounting impacts are excluded regardless of the financing method used for the acquisitions, including the use of cash, long-term debt, the issuance of ordinary shares, contingent consideration or any combination thereof.

These expenses and payments are excluded from adjusted net earnings and adjusted EPS because they generally occur at irregular intervals and are not indicative of the Company’s ongoing operations. Also included in this adjustment are certain expenses related to the Company’s collaboration agreement with Momenta Pharmaceuticals, Inc. (“Momenta”) including certain milestone related costs. Such costs include payments related to Mylan’s future decisions, on a product by product basis, to continue with the development of such product in the collaboration after certain R&D work is performed. Related amounts are excluded from adjusted net earnings and adjusted EPS as Mylan considers such payments as additional upfront buy-in payments for the products.

The impact of changes to the fair value of contingent consideration and accretion expense are excluded from adjusted net earnings and adjusted EPS because they are not indicative of the Company’s ongoing operations due to the variability of the amounts and the lack of predictability as to the occurrence and/or timing and management believes their exclusion is helpful to understanding the underlying, ongoing operational performance of the business.

Beginning in 2019, share-based compensation expense is excluded from adjusted net earnings and adjusted EPS. Our share-based compensation programs have become increasingly weighted toward performance-based compensation, which leads to variability and to a lack of predictability as to the occurrence and/or timing of amounts incurred. As such, management believes the exclusion of such amounts on an ongoing basis is helpful to understanding the underlying operational performance of the business. The impact of share-based compensation was insignificant to the financial results for the year ended December 31, 2018 due primarily to this variability.

The Company has undertaken restructurings and other optimization initiatives of differing types, scope and amount during the covered periods and, therefore, these charges should not be considered non-recurring; however, management excludes these amounts from adjusted net earnings and adjusted EPS because it believes it is helpful to understanding the underlying, ongoing operational performance of the business.



~~The~~ Netherlands		98-1189497
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered

Ordinary shares, nominal value €0.01	MYL	The NASDAQ Stock Market



Large accelerated filer	þ☑	Accelerated filer	¨☐

Non-accelerated filer	¨☐	Smaller reporting company	¨☐

		Emerging growth company	¨☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐



		Page
	PART I — FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations — Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	3
	Condensed Consolidated Statements of Comprehensive Earnings — Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	4
	Condensed Consolidated Balance Sheets — ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	5
	Condensed Consolidated Statements of Equity — Three and Six Months Ended June 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows — ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	68

	Notes to Condensed Consolidated Financial Statements	79

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	6966

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	8988

ITEM 4.	Controls and Procedures	8988

	PART II — OTHER INFORMATION
ITEM 1.	Legal Proceedings	9089

ITEM 1A.	Risk Factors	90

~~ITEM 5.~~	~~Other Information~~	9089

ITEM 6.	Exhibits	90

SIGNATURES		91


	Three Months Ended					Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,					September 30,						June 30,						June 30,
	2018			2017		2018			2017			2019			2018			2019			2018
Revenues:
Net sales	$	2,827.3		$	2,956.3	$	8,233.2		$	8,570.2		$	2,818.2		$	2,755.5		$	5,278.8		$	5,405.9
Other revenues	35.1			30.8		122.0			98.6			33.3			52.8			68.2			86.9
Total revenues	2,862.4			2,987.1		8,355.2			8,668.8			2,851.5			2,808.3			5,347.0			5,492.8
Cost of sales	1,823.2			1,809.0		5,369.2			5,180.3			1,918.9			1,845.8			3,609.2			3,546.0
Gross profit	1,039.2			1,178.1		2,986.0			3,488.5			932.6			962.5			1,737.8			1,946.8
Operating expenses:
Research and development	144.1			182.3		555.7			580.9			147.6			206.7			320.2			411.6
Selling, general and administrative	577.3			664.1		1,808.1			1,915.4			668.6			623.3			1,276.5			1,230.8
Litigation settlements and other contingencies, net	(20.4		)	15.2		(50.6		)	(25.8		)	20.9			(46.4		)	21.6			(30.2		)
Total operating expenses	701.0			861.6		2,313.2			2,470.5			837.1			783.6			1,618.3			1,612.2
Earnings from operations	338.2			316.5		672.8			1,018.0			95.5			178.9			119.5			334.6
Interest expense	136.2			131.8		407.1			406.3			131.2			139.2			262.4			270.9
Other expense, net	9.8			5.1		44.3			35.8			16.4			21.0			23.7			34.5
Earnings before income taxes	192.2			179.6		221.4			575.9
(Loss) Earnings before income taxes												(52.1		)	18.7			(166.6		)	29.2
Income tax provision (benefit)	15.5			91.3		(79.9		)	124.2			116.4			(18.8		)	26.9			(95.4		)
Net earnings	$	176.7		$	88.3	$	301.3		$	451.7
Earnings per ordinary share:
Net (loss) earnings												$	(168.5	)	$	37.5		$	(193.5	)	$	124.6
(Loss) Earnings per ordinary share:
Basic	$	0.34		$	0.17	$	0.59		$	0.84		$	(0.33	)	$	0.07		$	(0.38	)	$	0.24
Diluted	$	0.34		$	0.16	$	0.58		$	0.84		$	(0.33	)	$	0.07		$	(0.38	)	$	0.24
Weighted average ordinary shares outstanding:
Basic	514.5			535.2		514.4			534.9			515.5			514.4			515.3			514.4
Diluted	516.5			537.0		516.5			537.0			515.5			516.3			515.3			516.6



þ☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	June 30, 2019			December 31, 2018
ASSETS
Assets
Current assets:
Cash and cash equivalents	$	211.5		$	388.1
Accounts receivable, net	2,703.8			2,881.0
Inventories	2,776.2			2,580.2
Prepaid expenses and other current assets	573.9			518.4
Total current assets	6,265.4			6,367.7
Property, plant and equipment, net	2,146.0			2,170.2
Intangible assets, net	12,730.7			13,664.6
Goodwill	9,692.9			9,747.8
Deferred income tax benefit	553.1			572.2
Other assets	428.8			212.4
Total assets	$	31,816.9		$	32,734.9

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Accounts payable	$	1,538.2		$	1,617.0
Short-term borrowings	26.2			1.9
Income taxes payable	138.5			121.5
Current portion of long-term debt and other long-term obligations	724.4			699.8
Other current liabilities	2,133.0			2,147.6
Total current liabilities	4,560.3			4,587.8
Long-term debt	12,590.1			13,161.2
Deferred income tax liability	1,635.1			1,722.0
Other long-term obligations	1,128.6			1,096.8
Total liabilities	19,914.1			20,567.8
Equity
Mylan N.V. shareholders’ equity
Ordinary shares — nominal value €0.01 per ordinary share
Shares authorized: 1,200,000,000
Shares issued: 540,459,996 and 539,289,665 as of June 30, 2019 and December 31, 2018	6.1			6.0
Additional paid-in capital	8,617.3			8,591.4
Retained earnings	5,820.8			6,010.7
Accumulated other comprehensive loss	(1,541.7		)	(1,441.3		)
	12,902.5			13,166.8
Less: Treasury stock — at cost
Ordinary shares: 24,598,074 and 23,490,867 as of June 30, 2019 and December 31, 2018	999.7			999.7
Total equity	11,902.8			12,167.1
Total liabilities and equity	$	31,816.9		$	32,734.9



	September 30, 2018			December 31, 2017
ASSETS
Assets
Current assets:
Cash and cash equivalents	$	449.2		$	292.1
Accounts receivable, net	2,948.7			3,612.4
Inventories	2,560.6			2,542.7
Prepaid expenses and other current assets	583.2			766.1
Total current assets	6,541.7			7,213.3
Property, plant and equipment, net	2,119.6			2,339.1
Intangible assets, net	14,239.0			15,245.8
Goodwill	9,796.6			10,205.7
Deferred income tax benefit	514.0			496.8
Other assets	244.7			305.6
Total assets	$	33,455.6		$	35,806.3

LIABILITIES AND EQUITY
Liabilities
Current liabilities:
Accounts payable	$	1,401.1		$	1,452.5
Short-term borrowings	0.4			46.5
Income taxes payable	75.7			112.9
Current portion of long-term debt and other long-term obligations	1,176.4			1,808.9
Other current liabilities	2,528.4			2,964.5
Total current liabilities	5,182.0			6,385.3
Long-term debt	13,291.4			12,865.3
Deferred income tax liability	1,764.4			2,012.4
Other long-term obligations	1,151.6			1,235.7
Total liabilities	21,389.4			22,498.7
Equity
Mylan N.V. shareholders’ equity
Ordinary shares — nominal value €0.01 per ordinary share
Shares authorized: 1,200,000,000
Shares issued: 539,104,104 and 537,902,426 as of September 30, 2018 and December 31, 2017	6.0			6.0
Additional paid-in capital	8,585.0			8,586.0
Retained earnings	5,965.8			5,644.5
Accumulated other comprehensive loss	(1,490.9		)	(361.2		)
	13,065.9			13,875.3
Less: Treasury stock — at cost
Ordinary shares: 23,490,867 and 13,695,251 as of September 30, 2018 and December 31, 2017	999.7			567.7
Total equity	12,066.2			13,307.6
Total liabilities and equity	$	33,455.6		$	35,806.3



				Additional Paid-In Capital			Retained Earnings							Accumulated Other Comprehensive Loss			Total Equity
	Ordinary Shares									Treasury Stock
	Shares	Cost								Shares	Cost
Balance at March 31, 2019	539,943,344	$	6.0	$	8,606.5		$	5,989.3		23,490,867	$	(999.7	)	$	(1,710.5	)	$	11,891.6
Net loss	—	—		—			(168.5		)	—	—			—			(168.5		)
Other comprehensive earnings, net of tax	—	—		—			—			—	—			168.8			168.8
Issuance of restricted stock and stock options exercised, net	516,652	—		1.6			—			—	—			—			1.6
Taxes related to the net share settlement of equity awards	—	—		(7.6		)	—			—	—			—			(7.6		)
Share-based compensation expense	—	—		16.8			—			—	—			—			16.8
Cancellation of restricted stock	—	0.1		—			—			1,107,207	—			—			0.1
Balance at June 30, 2019	540,459,996	$	6.1	$	8,617.3		$	5,820.8		24,598,074	$	(999.7	)	$	(1,541.7	)	$	11,902.8

				Additional Paid-In Capital			Retained Earnings							Accumulated Other Comprehensive Loss			Total Equity
	Ordinary Shares									Treasury Stock
	Shares	Cost								Shares	Cost
Balance at December 31, 2018	539,289,665	$	6.0	$	8,591.4		$	6,010.7		23,490,867	$	(999.7	)	$	(1,441.3	)	$	12,167.1
Net loss	—	—		—			(193.5		)	—	—			—			(193.5		)
Other comprehensive loss, net of tax	—	—		—			—			—	—			(96.8		)	(96.8		)
Issuance of restricted stock and stock options exercised, net	1,170,331	—		3.9			—			—	—			—			3.9
Taxes related to the net share settlement of equity awards	—	—		(12.8		)	—			—	—			—			(12.8		)
Share-based compensation expense	—	—		34.8			—			—	—			—			34.8
Cancellation of restricted stock	—	0.1		—			—			1,107,207	—			—			0.1
Cumulative effect of the adoption of new accounting standards	—	—		—			3.6			—	—			(3.6		)	—
Balance at June 30, 2019	540,459,996	$	6.1	$	8,617.3		$	5,820.8		24,598,074	$	(999.7	)	$	(1,541.7	)	$	11,902.8



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended September 30, 2018
Central Nervous System & Anesthesia	$	154.7	$	219.6	$	92.4	$	466.7
Infectious Disease	63.1		157.8		223.2		444.1
Respiratory & Allergy	161.8		94.8		47.4		304.0
Cardiovascular	95.9		147.3		40.9		284.1
Gastroenterology	24.5		150.0		91.1		265.6
Diabetes & Metabolism	94.9		73.9		43.8		212.6
Dermatology	86.7		62.8		18.0		167.5
Women’s Healthcare	83.1		61.3		28.1		172.5
Oncology	171.0		18.2		31.9		221.1
Immunology	8.0		2.3		10.0		20.3
Other ⁽¹⁾	68.6		53.3		146.9		268.8
Total	$	1,012.3	$	1,041.3	$	773.7	$	2,827.3

Nine Months Ended September 30, 2018
Central Nervous System & Anesthesia	$	554.2	$	665.7	$	251.7	$	1,471.6
Infectious Disease	172.1		280.5		643.8		1,096.4
Respiratory & Allergy	457.3		351.8		147.7		956.8
Cardiovascular	262.4		443.2		126.6		832.2
Gastroenterology	102.5		448.3		249.3		800.1
Diabetes & Metabolism	318.6		227.9		102.1		648.6
Dermatology	265.7		217.4		70.1		553.2
Women’s Healthcare	261.4		198.1		69.5		529.0
Oncology	382.5		55.4		95.6		533.5
Immunology	36.1		7.3		29.1		72.5
Other ⁽¹⁾	185.6		174.7		379.0		739.3
Total	$	2,998.4	$	3,070.3	$	2,164.5	$	8,233.2


⁽¹⁾	Other consists of numerous therapeutic franchises, none of which individually exceeds 5% of consolidated net sales.



Accounting Standard Update	Effective Date
ASU 2018-18: Collaborative Arrangements (Topic 808) - Clarifying the Interaction between Topic 808 and Topic 606	January 1, 2020
ASU 2018-14: Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20) Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans	January 1, 2021
ASU 2018-13: Fair Value Measurement (Topic 820) Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	January 1, 2020



(In millions)	Balance as of December 31, 2017			Adjustments Due to ASU 2014-09		Adjustments Due to ASU 2016-01			Adjustments Due to ASU 2017-12			Balance as of January 1, 2018
Condensed Consolidated Balance Sheet
Assets
Prepaid expenses and other current assets	$	766.1		$	18.5	$	—		$	—		$	784.6

Liabilities
Deferred income tax liability	2,012.4			5.7		—			—			2,018.1

Equity
Retained earnings	5,644.5			12.8		10.0			(2.5		)	5,664.8
Accumulated other comprehensive loss	(361.2		)	—		(10.0		)	2.5			(368.7		)



	For the Three Months Ended September 30, 2018
(In millions)	As Reported			Balances Without Adoption of ASC 606			Effect of Change Increase (Decrease)
Condensed Consolidated Statement of Operations
Revenues	$	2,862.4		$	2,914.0		$	(51.6	)
Cost of sales	1,823.2			1,876.4			(53.2		)
Income tax provision	15.5			15.0			0.5
Net earnings	176.7			175.6			1.1

	For the Nine Months Ended September 30, 2018
(In millions)	As Reported			Balances Without Adoption of ASC 606			Effect of Change Increase (Decrease)
Condensed Consolidated Statement of Operations
Revenues	$	8,355.2		$	8,454.0		$	(98.8	)
Cost of sales	5,369.2			5,475.5			(106.3		)
Income tax benefit	(79.9		)	(82.3		)	2.4
Net earnings	301.3			296.2			5.1

	September 30, 2018
(In millions)	As Reported			Balances Without Adoption of ASC 606			Effect of Change Increase (Decrease)
Condensed Consolidated Balance Sheet
Prepaid expenses and other current assets	$	583.2		$	575.7		$	7.5
Income taxes payable	75.7			73.3			2.4
Retained earnings	5,965.8			5,960.7			5.1



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended June 30, 2019
Central Nervous System & Anesthesia	$	135.2	$	214.7	$	92.9	$	442.8
Infectious Disease	30.5		61.9		297.1		389.5
Respiratory & Allergy	258.2		121.9		56.2		436.3
Cardiovascular	48.9		131.7		40.6		221.2
Gastroenterology	30.7		159.2		102.9		292.8
Diabetes & Metabolism	83.8		81.9		37.0		202.7
Dermatology	25.5		80.3		21.0		126.8
Women’s Healthcare	90.2		60.2		24.2		174.6
Oncology	246.9		20.3		35.2		302.4
Immunology	9.0		13.8		10.9		33.7
Other ⁽¹⁾	64.5		43.7		87.2		195.4
Total	$	1,023.4	$	989.6	$	805.2	$	2,818.2

Six Months Ended June 30, 2019
Central Nervous System & Anesthesia	$	270.9	$	405.0	$	156.9	$	832.8
Infectious Disease	48.6		120.7		512.7		682.0
Respiratory & Allergy	496.8		229.7		99.9		826.4
Cardiovascular	95.8		232.4		74.8		403.0
Gastroenterology	64.9		287.0		180.4		532.3
Diabetes & Metabolism	234.8		139.1		76.2		450.1
Dermatology	39.4		141.9		41.4		222.7
Women’s Healthcare	169.1		104.8		39.3		313.2
Oncology	371.7		37.9		64.2		473.8
Immunology	19.1		21.0		17.3		57.4
Other ⁽¹⁾	135.2		165.4		184.5		485.1
Total	$	1,946.3	$	1,884.9	$	1,447.6	$	5,278.8



(In millions)	North America		Europe		Rest of World		Total
Three Months Ended June 30, 2018
Central Nervous System & Anesthesia	$	199.9	$	220.7	$	76.4	$	497.0
Infectious Disease	62.6		58.2		251.6		372.4
Respiratory & Allergy	181.6		129.4		53.7		364.7
Cardiovascular	76.1		149.1		46.2		271.4
Gastroenterology	33.9		145.1		92.1		271.1
Diabetes & Metabolism	114.1		80.2		33.5		227.8
Dermatology	84.5		74.3		27.2		186.0
Women’s Healthcare	85.2		66.8		22.2		174.2
Oncology	102.2		18.4		32.8		153.4
Immunology	14.1		2.5		10.7		27.3
Other ⁽¹⁾	46.6		45.9		117.7		210.2
Total	$	1,000.8	$	990.6	$	764.1	$	2,755.5

Six Months Ended June 30, 2018
Central Nervous System & Anesthesia	$	399.5	$	446.1	$	159.3	$	1,004.9
Infectious Disease	109.0		122.7		420.6		652.3
Respiratory & Allergy	295.5		257.0		100.3		652.8
Cardiovascular	166.5		295.9		85.7		548.1
Gastroenterology	78.0		298.3		158.2		534.5
Diabetes & Metabolism	223.7		154.0		58.3		436.0
Dermatology	179.0		154.6		52.1		385.7
Women’s Healthcare	178.3		136.8		41.4		356.5
Oncology	211.5		37.2		63.7		312.4
Immunology	28.1		5.0		19.1		52.2
Other ⁽¹⁾	117.0		121.4		232.1		470.5
Total	$	1,986.1	$	2,029.0	$	1,390.8	$	5,405.9


3.	~~Recent Accounting Pronouncements~~


3.	Recent Accounting Pronouncements



(In millions)
Current assets (net of cash acquired)	$	6.5
Identified intangible assets	121.0
Goodwill	92.2
Other assets	1.9
Total assets acquired	221.6
Current liabilities	(4.1		)
Deferred tax liabilities	(40.9		)
Other non-current liabilities	(1.7		)
Net assets acquired	$	174.9



	Number of Shares Under Stock Awards		Weighted Average Exercise Price per Share
Outstanding at December 31, 2018	6,815,278		$	36.61
Granted	712,850		27.32
Exercised	(287,578	)	13.94
Forfeited	(505,070	)	40.96
Outstanding at June 30, 2019	6,735,480		$	36.27
Vested and expected to vest at June 30, 2019	6,530,358		$	36.26
Exercisable at June 30, 2019	5,130,316		$	36.62



	Number of Shares Under Stock Awards		Weighted Average Exercise Price per Share
Outstanding at December 31, 2017	7,198,684		$	35.17
Granted	847,590		40.92
Exercised	(720,226	)	21.77
Forfeited	(286,473	)	48.37
Outstanding at September 30, 2018	7,039,575		$	36.69
Vested and expected to vest at September 30, 2018	6,821,737		$	36.48
Exercisable at September 30, 2018	5,335,545		$	34.76



	Number of Restricted Stock Awards		Weighted Average Grant-Date Fair Value per Share
Nonvested at December 31, 2018	6,393,081		$	40.75
Granted	2,288,255		27.41
Released	(1,432,837	)	43.60
Forfeited	(3,056,283	)	38.13
Nonvested at June 30, 2019	4,192,216		$	34.41



	Number of Restricted Stock Awards		Weighted Average Grant-Date Fair Value per Share
Nonvested at December 31, 2017	5,964,207		$	41.92
Granted	1,542,727		41.03
Released	(682,557	)	50.06
Forfeited	(257,208	)	44.88
Nonvested at September 30, 2018	6,567,169		$	40.79



	Pension and Other Postretirement Benefits
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2019			2018			2019			2018
Service cost	$	5.3		$	5.1		$	10.6		$	10.1
Interest cost	3.9			3.7			7.7			7.3
Expected return on plan assets	(3.1		)	(3.7		)	(6.1		)	(7.3		)
Amortization of prior service costs	0.2			0.1			0.5			0.2
Recognized net actuarial (gains) losses	(0.2		)	—			(0.4		)	0.1
Net periodic benefit cost	$	6.1		$	5.2		$	12.3		$	10.4



(In millions)	June 30, 2019		December 31, 2018
Prepaid expenses	$	154.0	$	130.6
Restricted cash	1.2		1.2
Available-for-sale fixed income securities	26.4		25.0
Fair value of financial instruments	54.3		33.8
Equity securities	36.7		32.5
Other current assets	301.3		295.3
Prepaid expenses and other current assets	$	573.9	$	518.4



(In millions)	September 30, 2018		December 31, 2017
Prepaid expenses	$	117.1	$	119.8
Restricted cash	53.9		77.8
Available-for-sale fixed income securities	25.3		31.5
Fair value of financial instruments	7.1		88.9
Equity securities	36.6		79.1
Other current assets	343.2		369.0
Prepaid expenses and other current assets	$	583.2	$	766.1



	As of June 30, 2019
Remaining lease terms	1 year to 25 years
Weighted-average remaining lease term	7 years
Weighted-average discount rate	4.3	%



(In millions)
Year ending December 31,
2019 (excluding the six months ended June 30, 2019)	$	37.3
2020	66.3
2021	48.1
2022	30.9
2023	22.9
2024	19.8
Thereafter	61.5
	$	286.8



(In millions)	North America Segment			Europe Segment			Rest of World Segment		Total
Balance at December 31, 2018:
Goodwill	$	3,892.9		$	4,657.4		$	1,582.5	$	10,132.8
Accumulated impairment losses	(385.0		)	—			—		(385.0		)
	3,507.9			4,657.4			1,582.5		9,747.8
Reclassifications⁽¹⁾	(165.7		)	25.2			140.5		—
Foreign currency translation	10.8			(76.2		)	10.5		(54.9		)
	$	3,353.0		$	4,606.4		$	1,733.5	$	9,692.9
Balance at June 30, 2019:
Goodwill	$	3,738.0		$	4,606.4		$	1,733.5	$	10,077.9
Accumulated impairment losses	(385.0		)	—			—		(385.0		)
	$	3,353.0		$	4,606.4		$	1,733.5	$	9,692.9


⁽¹⁾	The reclassification between segments realigns certain prior period foreign currency translation amounts to conform to current year presentation.


(In millions)	Weighted Average Life (Years)	Original Cost		Accumulated Amortization		Net Book Value		Weighted Average Life (Years)	Original Cost		Accumulated Amortization		Net Book Value
September 30, 2018
June 30, 2019
Product rights, licenses and other ⁽¹⁾	15	$	20,407.7	$	6,857.5	$	13,550.2	15	$	20,472.3	$	7,985.8	$	12,486.5
In-process research and development		688.8		—		688.8			244.2		—		244.2
		$	21,096.5	$	6,857.5	$	14,239.0		$	20,716.5	$	7,985.8	$	12,730.7
December 31, 2017
December 31, 2018
Product rights, licenses and other ⁽¹⁾	15	$	20,338.7	$	5,906.1	$	14,432.6	15	$	20,264.1	$	7,225.1	$	13,039.0
In-process research and development		813.2		—		813.2			625.6		—		625.6
		$	21,151.9	$	5,906.1	$	15,245.8		$	20,889.7	$	7,225.1	$	13,664.6


⁽¹⁾	Represents amortizable intangible assets. Other intangible assets consists principally of customer lists and contractual rights.


			Notional Amount Designated as a Net Investment Hedge						Notional Amount Designated as a Net Investment Hedge
(in millions)	Principal Amount		September 30, 2018		December 31, 2017		Principal Amount		June 30, 2019		December 31, 2018
2.250% Euro Senior Notes due 2024	€	1,000.0	€	1,000.0	€	1,000.0	€	1,000.0	€	1,000.0	€	1,000.0
3.125% Euro Senior Notes due 2028	750.0		750.0		750.0		750.0		750.0		750.0
1.250% Euro Senior Notes due 2020	750.0		104.0		104.0		750.0		104.0		104.0
2.125% Euro Senior Notes due 2025	500.0		500.0		—		500.0		500.0		500.0
Floating Rate Euro Notes due 2018	500.0		—		—
Floating Rate Euro Notes due 2020	500.0		—		—		500.0		—		—
Total	€	4,000.0	€	2,354.0	€	1,854.0	€	3,500.0	€	2,354.0	€	2,354.0



	Asset Derivatives
	June 30, 2019			December 31, 2018
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps	Prepaid expenses and other current assets	$	24.6	Prepaid expenses and other current assets	$	3.6
Foreign currency forward contracts	Prepaid expenses and other current assets	18.0		Prepaid expenses and other current assets	—
Total		$	42.6		$	3.6



	Liability Derivatives
	June 30, 2019			December 31, 2018
(In millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Foreign currency forward contracts	Other current liabilities	—		Other current liabilities	12.1
Total		$	—		$	12.1


	Location of Gain (Loss) Recognized in Earnings on Derivatives		Amount of Gain (Loss) Recognized in Earnings on Derivatives												Location of Gain (Loss) Recognized in Earnings on Derivatives		Amount of Gain (Loss) Recognized in Earnings on Derivatives
(In millions)			Three Months Ended						Nine Months Ended								Three Months Ended					Six Months Ended
		Location of Gain (Loss) Recognized in Earnings on Derivatives	September 30,						September 30,							Location of Gain (Loss) Recognized in Earnings on Derivatives	June 30,					June 30,
			2018			2017			2018			2017					2019		2018			2019		2018
Interest rate swaps	Interest expense		$	(5.0	)	$	(2.5	)	$	(27.3	)	$	(1.0	)	Interest expense		$	13.5	$	(6.3	)	$	21.0	$	(22.3	)
Total			$	(5.0	)	$	(2.5	)	$	(27.3	)	$	(1.0	)			$	13.5	$	(6.3	)	$	21.0	$	(22.3	)



	Amount of Gain (Loss) Recognized in AOCE (Net of Tax) on Derivative
	Three Months Ended					Six Months Ended
	June 30,					June 30,
(In millions)	2019		2018			2019		2018
Foreign currency forward contracts	$	3.8	$	(38.7	)	$	19.3	$	(53.8	)
Total	$	3.8	$	(38.7	)	$	19.3	$	(53.8	)


	Location of Gain (Loss) Reclassified from AOCE into Earnings (Effective Portion)	Amount of Gain (Loss) Reclassified from AOCE into Earnings												Location of Gain (Loss) Reclassified from AOCE into Earnings (Effective Portion)	Amount of Gain (Loss) Reclassified from AOCE into Earnings
		Three Months Ended						Nine Months Ended							Three Months Ended						Six Months Ended
		September 30,						September 30,							June 30,						June 30,
(In millions)		2018			2017			2018			2017				2019			2018			2019			2018
Foreign currency forward contracts	Net sales	$	0.9		$	2.0		$	8.1		$	(3.8	)	Net sales	$	(1.9	)	$	2.4		$	(1.6	)	$	7.2
Interest rate swaps	Interest expense	(1.9		)	(1.9		)	(5.7		)	(5.5		)	Interest expense	(1.8		)	(1.9		)	(3.6		)	(3.8		)
Total		$	(1.0	)	$	0.1		$	2.4		$	(9.3	)		$	(3.7	)	$	0.5		$	(5.2	)	$	3.4