Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 12, 2015 | Jun. 30, 2014 |
Document Information [Line Items] | |||
Entity Registrant Name | ALLERGAN INC. | ||
Entity Central Index Key | 850693 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $50,168 | ||
Entity Common Stock, Shares Outstanding | 307,605,860 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ||
Cash and equivalents | $4,911.40 | $3,046.10 |
Short-term investments | 55 | 603 |
Trade receivables, net | 914.5 | 883.3 |
Inventories | 296 | 285.3 |
Other current assets | 694.3 | 493 |
Assets of discontinued operations | 0 | 9 |
Total current assets | 6,871.20 | 5,319.70 |
Investments and other assets | 271.9 | 213.2 |
Deferred tax assets | 86.9 | 128.8 |
Property, plant and equipment, net | 1,006.30 | 923.2 |
Goodwill | 2,392.90 | 2,339.40 |
Intangibles, net | 1,786.50 | 1,650 |
Total assets | 12,415.70 | 10,574.30 |
Current liabilities: | ||
Notes payable | 72.1 | 55.6 |
Accounts payable | 287.4 | 283.2 |
Accrued compensation | 292.8 | 269.1 |
Other accrued expenses | 905 | 597.5 |
Income taxes | 0 | 38.9 |
Total current liabilities | 1,557.30 | 1,244.30 |
Long-term debt | 2,085.30 | 2,098.30 |
Other liabilities | 1,010.10 | 762.2 |
Commitments and contingencies | ||
Allergan, Inc. stockholders' equity: | ||
Preferred stock, $.01 par value; authorized 5,000,000 shares; none issued | 0 | 0 |
Common stock, $.01 par value; authorized 500,000,000 shares; issued 307,605,860 and 307,554,060 shares as of December 31, 2014 and 2013, respectively | 3.1 | 3.1 |
Additional paid-in capital | 3,353.70 | 3,032.80 |
Accumulated other comprehensive loss | -408.6 | -226.6 |
Retained earnings | 5,894.80 | 4,646.70 |
Stockholders' equity subtotal before treasury stock | 8,843 | 7,456 |
Less treasury stock, at cost (8,373,176 and 9,947,345 shares as of December 31, 2014 and 2013, respectively) | -1,090 | -992.8 |
Total stockholders' equity | 7,753 | 6,463.20 |
Noncontrolling interest | 10 | 6.3 |
Total equity | 7,763 | 6,469.50 |
Total liabilities and equity | $12,415.70 | $10,574.30 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Allergan, Inc. stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 307,605,860 | 307,554,060 |
Treasury stock, shares (in shares) | 8,373,176 | 9,947,345 |
CONSOLIDATED_STATEMENTS_OF_EAR
CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Product net sales | $7,126.10 | $6,197.50 | $5,549.30 |
Other revenues | 111.8 | 102.9 | 97.3 |
Total revenues | 7,237.90 | 6,300.40 | 5,646.60 |
Operating costs and expenses: | |||
Cost of sales (excludes amortization of intangible assets) | 842.4 | 795.8 | 751.2 |
Selling, general and administrative | 2,837.20 | 2,519.40 | 2,193.10 |
Research and development | 1,191.60 | 1,042.30 | 977.3 |
Amortization of intangible assets | 112.4 | 116.7 | 90.2 |
Impairment of intangible assets and related costs | 0 | 11.4 | 22.3 |
Restructuring charges | 245 | 5.5 | 1.5 |
Operating income | 2,009.30 | 1,809.30 | 1,611 |
Non-operating income (expense): | |||
Interest income | 7.7 | 6.8 | 6.7 |
Interest expense | -69.4 | -75 | -63.6 |
Other, net | 41.7 | -10.3 | -23.1 |
Total non-operating income (expense) | -20 | -78.5 | -80 |
Earnings from continuing operations before income taxes | 1,989.30 | 1,730.80 | 1,531 |
Provision for income taxes | 456.7 | 458.3 | 430.3 |
Earnings from continuing operations | 1,532.60 | 1,272.50 | 1,100.70 |
Discontinued Operations: | |||
Earnings from discontinued operations, net of applicable income tax expense of $6.9 million and $0.5 million for the years ended December 31, 2013 and 2012, respectively | 0 | 14.1 | 1.8 |
Loss on sale of discontinued operation, net of applicable income tax expense (benefit) of $1.3 million and $(110.3) million for the years ended December 31, 2014 and 2013, respectively | -3.8 | -297.9 | 0 |
Discontinued operations | -3.8 | -283.8 | 1.8 |
Net earnings | 1,528.80 | 988.7 | 1,102.50 |
Net earnings attributable to noncontrolling interest | 4.6 | 3.6 | 3.7 |
Net earnings attributable to Allergan, Inc. | $1,524.20 | $985.10 | $1,098.80 |
Basic earnings per share attributable to Allergan, Inc. stockholders: | |||
Continuing operations (in dollars per share) | $5.13 | $4.28 | $3.64 |
Discontinued operations (in dollars per share) | ($0.01) | ($0.96) | $0 |
Net basic earnings per share attributable to Allergan, Inc. stockholders (in dollars per share) | $5.12 | $3.32 | $3.64 |
Diluted earnings per share attributable to Allergan, Inc. stockholders: | |||
Continuing operations (in dollars per share) | $5.03 | $4.20 | $3.57 |
Discontinued operations (in dollars per share) | ($0.02) | ($0.94) | $0.01 |
Net diluted earnings per share attributable to Allergan, Inc. stockholder (in dollars per share) | $5.01 | $3.26 | $3.58 |
CONSOLIDATED_STATEMENTS_OF_EAR1
CONSOLIDATED STATEMENTS OF EARNINGS (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings from discontinued operations, applicable income tax expense | $0 | $6.90 | $0.50 |
Loss on sale of discontinued operations, applicable income tax expense (benefit) | $1.30 | ($110.30) | $0 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net earnings | $1,528.80 | $988.70 | $1,102.50 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | -119.6 | -8.6 | 9.6 |
Unrealized holding gain on available-for-sale securities, net of tax expense of $3.3 million | 5.8 | 0 | 0 |
Amortization of deferred holding gains on derivatives designated as cash flow hedges included in net earnings, net of tax benefit of $0.5 million for the years ended December 31, 2014 and 2013 and $0.6 million for the year ended December 31,2012, respectively | -0.8 | -0.8 | -0.7 |
Pension and postretirement benefit plan adjustments: | |||
Net (loss) gain, net of tax benefit (expense) of $18.0 million, $(9.0) million and $1.1 million for the years ended December 31, 2014, 2013 and 2012, respectively | -72 | 9.1 | -35.9 |
Additional net prior service cost due to plan amendments, net of tax benefit of $4.4 million | -17.8 | 0 | 0 |
Amortization, net of tax expense of $5.5 million, $14.1 million and $0.8 million for the years ended December 31, 2014, 2013 and 2012, respectively | 22.1 | 14.2 | 25.1 |
Other comprehensive (loss) income | -182.3 | 13.9 | -1.9 |
Total comprehensive income | 1,346.50 | 1,002.60 | 1,100.60 |
Comprehensive income attributable to noncontrolling interest | 4.3 | 2.8 | 5 |
Comprehensive income attributable to Allergan, Inc. | $1,342.20 | $999.80 | $1,095.60 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other Comprehensive Income (Loss), Tax [Abstract] | |||
Unrealized holding gain on available-for-sale securities, tax expense | $3.30 | $0 | $0 |
Amortization of deferred holding gains on derivatives designated as cash flow hedges included in net earnings, tax benefit | 0.5 | 0.5 | 0.6 |
Net (loss) gain, tax benefit (expense) | 18 | -9 | 1.1 |
Additional net prior service cost due to plan amendments, tax benefit | 4.4 | 0 | 0 |
Amortization, tax expense | $5.50 | $14.10 | $0.80 |
CONSOLIDATED_STATEMENTS_OF_EQU
CONSOLIDATED STATEMENTS OF EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] |
In Millions, except Share data | |||||||
Beginning balance at Dec. 31, 2011 | $5,332.40 | $3.10 | $2,761.80 | ($241.40) | $2,969.30 | ($183.20) | $22.80 |
Beginning balance, common stock (in shares) at Dec. 31, 2011 | 307,500,000 | ||||||
Beginning balance, treasury stock (in shares) at Dec. 31, 2011 | -2,300,000 | ||||||
Net earnings | 1,102.50 | 1,098.80 | 3.7 | ||||
Other comprehensive income (loss) | -1.9 | -3.2 | 1.3 | ||||
Dividends ($0.20 per share) | -60.4 | -60.4 | |||||
Stock options exercised (in shares) | 4,928,000 | 4,900,000 | |||||
Stock options exercised | 246.2 | 0.6 | -177.3 | 422.9 | |||
Excess tax benefits from share-based compensation | 45.7 | 45.7 | |||||
Activity under other stock plans (in shares) | 100,000 | ||||||
Activity under other stock plans | 6.4 | -0.2 | 6.6 | ||||
Purchase of treasury stock (in shares) | -10,000,000 | ||||||
Purchase of treasury stock | -909 | -909 | |||||
Stock-based award activity (in shares) | 100,000 | ||||||
Stock-based award activity | 103 | 92.7 | 1.7 | 8.6 | |||
Dividends to noncontrolling interest | -2.3 | -2.3 | |||||
Ending balance at Dec. 31, 2012 | 5,862.60 | 3.1 | 2,900.60 | -244.6 | 3,832.10 | -654.1 | 25.5 |
Ending balance, treasury stock (in shares) at Dec. 31, 2012 | -7,200,000 | ||||||
Beginning balance, common stock (in shares) at Dec. 31, 2012 | 307,500,000 | ||||||
Net earnings | 988.7 | 985.1 | 3.6 | ||||
Other comprehensive income (loss) | 13.9 | 14.7 | -0.8 | ||||
Dividends ($0.20 per share) | -59.5 | -59.5 | |||||
Stock options exercised (in shares) | 3,187,000 | 100,000 | 3,200,000 | ||||
Stock options exercised | 182.3 | 0.7 | -109.9 | 291.5 | |||
Excess tax benefits from share-based compensation | 37.7 | 37.7 | |||||
Activity under other stock plans (in shares) | 100,000 | ||||||
Activity under other stock plans | 6.3 | -0.6 | -0.7 | 7.6 | |||
Purchase of treasury stock (in shares) | -6,100,000 | ||||||
Purchase of treasury stock | -650.7 | -650.7 | |||||
Stock-based award activity (in shares) | 100,000 | ||||||
Stock-based award activity | 108.2 | 95.7 | -0.4 | 12.9 | |||
Purchase of noncontrolling interest in a subsidiary | -18 | -20 | |||||
Purchase of noncontrolling interest in a subsidiary | -1.3 | 3.3 | |||||
Dividends to noncontrolling interest | -2 | -2 | |||||
Ending balance at Dec. 31, 2013 | 6,469.50 | 3.1 | 3,032.80 | -226.6 | 4,646.70 | -992.8 | 6.3 |
Ending balance, common stock (in shares) at Dec. 31, 2013 | 307,554,060 | 307,600,000 | |||||
Ending balance, treasury stock (in shares) at Dec. 31, 2013 | -9,947,345 | -9,900,000 | |||||
Net earnings | 1,528.80 | 1,524.20 | 4.6 | ||||
Other comprehensive income (loss) | -182.3 | -182 | -0.3 | ||||
Dividends ($0.20 per share) | -59.7 | -59.7 | |||||
Stock options exercised (in shares) | 7,629,000 | 7,600,000 | |||||
Stock options exercised | 519.1 | 3.1 | -219.3 | 735.3 | |||
Excess tax benefits from share-based compensation | 167.5 | 167.5 | |||||
Activity under other stock plans | 6 | 0.6 | 2.3 | 3.1 | |||
Purchase of treasury stock (in shares) | -6,100,000 | ||||||
Purchase of treasury stock | -839.2 | -839.2 | |||||
Stock-based award activity (in shares) | |||||||
Stock-based award activity | 153.9 | 149.7 | 0.6 | 3.6 | |||
Dividends to noncontrolling interest | -0.6 | -0.6 | |||||
Ending balance at Dec. 31, 2014 | $7,763 | $3.10 | $3,353.70 | ($408.60) | $5,894.80 | ($1,090) | $10 |
Ending balance, common stock (in shares) at Dec. 31, 2014 | 307,605,860 | 307,600,000 | |||||
Ending balance, treasury stock (in shares) at Dec. 31, 2014 | -8,373,176 | -8,400,000 |
CONSOLIDATED_STATEMENTS_OF_EQU1
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends per share | $0.20 | $0.20 | $0.20 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net earnings | $1,528.80 | $988.70 | $1,102.50 |
Non-cash items included in net earnings: | |||
Depreciation and amortization | 248.1 | 254.6 | 256.6 |
Amortization of original issue discount and debt issuance costs | 2.8 | 2.6 | 1.9 |
Amortization of net realized gain on interest rate swaps | -15 | -14.4 | -7.7 |
Deferred income tax benefit | -79.8 | -192.2 | -88.3 |
Loss on disposal and impairment of assets | 29.8 | 5.8 | 5.7 |
Unrealized (gain) loss on derivative instruments | -37.2 | -10.4 | 15.3 |
Expense of share-based compensation plans | 159.7 | 114.4 | 109.1 |
Loss on sale of discontinued operations | 0 | 408.2 | 0 |
Impairment of intangible assets and related costs | 0 | 11.4 | 22.3 |
(Income) expense from changes in fair value of contingent consideration | -15.1 | 70.7 | 5.4 |
Provision for losses on trade receivables in Venezuela | 37.3 | 0 | 0 |
Restructuring charges | 246.4 | 5.5 | 5.7 |
Loss on investments | 3.1 | 3.7 | 0 |
Pension and other post-retirement benefit plans settlements and curtailments | 12.1 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Trade receivables | -115.7 | -139.6 | -34.3 |
Inventories | -43.8 | -26.9 | -7.3 |
Other current assets | -23.3 | -0.8 | -16 |
Other non-current assets | -29.7 | -15.5 | 44.1 |
Accounts payable | 1.9 | 37.4 | 32.7 |
Accrued expenses | 115.9 | 110.2 | 73.1 |
Income taxes | -124 | 64.9 | 52.4 |
Other liabilities | 25.5 | 17.1 | 26.7 |
Net cash provided by operating activities | 1,927.80 | 1,695.40 | 1,599.90 |
Cash flows from investing activities: | |||
Purchases of short-term investments | -1,269.80 | -1,025.60 | -865.2 |
Purchases of equity investments | -20.3 | 0 | 0 |
Acquisitions, net of cash acquired | -67.5 | -892.1 | -349.2 |
Additions to property, plant and equipment | -243.9 | -171.9 | -143.3 |
Additions to capitalized software | -19 | -11.8 | -13.9 |
Additions to intangible assets | -15 | -0.3 | -4.1 |
Proceeds from maturities of short-term investments | 1,815.90 | 683.2 | 784.6 |
Proceeds from sale of business | 1.8 | 42.7 | 0 |
Proceeds from sale of property, plant and equipment | 0.5 | 0.5 | 1.8 |
Net cash provided by (used in) investing activities | 182.7 | -1,375.30 | -589.3 |
Cash flows from financing activities: | |||
Dividends to stockholders | -59.6 | -59.4 | -60.4 |
Payments to acquire treasury stock | -839.2 | -650.7 | -909 |
Purchase of noncontrolling interest in a subsidiary | 0 | -18 | 0 |
Payments of contingent consideration | -10.2 | -61.2 | -5.1 |
Net borrowings (repayments) of notes payable | 16.5 | 6.8 | -35.1 |
Debt issuance costs | 0 | -4.8 | 0 |
Proceeds from issuance of senior notes, net of discount | 0 | 598.5 | 0 |
Sale of stock to employees | 521 | 179.3 | 246.4 |
Excess tax benefits from share-based compensation | 167.5 | 37.7 | 45.7 |
Net cash (used in) provided by financing activities | -204 | 28.2 | -717.5 |
Effect of exchange rate changes on cash and equivalents | -41.2 | -4 | 2.6 |
Net increase in cash and equivalents | 1,865.30 | 344.3 | 295.7 |
Cash and equivalents at beginning of period | 3,046.10 | 2,701.80 | 2,406.10 |
Cash and equivalents at end of period | 4,911.40 | 3,046.10 | 2,701.80 |
Cash paid for: | |||
Interest, net of amount capitalized | 83.4 | 83.3 | 64.2 |
Income taxes, net of refunds | $487.80 | $455.30 | $407 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |
Sale of obesity intervention business, minority equity interest received as part of the total consideration | $15 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1: Summary of Significant Accounting Policies |
The consolidated financial statements include the accounts of Allergan, Inc. (“Allergan” or the “Company”) and all of its subsidiaries. All significant intercompany transactions and balances among the consolidated entities have been eliminated from the consolidated financial statements. | |
Use of Estimates | |
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States and, as such, include amounts based on informed estimates and judgments of management. Actual results could differ materially from those estimates. | |
Foreign Currency Translation | |
The financial position and results of operations of the Company’s foreign subsidiaries are generally determined using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each year end. Income statement accounts are translated at the average rate of exchange prevailing during the year. Adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in equity. Aggregate net realized and unrealized gains (losses) resulting from foreign currency transactions and derivative contracts of approximately $44.9 million, $(7.4) million and $(23.4) million for the years ended December 31, 2014, 2013 and 2012, respectively, are included in “Other, net” in the Company’s consolidated statements of earnings. | |
Cash and Equivalents | |
The Company considers cash in banks, repurchase agreements, commercial paper, money-market funds and deposits with financial institutions with maturities of three months or less when purchased and that can be liquidated without prior notice or penalty, to be cash and equivalents. | |
Short-Term Investments | |
Short-term investments consist primarily of investment grade commercial paper and time deposits with financial institutions with maturities from three months to one year when purchased and are classified as available-for-sale. Short-term investments are valued at cost, which approximates fair value due to their short-term maturities. | |
Investments | |
The Company has both marketable and non-marketable equity investments in conjunction with its various collaboration arrangements. The Company classifies its marketable equity investments as available-for-sale securities with net unrealized gains or losses recorded as a component of accumulated other comprehensive loss. The non-marketable equity investments represent investments in start-up companies and are recorded at cost. Marketable and non-marketable equity investments are evaluated periodically for impairment. If it is determined that a decline of any investment is other than temporary, then the investment basis would be written down to fair value and the write-down would be included in earnings as a loss. | |
Inventories | |
Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. | |
Long-Lived Assets | |
Property, plant and equipment are stated at cost. Additions, major renewals and improvements are capitalized, while maintenance and repairs are expensed. Upon disposition, the net book value of assets is relieved and resulting gains or losses are reflected in earnings. For financial reporting purposes, depreciation is generally provided on the straight-line method over the useful life of the related asset. The useful lives for buildings, including building improvements, range from seven years to 40 years and, for machinery and equipment, three years to 15 years. | |
Leasehold improvements are amortized over the shorter of their economic lives or lease terms. Accelerated depreciation methods are generally used for income tax purposes. | |
All long-lived assets are reviewed for impairment in value when changes in circumstances dictate, based upon undiscounted future operating cash flows, and appropriate losses are recognized and reflected in current earnings, to the extent the carrying amount of an asset exceeds its estimated fair value determined by the use of appraisals, discounted cash flow analyses or comparable fair values of similar assets. | |
Goodwill and Intangible Assets | |
Goodwill represents the excess of acquisition cost over the fair value of the net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead tested for impairment annually. Intangible assets include developed technology, customer relationships, licensing agreements, trademarks, technology-related assets and other rights, which are being amortized over their estimated useful lives ranging from three years to 21 years, and in-process research and development assets with indefinite useful lives that are not amortized, but instead tested for impairment until the successful completion and commercialization or abandonment of the associated research and development efforts, at which point the in-process research and development assets are either amortized over their estimated useful lives or written-off immediately. | |
Treasury Stock | |
Treasury stock is accounted for by the cost method. The Company maintains an evergreen stock repurchase program. The evergreen stock repurchase program authorizes management to repurchase the Company’s common stock for the primary purpose of funding its stock-based benefit plans. Under the stock repurchase program, the Company may maintain up to 18.4 million repurchased shares in its treasury account at any one time. As of December 31, 2014 and 2013, the Company held approximately 8.4 million and 9.9 million treasury shares, respectively, under this program. | |
Revenue Recognition | |
The Company recognizes revenue from product sales when goods are shipped and title and risk of loss transfer to its customers. A portion of the Company’s revenue is generated from consigned inventory of breast implants maintained at physician, hospital and clinic locations. These customers are contractually obligated to maintain a specific level of inventory and to notify the Company upon use. Revenue for consigned inventory is recognized at the time the Company is notified by the customer that the product has been used. Notification is usually through the replenishing of the inventory, and the Company periodically reviews consignment inventories to confirm the accuracy of customer reporting. | |
The Company generally offers cash discounts to customers for the early payment of receivables. Those discounts are recorded as a reduction of revenue and accounts receivable in the same period that the related sale is recorded. The amounts reserved for cash discounts were $7.5 million and $6.3 million at December 31, 2014 and 2013, respectively. The Company permits returns of product from most product lines by any class of customer if such product is returned in a timely manner, in good condition and from normal distribution channels. Return policies in certain international markets and for certain medical device products, primarily breast implants, provide for more stringent guidelines in accordance with the terms of contractual agreements with customers. Estimated allowances for sales returns are based upon the Company’s historical patterns of product returns matched against sales, and management’s evaluation of specific factors that may increase the risk of product returns. The amount of allowances for sales returns recognized in the Company’s consolidated balance sheets at December 31, 2014 and 2013 were $83.4 million and $84.4 million, respectively, and are recorded in “Other accrued expenses” and “Trade receivables, net” in the Company’s consolidated balance sheets. (See Note 5, “Composition of Certain Financial Statement Captions.”) Actual historical allowances for cash discounts and product returns have been consistent with the amounts reserved or accrued. | |
The Company participates in various U.S. federal and state government rebate programs, the largest of which are Medicaid, Medicare and the U.S. Department of Veterans Affairs. The Company also has contracts with various managed care and group purchasing organizations that provide for sales rebates and other contractual discounts. In the United States, the Company also incurs chargebacks, which are reimbursements to wholesalers for honoring contracted prices to third parties. Outside of the United States, the Company incurs sales allowances based on contractual provisions and legislative mandates. The Company also offers rebate and other incentive programs directly to customers for its aesthetic products and certain therapeutic products, including Botox® for both therapeutic and cosmetic uses, the Juvéderm® franchise, Latisse®, Natrelle®, Acuvail®, Aczone® and Restasis®, and for certain other skin care products. Sales rebates and incentive accruals reduce revenue in the same period that the related sale is recorded and are included in “Other accrued expenses” in the Company's consolidated balance sheets. (See Note 5, “Composition of Certain Financial Statement Captions.”) The amounts accrued for sales rebates and other incentive programs were $372.1 million and $279.3 million at December 31, 2014 and 2013, respectively. | |
The Company’s procedures for estimating amounts accrued for sales rebates and other incentive programs at the end of any period are based on available quantitative data and are supplemented by management’s judgment with respect to many factors, including but not limited to, current market dynamics, changes in contract terms, changes in sales trends, an evaluation of current laws and regulations and product pricing. Quantitatively, the Company uses historical sales, product utilization and rebate data and applies forecasting techniques in order to estimate the Company’s liability amounts. Qualitatively, management’s judgment is applied to these items to modify, if appropriate, the estimated liability amounts. Additionally, there is a significant time lag between the date the Company determines the estimated liability and when the Company actually pays the liability. Due to this time lag, the Company records adjustments to its estimated liabilities over several periods, which can result in a net increase to earnings or a net decrease to earnings in those periods. | |
The Company recognizes license fees, royalties and reimbursement income for services provided as other revenues based on the facts and circumstances of each contractual agreement. In general, the Company recognizes income upon the signing of a contractual agreement that grants rights to products or technology to a third party if the Company has no further obligation to provide products or services to the third party after entering into the contract. The Company recognizes contingent consideration earned from the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. The Company defers income under contractual agreements when it has further obligations that indicate that a separate earnings process has not been completed. | |
Contingent Consideration | |
Contingent consideration liabilities represent future amounts the Company may be required to pay in conjunction with various business combinations. The ultimate amount of future payments is based on specified future criteria, such as sales performance and the achievement of certain future development, regulatory and sales milestones and other contractual performance conditions. The Company estimates the fair value of the contingent consideration liabilities related to sales performance using the income approach, which involves forecasting estimated future net cash flows and discounting the net cash flows to their present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities related to the achievement of future development and regulatory milestones by assigning an achievement probability to each potential milestone and discounting the associated cash payment to its present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities associated with sales milestones by employing Monte Carlo simulations to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. The fair value of other contractual performance conditions is measured by assigning an achievement probability to each payment and discounting the payment to its present value using the Company's estimated cost of borrowing. The Company evaluates its estimates of the fair value of contingent consideration liabilities on a periodic basis. Any changes in the fair value of contingent consideration liabilities are recorded through earnings as “Selling, general and administrative” in the Company’s consolidated statements of earnings. The total estimated fair value of contingent consideration liabilities was $365.9 million and $225.2 million at December 31, 2014 and 2013, respectively, and was included in "Other accrued expenses" and "Other liabilities" in the consolidated balance sheets. | |
Share-Based Compensation | |
The Company recognizes compensation expense for all share-based awards made to employees and directors. The fair value of share-based awards is estimated at the grant date. The fair value of stock option awards that vest based on a service condition is estimated using the Black-Scholes option-pricing model. The fair value of share-based awards that contain a market condition is generally estimated using a Monte Carlo simulation model, and the fair value of modifications to share-based awards is generally estimated using a lattice model. Compensation expense for share-based awards based solely on a service condition is recognized over the requisite service period only for those awards that are ultimately expected to vest. Compensation expense for share-based awards that contain a market condition is recognized over the requisite service period. | |
Advertising Expenses | |
Advertising expenses relating to production costs are expensed as incurred and the costs of television time, radio time and space in publications are expensed when the related advertising occurs. Advertising expenses were approximately $247.5 million, $179.7 million and $158.5 million in 2014, 2013 and 2012, respectively. | |
Product Liability Self-Insurance | |
The Company is largely self-insured for future product liability losses related to all of its products. The Company has historically been and continues to be self-insured for any product liability losses related to its breast implant products. Future product liability losses are, by their nature, uncertain and are based upon complex judgments and probabilities. The factors to consider in developing product liability reserves include the merits and jurisdiction of each claim, the nature and the number of other similar current and past claims, the nature of the product use and the likelihood of settlement. In addition, the Company accrues for certain potential product liability losses estimated to be incurred, but not reported, to the extent they can be reasonably estimated. The Company estimates these accruals for potential losses based primarily on historical claims experience and data regarding product usage. | |
Income Taxes | |
The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. | |
Valuation allowances against the Company’s deferred tax assets were $39.1 million and $48.9 million at December 31, 2014 and December 31, 2013, respectively. Changes in the valuation allowances are generally recognized in the provision for income taxes as a component of the estimated annual effective tax rate. | |
The Company has not provided for withholding and U.S. taxes for the unremitted earnings of certain non-U.S. subsidiaries because it has currently reinvested these earnings indefinitely in these foreign operations. At December 31, 2014, the Company had approximately $4,485.3 million in unremitted earnings outside the United States for which withholding and U.S. taxes were not provided. Income tax expense would be incurred if these earnings were remitted to the United States. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against the Company’s U.S. tax liability, if any. | |
Acquisitions | |
The accounting for acquisitions requires extensive use of estimates and judgments to measure the fair value of the identifiable tangible and intangible assets acquired, including in-process research and development, and liabilities assumed. Additionally, the Company must determine whether an acquired entity is considered to be a business or a set of net assets, because the excess of the purchase price over the fair value of net assets acquired can only be recognized as goodwill in a business combination. | |
On August 13, 2014, the Company acquired LiRIS Biomedical, Inc. for $67.5 million in cash and estimated contingent consideration of $170.5 million as of the acquisition date. On March 1, 2013, the Company acquired MAP Pharmaceuticals, Inc. for an aggregate purchase price of approximately $871.7 million, net of cash acquired. On April 12, 2013, the Company acquired Exemplar Pharma, LLC for an aggregate purchase price of approximately $16.1 million, net of cash acquired. The Company accounted for these acquisitions as business combinations. In March 2014, the Company completed the acquisition of certain assets related to technology under development for use as a dermal filler from Aline Aesthetics, LLC and Tautona Group, L.P. for an upfront payment of $10.0 million and potential future payments for certain milestone events. The Company accounted for this acquisition as a purchase of net assets. The tangible and intangible assets acquired and liabilities assumed in connection with these acquisitions were recognized based on their estimated fair values at the acquisition dates. The determination of estimated fair values requires significant estimates and assumptions including, but not limited to, determining the timing and estimated costs to complete the in-process projects, projecting regulatory approvals, estimating future cash flows and developing appropriate discount rates. The Company believes the estimated fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions. | |
Comprehensive Income (Loss) | |
Comprehensive income (loss) encompasses all changes in equity other than those with stockholders and consists of net earnings (losses), foreign currency translation adjustments, certain pension and other postretirement benefit plan adjustments, unrealized gains or losses on marketable equity investments and unrealized and realized gains or losses on derivative instruments, if applicable. The Company does not recognize U.S. income taxes on foreign currency translation adjustments since it does not provide for such taxes on undistributed earnings of foreign subsidiaries. | |
Reclassifications | |
Certain reclassifications of prior year amounts have been made to conform with the current year presentation. | |
Pending Merger with Actavis | |
In November 2014, the Company entered into a definitive agreement with Actavis plc (Actavis) under which Actavis will acquire Allergan for a combination of $129.22 in cash and 0.3683 Actavis shares for each share of Allergan common stock. The transaction remains subject to customary closing conditions, including receipt of stockholder approval and certain regulatory approvals. The transaction is expected to close in the late first quarter or early second quarter of 2015. | |
Recently Adopted Accounting Standards | |
In July 2013, the Financial Accounting Standards Board (FASB) issued an accounting standards update that requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. This guidance became effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company adopted the provisions of the guidance in the first quarter of 2014. The adoption did not have a material impact on the Company’s consolidated financial statements. | |
In March 2013, the FASB issued an accounting standards update that provides guidance on the accounting for the cumulative translation adjustment (CTA) upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. Under this guidance, an entity should recognize the CTA in earnings based on meeting certain criteria, including when it ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity or upon a sale or transfer that results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets resides. This guidance became effective for fiscal years beginning on or after December 15, 2013, with early adoption permitted. The Company adopted the provisions of the guidance in the first quarter of 2014. The adoption did not have a material impact on the Company’s consolidated financial statements. | |
New Accounting Standards Not Yet Adopted | |
In June 2014, the FASB issued an accounting standards update that requires a performance target that affects vesting of a share-based payment award and that could be achieved after the requisite service period to be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized over the required service period, if it is probable that the performance target will be achieved. This guidance will be effective for fiscal years beginning after December 15, 2015, which will be the Company's fiscal year 2016, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's consolidated financial statements. | |
In May 2014, the FASB issued an accounting standards update that creates a single source of revenue guidance for companies in all industries. The new standard provides guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers, unless the contracts are within the scope of other accounting standards. It also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets. This guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach and will be effective for fiscal years beginning after December 15, 2016, which will be the Company's fiscal year 2017. The Company has not yet evaluated the potential impact of adopting the guidance on the Company's consolidated financial statements. | |
In April 2014, the FASB issued an accounting standards update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operation. It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance will be effective for fiscal years beginning after December 15, 2014, which will be the Company's fiscal year 2015, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's consolidated financial statements. |
Acquisitions_and_Collaboration
Acquisitions and Collaborations | 12 Months Ended |
Dec. 31, 2014 | |
Acquisitions and Collaborations [Abstract] | |
Acquisitions and Collaborations | Note 2: Acquisitions and Collaborations |
LiRIS Acquisition | |
On August 13, 2014, the Company completed the acquisition of LiRIS Biomedical, Inc. (LiRIS), a clinical-stage specialty pharmaceutical company based in the United States focused on developing a pipeline of innovative treatments for bladder diseases, for an upfront payment of $67.5 million, plus up to an aggregate of $295.0 million in payments contingent upon achieving certain future development milestones and up to an aggregate of $225.0 million in payments contingent upon achieving certain commercial milestones. The estimated fair value of the contingent consideration as of the acquisition date was $170.5 million. The acquisition was funded from current cash and equivalents balances. | |
The Company recognized tangible and intangible assets acquired and liabilities assumed in connection with the LiRIS acquisition based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recognized as goodwill. The goodwill acquired in the LiRIS acquisition is not deductible for federal income tax purposes. In connection with the acquisition, the Company acquired assets with a fair value of $307.8 million, consisting of intangible assets of $238.0 million and goodwill of $69.8 million, and assumed non-current deferred tax liabilities of $69.8 million. As of December 31, 2014, the total estimated fair value of the contingent consideration of $164.8 million was included in “Other liabilities.” | |
The intangible assets consist of an in-process research and development asset of $225.3 million and a patented device technology asset of $12.7 million associated with LiRIS' proprietary delivery system that has an estimated useful life of 16 years. The in-process research and development asset relates to LiRIS’ lead investigational product for the treatment of interstitial cystitis and bladder pain syndrome which is currently in Phase II clinical trials. The estimated fair value of the in-process research and development asset was determined based on the use of a discounted cash flow model using an income approach. The in-process research and development asset is classified as an indefinite-lived intangible asset until the successful completion and commercialization or abandonment of the associated research and development efforts. | |
Goodwill represents the excess of the LiRIS purchase price over the sum of the fair values assigned to assets acquired less liabilities assumed. The LiRIS acquisition has the potential to broaden the Company's product offering in urology in a disease state with high unmet needs, which the Company believes supports the amount of goodwill recognized as a result of the purchase price paid for LiRIS, in relation to other acquired tangible and intangible assets. | |
The Company estimated the fair value of the contingent consideration liabilities related to the achievement of future development and regulatory milestones by assigning an achievement probability to each potential milestone and discounting the associated cash payment to its present value using a risk-adjusted rate of return. The Company estimated the fair value of the contingent consideration liabilities associated with sales milestones by employing Monte Carlo simulations to estimate the volatility and systematic relative risk of acquired product revenues and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. | |
MAP Acquisition | |
On March 1, 2013, the Company completed the acquisition of MAP Pharmaceuticals, Inc. (MAP), a biopharmaceutical company based in the United States focused on developing and commercializing new therapies in neurology, including SempranaTM, formerly referred to as Levadex®, an orally inhaled drug for the potential acute treatment of migraine in adults, for an aggregate purchase price of approximately $871.7 million, net of cash acquired. The acquisition was funded from a combination of current cash and equivalents and short-term investments. | |
The Company recognized tangible and intangible assets acquired and liabilities assumed in connection with the MAP acquisition based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair value of net assets acquired was recognized as goodwill. The goodwill acquired in the MAP acquisition is not deductible for federal income tax purposes. In connection with the acquisition, the Company acquired assets with a fair value of $1,233.6 million, consisting of current assets of $2.3 million, property, plant and equipment of $7.7 million, other non-current assets of $0.3 million, deferred tax assets of $132.7 million, intangible assets of $915.6 million and goodwill of $175.0 million, and assumed liabilities of $361.9 million, consisting of current liabilities of $27.3 million and deferred tax liabilities of $334.6 million. | |
The intangible assets consist of an in-process research and development asset of $683.5 million associated with SempranaTM and a patented device technology asset of $232.1 million associated with MAP's proprietary Tempo® delivery system that has an estimated useful life of 15 years. | |
Goodwill represents the excess of the MAP purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed. The MAP acquisition broadens the Company's product offering for the treatment of migraine headaches and MAP's proprietary drug particle and inhalation technology provides the potential for new product development opportunities, which the Company believes support the amount of goodwill recognized as a result of the purchase price paid for MAP, in relation to other acquired tangible and intangible assets. | |
Exemplar Acquisition | |
On April 12, 2013, the Company completed the acquisition of Exemplar Pharma, LLC (Exemplar), a third party contract manufacturer for MAP's Tempo® delivery system, for an aggregate purchase price of approximately $16.1 million, net of cash acquired. Prior to the acquisition, the Company also had a $1.9 million payable to Exemplar, which was effectively settled upon the acquisition. In connection with the acquisition, the Company acquired assets with a fair value of $16.6 million, consisting of current assets of $0.5 million, property, plant and equipment of $2.1 million and goodwill of $14.0 million, and assumed current liabilities of $0.5 million. The goodwill acquired in the Exemplar acquisition is deductible for federal income tax purposes. | |
Medytox Collaboration | |
On September 25, 2013, the Company announced that it had entered into a license agreement with Medytox, Inc. (Medytox), contingent on obtaining certain government approvals. In January 2014, the Company closed the transaction. Under the terms of the agreement, the Company made an upfront payment to Medytox of $65.0 million in January 2014 and Medytox granted the Company exclusive rights, worldwide outside of Korea with co-exclusive rights in Japan, to develop and, if approved, commercialize certain neurotoxin product candidates currently in development, including a potential liquid-injectable product. The upfront payment of $65.0 million was recorded as research and development (R&D) expense in the first quarter of 2014 because the technology has not yet achieved regulatory approval. The terms of the agreement also include potential future development milestone payments of up to $116.5 million and potential future sales milestone payments of up to $180.5 million, as well as potential future royalty payments. In the third quarter of 2014, the Company made a development milestone payment to Medytox of $15.0 million, which was recorded as R&D expense because the technology has not yet achieved regulatory approval. | |
Other Acquisitions and Collaborations | |
In March 2014, the Company completed the acquisition of certain assets from Aline Aesthetics, LLC and Tautona Group, L.P. for an upfront payment of $10.0 million and potential future payments for certain milestone events. The Company accounted for the acquisition as a purchase of net assets. The acquired assets primarily consist of intellectual property related to technology under development for use as a dermal filler that has not achieved regulatory approval. The upfront payment was accrued and recorded as R&D expense in the first quarter of 2014 and was paid in the second quarter of 2014. | |
In November 2013, the Company purchased a noncontrolling interest in a subsidiary from a minority shareholder for $18.0 million. The Company accounted for the purchase as an equity transaction and recorded the difference between the cash consideration and the carrying amount of the noncontrolling interest, including its share of accumulated other comprehensive income, as a decrease in additional paid-in capital of $1.3 million. | |
On September 10, 2013, the Company entered into a license and collaboration agreement with a third party pursuant to which the Company obtained exclusive global rights to research, manufacture and commercialize certain technologies for the treatment of ocular disease. Under the terms of the agreement, the Company made a $6.5 million upfront payment, which was recorded as R&D expense in the third quarter of 2013 because the technology has not yet achieved regulatory approval. The terms of the agreement also include potential future payments to the third party related to the Company’s achievement of development, regulatory and sales milestone events, as well as potential future royalty payments. | |
In connection with various business development transactions where the Company has outlicensed its technology to third parties, the Company has aggregate potential future milestone receipts of approximately $45.9 million as of December 31, 2014, none of which are individually significant. Of that amount, approximately $3.5 million relates to achievement of certain development milestones, approximately $17.0 million relates to achievement of certain regulatory milestones, and approximately $25.4 million relates to achievement of certain commercial sales milestones. Due to the challenges associated with developing and obtaining approval for pharmaceutical products, there is substantial uncertainty whether any of the future milestones will be achieved. The Company evaluates whether milestone payments are substantive based on the facts and circumstances associated with each milestone payment. | |
The Company believes that the fair values assigned to the assets acquired and liabilities assumed for its acquisitions were based on reasonable assumptions. The Company's fair value estimates may change during the allowable measurement period, which is up to one year from the acquisition date, if additional information becomes available. |
Discontinued_Operations
Discontinued Operations | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Discontinued Operations | Note 3: Discontinued Operations | |||||||
On February 1, 2013, the Company formally committed to pursue a sale of its obesity intervention business unit, including the assets related to the Lap-Band® gastric band system and the Orbera™ intra-gastric balloon system. Accordingly, beginning in the first quarter of 2013, the Company has reported the financial results from that business unit as discontinued operations in the consolidated statements of earnings and the remaining assets related to that business unit as assets of discontinued operations in the consolidated balance sheets. | ||||||||
On December 2, 2013, the Company completed the sale of its obesity intervention business to Apollo Endosurgery, Inc. (Apollo) for cash consideration of $75.0 million, subject to certain adjustments, and certain additional consideration, including a minority equity interest in Apollo with an estimated fair value of $15.0 million and contingent consideration of up to $20.0 million to be paid upon the achievement of certain regulatory and sales milestones. At the closing date, the cash consideration was reduced by the amount of inventories held outside of the United States of $7.6 million and net trade accounts receivable and payable of $19.4 million, which the Company retained pursuant to the sale and transition services agreements with Apollo. | ||||||||
For the year ended December 31, 2013, the Company reported a total pre-tax loss of $408.2 million ($297.9 million after tax) on the disposal of the obesity intervention business unit net assets. The pre-tax loss includes transaction costs of approximately $2.6 million, consisting primarily of investment banking fees. For the year ended December 31, 2014, the Company recognized an additional pre-tax loss of $2.5 million ($3.8 million after tax), on the disposal of the obesity intervention business unit net assets. | ||||||||
In connection with the sale of the obesity intervention business, the Company also entered into certain transitional service agreements designed to facilitate the orderly transfer of business operations to Apollo. These agreements primarily relate to administrative services in the United States and distribution services outside of the United States, all of which are generally to be provided for a period of up to 12 months. The Company will also manufacture and supply products to Apollo for a transitional period not to exceed 24 months in order to allow Apollo adequate time to obtain regulatory approval for licenses and manufacturing facilities. The continuing cash flows from these agreements are not significant, and the Company has no significant continuing involvement in the obesity intervention business. Net sales made pursuant to the manufacturing and distribution agreements are recorded as product net sales in the Company's consolidated statements of earnings and are reflected as other medical devices product net sales. | ||||||||
The results of operations from discontinued operations presented below include certain allocations that management believes fairly reflect the utilization of services provided to the obesity intervention business. The allocations do not include amounts related to general corporate administrative expenses or interest expense. Therefore, the results of operations from the obesity intervention business unit do not necessarily reflect what the results of operations would have been had the business operated as a stand-alone entity. | ||||||||
The following table summarizes the results of operations from discontinued operations for the years ended December 31, 2013 and 2012, respectively: | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Product net sales | $ | 114.4 | $ | 159.5 | ||||
Operating costs and expenses: | ||||||||
Cost of sales (excludes amortization of intangible assets) | 20.2 | 24.3 | ||||||
Selling, general and administrative | 57.9 | 75.3 | ||||||
Research and development | 5 | 12.3 | ||||||
Amortization of intangible assets | 10.3 | 41.1 | ||||||
Restructuring charges | — | 4.2 | ||||||
Earnings from discontinued operations before income taxes | 21 | 2.3 | ||||||
Provision for income taxes | (6.9 | ) | (0.5 | ) | ||||
Earnings from discontinued operations, net of income taxes | $ | 14.1 | $ | 1.8 | ||||
Restructuring_Charges_and_Inte
Restructuring Charges and Integration Costs | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||
Restructuring Charges and Integration Costs | Note 4: Restructuring Charges and Integration Costs | ||||||||||||||||
July 2014 Restructuring Plan | |||||||||||||||||
In July 2014, the Company completed a global review of its structures and processes, portfolio of research and development projects and marketed products, and its geographies in an effort to prioritize the highest value investments. As a result of this review, the Company initiated a restructuring of its global operations to improve efficiency and productivity. The restructuring of the global operations will have an impact across all of the Company’s businesses and functions, including sales and marketing, manufacturing and R&D, as well as groups such as information technology, shared services and corporate operations. The Company evaluates segment performance on a product net sales and operating income basis exclusive of restructuring charges. Accordingly, the Company’s financial reporting systems do not allocate restructuring charges to the Company’s segments. | |||||||||||||||||
The Company currently estimates that it will incur total non-recurring pre-tax charges of between $325.0 million and $375.0 million in connection with the restructuring and other costs, of which $80.0 million to $90.0 million will be a non-cash charge associated with the acceleration of previously unrecognized share-based compensation costs and certain other non-cash accounting adjustments. As part of the restructuring, the Company will reduce its workforce by approximately 1,500 employees, or approximately 13 percent of its current global headcount, and eliminate an additional approximately 250 vacant positions. | |||||||||||||||||
The Company began to record costs associated with the July 2014 restructuring plan in the third quarter of 2014 and expects to continue to recognize costs through the second quarter of 2015. The restructuring charges primarily consist of employee severance and other one-time termination benefits, facility lease and other contract termination costs and other costs, primarily consisting of relocation costs and consulting fees, associated with the restructuring plan. During 2014, the Company recorded restructuring charges of $219.4 million and recognized additional costs of $28.4 million related to accelerated share-based compensation, consisting of $1.0 million of cost of sales, $16.2 million in SG&A expenses and $11.2 million in R&D expenses, and $36.5 million of asset write-offs and accelerated depreciation costs, consisting of $0.3 million of cost of sales, $27.9 million in SG&A expenses and $8.3 million in R&D expenses. In addition, in 2014 the Company also recognized pension curtailment and settlement charges, duplicate operating expenses and other costs of $15.6 million, consisting of $0.7 million of cost of sales, $13.4 million in SG&A expenses and $1.5 million in R&D expenses. | |||||||||||||||||
The following table presents the restructuring charges related to the July 2014 restructuring plan during the year ended December 31, 2014: | |||||||||||||||||
Employee Severance | Contract Termination Costs | Other | Total | ||||||||||||||
(in millions) | |||||||||||||||||
Restructuring charges during 2014 | $ | 150.4 | $ | 39.7 | $ | 29.3 | $ | 219.4 | |||||||||
Spending | (52.7 | ) | (5.2 | ) | (19.7 | ) | (77.6 | ) | |||||||||
Balance at December 31, 2014 (included in "Accounts payable," "Other accrued expenses" and "Other liabilities") | $ | 97.7 | $ | 34.5 | $ | 9.6 | $ | 141.8 | |||||||||
January 2014 Restructuring Plan | |||||||||||||||||
In January 2014, the Company initiated a restructuring plan that includes certain sales force realignments and position eliminations, certain facility relocations and closures in the United States and Europe and the realignment of certain other business support functions, which affected approximately 250 employees. | |||||||||||||||||
The Company began to record costs associated with the January 2014 restructuring plan in the first quarter of 2014 and substantially completed all activities related to the restructuring plan in the fourth quarter of 2014 with the exception of certain expenses related to the relocation of a minor manufacturing facility to be incurred in 2015. The restructuring charges primarily consist of employee severance, one-time termination benefits and contract termination costs associated with the restructuring plan. During 2014, the Company recorded restructuring charges of $24.5 million and recognized additional costs of $11.4 million related to accelerated depreciation and share-based compensation expenses and duplicate operating expenses, consisting of $3.2 million of cost of sales, $6.0 million in SG&A expenses and $2.2 million in R&D expenses. | |||||||||||||||||
The following table presents the restructuring charges related to the January 2014 restructuring plan during the year ended December 31, 2014: | |||||||||||||||||
Employee Severance | Other | Total | |||||||||||||||
(in millions) | |||||||||||||||||
Restructuring charges during 2014 | $ | 21.7 | $ | 2.8 | $ | 24.5 | |||||||||||
Spending | (15.5 | ) | (2.4 | ) | (17.9 | ) | |||||||||||
Balance at December 31, 2014 (included in "Other accrued expenses") | $ | 6.2 | $ | 0.4 | $ | 6.6 | |||||||||||
Other Restructuring Activities and Integration Costs | |||||||||||||||||
In connection with the March 2013 acquisition of MAP, the April 2013 acquisition of Exemplar and the December 2012 acquisition of SkinMedica, Inc., the Company initiated restructuring activities in 2013 to integrate the operations of the acquired businesses with the Company's operations and to capture synergies through the centralization of certain research and development, manufacturing, general and administrative and commercial functions. For the year ended December 31, 2013, the Company recorded $4.5 million of restructuring charges, primarily consisting of employee severance and other one-time termination benefits for approximately 111 people. In the first quarter of 2014, the Company recorded an additional $0.4 million of restructuring charges. | |||||||||||||||||
Included in 2014 are $0.7 million of restructuring charges for lease terminations and employee severance and other one-time termination benefits, $0.1 million of SG&A expenses and $0.5 million of R&D expenses related to the realignment of various business functions. Included in 2013 are $1.0 million of restructuring charges for employee severance and other one-time termination benefits, $1.7 million of SG&A expenses and $1.1 million of R&D expenses related to the realignment of various business functions. Included in 2012 are $1.5 million of restructuring charges for lease terminations and employee severance and other one-time termination benefits, $1.5 million of SG&A expenses and $0.3 million of R&D expenses related to the realignment of various business functions. | |||||||||||||||||
Included in 2014 are $2.3 million of SG&A expenses and $0.4 million of R&D expenses related to transaction and integration costs associated with the purchase of various businesses and collaboration agreements. Included in 2013 are $0.1 million of cost of sales and $20.6 million of SG&A expenses related to transaction and integration costs associated with the purchase of various businesses and collaboration agreements. The SG&A expenses for the year ended December 31, 2013 primarily consist of investment banking and legal fees. Included in 2012 are $0.1 million of cost of sales and $2.3 million of SG&A expenses related to transaction and integration costs associated with the purchase of various businesses and collaboration agreements. |
Composition_of_Certain_Financi
Composition of Certain Financial Statement Captions | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Composition of Certain Financial Statement Captions [Abstract] | ||||||||
Composition of Certain Financial Statement Captions | Note 5: Composition of Certain Financial Statement Captions | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Trade receivables, net | ||||||||
Trade receivables | $ | 1,004.20 | $ | 935.4 | ||||
Less allowance for sales returns — medical device products | (23.0 | ) | (27.9 | ) | ||||
Less allowance for doubtful accounts | (66.7 | ) | (24.2 | ) | ||||
$ | 914.5 | $ | 883.3 | |||||
Inventories | ||||||||
Finished products | $ | 188.3 | $ | 180 | ||||
Work in process | 50.5 | 44.1 | ||||||
Raw materials | 57.2 | 61.2 | ||||||
$ | 296 | $ | 285.3 | |||||
Other current assets | ||||||||
Prepaid expenses | $ | 218.4 | $ | 157.1 | ||||
Deferred taxes | 343.5 | 277.9 | ||||||
Foreign currency derivative assets | 75.1 | 20.4 | ||||||
Other | 57.3 | 37.6 | ||||||
$ | 694.3 | $ | 493 | |||||
Investments and other assets | ||||||||
Deferred executive compensation investments | $ | 112.9 | $ | 100.7 | ||||
Capitalized software | 37 | 36.8 | ||||||
Prepaid pensions | 11.1 | 5.6 | ||||||
Debt issuance costs | 8.6 | 10.8 | ||||||
Equity investments | 47.2 | 20.8 | ||||||
Other | 55.1 | 38.5 | ||||||
$ | 271.9 | $ | 213.2 | |||||
Property, plant and equipment, net | ||||||||
Land | $ | 71.2 | $ | 62.2 | ||||
Buildings | 1,066.10 | 962.8 | ||||||
Machinery and equipment | 844 | 784.8 | ||||||
1,981.30 | 1,809.80 | |||||||
Less accumulated depreciation | (975.0 | ) | (886.6 | ) | ||||
$ | 1,006.30 | $ | 923.2 | |||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Other accrued expenses | ||||||||
Sales rebates and other incentive programs | $ | 372.1 | $ | 279.3 | ||||
Royalties | 27.3 | 26.2 | ||||||
Interest | 22 | 22 | ||||||
Sales returns — specialty pharmaceutical products | 60.4 | 56.5 | ||||||
Product warranties — breast implant products | 7.7 | 7.6 | ||||||
Contingent consideration | 53.8 | 9.9 | ||||||
Investment bank advisory fees | 24 | — | ||||||
Annual branded prescription drug fee | 34.1 | 6.1 | ||||||
Restructuring charges | 109.6 | — | ||||||
Other | 194 | 189.9 | ||||||
$ | 905 | $ | 597.5 | |||||
Other liabilities | ||||||||
Postretirement benefit plan | $ | 56.5 | $ | 44.3 | ||||
Qualified and non-qualified pension plans | 267.3 | 194.5 | ||||||
Deferred executive compensation | 116.3 | 105.3 | ||||||
Deferred income | 72.8 | 67 | ||||||
Contingent consideration | 312.1 | 215.3 | ||||||
Product warranties — breast implant products | 28.5 | 26 | ||||||
Unrecognized tax benefit liabilities | 82.6 | 67.7 | ||||||
Other | 74 | 42.1 | ||||||
$ | 1,010.10 | $ | 762.2 | |||||
Accumulated other comprehensive loss | ||||||||
Foreign currency translation adjustments | $ | (149.0 | ) | $ | (29.7 | ) | ||
Deferred holding gains on derivative instruments, net of taxes of $0.7 million and $1.2 million for 2014 and 2013, respectively | 1 | 1.8 | ||||||
Unrealized gain on marketable equity investments, net of taxes of $3.3 million | 5.8 | — | ||||||
Actuarial losses not yet recognized as a component of pension and postretirement benefit plan costs, net of taxes of $100.4 million and $83.5 million for 2014 and 2013, respectively | (266.4 | ) | (198.7 | ) | ||||
$ | (408.6 | ) | $ | (226.6 | ) | |||
At December 31, 2014 and 2013, approximately $13.0 million and $11.7 million, respectively, of the Company’s finished goods inventories, primarily breast implants, were held on consignment at a large number of doctors’ offices, clinics and hospitals worldwide. The value and quantity at any one location are not significant. At December 31, 2014 and 2013, approximately $9.9 million and $10.3 million, respectively, of specific reserves for sales returns related to certain genericized eye care pharmaceuticals and urologics products are included in accrued sales returns – specialty pharmaceutical products. |
Intangibles_and_Goodwill
Intangibles and Goodwill | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||
Intangibles and Goodwill | Note 6: Intangibles and Goodwill | |||||||||||||||||||
Intangibles | ||||||||||||||||||||
At December 31, 2014 and 2013, the components of intangibles and certain other related information were as follows: | ||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||
Gross | Accumulated | Weighted | Gross | Accumulated | Weighted | |||||||||||||||
Amount | Amortization | Average | Amount | Amortization | Average | |||||||||||||||
Amortization | Amortization | |||||||||||||||||||
Period | Period | |||||||||||||||||||
(in millions) | (in years) | (in millions) | (in years) | |||||||||||||||||
Amortizable Intangible Assets: | ||||||||||||||||||||
Developed technology | $ | 648.5 | $ | (394.9 | ) | 11.1 | $ | 647.7 | $ | (343.8 | ) | 11.1 | ||||||||
Customer relationships | 54.2 | (41.9 | ) | 2.7 | 54.7 | (21.8 | ) | 2.7 | ||||||||||||
Licensing | 190.5 | (167.7 | ) | 9.3 | 185.8 | (164.8 | ) | 9.3 | ||||||||||||
Trademarks | 89.1 | (33.8 | ) | 12.4 | 89.6 | (29.7 | ) | 12.4 | ||||||||||||
Technology-related assets | 335.3 | (86.3 | ) | 14.9 | 327.5 | (66.9 | ) | 14.8 | ||||||||||||
Other | 29 | (14.6 | ) | 7.7 | 30.7 | (12.8 | ) | 7.6 | ||||||||||||
1,346.60 | (739.2 | ) | 11.5 | 1,336.00 | (639.8 | ) | 11.4 | |||||||||||||
Unamortizable Intangible Assets: | ||||||||||||||||||||
In-process research and development | 1,179.10 | — | 953.8 | — | ||||||||||||||||
$ | 2,525.70 | $ | (739.2 | ) | $ | 2,289.80 | $ | (639.8 | ) | |||||||||||
Developed technology consists primarily of current product offerings, primarily breast aesthetics products, dermal fillers, skin care products and eye care products acquired in connection with business combinations, asset acquisitions and initial licensing transactions for products previously approved for marketing. Customer relationship assets consist of the estimated value of relationships with customers acquired in connection with business combinations. Licensing assets consist primarily of capitalized payments to third party licensors related to the achievement of regulatory approvals to commercialize products in specified markets and up-front payments associated with royalty obligations for products that have achieved regulatory approval for marketing. Technology-related assets consist of patented drug delivery technologies acquired in connection with the Company's August 2014 acquisition of LiRIS and 2013 acquisition of MAP, proprietary technology associated with silicone gel breast implants acquired in connection with the Company's 2006 acquisition of Inamed Corporation, dermal filler technology acquired in connection with the Company’s 2007 acquisition of Groupe Cornéal Laboratoires and a drug delivery technology acquired in connection with the Company’s 2003 acquisition of Oculex Pharmaceuticals, Inc. Other intangible assets consist primarily of acquired product registration rights, distributor relationships, distribution rights, government permits, non-compete agreements and a defensive asset associated with developed technology that has been commercialized. The in-process research and development assets consist primarily of an investigational product for the treatment of interstitial cystitis and bladder pain syndrome acquired in connection with the Company's August 2014 acquisition of LiRIS that is currently in Phase II clinical trials, an orally inhaled drug for the potential acute treatment of migraine in adults acquired in connection with the Company's 2013 acquisition of MAP and a novel compound to treat erythema associated with rosacea acquired in connection with the Company’s 2011 acquisition of Vicept Therapeutics, Inc. (Vicept) that is currently under development. | ||||||||||||||||||||
In the fourth quarter of 2013, the Company recorded a pre-tax charge of $11.4 million related to the impairment of an intangible asset for distribution rights acquired in connection with the Company's 2011 acquisition of Precision Light, Inc. as a result of the Company's decision to discontinue the sale of products related to those distribution rights. | ||||||||||||||||||||
In the fourth quarter of 2012, the Company recorded a pre-tax charge of $17.0 million related to the partial impairment of the in-process research and development asset acquired in connection with the Company’s 2011 acquisition of Vicept. The impairment charge was recognized because the carrying amount of the asset was determined to be in excess of its estimated fair value. | ||||||||||||||||||||
The following table provides amortization expense by major categories of intangible assets for the years ended December 31, 2014, 2013 and 2012, respectively: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
Developed technology | $ | 59.1 | $ | 57.2 | $ | 53.4 | ||||||||||||||
Customer relationships | 20.5 | 20.5 | 1.1 | |||||||||||||||||
Licensing | 3 | 7.4 | 20.4 | |||||||||||||||||
Trademarks | 4.4 | 4.4 | 0.4 | |||||||||||||||||
Technology-related assets | 22.3 | 19.4 | 6.5 | |||||||||||||||||
Other | 3.1 | 7.8 | 8.4 | |||||||||||||||||
$ | 112.4 | $ | 116.7 | $ | 90.2 | |||||||||||||||
Amortization expense related to acquired intangible assets generally benefits multiple business functions within the Company, such as the Company’s ability to sell, manufacture, research, market and distribute products, compounds and intellectual property. The amount of amortization expense excluded from cost of sales consists primarily of amounts amortized with respect to developed technology and licensing intangible assets. | ||||||||||||||||||||
Estimated amortization expense is $97.7 million for 2015, $77.5 million for 2016, $59.6 million for 2017, $57.6 million for 2018 and $55.6 million for 2019. | ||||||||||||||||||||
Goodwill | ||||||||||||||||||||
Changes in the carrying amount of goodwill by operating segment for the years ended December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||
Specialty | Medical | Total | ||||||||||||||||||
Pharmaceuticals | Devices | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Balance at December 31, 2012 | $ | 299.8 | $ | 1,834.00 | $ | 2,133.80 | ||||||||||||||
MAP acquisition | 175 | — | 175 | |||||||||||||||||
Exemplar acquisition | 14 | — | 14 | |||||||||||||||||
SkinMedica acquisition adjustments | 17.6 | — | 17.6 | |||||||||||||||||
Foreign exchange translation effects and other | (5.2 | ) | 4.2 | (1.0 | ) | |||||||||||||||
Balance at December 31, 2013 | 501.2 | 1,838.20 | 2,339.40 | |||||||||||||||||
LiRIS acquisition | 69.8 | — | 69.8 | |||||||||||||||||
Foreign exchange translation effects | (3.9 | ) | (12.4 | ) | (16.3 | ) | ||||||||||||||
Balance at December 31, 2014 | $ | 567.1 | $ | 1,825.80 | $ | 2,392.90 | ||||||||||||||
The SkinMedica acquisition adjustments primarily relate to adjusting the assigned fair values associated with deferred tax assets and deferred tax liabilities and a contractual purchase price adjustment of $2.8 million. The Company does not consider the adjustments to be material. |
Notes_Payable_and_LongTerm_Deb
Notes Payable and Long-Term Debt | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||
Notes Payable and Long-Term Debt | Note 7: Notes Payable and Long-Term Debt | |||||||||||||
2014 | 31-Dec-14 | 2013 | 31-Dec-13 | |||||||||||
Average | Average | |||||||||||||
Effective | Effective | |||||||||||||
Interest | Interest | |||||||||||||
Rate | Rate | |||||||||||||
(in millions) | (in millions) | |||||||||||||
Bank loans | 8.83 | % | $ | 72.1 | 6.07 | % | $ | 55.6 | ||||||
Real estate mortgage; maturing 2017 | 5.65 | % | 20 | 5.65 | % | 20 | ||||||||
Senior notes due 2016 | 3.94 | % | 817.5 | 3.94 | % | 831 | ||||||||
Senior notes due 2018 | 1.39 | % | 249.7 | 1.39 | % | 249.5 | ||||||||
Senior notes due 2020 | 3.41 | % | 648.9 | 3.41 | % | 648.7 | ||||||||
Senior notes due 2023 | 2.83 | % | 349.2 | 2.83 | % | 349.1 | ||||||||
2,157.40 | 2,153.90 | |||||||||||||
Less current maturities | 72.1 | 55.6 | ||||||||||||
Total long-term debt | $ | 2,085.30 | $ | 2,098.30 | ||||||||||
At December 31, 2014, the Company had a committed long-term credit facility, a commercial paper program, a shelf registration statement that allows the Company to issue additional securities, including debt securities, in one or more offerings from time to time, a real estate mortgage and various foreign bank facilities. The committed long-term credit facility will expire in October 2016. The termination date can be further extended from time to time upon the Company’s request and acceptance by the issuer of the facility for a period of one year from the last scheduled termination date for each request accepted. The committed long-term credit facility allows for borrowings of up to $800.0 million. The commercial paper program also provides for up to $800.0 million in borrowings. However, the combined borrowings under the committed long-term credit facility and the commercial paper program may not exceed $800.0 million in the aggregate. Borrowings under the committed long-term credit facility are subject to certain financial and operating covenants that include, among other provisions, maximum leverage ratios. Certain covenants also limit subsidiary debt. The Company was in compliance with these covenants at December 31, 2014. As of December 31, 2014, the Company had no borrowings under its committed long-term credit facility, $20.0 million in borrowings outstanding under the real estate mortgage, $72.1 million in borrowings outstanding under various foreign bank facilities and no borrowings under the commercial paper program. Commercial paper, when outstanding, is issued at current short-term interest rates. Additionally, any future borrowings that are outstanding under the long-term credit facility may be subject to a floating interest rate. The Company may from time to time seek to retire or purchase its outstanding debt. | ||||||||||||||
On March 12, 2013, the Company issued concurrently in a registered offering $250.0 million in aggregate principal amount of 1.35% Senior Notes due 2018 (2018 Notes) and $350.0 million in aggregate principal amount of 2.80% Senior Notes due 2023 (2023 Notes). | ||||||||||||||
The 2018 Notes, which were sold at 99.793% of par value with an effective interest rate of 1.39%, are unsecured and pay interest semi-annually on the principal amount of the notes at a rate of 1.35% per annum, and are redeemable at any time at the Company's option, subject to a make-whole provision based on the present value of remaining interest payments at the time of the redemption. The aggregate outstanding principal amount of the 2018 Notes will be due and payable on March 15, 2018, unless earlier redeemed by the Company. The original discount of approximately $0.5 million and the deferred debt issuance costs associated with the 2018 Notes are being amortized using the effective interest method over the stated term of 5 years. | ||||||||||||||
The 2023 Notes, which were sold at 99.714% of par value with an effective interest rate of 2.83%, are unsecured and pay interest semi-annually on the principal amount of the notes at a rate of 2.80% per annum, and are redeemable at any time at the Company's option, subject to a make-whole provision based on the present value of remaining interest payments at the time of the redemption, if the redemption occurs prior to December 15, 2022 (three months prior to the maturity of the 2023 Notes). If the redemption occurs on or after December 15, 2022, then such redemption is not subject to the make-whole provision. The aggregate outstanding principal amount of the 2023 Notes will be due and payable on March 15, 2023, unless earlier redeemed by the Company. The original discount of approximately $1.0 million and the deferred debt issuance costs associated with the 2023 Notes are being amortized using the effective interest method over the stated term of 10 years. | ||||||||||||||
On September 14, 2010, the Company issued its 3.375% Senior Notes due 2020 (2020 Notes) in a registered offering for an aggregate principal amount of $650.0 million. The 2020 Notes, which were sold at 99.697% of par value with an effective interest rate of 3.41%, are unsecured and pay interest semi-annually on the principal amount of the notes at a rate of 3.375% per annum, and are redeemable at any time at the Company’s option, subject to a make-whole provision based on the present value of remaining interest payments at the time of the redemption. The aggregate outstanding principal amount of the 2020 Notes will be due and payable on September 15, 2020, unless earlier redeemed by the Company. The original discount of approximately $2.0 million and the deferred debt issuance costs associated with the 2020 Notes are being amortized using the effective interest method over the stated term of 10 years. | ||||||||||||||
On April 12, 2006, the Company completed the private placement of its 5.75% Senior Notes due 2016 (2016 Notes) for an aggregate principal amount of $800.0 million. The 2016 Notes, which were sold at 99.717% of par value with an effective interest rate of 5.79%, are unsecured and pay interest semi-annually on the principal amount of the notes at a rate of 5.75% per annum, and are redeemable at any time at the Company’s option, subject to a make-whole provision based on the present value of remaining interest payments at the time of the redemption. The aggregate outstanding principal amount of the 2016 Notes will be due and payable on April 1, 2016, unless earlier redeemed by the Company. The original discount of approximately $2.3 million and the deferred debt issuance costs associated with the 2016 Notes are being amortized using the effective interest method over the stated term of 10 years. | ||||||||||||||
On January 31, 2007, the Company entered into a nine-year, two month interest rate swap with a $300.0 million notional amount. The swap received interest at a fixed rate of 5.75% and paid interest at a variable interest rate equal to 3-month LIBOR plus 0.368%, and effectively converted $300.0 million of the 2016 Notes to a variable interest rate. Based on the structure of the hedging relationship, the hedge met the criteria for using the short-cut method for a fair value hedge. In September 2012, the Company terminated the interest rate swap and received $54.7 million, which included accrued interest of $3.7 million. Upon termination of the interest rate swap, the Company added the net fair value received of $51.0 million to the carrying value of the 2016 Notes. The amount received for the termination of the interest rate swap is being amortized as a reduction to interest expense over the remaining life of the debt, which effectively fixes the interest rate for the remaining term of the 2016 Notes at 3.94%. As of December 31, 2014 and 2013, the unamortized amount of the terminated interest rate swap included in the carrying value of the 2016 Notes was $17.8 million and $31.5 million, respectively. During 2014, 2013 and 2012, the Company recognized $13.7 million, $13.1 million and $13.8 million, respectively, as a reduction of interest expense due to the effect of the interest rate swap. | ||||||||||||||
In February 2006, the Company entered into interest rate swap contracts based on 3-month LIBOR with an aggregate notional amount of $800.0 million, a swap period of 10 years and a starting swap rate of 5.198%. The Company entered into these swap contracts as a cash flow hedge to effectively fix the future interest rate for the 2016 Notes. In April 2006, the Company terminated the interest rate swap contracts and received approximately $13.0 million. The total gain was recorded to accumulated other comprehensive loss and is being amortized as a reduction to interest expense over a 10 year period to match the term of the 2016 Notes. During 2014, 2013 and 2012, the Company recognized $1.3 million, respectively, as a reduction of interest expense due to the amortization of deferred holding gains on derivatives designated as cash flow hedges. These amounts were reclassified from accumulated other comprehensive loss. As of December 31, 2014, the remaining unrecognized gain of $1.7 million ($1.0 million, net of tax) is recorded as a component of accumulated other comprehensive loss. The Company expects to reclassify an estimated pre-tax amount of $1.3 million from accumulated other comprehensive loss as a reduction in interest expense during fiscal year 2015 due to the amortization of deferred holding gains on derivatives designated as cash flow hedges. | ||||||||||||||
The aggregate maturities of total debt obligations, excluding the unamortized amount related to the terminated interest rate swap of $17.8 million, for each of the next five years and thereafter are as follows: $72.1 million in 2015; $799.7 million in 2016, $20.0 million in 2017, $249.7 million in 2018, zero in 2019 and $998.1 million thereafter. Interest incurred of $5.6 million in 2014, $1.8 million in 2013 and $0.9 million in 2012 has been capitalized and included in property, plant and equipment. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Note 8: Income Taxes | |||||||||||
The components of earnings from continuing operations before income taxes were: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions) | ||||||||||||
U.S. | $ | 922.5 | $ | 890.1 | $ | 846.8 | ||||||
Non-U.S. | 1,066.80 | 840.7 | 684.2 | |||||||||
Total | $ | 1,989.30 | $ | 1,730.80 | $ | 1,531.00 | ||||||
The provision for income taxes consists of the following: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions) | ||||||||||||
Current | ||||||||||||
U.S. federal | $ | 352.9 | $ | 342.4 | $ | 378.3 | ||||||
U.S. state | 16.2 | 24.7 | 20.4 | |||||||||
Non-U.S. | 167.4 | 152.7 | 103.9 | |||||||||
Total current | 536.5 | 519.8 | 502.6 | |||||||||
Deferred | ||||||||||||
U.S. federal | (31.6 | ) | (34.8 | ) | (72.7 | ) | ||||||
U.S. state | (25.3 | ) | (12.6 | ) | 0.1 | |||||||
Non-U.S. | (22.9 | ) | (14.1 | ) | 0.3 | |||||||
Total deferred | (79.8 | ) | (61.5 | ) | (72.3 | ) | ||||||
Total | $ | 456.7 | $ | 458.3 | $ | 430.3 | ||||||
The current provision for income taxes does not reflect the tax benefit of $167.5 million, $37.7 million and $45.7 million for the years ended December 31, 2014, 2013 and 2012, respectively, related to excess tax benefits from share-based compensation recorded directly to “Additional paid-in capital” in the consolidated balance sheets. | ||||||||||||
The reconciliations of the U.S. federal statutory tax rate to the combined effective tax rate follow: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Statutory rate of tax expense | 35 | % | 35 | % | 35 | % | ||||||
State taxes, net of U.S. tax benefit | 0.4 | 0.9 | 1.1 | |||||||||
Tax differential on foreign earnings | (10.8 | ) | (9.0 | ) | (8.8 | ) | ||||||
Other credits (R&D) | (2.9 | ) | (3.0 | ) | (0.9 | ) | ||||||
Tax audit settlements/adjustments | 0.7 | 0.8 | 1.3 | |||||||||
Other | 0.6 | 1.8 | 0.4 | |||||||||
Effective tax rate | 23 | % | 26.5 | % | 28.1 | % | ||||||
On December 19, 2014, the President of the United States signed into law The Tax Increase Prevention Act of 2014. Under prior U.S. law, a taxpayer was entitled to a research tax credit for qualifying amounts paid or incurred on or before December 31, 2013. The 2014 Tax Increase Prevention Act extends the research credit for one year to December 31, 2014 and includes amounts paid or incurred after December 31, 2013. In the fourth quarter of 2014, the Company recognized the full year benefit of $19.8 million for the U.S. R&D tax credit for fiscal year 2014. | ||||||||||||
Withholding and U.S. taxes have not been provided on approximately $4,485.3 million of unremitted earnings of certain non-U.S. subsidiaries because the Company has currently reinvested these earnings indefinitely in such operations, or the U.S. taxes on such earnings will be offset by appropriate credits for foreign income taxes paid. Such earnings would become taxable upon the sale or liquidation of these non-U.S. subsidiaries or upon the remittance of dividends. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against the Company’s U.S. tax liability, if any. | ||||||||||||
The Company and its domestic subsidiaries file a consolidated U.S. federal income tax return. During the third quarter of 2013, the Company reached a preliminary settlement for the Company’s acquired subsidiary, Inamed, for tax year 2005 with the IRS that was pending final review and approval by the U.S. Tax Court. The U.S. Tax Court approved the settlement in the first quarter of 2014. The impact of this settlement resulted in a $3.6 million refund and carryforward of certain tax attributes into the Company’s 2006 tax year filing. | ||||||||||||
During the fourth quarter of 2013, the Company signed an agreement with the U.S. and Canadian competent authorities for certain transfer pricing issues covering tax years 2005 through 2011. As a result of the above, all positions have been resolved between the Company and the IRS for tax years 2005 and 2006. The final settlement generated a refund of $1.4 million. | ||||||||||||
With respect to the Company's U.S. federal income tax audit with the IRS for tax years 2007 and 2008, all positions have been tentatively resolved between the Company and the IRS with the exception of one position where the Company is pursuing Mutual Agreement Procedures with the U.S. and French competent authorities to seek relief from double taxation. In the fourth quarter of 2013, the Company paid a tax deposit of $19.5 million to the IRS for positions tentatively resolved for these years. | ||||||||||||
The Company and its consolidated subsidiaries are currently under examination by the IRS for tax years 2009 and 2010. The Company believes that it has provided adequate accruals for any tax deficiencies or reductions in tax benefits that could result from all open audit years. | ||||||||||||
The Company has been pursuing an Advanced Pricing Agreement with the IRS for certain transfer pricing issues covering tax years 2009 through 2013. A final agreement has been reached in the fourth quarter of 2014, resulting in a tax refund of $1.4 million. | ||||||||||||
During the second and third quarters of 2014, the Company reached final settlement with the state of California for tax years 2000 through 2004. The impact of this settlement is not considered material. | ||||||||||||
At December 31, 2014, the Company has net operating loss carryforwards, with various expiration dates, in certain non-U.S. subsidiaries of approximately $39.8 million. The majority of the non-U.S. net operating loss carryforwards are not likely to be realized and have been reduced by a valuation allowance. The Company has U.S. federal and state net operating loss carryforwards of approximately $694.1 million. The state net operating loss carryforwards include $329.3 million that is not likely to be realized and has been reduced by a valuation allowance. Certain of our U.S. net operating losses are subject to limitations under section 382 of the Internal Revenue Code. If not utilized, the U.S. federal and state net operating loss carryforwards will expire between 2015 and 2033. | ||||||||||||
At December 31, 2014, the Company has U.S. tax credit carryforwards of approximately $38.1 million and has provided a valuation allowance for $3.1 million of those U.S. tax credit carryforwards. | ||||||||||||
The Company has a subsidiary in Costa Rica which previously operated under a local country tax incentive and the subsidiary was exempt from income tax through the first quarter of 2014. The Company has since qualified for future incentives and tax credits which are comparable to the past incentives through 2021. | ||||||||||||
Temporary differences and carryforwards/carrybacks which give rise to a significant portion of deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows: | ||||||||||||
2014 | 2013 | |||||||||||
(in millions) | ||||||||||||
Deferred tax assets | ||||||||||||
Net operating losses | $ | 144.9 | $ | 179.7 | ||||||||
Accrued expenses | 173.6 | 130 | ||||||||||
Capitalized expenses | 161.1 | 176.5 | ||||||||||
Deferred compensation | 52.1 | 47.4 | ||||||||||
Medicare, Medicaid and other accrued health care rebates | 110.1 | 80 | ||||||||||
Postretirement medical benefits | 21.9 | 16.6 | ||||||||||
Capitalized intangible assets | 31.5 | 38.9 | ||||||||||
Deferred revenue | 19.2 | 19.2 | ||||||||||
Inventory reserves and adjustments | 14.2 | 14.5 | ||||||||||
Share-based compensation awards | 94.8 | 101.6 | ||||||||||
Unbilled costs | 28.1 | 28.3 | ||||||||||
Pension plans | 69.9 | 52.6 | ||||||||||
R&D credits | 37.2 | 26.2 | ||||||||||
All other | 57.4 | 46.3 | ||||||||||
1,016.00 | 957.8 | |||||||||||
Less: valuation allowance | (39.1 | ) | (48.9 | ) | ||||||||
Total deferred tax assets | 976.9 | 908.9 | ||||||||||
Deferred tax liabilities | ||||||||||||
Depreciation | (13.1 | ) | 0.1 | |||||||||
Developed and technology-related intangible assets | 131.3 | 153.5 | ||||||||||
In-process R&D | 428.3 | 348.6 | ||||||||||
Total deferred tax liabilities | 546.5 | 502.2 | ||||||||||
Net deferred tax assets | $ | 430.4 | $ | 406.7 | ||||||||
The balances of net current deferred tax assets and net non-current deferred tax assets at December 31, 2014 were $343.5 million and $86.9 million, respectively. The balances of net current deferred tax assets and net non-current deferred tax assets at December 31, 2013 were $277.9 million and $128.8 million, respectively. Net current deferred tax assets are included in “Other current assets” in the Company’s consolidated balance sheets. | ||||||||||||
The decrease in the amount of valuation allowance at December 31, 2014 compared to December 31, 2013 is primarily attributable to the ability of the Company to utilize its California R&D tax credits in the foreseeable future. | ||||||||||||
Based on the Company's historical pre-tax earnings, management believes it is more likely than not that the Company will realize the benefit of the existing total deferred tax assets at December 31, 2014. Management believes the existing net deductible temporary differences will reverse during periods in which the Company generates net taxable income; however, there can be no assurance that the Company will generate any earnings or any specific level of continuing earnings in future years. Certain tax planning or other strategies could be implemented, if necessary, to supplement income from operations to fully realize recorded tax benefits. | ||||||||||||
Disclosures for Uncertainty in Income Taxes | ||||||||||||
The Company classifies interest expense related to uncertainty in income taxes in the consolidated statements of earnings as interest expense. Income tax penalties are recorded in income tax expense, and are not material. | ||||||||||||
A tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of 2014, 2013 and 2012 is as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions) | ||||||||||||
Balance, beginning of year | $ | 77.3 | $ | 61.9 | $ | 53 | ||||||
Gross increase as a result of positions taken in a prior year | 8.4 | 8.7 | 20.9 | |||||||||
Gross decrease as a result of positions taken in a prior year | (32.7 | ) | (14.6 | ) | (12.7 | ) | ||||||
Gross increase as a result of positions taken in current year | 39.1 | 23.3 | 3.4 | |||||||||
Gross decrease as a result of positions taken in current year | (2.1 | ) | — | — | ||||||||
Increases (decreases) related to settlements | 1.8 | (2.0 | ) | (2.7 | ) | |||||||
Decreases due to lapse in statute of limitations | (0.2 | ) | — | — | ||||||||
Balance, end of year | $ | 91.6 | $ | 77.3 | $ | 61.9 | ||||||
The total amount of unrecognized tax benefits at December 31, 2014, 2013 and 2012 that, if recognized, would affect the effective tax rate is $84.1 million, $70.5 million and $55.2 million, respectively. | ||||||||||||
The total amount of interest (income) expense related to uncertainty in income taxes recognized in the Company’s consolidated statements of earnings is $(2.8) million, $4.3 million and $2.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. The total amount of accrued interest expense related to uncertainty in income taxes included in the Company’s consolidated balance sheets is $10.8 million and $9.8 million at December 31, 2014 and 2013, respectively. | ||||||||||||
The Company expects that during the next 12 months it is reasonably possible that unrecognized tax benefit liabilities related to various audit issues will decrease by approximately $5.0 million to $6.0 million primarily due to settlements of income tax audits and Competent Authority negotiations. | ||||||||||||
The following tax years remain subject to examination: | ||||||||||||
Major Jurisdictions | Open Years | |||||||||||
U.S. Federal | 2007 - 2013 | |||||||||||
California | 2005 - 2013 | |||||||||||
Brazil | 2009 - 2013 | |||||||||||
Canada | 2007 - 2013 | |||||||||||
France | 2011 - 2013 | |||||||||||
Germany | 2012 - 2013 | |||||||||||
Italy | 2009 - 2013 | |||||||||||
Ireland | 2007 - 2013 | |||||||||||
Spain | 2010 - 2013 | |||||||||||
United Kingdom | 2011 - 2013 |
Employee_Retirement_and_Other_
Employee Retirement and Other Benefit Plans | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||
Employee Retirement and Other Benefit Plans | Note 9: Employee Retirement and Other Benefit Plans | |||||||||||||||||||||||
Pension and Postretirement Benefit Plans | ||||||||||||||||||||||||
The Company sponsors various qualified defined benefit pension plans covering a substantial portion of its employees. In addition, the Company sponsors two supplemental nonqualified plans covering certain management employees and officers. U.S. pension benefits are based on years of service and compensation during the five highest consecutive earnings years. Foreign pension benefits are based on various formulas that consider years of service, average or highest earnings during specified periods of employment and other criteria. | ||||||||||||||||||||||||
In October 2014, the Company announced that it has amended its U.S. qualified and unqualified defined benefit pension plans to close the plans to any future participant service credits (plan freeze) effective December 31, 2014. In December 2014, the Company announced that it has amended its Ireland and U.K. pension plans to close the plans to any future participant service credits effective December 31, 2014 and February 28, 2015, respectively. In conjunction with the plan freezes, the Company added one additional year of service credit to the calculation of benefits for all active members of the U.S., Ireland and U.K pension plans as of December 31, 2014. The effect of the plan amendments, the additional year of service credit and the related impact from severance actions associated with our 2014 restructuring plans resulted in a net decrease of $112.4 million in net accrued benefit costs on the balance sheet at December 31, 2014, a pre-tax settlement charge of $0.9 million and certain plan settlement payments of $2.2 million. | ||||||||||||||||||||||||
Additionally, in 2014 the Company initiated and completed a program to offer voluntary lump-sum pension payouts to terminated vested participants of its U.S. qualified defined benefit pension plan. The program provided participants with a one-time choice of electing to receive a lump-sum settlement of their remaining pension benefit. As part of this voluntary lump-sum program, the Company paid approximately $63.6 million from its pension assets with a corresponding reduction in pension obligations and recognized an associated $13.0 million settlement charge. | ||||||||||||||||||||||||
The Company also has one retiree health plan that covers U.S. retirees and dependents. Retiree contributions are required depending on the year of retirement and the number of years of service at the time of retirement. Disbursements exceed retiree contributions and the plan currently has no assets. The accounting for the retiree health care plan anticipates future cost-sharing changes to the written plan that are consistent with the Company’s past practice and management’s intent to manage plan costs. The Company’s history of retiree medical plan modifications indicates a consistent approach to increasing the cost sharing provisions of the plan. Due to the impact from severance actions associated with our July 2014 restructuring plan, the U.S. retiree health plan experienced a benefit curtailment in 2014 that resulted in a reduction of the projected benefit obligation of $1.9 million and a pre-tax curtailment gain of $1.8 million. | ||||||||||||||||||||||||
Accounting for Defined Benefit Pension and Other Postretirement Plans | ||||||||||||||||||||||||
The Company recognizes on its balance sheet an asset or liability equal to the over- or under-funded benefit obligation of each defined benefit pension and other postretirement plan. Actuarial gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost are recognized, net of tax, as a component of other comprehensive income. | ||||||||||||||||||||||||
Included in accumulated other comprehensive loss as of December 31, 2014 and 2013 are unrecognized actuarial losses of $337.8 million and $288.7 million, respectively, related to the Company’s pension plans. Of the December 31, 2014 amount, the Company expects to recognize approximately $8.1 million in net periodic benefit cost during 2015. Also included in accumulated other comprehensive loss at December 31, 2014 and 2013 are unrecognized prior service credits of $12.5 million and $17.0 million, respectively, and unrecognized actuarial losses of $20.6 million and $12.1 million, respectively, related to the Company’s retiree health plan. Of the December 31, 2014 amounts, the Company expects to recognize $2.4 million of the unrecognized prior service credits and $1.6 million of the unrecognized actuarial losses in net periodic benefit cost during 2015. | ||||||||||||||||||||||||
Components of net periodic benefit cost, change in projected benefit obligation, change in plan assets, funded status, funding policy, fair value of plan assets, assumptions used to determine net periodic benefit cost and estimated future benefit payments are summarized below for the Company’s U.S. and major non-U.S. pension plans and retiree health plan. | ||||||||||||||||||||||||
Net Periodic Benefit Cost | ||||||||||||||||||||||||
Components of net periodic benefit cost for the years ended 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Service cost | $ | 29.4 | $ | 28.5 | $ | 25.7 | $ | 1.5 | $ | 1.8 | $ | 1.7 | ||||||||||||
Interest cost | 52 | 46.2 | 43.8 | 2.3 | 2 | 1.9 | ||||||||||||||||||
Expected return on plan assets | (52.8 | ) | (45.0 | ) | (43.4 | ) | — | — | — | |||||||||||||||
Plan curtailment | — | — | — | (1.8 | ) | — | — | |||||||||||||||||
Loss on plan settlements | 13.9 | — | — | — | — | — | ||||||||||||||||||
Amortization of prior service costs (credits) | — | — | — | (2.7 | ) | (2.7 | ) | (2.7 | ) | |||||||||||||||
Recognized net actuarial losses | 15.7 | 31 | 27 | 0.8 | 1.4 | 1.3 | ||||||||||||||||||
Net periodic benefit cost | $ | 58.2 | $ | 60.7 | $ | 53.1 | $ | 0.1 | $ | 2.5 | $ | 2.2 | ||||||||||||
Benefit Obligation, Change in Plan Assets and Funded Status | ||||||||||||||||||||||||
The table below presents components of the change in projected benefit obligation, change in plan assets and funded status at December 31, 2014 and 2013. | ||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Change in Projected Benefit Obligation | ||||||||||||||||||||||||
Projected benefit obligation, beginning of year | $ | 1,125.60 | $ | 1,084.60 | $ | 45.8 | $ | 47.9 | ||||||||||||||||
Service cost | 29.4 | 28.5 | 1.5 | 1.8 | ||||||||||||||||||||
Interest cost | 52 | 46.2 | 2.3 | 2 | ||||||||||||||||||||
Participant contributions | 1.5 | 1.5 | — | — | ||||||||||||||||||||
Plan changes | (112.4 | ) | (1.0 | ) | (1.9 | ) | — | |||||||||||||||||
Plan settlements | (65.8 | ) | — | — | — | |||||||||||||||||||
Actuarial losses (gains) | 313.5 | (25.7 | ) | 11.3 | (5.4 | ) | ||||||||||||||||||
Benefits paid | (25.8 | ) | (19.8 | ) | (1.0 | ) | (0.5 | ) | ||||||||||||||||
Impact of foreign currency translation | (39.3 | ) | 11.3 | — | — | |||||||||||||||||||
Projected benefit obligation, end of year | 1,278.70 | 1,125.60 | 58 | 45.8 | ||||||||||||||||||||
Change in Plan Assets | ||||||||||||||||||||||||
Fair value of plan assets, beginning of year | 933.9 | 869.3 | — | — | ||||||||||||||||||||
Actual return on plan assets | 155.1 | 31.3 | — | — | ||||||||||||||||||||
Company contributions | 51.9 | 42.3 | 1 | 0.5 | ||||||||||||||||||||
Participant contributions | 1.5 | 1.5 | — | — | ||||||||||||||||||||
Plan settlements | (65.8 | ) | — | — | — | |||||||||||||||||||
Benefits paid | (25.8 | ) | (19.8 | ) | (1.0 | ) | (0.5 | ) | ||||||||||||||||
Impact of foreign currency translation | (31.1 | ) | 9.3 | — | — | |||||||||||||||||||
Fair value of plan assets, end of year | 1,019.70 | 933.9 | — | — | ||||||||||||||||||||
Funded status of plans | $ | (259.0 | ) | $ | (191.7 | ) | $ | (58.0 | ) | $ | (45.8 | ) | ||||||||||||
Net accrued benefit costs for pension plans and other postretirement benefits are reported in the following components of the Company’s consolidated balance sheet at December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Investments and other assets | $ | 11.1 | $ | 5.6 | $ | — | $ | — | ||||||||||||||||
Accrued compensation | (2.8 | ) | (2.8 | ) | (1.5 | ) | (1.5 | ) | ||||||||||||||||
Other liabilities | (267.3 | ) | (194.5 | ) | (56.5 | ) | (44.3 | ) | ||||||||||||||||
Net accrued benefit costs | $ | (259.0 | ) | $ | (191.7 | ) | $ | (58.0 | ) | $ | (45.8 | ) | ||||||||||||
The accumulated benefit obligation for the Company’s U.S. and major non-U.S. pension plans was $1,272.6 million and $1,018.0 million at December 31, 2014 and 2013, respectively. | ||||||||||||||||||||||||
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of the fair value of plan assets and pension plans with accumulated benefit obligations in excess of the fair value of plan assets at December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||
Projected Benefit | Accumulated | |||||||||||||||||||||||
Obligation | Benefit | |||||||||||||||||||||||
Exceeds | Obligation | |||||||||||||||||||||||
the Fair Value of | Exceeds the Fair | |||||||||||||||||||||||
Plan Assets | Value of | |||||||||||||||||||||||
Plan Assets | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Projected benefit obligation | $ | 1,144.10 | $ | 1,098.40 | $ | 1,144.10 | $ | 327.5 | ||||||||||||||||
Accumulated benefit obligation | 1,138.00 | 992.3 | 1,138.00 | 283.5 | ||||||||||||||||||||
Fair value of plan assets | 873.9 | 901.1 | 873.9 | 156.6 | ||||||||||||||||||||
The Company’s funding policy for its funded pension plans is based upon the greater of: (i) annual service cost, administrative expenses and a seven year amortization of any funded deficit or surplus relative to the projected pension benefit obligations or (ii) local statutory requirements. The Company’s funding policy is subject to certain statutory regulations with respect to annual minimum and maximum company contributions. Plan benefits for the nonqualified plans are paid as they come due. In 2015, the Company expects to pay contributions of between $10.0 million and $15.0 million for its U.S. and non-U.S. pension plans and between $1.0 million and $2.0 million for its other postretirement plan (unaudited). | ||||||||||||||||||||||||
Fair Value of Plan Assets | ||||||||||||||||||||||||
The Company measures the fair value of plan assets based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy described in Note 12, “Fair Value Measurements.” | ||||||||||||||||||||||||
The table below presents total plan assets by investment category as of December 31, 2014 and 2013 and the classification of each investment category within the fair value hierarchy with respect to the inputs used to measure fair value: | ||||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Cash and Equivalents | $ | 24.5 | $ | — | $ | 24.5 | $ | — | ||||||||||||||||
Equity Securities | ||||||||||||||||||||||||
U.S. small-cap growth | 26.8 | — | 26.8 | — | ||||||||||||||||||||
U.S. large-cap index | 76.8 | — | 76.8 | — | ||||||||||||||||||||
International equities | 217.3 | 217.3 | — | — | ||||||||||||||||||||
Fixed Income Securities | ||||||||||||||||||||||||
U.S. Treasury bonds | 90.8 | — | 90.8 | — | ||||||||||||||||||||
Global corporate bonds | 413.7 | — | 413.7 | — | ||||||||||||||||||||
International bond funds | 111.7 | — | 111.7 | — | ||||||||||||||||||||
Global corporate bond funds | 17.3 | 17.3 | — | — | ||||||||||||||||||||
International government bond funds | 40.8 | 40.8 | — | — | ||||||||||||||||||||
$ | 1,019.70 | $ | 275.4 | $ | 744.3 | $ | — | |||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Cash and Equivalents | $ | 16.9 | $ | — | $ | 16.9 | $ | — | ||||||||||||||||
Equity Securities | ||||||||||||||||||||||||
U.S. small-cap growth | 26.1 | — | 26.1 | — | ||||||||||||||||||||
U.S. large-cap index | 65.3 | — | 65.3 | — | ||||||||||||||||||||
International equities | 212.7 | 212.7 | — | — | ||||||||||||||||||||
Fixed Income Securities | ||||||||||||||||||||||||
U.S. Treasury bonds | 86.5 | — | 86.5 | — | ||||||||||||||||||||
Global corporate bonds | 385.1 | — | 385.1 | — | ||||||||||||||||||||
International bond funds | 91.4 | — | 91.4 | — | ||||||||||||||||||||
Global corporate bond funds | 20.4 | 20.4 | — | — | ||||||||||||||||||||
International government bond funds | 29.5 | 29.5 | — | — | ||||||||||||||||||||
$ | 933.9 | $ | 262.6 | $ | 671.3 | $ | — | |||||||||||||||||
The Company’s target asset allocation for both its U.S. and non-U.S. pension plans’ assets is 30% equity securities and 70% fixed income securities. Risk tolerance on invested pension plan assets is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. Investment risk is measured and monitored on an ongoing basis through annual liability measures, periodic asset/liability studies and quarterly investment portfolio reviews. | ||||||||||||||||||||||||
Assumptions | ||||||||||||||||||||||||
The weighted-average assumptions used to determine net periodic benefit cost and projected benefit obligation were as follows: | ||||||||||||||||||||||||
Pension Benefits | Other | |||||||||||||||||||||||
Postretirement Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||
For Determining Net Periodic Benefit Cost | ||||||||||||||||||||||||
U.S. Plans: | ||||||||||||||||||||||||
Discount rate | 5.05 | % | 4.23 | % | 4.63 | % | 5.02 | % | 4.21 | % | 4.6 | % | ||||||||||||
Expected return on plan assets | 6.25 | % | 6.25 | % | 6.75 | % | — | — | — | |||||||||||||||
Rate of compensation increase | 4 | % | 4 | % | 4 | % | — | — | — | |||||||||||||||
Non-U.S. Pension Plans: | ||||||||||||||||||||||||
Discount rate | 4.19 | % | 4.55 | % | 5.14 | % | ||||||||||||||||||
Expected return on plan assets | 4.56 | % | 4.36 | % | 4.8 | % | ||||||||||||||||||
Rate of compensation increase | 2.94 | % | 2.89 | % | 3.04 | % | ||||||||||||||||||
For Determining Projected Benefit Obligation | ||||||||||||||||||||||||
U.S. Plans: | ||||||||||||||||||||||||
Discount rate | 4.21 | % | 5.05 | % | 4.21 | % | 5.02 | % | ||||||||||||||||
Rate of compensation increase | — | 4 | % | — | — | |||||||||||||||||||
Non-U.S. Pension Plans: | ||||||||||||||||||||||||
Discount rate | 2.64 | % | 4.19 | % | ||||||||||||||||||||
Rate of compensation increase | 2.92 | % | 2.94 | % | ||||||||||||||||||||
Under the current terms of the U.S. retiree health plan, the annual increase in the Company's subsidy to each retiree is capped at the lesser of 3.0% or the rate of medical inflation. The assumed annual increase in medical inflation is 3.0% for the duration of the plan. | ||||||||||||||||||||||||
For the U.S. qualified pension plan and the non-U.S. funded pension plans, the expected return on plan assets was determined using a building block approach that considers diversification and rebalancing for a long-term portfolio of invested assets. Historical market returns are studied and long-term historical relationships between equities and fixed income are preserved in a manner consistent with the widely-accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are also evaluated before long-term capital market assumptions are determined. The Company’s pension plan assets are managed by outside investment managers using a total return investment approach whereby a mix of equities and debt securities investments are used to maximize the long-term rate of return on plan assets, and the Company utilizes a liability driven investment strategy to reduce financial volatility in the funded pension plans over time. The Company’s overall expected long-term rate of return on assets for 2015 is 6.25% for its U.S. funded pension plan and 3.70% for its non-U.S. funded pension plans. | ||||||||||||||||||||||||
Estimated Future Benefit Payments | ||||||||||||||||||||||||
Estimated benefit payments over the next 10 years for the Company’s U.S. and major non-U.S. pension plans and retiree health plan are as follows: | ||||||||||||||||||||||||
Pension | Other | |||||||||||||||||||||||
Benefits | Postretirement | |||||||||||||||||||||||
Benefits | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2015 | $ | 26.1 | $ | 1.5 | ||||||||||||||||||||
2016 | 28.7 | 2.2 | ||||||||||||||||||||||
2017 | 31.4 | 2.6 | ||||||||||||||||||||||
2018 | 34.1 | 2.8 | ||||||||||||||||||||||
2019 | 37.4 | 2.9 | ||||||||||||||||||||||
2020 – 2024 | 226.6 | 17.1 | ||||||||||||||||||||||
$ | 384.3 | $ | 29.1 | |||||||||||||||||||||
Savings and Investment Plan | ||||||||||||||||||||||||
The Company has a Savings and Investment Plan, which allows all U.S. employees to become participants upon employment. In 2014, 2013 and 2012, participants’ contributions, up to 4% of compensation, generally qualified for a 100% Company match. Company contributions are used to purchase various investment funds at the participants’ discretion. The Company’s cost of the plan was $21.1 million, $23.0 million and $19.9 million in 2014, 2013 and 2012, respectively. Effective January 1, 2015, the Company increased the company match for eligible participants' contributions to up to 5% of compensation. | ||||||||||||||||||||||||
In addition, the Company has a Company sponsored retirement contribution program under the Savings and Investment Plan, which provides all U.S. employees hired after September 30, 2002 with at least six months of service and certain other employees who previously elected to participate in the Company sponsored retirement contribution program under the Savings and Investment Plan, a Company provided retirement contribution of 5% of annual pay if they are employed on the last day of each calendar year. Participating employees who receive the 5% Company retirement contribution do not accrue benefits under the Company’s defined benefit pension plan. The Company’s cost of the retirement contribution program under the Savings and Investment Plan was $24.6 million, $25.6 million and $23.0 million in 2014, 2013 and 2012, respectively. |
Employee_Stock_Plans
Employee Stock Plans | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Employee Stock Plans | Note 10: Employee Stock Plans | ||||||||||||||||||||
The Company has an incentive award plan that provides for the granting of non-qualified stock options, incentive stock options, stock appreciation rights, performance shares, restricted stock and restricted stock units to officers, key employees and non-employee directors. | |||||||||||||||||||||
Stock option grants to officers and key employees under the incentive award plan are generally granted at an exercise price equal to the fair market value at the date of grant, generally expire ten years after their original date of grant and generally become vested and exercisable at a rate of 25% per year beginning twelve months after the date of grant. Restricted share awards to officers and key employees generally become fully vested and free of restrictions four years from the date of grant, except for restricted stock grants pursuant to the Company’s executive bonus plan, which generally become fully vested and free of restrictions two years from the date of grant. | |||||||||||||||||||||
Restricted share awards to non-employee directors generally vest and become free of restrictions twelve months after the date of grant. | |||||||||||||||||||||
At December 31, 2014, the aggregate number of shares available for future grant under the incentive award plan for stock options and restricted share awards was approximately 15.7 million shares. | |||||||||||||||||||||
Share-Based Award Activity and Balances | |||||||||||||||||||||
The following table summarizes the Company’s stock option activity: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||||||
of | Average | of | Average | of | Average | ||||||||||||||||
Shares | Exercise | Shares | Exercise | Shares | Exercise | ||||||||||||||||
Price | Price | Price | |||||||||||||||||||
(in thousands, except option exercise price and fair value data) | |||||||||||||||||||||
Outstanding, beginning of year | 22,017 | $ | 73.41 | 21,567 | $ | 65 | 22,651 | $ | 57.47 | ||||||||||||
Options granted | 3,653 | 125.27 | 4,511 | 105.38 | 4,372 | 88.01 | |||||||||||||||
Options exercised | (7,629 | ) | 68.05 | (3,187 | ) | 57.36 | (4,928 | ) | 50.02 | ||||||||||||
Options cancelled | (357 | ) | 103.22 | (874 | ) | 89.29 | (528 | ) | 72.39 | ||||||||||||
Outstanding, end of year | 17,684 | 85.83 | 22,017 | 73.41 | 21,567 | 65 | |||||||||||||||
Exercisable, end of year | 9,517 | 67.96 | 12,051 | 59.52 | 10,906 | 56.25 | |||||||||||||||
Weighted average per share fair value of options granted during the year | $ | 38.62 | $ | 27.58 | $ | 22.45 | |||||||||||||||
The aggregate intrinsic value of stock options exercised in 2014, 2013 and 2012 was $652.3 million, $149.7 million and $202.4 million, respectively. | |||||||||||||||||||||
As of December 31, 2014, the weighted average remaining contractual life of options outstanding and options exercisable are 6.1 years and 4.4 years, respectively, and based on the Company’s closing year-end stock price of $212.59 at December 31, 2014, the aggregate intrinsic value of options outstanding and options exercisable are $2,241.7 million and $1,376.4 million, respectively. Upon exercise of stock options, the Company generally issues shares from treasury stock. | |||||||||||||||||||||
The following table summarizes the Company’s restricted share activity: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||||||
of | Average | of | Average | of | Average | ||||||||||||||||
Shares | Grant-Date | Shares | Grant-Date | Shares | Grant-Date | ||||||||||||||||
Fair Value | Fair Value | Fair Value | |||||||||||||||||||
(in thousands, except fair value data) | |||||||||||||||||||||
Restricted share awards, beginning of year | 875 | $ | 76.59 | 1,165 | $ | 67.08 | 1,035 | $ | 57.38 | ||||||||||||
Shares granted | 283 | 155.49 | 178 | 104.66 | 360 | 88.75 | |||||||||||||||
Shares vested | (287 | ) | 70.53 | (406 | ) | 48.2 | (198 | ) | 57.22 | ||||||||||||
Shares cancelled | (55 | ) | 94.63 | (62 | ) | 78.69 | (32 | ) | 59.87 | ||||||||||||
Restricted share awards, end of year | 816 | 104.85 | 875 | 76.59 | 1,165 | 67.08 | |||||||||||||||
Restricted share awards granted in 2014 include special performance-based awards of restricted stock units, or Performance RSUs, to certain executive officers and key employees, excluding the Company's Chief Executive Officer. The purpose of this grant of Performance RSUs is to emphasize the Company’s commitment to executing its strategic plan and further align the compensation of these executive officers and key employees with the delivery of sustained stockholder value. The Performance RSUs will cliff vest, if at all, upon the certification of achievement of both of the following performance targets, subject to the employee’s continuous employment: (1) achievement of 2016 non-GAAP diluted earnings per share of $10.00, excluding the effect of any extraordinary share repurchase program and business combinations; and (2) achievement of a three-year (2014-2016) total stockholder return (stock price appreciation plus dividends), or TSR, that meets or exceeds the three-year median TSR during the same period for our compensation peer group. Under the terms of the merger agreement with Actavis, the Performance RSUs will vest in full upon the closing of the Actavis acquisition of Allergan. The grant date fair value of the Performance RSUs was approximately $18 million, which is recognized as expense over the performance period. | |||||||||||||||||||||
Restricted share awards granted in 2012 include a grant to the Company's Chief Executive Officer of restricted stock units that have both market-based and service-based vesting conditions. The terms of the award allow for up to 165,000 shares of the Company's common stock to be earned if the Company's stock price meets certain thresholds and the Chief Executive Officer remains employed with the Company for five years from the date of grant. As of December 31, 2014 the market-based vesting condition had been met. Under the terms of the merger agreement with Actavis, this award will accelerate in full upon the closing of the Actavis acquisition of Allergan. | |||||||||||||||||||||
The total fair value of restricted shares that vested was $41.4 million in 2014, $43.0 million in 2013 and $17.9 million in 2012, respectively. | |||||||||||||||||||||
Valuation and Expense Recognition of Share-Based Awards | |||||||||||||||||||||
The Company accounts for the measurement and recognition of compensation expense for all share-based awards made to the Company’s employees and directors based on the estimated fair value of the awards. | |||||||||||||||||||||
The following table summarizes share-based compensation expense by award type for the years ended December 31, 2014, 2013 and 2012, respectively: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in millions) | |||||||||||||||||||||
Employee and director stock options | $ | 133.4 | $ | 90.1 | $ | 81.1 | |||||||||||||||
Employee and director restricted share awards | 20.5 | 16.4 | 19.4 | ||||||||||||||||||
Stock contributed to employee benefit plans | 5.8 | 6.2 | 6.1 | ||||||||||||||||||
Pre-tax share-based compensation expense | 159.7 | 112.7 | 106.6 | ||||||||||||||||||
Income tax benefit | (50.6 | ) | (35.8 | ) | (34.6 | ) | |||||||||||||||
Net share-based compensation expense | $ | 109.1 | $ | 76.9 | $ | 72 | |||||||||||||||
The following table summarizes pre-tax share-based compensation expense by expense category for the years ended December 31, 2014, 2013 and 2012, respectively: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in millions) | |||||||||||||||||||||
Cost of sales | $ | 10.9 | $ | 9.4 | $ | 9 | |||||||||||||||
Selling, general and administrative | 103 | 74.1 | 70.1 | ||||||||||||||||||
Research and development | 45.8 | 29.2 | 27.5 | ||||||||||||||||||
Pre-tax share-based compensation expense | $ | 159.7 | $ | 112.7 | $ | 106.6 | |||||||||||||||
The fair value of stock option awards that vest based solely on a service condition is estimated using the Black-Scholes option-pricing model. The fair value of share-based awards that contain a market condition is generally estimated using a Monte Carlo simulation model, and the fair value of modifications to share-based awards is generally estimated using a lattice model. | |||||||||||||||||||||
The determination of fair value using the Black-Scholes, Monte Carlo simulation and lattice models is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. Stock options granted during 2014, 2013 and 2012 were valued using the Black-Scholes option-pricing model with the following weighted-average assumptions: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected volatility | 29.71 | % | 26.22 | % | 25.65 | % | |||||||||||||||
Risk-free interest rate | 1.78 | % | 1.05 | % | 1.07 | % | |||||||||||||||
Expected dividend yield | 0.18 | % | 0.2 | % | 0.26 | % | |||||||||||||||
Expected option life (in years) | 5.72 | 5.73 | 5.73 | ||||||||||||||||||
The Company estimates its stock price volatility based on an equal weighting of the Company’s historical stock price volatility and the average implied volatility of at-the-money options traded in the open market. The risk-free interest rate assumption is based on observed interest rates for the appropriate term of the Company’s stock options. The Company does not target a specific dividend yield for its dividend payments but is required to assume a dividend yield as an input to the Black-Scholes option-pricing model. The dividend yield assumption is based on the Company’s history and an expectation of future dividend amounts. The expected option life assumption is estimated based on actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. | |||||||||||||||||||||
Compensation expense for share-based awards based solely on a service condition is recognized only for those awards that are ultimately expected to vest. An estimated forfeiture rate has been applied to unvested awards for the purpose of calculating compensation cost. Forfeitures were estimated based on historical experience. These estimates are revised, if necessary, in future periods if actual forfeitures differ from the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs. Compensation expense for share-based awards based on a service condition is recognized over the requisite service period using the straight-line single option method. Compensation expense for share-based awards that contain a market condition is recognized over the requisite service period and is not subject to forfeiture unless the requisite service is not rendered prior to satisfaction of the market condition. | |||||||||||||||||||||
As of December 31, 2014, total compensation cost related to non-vested stock options and restricted stock not yet recognized was approximately $224.5 million, which is expected to be recognized over the next 46 months (32 months on a weighted-average basis). The Company has not capitalized as part of inventory any share-based compensation costs because such costs were negligible as of December 31, 2014, 2013 and 2012. |
Financial_Instruments
Financial Instruments | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||
Financial Instruments | Note 11: Financial Instruments | |||||||||||||||
In the normal course of business, operations of the Company are exposed to risks associated with fluctuations in interest rates and foreign currency exchange rates. The Company addresses these risks through controlled risk management that includes the use of derivative financial instruments to economically hedge or reduce these exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes. | ||||||||||||||||
The Company has not experienced any losses to date on its derivative financial instruments due to counterparty credit risk. | ||||||||||||||||
The Company assesses the adequacy and effectiveness of its interest rate and foreign exchange hedge positions by continually monitoring its interest rate swap and foreign exchange forward and option positions both on a stand-alone basis and in conjunction with its underlying interest rate and foreign currency exposures, from an accounting and economic perspective. | ||||||||||||||||
However, given the inherent limitations of forecasting and the anticipatory nature of the exposures intended to be hedged, the Company cannot assure that such programs will offset more than a portion of the adverse financial impact resulting from unfavorable movements in either interest or foreign exchange rates. In addition, the timing of the accounting for recognition of gains and losses related to mark-to-market instruments for any given period may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Company’s consolidated operating results and financial position. | ||||||||||||||||
Interest Rate Risk Management | ||||||||||||||||
The Company’s interest income and expense are more sensitive to fluctuations in the general level of U.S. interest rates than to changes in rates in other markets. Changes in U.S. interest rates affect the interest earned on cash and equivalents and short-term investments and interest expense on debt, as well as costs associated with foreign currency contracts. For a discussion of the Company’s interest rate swap activities, see Note 7, “Notes Payable and Long-Term Debt.” | ||||||||||||||||
Foreign Exchange Risk Management | ||||||||||||||||
Overall, the Company is a net recipient of currencies other than the U.S. dollar and, as such, benefits from a weaker dollar and is adversely affected by a stronger dollar relative to major currencies worldwide. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may negatively affect the Company’s consolidated revenues or operating costs and expenses as expressed in U.S. dollars. | ||||||||||||||||
From time to time, the Company enters into foreign currency option and forward contracts to reduce earnings and cash flow volatility associated with foreign exchange rate changes to allow management to focus its attention on its core business issues. Accordingly, the Company enters into various contracts which change in value as foreign exchange rates change to economically offset the effect of changes in the value of foreign currency assets and liabilities, commitments and anticipated foreign currency denominated sales and operating expenses. The Company enters into foreign currency option and forward contracts in amounts between minimum and maximum anticipated foreign exchange exposures. The Company does not designate these derivative instruments as accounting hedges. | ||||||||||||||||
The Company uses foreign currency option contracts, which provide for the sale or purchase of foreign currencies to economically hedge the currency exchange risks associated with probable but not firmly committed transactions that arise in the normal course of the Company’s business. Probable but not firmly committed transactions are comprised primarily of sales of products and purchases of raw material in currencies other than the U.S. dollar. The foreign currency option contracts are entered into to reduce the volatility of earnings generated in currencies other than the U.S. dollar. While these instruments are subject to fluctuations in value, such fluctuations are anticipated to offset changes in the value of the underlying exposures. | ||||||||||||||||
Changes in the fair value of open foreign currency option contracts and any realized gains (losses) on settled contracts are recorded through earnings as “Other, net” in the accompanying consolidated statements of earnings. During 2014, 2013 and 2012, the Company recognized realized gains on settled foreign currency option contracts of $16.5 million, $6.4 million and $14.2 million, respectively, and net unrealized gains (losses) on open foreign currency option contracts of $37.2 million, $10.4 million and $(15.3) million, respectively. The premium costs of purchased foreign exchange option contracts are recorded in “Other current assets” and amortized to “Other, net” over the life of the options. | ||||||||||||||||
All of the Company’s outstanding foreign exchange forward contracts are entered into to offset the change in value of certain intercompany receivables or payables that are subject to fluctuations in foreign currency exchange rates. The realized and unrealized gains and losses from foreign currency forward contracts and the revaluation of the foreign denominated intercompany receivables or payables are recorded through “Other, net” in the accompanying consolidated statements of earnings. During 2014, 2013 and 2012, the Company recognized total realized and unrealized gains (losses) from foreign exchange forward contracts of $2.0 million, $5.3 million and $(0.9) million, respectively. | ||||||||||||||||
The fair value of outstanding foreign exchange option and forward contracts, collectively referred to as foreign currency derivative financial instruments, are recorded in “Other current assets” and “Accounts payable.” At December 31, 2014 and 2013, foreign currency derivative assets associated with the foreign exchange option contracts of $75.1 million and $20.2 million, respectively, were included in “Other current assets.” At December 31, 2014, net foreign currency derivative liabilities associated with the foreign exchange forward contracts of $3.9 million were included in "Accounts payable."At December 31, 2013, net foreign currency derivative assets associated with the foreign exchange forward contracts of $0.2 million were included in “Other current assets.” | ||||||||||||||||
At December 31, 2014 and 2013, the notional principal and fair value of the Company’s outstanding foreign currency derivative financial instruments were as follows: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Notional | Fair | Notional | Fair | |||||||||||||
Principal | Value | Principal | Value | |||||||||||||
(in millions) | ||||||||||||||||
Foreign currency forward exchange contracts | $ | 32.8 | $ | (2.8 | ) | $ | 35 | $ | 0.1 | |||||||
(Receive U.S. dollar/pay foreign currency) | ||||||||||||||||
Foreign currency forward exchange contracts | 37.5 | (1.1 | ) | 41.3 | 0.1 | |||||||||||
(Pay U.S. dollar/receive foreign currency) | ||||||||||||||||
Foreign currency sold — put options | 849.3 | 75.1 | 560.8 | 20.2 | ||||||||||||
The notional principal amounts provide one measure of the transaction volume outstanding as of December 31, 2014 and 2013, and do not represent the amount of the Company’s exposure to market loss. The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information as of December 31, 2014 and 2013. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments. | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
At December 31, 2014 and 2013, the Company’s other financial instruments included cash and equivalents, short-term investments, trade receivables, equity investments, accounts payable and borrowings. The carrying amount of cash and equivalents, short-term investments, trade receivables and accounts payable approximates fair value due to the short-term maturities of these instruments. The fair value of marketable equity investments, notes payable and long-term debt are estimated based on quoted market prices and interest rates. The fair value of non-marketable equity investments, which represent investments in start-up companies, are estimated based on information provided by these companies. | ||||||||||||||||
The carrying amount and estimated fair value of the Company’s other financial instruments at December 31, 2014 and 2013 were as follows: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(in millions) | ||||||||||||||||
Cash and equivalents | $ | 4,911.40 | $ | 4,911.40 | $ | 3,046.10 | $ | 3,046.10 | ||||||||
Short-term investments | 55 | 55 | 603 | 603 | ||||||||||||
Non-current investments: | ||||||||||||||||
Marketable equity | 20.7 | 20.7 | — | — | ||||||||||||
Non-marketable equity | 26.5 | 26.5 | 20.8 | 20.8 | ||||||||||||
Notes payable | 72.1 | 72.1 | 55.6 | 55.6 | ||||||||||||
Long-term debt | 2,085.30 | 2,095.50 | 2,098.30 | 2,163.80 | ||||||||||||
In 2014 and 2013, the Company recorded impairment charges of $3.1 million and $3.7 million, respectively, included in "Other, net" non-operating expense due to the other than temporary decline in value of non-marketable equity investments. | ||||||||||||||||
Concentration of Credit Risk | ||||||||||||||||
Financial instruments that potentially subject the Company to credit risk principally consist of trade receivables. Wholesale distributors, major retail chains and managed care organizations account for a substantial portion of trade receivables. This risk is limited due to the number of customers comprising the Company’s customer base, and their geographic dispersion. At December 31, 2014, trade receivables from McKesson Drug Company represented approximately 11% of total trade receivables, net. Ongoing credit evaluations of customers’ financial condition are performed and, generally, no collateral is required. The Company has purchased an insurance policy intended to reduce the Company’s exposure to potential credit risks associated with certain U.S. customers. To date, no claims have been made against the insurance policy. | ||||||||||||||||
The allowance for doubtful accounts at December 31, 2014 and 2013 was $66.7 million and $24.2 million, respectively. The allowance for doubtful accounts at December 31, 2014 includes the addition of $37.3 million of allowances in the third quarter of 2014 for estimated uncollectible U.S. dollar denominated trade receivables from customers in Venezuela. Except for the addition of allowances in 2014 related to the trade receivables in Venezuela, the Company maintains reserves for potential credit losses and such losses, in the aggregate, have not historically exceeded management’s estimates. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements | Note 12: Fair Value Measurements | |||||||||||||||
The Company measures fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||||||
As of December 31, 2014 and 2013, the Company has certain assets and liabilities that are required to be measured at fair value on a recurring basis. These include cash equivalents, short-term investments, marketable equity securities, foreign currency derivatives, deferred executive compensation investments and liabilities and contingent consideration liabilities. These assets and liabilities are classified in the table below in one of the three categories of the fair value hierarchy described above. | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 55 | $ | — | $ | 55 | $ | — | ||||||||
Foreign time deposits | 47.7 | — | 47.7 | — | ||||||||||||
Other cash equivalents | 4,173.90 | — | 4,173.90 | — | ||||||||||||
Marketable equity securities | 20.7 | 20.7 | — | — | ||||||||||||
Foreign currency derivative assets | 75.1 | — | 75.1 | — | ||||||||||||
Deferred executive compensation investments | 112.9 | 90.3 | 22.6 | — | ||||||||||||
$ | 4,485.30 | $ | 111 | $ | 4,374.30 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Foreign currency derivative liabilities | $ | 3.9 | $ | — | $ | 3.9 | $ | — | ||||||||
Deferred executive compensation liabilities | 105.7 | 83.1 | 22.6 | — | ||||||||||||
Contingent consideration liabilities | 365.9 | — | — | 365.9 | ||||||||||||
$ | 475.5 | $ | 83.1 | $ | 26.5 | $ | 365.9 | |||||||||
December 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 2,016.80 | $ | — | $ | 2,016.80 | $ | — | ||||||||
Foreign time deposits | 370.3 | — | 370.3 | — | ||||||||||||
Other cash equivalents | 1,080.40 | — | 1,080.40 | — | ||||||||||||
Foreign currency derivative assets | 20.4 | — | 20.4 | — | ||||||||||||
Deferred executive compensation investments | 100.7 | 80.4 | 20.3 | — | ||||||||||||
$ | 3,588.60 | $ | 80.4 | $ | 3,508.20 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred executive compensation liabilities | 93 | 72.7 | 20.3 | — | ||||||||||||
Contingent consideration liabilities | 225.2 | — | — | 225.2 | ||||||||||||
$ | 318.2 | $ | 72.7 | $ | 20.3 | $ | 225.2 | |||||||||
Cash equivalents consist of commercial paper, foreign time deposits and other cash equivalents. Other cash equivalents consist primarily of money-market fund investments. Short-term investments consist of commercial paper and foreign time deposits. Cash equivalents and short-term investments are valued at cost, which approximates fair value due to the short-term maturities of these instruments. Marketable equity securities are valued using quoted stock prices from the National Association of Securities Dealers Automated Quotation System at the reporting date. Foreign currency derivative assets and liabilities are valued using quoted forward foreign exchange prices and option volatility at the reporting date. The Company believes the fair values assigned to its derivative instruments as of December 31, 2014 and 2013 are based upon reasonable estimates and assumptions. Assets and liabilities related to deferred executive compensation consist of actively traded mutual funds classified as Level 1 and money-market funds classified as Level 2. | ||||||||||||||||
Contingent consideration liabilities represent future amounts the Company may be required to pay in conjunction with various business combinations. The ultimate amount of future payments is based on specified future criteria, such as sales performance and the achievement of certain future development, regulatory and sales milestones and other contractual performance conditions. The Company evaluates its estimates of the fair value of contingent consideration liabilities on a periodic basis. Any changes in the fair value of contingent consideration liabilities are recorded as SG&A expense. | ||||||||||||||||
The Company estimates the fair value of the contingent consideration liabilities related to sales performance using the income approach, which involves forecasting estimated future net cash flows and discounting the net cash flows to their present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities related to the achievement of future development and regulatory milestones by assigning an achievement probability to each potential milestone and discounting the associated cash payment to its present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities associated with sales milestones by employing Monte Carlo simulations to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. The fair value of other contractual performance conditions is measured by assigning an achievement probability to each payment and discounting the payment to its present value using the Company's estimated cost of borrowing. The unobservable inputs to the valuation models that have the most significant effect on the fair value of the Company's contingent consideration liabilities are the probabilities that certain in-process development projects will meet specified development milestones, including ultimate approval by the FDA. The Company currently estimates that the probabilities of success in meeting the specified development milestones are between 30% and 80%. | ||||||||||||||||
The following table provides a reconciliation of the change in the contingent consideration liabilities for the years ended December 31, 2014 and 2013: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
(in million) | ||||||||||||||||
Balance, beginning of year | $ | 225.2 | $ | 224.3 | ||||||||||||
Additions during the period related to business combinations | 170.5 | — | ||||||||||||||
Change in the estimated fair value of the contingent consideration liabilities | (15.1 | ) | 70.7 | |||||||||||||
Payments made during the period | (10.2 | ) | (61.2 | ) | ||||||||||||
Foreign exchange translation effects | (4.5 | ) | (8.6 | ) | ||||||||||||
Balance, end of year | $ | 365.9 | $ | 225.2 | ||||||||||||
The change in estimated fair value of contingent consideration liabilities during 2013 is primarily related to positive results from a Phase II clinical trial for the Company's novel compound to treat erythema associated with rosacea that was acquired in connection with the 2011 acquisition of Vicept Therapeutics, Inc. The successful completion of this Phase II clinical trial increased the technology's probability of success in meeting future specified development milestones and, accordingly, increased the Company's estimated fair value of the related contingent consideration liability. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13: Commitments and Contingencies |
Legal Proceedings | |
In the ordinary course of business, the Company is involved in various legal actions, government investigations and environmental proceedings, and we anticipate that additional actions will be brought against us in the future. The most significant of these actions, proceedings and investigations are described below. | |
The Company’s legal proceedings range from cases brought by a single plaintiff to a class action with thousands of putative class members. These legal proceedings, as well as other matters, involve various aspects of the Company’s business and a variety of claims (including but not limited to patent infringement, marketing, product liability, pricing and trade practices and securities law), some of which present novel factual allegations and/or unique legal theories. Complex legal proceedings frequently extend for several years, and a number of the matters pending against the Company are at very early stages of the legal process. As a result, some pending matters have not yet progressed sufficiently through discovery and/or development of important factual information and legal issues to enable the Company to determine whether the proceeding is material to the Company or to estimate a range of possible loss, if any. Unless otherwise disclosed, the Company is unable to estimate the possible loss or range of loss for the legal proceedings described below. Litigation is unpredictable and, while it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows. | |
Stockholder Derivative Litigation | |
Botox® Settlement-Related Actions | |
In 2010, Daniel Himmel, Willa Rosenbloom, the Pompano Beach Police & Firefighters’ Retirement System and the Western Washington Laborers-Employers Pension Trust separately filed stockholder derivative complaints against the Company’s then-current Board of Directors as of September 2010 and Allergan, Inc. in the U.S. District Court for the Central District of California alleging violations of federal securities laws, breaches of fiduciary duties, abuse of control, gross mismanagement, and corporate waste and seeks, among other things, damages, corporate governance reforms, attorneys’ fees and costs. The actions were subsequently consolidated. In 2012, the U.S. District Court entered an order granting the Company’s and the individual defendants’ motion to dismiss the first amended verified consolidated complaint and dismissed the consolidated action with prejudice. The plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit and their opening appellate brief. The Company and the individual defendants have filed an answering appellate brief. In June 2014, the U.S. Court of Appeals for the Ninth Circuit heard oral argument on plaintiffs’ appeal regarding the U.S. District Court for the Central District of California’s granting of the Company’s and the individual defendants’ motion to dismiss and took the matter under submission. In September 2014, the U.S. Court of Appeals for the Ninth Circuit reversed the U.S. District Court’s dismissal and remanded the matter for further proceedings. | |
In October 2014, the individual defendants filed a motion to dismiss. In October 2014, the Company filed a motion to stay the case pending investigation and determinations of the Special Litigation Committee appointed by the Company's Board of Directors, which was granted in December 2014. | |
Delaware Action. In September 2010, Louisiana Municipal Police Employees’ Retirement System (LMPRS) filed a complaint in the Court of Chancery of the State of Delaware alleging derivative claims against the Company’s then-current Board of Directors and nominally the Company for breach of fiduciary duties related to certain alleged sales and marketing practices concerning Botox®. In June 2011, the court ordered that U.F.C.W. Local 1776 & Participating Employers Pension Fund (UFCW Fund) may intervene. In February 2012, the Company and the individual defendants filed a memorandum regarding the preclusive effect of the U.S. District Court of California’s dismissal of a related consolidated shareholders derivative action. In June 2012, the court denied the motions to dismiss. In April 2013, the Supreme Court of the State of Delaware en banc reversed the Court of Chancery’s judgment denying the Company and the individual defendants’ motions to dismiss and in July 2013, the Court of Chancery dismissed the matter with prejudice. In September 2014, Court of Chancery of the State of Delaware granted the plaintiffs’ motion for relief from the final order of July 2013 based on the U.S. Court of Appeals for the Ninth Circuit reversal of the U.S. District Court of the State of California’s dismissal of the related consolidated shareholder derivative action. | |
In November 2014, the Company filed a motion to stay the case pending investigation and determinations of the Special Litigation Committee appointed by the Company's Board of Directors, which was granted in December 2014. | |
Government Investigations | |
In May 2012, the Company received service of process of a Subpoena Duces Tecum from the Department of Health and Human Services, Office of the Inspector General. The subpoena requests the production of documents relating to Lap-Band®. In February 2013, the Company received a Civil Investigative Demand from the U.S. Department of Justice requesting information relating to the Lap-Band®. | |
Patent Litigation | |
We are involved in patent litigation matters, including certain paragraph 4 invalidity and non-infringement claims brought under the Hatch-Waxman Act in the United States described below. | |
Combigan® | |
Combigan® I. After Sandoz, Inc. (Sandoz), Alcon Research, Ltd. and its affiliates (Alcon), Hi-Tech, Apotex Corp. (Apotex), Watson Pharma, Inc. and Watson Pharmaceuticals, Inc. (Watson, and collectively, the Combigan Defendants) each filed an ANDA seeking approval of generic forms of Combigan®, a brimonidine tartrate 0.2%, timolol 0.5% ophthalmic solution, the Company received paragraph 4 invalidity and noninfringement certifications from the Combigan Defendants contending that U.S. Patent Numbers 7,030,149, 7,320,976, 7,323,463 and 7,642,258 (the Combigan Patents) are invalid or not infringed by the proposed generic products. The Company filed a complaint against the Combigan Defendants in the U.S. District Court for the Eastern District of Texas, Marshall Division, alleging infringement of the Combigan Patents. Before trial, the Company settled with Hi-Tech. In 2011, the U.S. District Court held a bench trial and issued its opinion holding that the Combigan Patents are not invalid and are infringed by defendants’ proposed products, and entered a final judgment and injunction in the Company’s favor. In May 2013, the U.S. Court of Appeals for the Federal Circuit affirmed the ruling of the U.S. District Court finding that U.S. Patent Number 7,030,149 is not invalid, affirmed the District Court’s claim construction ruling and reversed the District Court’s ruling finding that the asserted claims of U.S. Patent Number 7,323,463 are not invalid; the Court of Appeals declined to address the claims regarding U.S. Patent Numbers 7,320,976 and 7,642,258. In January 2014, Sandoz and Alcon filed a Petition for Writ of Certiorari to the U.S. Supreme Court appealing this Court of Appeals ruling. In September and October 2013, Sandoz, Alcon, and Apotex filed a motion seeking to modify the permanent injunction issued by the U.S. District Court for the Eastern District of Texas. In December 2013, the U.S. District Court for the Eastern District of Texas denied Sandoz, Alcon, and Apotex’s motion to modify the permanent injunction. In February 2014, Sandoz, Alcon and Apotex filed a Notice of Appeal to the U.S. Court of Appeals for the Federal Circuit appealing this District Court ruling. In March 2014, the U.S. Supreme Court denied Sandoz, Inc., Alcon Research, Ltd. and Falcon Pharmaceuticals, Ltd.’s Petition for Writ of Certiorari. | |
In December 2014, the U.S. Court of Appeals for the Federal Circuit affirmed the U.S. District Court for the Eastern District of Texas’ denial of Sandoz, Alcon, and Apotex’s amended motion to modify the injunction. In December 2014, the U.S. District Court for the Eastern District of Texas entered judgment denying Sandoz, Alcon, and Apotex’s amended motion to modify the injunction. | |
Combigan® II. In 2012, the Company filed a complaint against Sandoz, Alcon, Apotex and Watson in the U.S. District Court for the Eastern District of Texas, Marshall Division, alleging that their proposed products infringe U.S. Patent Number 8,133,890 (‘890 Patent), and subsequently amended their complaint to assert infringement of U.S. Patent Number 8,354,409. In March 2013, the Company received a paragraph 4 invalidity and noninfringement certification from Sandoz, contending that the ‘890 Patent is invalid and not infringed by the proposed generic product. In October 2013, the Company filed a motion to stay and administratively close the Combigan II matter, which was granted. | |
Latisse®. After Apotex, Sandoz, Hi-Tech and Watson each filed an ANDA seeking approval of a generic form of Latisse® 0.03% bimatoprost ophthalmic solution, the Company received paragraph 4 invalidity and noninfringement certifications from Apotex, Sandoz, Hi-Tech and Watson contending that U.S. Patent Numbers 7,351,404 (‘404 Patent), 7,388,029 (‘029 Patent), 8,038,988 (‘988 Patent) and 8,101,161 (‘161 Patent) are invalid or not infringed by the proposed generic products. The Company, with Duke University, filed complaints against Sandoz, Alcon, Apotex and Watson in the U.S. District Court for the Middle District of North Carolina alleging that their proposed products infringe the ‘404, ‘029, ‘988 and ‘161 Patents. | |
In 2012, the U.S. District Court commenced a bench trial on the ‘404 and ‘029 Patents in the Apotex, Sandoz, and Hi-Tech actions. In January 2013, the U.S. District Court issued its opinion holding that the ‘404 and ‘029 Patents are not invalid and are infringed by Apotex, Sandoz, and Hi-Tech’s proposed products and entered a final judgment in the Company’s favor and against these defendants. In February 2013, the U.S. District Court issued judgment for the Company and Duke University against Watson, finding that the ‘404 and ‘029 Patents are not invalid and are infringed by Watson’s proposed product. In February 2013, the Company and Duke filed motions for permanent injunction as to Apotex, Sandoz, Hi-Tech and Watson. In February 2013, Apotex, Sandoz and Hi-Tech filed a Notice of Appeal. The U.S. District Court has not yet set a trial date for the actions on the ‘988 and ‘161 Patents. | |
In January 2013, the Company filed a complaint against Apotex, Sandoz, Hi-Tech and Watson in the U.S. District Court for the Middle District of North Carolina alleging that the defendants’ proposed products infringe U.S. Patent Number 8,263,054. No trial date has been set. In April 2013, the U.S. District Court granted the Company and Duke University’s motions for permanent injunction as to Apotex, Sandoz, Hi-Tech, and Watson. In April 2013, the U.S. District Court for the Middle District of North Carolina entered a permanent injunction against Apotex, Sandoz, Hi-Tech, and Watson. In May 2013, the U.S. Court of Appeals for the Federal Circuit denied the Company’s motion to dismiss Apotex, Sandoz, and Hi-Tech’s appeal, but granted it with respect to Watson. In May 2013, Watson filed an amended notice of appeal and its appeal was consolidated with that of Apotex, Sandoz, and Hi-Tech. In February 2014, the U.S. Court of Appeals for the Federal Circuit heard oral argument on Apotex, Sandoz, Hi-Tech, and Watson’s appeal regarding the ‘404 and ‘029 Patents and took the matter under submission. In June 2014, the U.S. Court of Appeals for the Federal Circuit reversed the finding of the U.S. District Court for the Middle District of North Carolina and held that U.S. Patent Numbers 7,351,404 and 7,388,029 are invalid. | |
In June 2014, Apotex filed an ANDA seeking approval of a generic form of Latisse® 0.03% bimatoprost ophthalmic solution. The Company subsequently received a paragraph 4 invalidity and noninfringement certification from Apotex contending that U.S. Patent Numbers 8,632,760 (‘760 Patent) and 8,541,466 (‘466 Patent) are invalid or not infringed by Apotex’s proposed generic product. | |
In June 2014, Sandoz filed an ANDA seeking approval of a generic form of Latisse® 0.03% bimatoprost ophthalmic solution. The Company subsequently received a paragraph 4 invalidity and noninfringement certification from Sandoz contending that U.S. Patent Numbers 8,038,988, 8,101,161, 8,263,054, ‘760 Patent, and ‘466 Patent are invalid or not infringed by Sandoz’s proposed generic product. | |
In August 2014, the Company received paragraph 4 invalidity and noninfringement certifications from Apotex contending that U.S. Patent Number 8,758,733 (the ’733 Patent) is invalid or not infringed by Apotex’s proposed generic product. | |
In August 2014, the Company and Duke University filed a petition for panel or en banc rehearing in the U.S. Court of Appeals for the Federal Circuit, which was denied in September 2014. In September 2014, the U.S. Court of Appeal for the Federal Circuit issued a mandate. In October 2014, the Company filed a Petition for Writ of Certiorari to the U.S. Supreme Court appealing the Court of Appeals’ ruling. | |
In November 2014, the Company filed motions to dismiss its claims on the ‘998, ‘161, and ‘054 patents, which were granted in January 2015. | |
In December 2014, the Company filed complaints against Apotex, Sandoz, Akorn, Inc., Hi-Tech, and Watson in the U.S. District Court for the Middle District of North Carolina alleging that the defendants’ proposed products infringe U.S. Patent Number 8,906,962. In January 2015, the Company filed amended complaints against Apotex, Sandoz, Akorn, Inc., Hi-Tech, and Watson in the U.S. District Court for the Middle District of North Carolina alleging that the defendants’ proposed products infringe U.S. Patent Numbers 8,906,962 and 8,926,953. | |
In January 2015, the U.S. Supreme Court denied the Company’s Petition for Writ of Certiorari. | |
Lumigan® 0.01%. After Sandoz, Lupin, Hi-Tech and Watson (the Lumigan Defendants) each filed an ANDA seeking approval of a generic form of Lumigan® 0.01% bimatoprost ophthalmic solution, the Company received paragraph 4 invalidity and noninfringement certifications contending that U.S. Patent Numbers 7,851,504 and 5,688,819 (Lumigan Patents) are invalid or not infringed by the proposed generic products. The Company filed complaints against the Lumigan Defendants in the U.S. District Court for the Eastern District of Texas alleging that their proposed products infringe the Lumigan Patents. In January 2013, the Company filed an amended complaint against the Lumigan Defendants alleging that, in addition to the Lumigan Patents, the defendants’ proposed generic products infringe U.S. Patent Numbers 8,278,353, 8,299,118, 8,309,605, and 8,338,479 (Additional Lumigan Patents). In July 2013, a bench trial was held and the U.S. District Court for the Eastern District of Texas took the matter under submission. In 2013, after Lupin and Watson separately filed an ANDA with the FDA seeking approval to market a generic version of Lumigan® 0.01%, the Company received paragraph 4 invalidity and noninfringement certifications from Lupin and Watson, contending that the Additional Lumigan Patents are invalid and not infringed by the proposed generic product. In January 2014, the U.S. District Court issued its opinion holding that the Lumigan Patents and Additional Lumigan Patents (excluding U.S. Patent Number 5,688,819, which claim was previously dismissed by the Company) are not invalid and are infringed by the Lumigan Defendants’ proposed products and entered a final judgment and injunction in the Company’s favor and against the Lumigan Defendants. In February 2014, the Lumigan Defendants filed a Notice of Appeal to the U.S. Court of Appeals for the Federal Circuit. | |
Restasis®. In January 2014, the Company received a purported paragraph 4 certification from Watson contending that it had filed an ANDA seeking approval of a generic form of Restasis® (cyclosporine) ophthalmic emulsion, 0.05%, and that U.S. Patent Number 8,629,111 (Restasis Patent) is invalid, unenforceable and/or not infringed. In March 2014, the Company filed a complaint against Watson in the U.S. District Court for the Eastern District of Texas alleging that Watson sent a premature, improper, null and void paragraph 4 certification and, in the alternative, that its proposed product infringes the Restasis Patent. In April 2014, the Company received a purported paragraph 4 certification from Watson contending that it had filed an ANDA seeking approval of a generic form of Restasis® and that U.S. Patent Numbers 8,633,162, 8,642,556, 8,648,048, and 8,685,930 (together with the Restasis Patent, the Restasis Patents) are invalid, unenforceable and/or not infringed. In May 2014, the Company filed a complaint against Watson in the U.S. District Court for the Eastern District of Texas alleging that Watson sent a premature, improper, null and void paragraph 4 certification and, in the alternative, that its proposed product infringes the Restasis Patents. In April 2014, Watson filed a motion to dismiss for lack of personal jurisdiction. In June 2014, the Company filed a motion for summary judgment on its false paragraph 4 notification claims and a motion to dismiss its patent infringement claims. | |
In June 2014, Watson filed a motion to strike the Company’s motion for summary judgment as premature, or in the alternative, to stay briefing, and a motion to dismiss for lack of personal jurisdiction. In June 2014, the U.S. District Court consolidated the two matters. In July 2014, Watson filed a motion to dismiss for lack of personal jurisdiction in the consolidated case. In August 2014, the U.S. District Court denied Watson’s motion to strike. The U.S. District Court set a trial date of April 2016. | |
In December 2014, the U.S. District Court for the Eastern District of Texas denied Watson’s motion to dismiss for lack of personal jurisdiction and granted the Company’s motion to dismiss patent infringement claims and granted-in-part and denied-in-part the Company’s motion for summary judgment with respect to declaratory judgment claims. | |
Other Litigation | |
Allergan, Inc. v. Cayman Chemical Company, et al. The Company, with Duke University (Duke) and Murray A. Johnstone, M,D. (Johnstone), filed complaints against several defendants, including Athena Cosmetics, Inc. (Athena), Cosmetic Alchemy, LLC (Cosmetic Alchemy), LifeTech Resources, LLC (LifeTech), and Rocasuba, Inc. (Rocasuba), in the U.S. District Court for the Central District of California alleging that the defendants are in violation of the California unfair competition statute and infringing the ‘404 Patent and U.S. Patent Numbers 6,262,105 (‘105 Patent) and 7,388,029 (‘029 Patent). In 2012, the U.S. District Court granted the Company’s motion for partial summary judgment on our unfair competition claim against Athena, Cosmetic Alchemy, LifeTech and Rocasuba. In 2012, the U.S. District Court granted the motion by the Company and Duke to dismiss the claims on the ‘029 patent. The U.S. District Court set trial on the patent claims for May 7, 2013. In January 2013, Athena filed a motion for summary judgment of invalidity of the ‘404 Patent, the Company filed a motion for permanent injunction against Athena, Cosmetic Alchemy, LifeTech and Rocasuba, and the Company and Johnstone filed a motion for partial summary judgment against Cosmetic Alchemy on their patent infringement and contributory infringement claims regarding the ‘105 Patent. In 2013, the Company reached a settlement with LifeTech and Rocasuba and they were dismissed from the case. In February and March 2013, the U.S. District Court for the Central District of California denied Athena motion for summary judgment of invalidity of the ‘404 Patent, granted the Company’s motion for permanent injunction against Athena, Cosmetic Alchemy, LifeTech, and Rocasuba, and granted the Company and Johnstone’s motion for partial summary judgment against Cosmetic Alchemy on its patent infringement and contributory infringement claims regarding the ‘105 Patent. In March 2013, Cosmetic Alchemy was dismissed from the case. In March 2013, Athena filed a Notice of Appeal to the U.S. Court of Appeals for the Federal Circuit. In March 2013, the U.S. District Court dismissed all claims and counterclaims except the Company’s unfair competition claim against Athena. In October 2013, the U.S. Court of Appeals for the Federal Circuit heard oral argument on Athena’s appeal and took the matter under submission. In December 2013, the U.S. Court of Appeals for the Federal Circuit affirmed the U.S. District Court’s grant of summary judgment that Athena violated the California unfair competition statute, vacated the injunction entered by the U.S. District Court, and remanded to the U.S. District Court to limit the scope of the injunction to regulate conduct occurring within California. In May 2014, Athena Cosmetics, Inc. filed a Petition for Writ of Certiorari to the U.S. Supreme Court. | |
Valeant and Pershing Square Insider Trading Action | |
In August 2014, the Company filed a complaint in the U.S. District Court for the Central District of California against Valeant Pharmaceuticals International, Inc. (Valeant), Pershing Square Capital Management, L.P. (Pershing Square) and its principal, William A. Ackman, alleging that Valeant, Pershing Square and Mr. Ackman violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices, and failed to disclose legally required information. The complaint alleges that Valeant, Pershing Square and Mr. Ackman, violated Sections 13(d), 14(a), and 14(e) of the Securities Exchange Act of 1934, as amended (Exchange Act), which prohibit insider trading and require full and fair disclosure for stockholders in the context of proxy solicitations and tender offers, and the rules promulgated by the U.S. Securities and Exchange Commission under those Sections, including Rule 14e-3. In its complaint, the Company is seeking, among other remedies, a declaration from the court that Pershing Square and Valeant violated insider trading and disclosure laws, and an order rescinding Pershing Square’s purchase of the Company shares it acquired illegally. | |
In October 2014, the Company filed a motion for preliminary injunction, the hearing for which was held on October 28, 2014. On November 4, 2014, the U.S. District Court for the Central District of California ruled that serious questions were raised as to whether Valeant and Pershing Square violated Rule 14e-3 of the Exchange Act, which prohibits trading on the basis of material nonpublic information when an offering person has taken a substantial step or steps to commence a tender offer of a target company. The Court ordered that Valeant and Pershing Square make certain corrective disclosures to their September 24, 2014 proxy solicitation statement. | |
In December 2014, the U.S. District Court for the Central District of California set trial for June 28, 2016. On December 26, 2014, Defendants filed a motion for summary judgment. The Court set the hearing on that motion for March 23, 2015. On January 26, 2015, the Company filed an amended complaint. The amended complaint alleges that Valeant, Pershing Square and Mr. Ackman violated Section 14(e) of the Exchange Act, and that Pershing Square and Mr. Ackman violated Section 13(d) of the Exchange Act. | |
Contingencies | |
The Company is largely self-insured for future product liability losses related to all of its products. The Company has historically been and continues to be self-insured for any product liability losses related to its breast implant products. Future product liability losses are, by their nature, uncertain and are based upon complex judgments and probabilities. The Company accrues for certain potential product liability losses estimated to be incurred, but not reported, to the extent they can be reasonably estimated. The Company estimates these accruals for potential losses based primarily on historical claims experience and data regarding product usage. The total value of self-insured product liability claims settled in 2014, 2013 and 2012, respectively, and the value of known and reasonably estimable incurred but unreported self-insured product liability claims pending as of December 31, 2014 and 2013 are not material. | |
The Company has provided reserves for contingencies related to various lawsuits, claims and contractual disputes that management believes are probable and reasonably estimable. The amounts reserved for these contingencies as of December 31, 2014 and 2013 are not material. | |
Operating Lease Obligations | |
The Company leases certain facilities, office equipment and automobiles and provides for payment of taxes, insurance and other charges on certain of these leases. Rental expense was $73.4 million in 2014, $79.0 million in 2013 and $67.0 million in 2012. | |
Future minimum rental payments under non-cancelable operating lease commitments with a term of more than one year as of December 31, 2014 are as follows: $60.2 million in 2015, $47.1 million in 2016, $32.7 million in 2017, $20.6 million in 2018, $15.5 million in 2019 and $51.1 million thereafter. |
Guarantees
Guarantees | 12 Months Ended |
Dec. 31, 2014 | |
Guarantees [Abstract] | |
Guarantees | Note 14: Guarantees |
The Company’s Amended and Restated Certificate of Incorporation provides that the Company will indemnify, to the fullest extent permitted by the Delaware General Corporation Law, each person that is involved in or is, or is threatened to be, made a party to any action, suit or proceeding by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Company or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. The Company has also entered into contractual indemnity agreements with each of its directors and executive officers pursuant to which, among other things, the Company has agreed to indemnify such directors and executive officers against any payments they are required to make as a result of a claim brought against such executive officer or director in such capacity, excluding claims (i) relating to the action or inaction of a director or executive officer that resulted in such director or executive officer gaining illegal personal profit or advantage, (ii) for an accounting of profits made from the purchase or sale of securities of the Company within the meaning of Section 16(b) of the Exchange Act, or similar provisions of any state law or (iii) that are based upon or arise out of such director’s or executive officer’s knowingly fraudulent, deliberately dishonest or willful misconduct. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies intended to reduce the Company’s monetary exposure and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions, but makes no assurance that such amounts will not be paid in the future. The Company currently believes the estimated fair value of these indemnification arrangements is minimal. | |
The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trials investigators in its drug, biologics and medical device development programs, in sponsored research agreements with academic and not-for-profit institutions, in various comparable agreements involving parties performing services for the Company in the ordinary course of business, in agreements with financial advisors, and in its real estate leases. The Company also customarily agrees to certain indemnification provisions in its acquisition agreements and discovery and development collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s products, compounds or drug candidates. With respect to financial advisor agreements, the indemnification provisions typically apply to any claim asserted against the advisors relating to their scope of work for the Company, including claims related to acquisition or merger transactions. With respect to real estate lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s acquisition agreements and collaboration agreements are similar, but in addition often provide indemnification for the collaborator in the event of third party claims alleging infringement of intellectual property rights. In each of the above cases, the terms of these indemnification provisions generally survive the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability intended to reduce the Company’s exposure for indemnification and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal. |
Product_Warranties
Product Warranties | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Product Warranties Disclosures [Abstract] | ||||||||
Product Warranties | Note 15: Product Warranties | |||||||
The Company provides warranty programs for breast implant sales primarily in the United States, Europe and certain other countries. Management estimates the amount of potential future claims from these warranty programs based on actuarial analyses. Expected future obligations are determined based on the history of product shipments and claims and are discounted to a current value. The liability is included in both current and long-term liabilities in the Company’s consolidated balance sheets. The U.S. programs include the ConfidencePlus® and ConfidencePlus® Premier warranty programs. The ConfidencePlus® program, which is limited to saline breast implants, currently provides lifetime product replacement and contralateral implant replacement. The ConfidencePlus® Premier program, which is standard for silicone gel implants and requires a low enrollment fee for saline breast implants, generally provides lifetime product replacement, $2,400 of financial assistance for saline breast implants and $3,500 of financial assistance for silicone gel breast implants for surgical procedures within ten years of implantation and contralateral implant replacement. The warranty programs in non-U.S. markets generally have similar terms and conditions to the U.S. programs. The Company does not warrant any level of aesthetic result and, as required by government regulation, makes extensive disclosures concerning the risks of the use of its products and breast implant surgery. Changes to actual warranty claims incurred and interest rates could have a material impact on the actuarial analysis and the Company’s estimated liabilities. A large majority of the product warranty liability arises from the U.S. warranty programs. The Company does not currently offer any similar warranty program on any other product. | ||||||||
The following table provides a reconciliation of the change in estimated product warranty liabilities for the years ended December 31, 2014 and 2013: | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Balance, beginning of year | $ | 33.6 | $ | 34.4 | ||||
Provision for warranties issued during the year | 12 | 8 | ||||||
Settlements made during the year | (9.4 | ) | (8.1 | ) | ||||
Decreases in warranty estimates | — | (0.7 | ) | |||||
Balance, end of year | $ | 36.2 | $ | 33.6 | ||||
Current portion | $ | 7.7 | $ | 7.6 | ||||
Non-current portion | 28.5 | 26 | ||||||
Total | $ | 36.2 | $ | 33.6 | ||||
Business_Segment_Information
Business Segment Information | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||
Business Segment Information | Note 16: Business Segment Information | |||||||||||||||||||||||||||||||
The Company operates its business on the basis of two reportable segments — specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces a broad range of pharmaceutical products, including: ophthalmic products for dry eye, glaucoma, inflammation, infection, allergy and retinal disease; Botox® for certain therapeutic and aesthetic indications; skin care products for acne, psoriasis, eyelash growth and other prescription and physician-dispensed skin care products; and urologics products. The medical devices segment produces a broad range of medical devices, including: breast implants for augmentation, revision and reconstructive surgery and tissue expanders; and facial aesthetics products. The Company provides global marketing strategy teams to ensure development and execution of a consistent marketing strategy for its products in all geographic regions that share similar distribution channels and customers. | ||||||||||||||||||||||||||||||||
The Company evaluates segment performance on a product net sales and operating income basis exclusive of general and administrative expenses and other indirect costs, legal settlement expenses, impairment of intangible assets and related costs, restructuring charges, amortization of certain identifiable intangible assets related to business combinations, asset acquisitions and related capitalized licensing costs and certain other adjustments, which are not allocated to the Company’s segments for performance assessment by the Company’s chief operating decision maker. Other adjustments excluded from the Company’s segments for performance assessment represent income or expenses that do not reflect, according to established Company-defined criteria, operating income or expenses associated with the Company’s core business activities. Because operating segments are generally defined by the products they design and sell, they do not make sales to each other. The Company does not discretely allocate assets to its operating segments, nor does the Company’s chief operating decision maker evaluate operating segments using discrete asset information. | ||||||||||||||||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Product net sales: | ||||||||||||||||||||||||||||||||
Specialty pharmaceuticals | $ | 6,012.10 | $ | 5,339.00 | $ | 4,784.60 | ||||||||||||||||||||||||||
Medical devices | 1,114.00 | 858.5 | 764.7 | |||||||||||||||||||||||||||||
Total product net sales | 7,126.10 | 6,197.50 | 5,549.30 | |||||||||||||||||||||||||||||
Other revenues | 111.8 | 102.9 | 97.3 | |||||||||||||||||||||||||||||
Total revenues | $ | 7,237.90 | $ | 6,300.40 | $ | 5,646.60 | ||||||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||||||||
Specialty pharmaceuticals | $ | 2,832.30 | $ | 2,282.00 | $ | 1,997.70 | ||||||||||||||||||||||||||
Medical devices | 382.9 | 246.2 | 229.1 | |||||||||||||||||||||||||||||
Total segments | 3,215.20 | 2,528.20 | 2,226.80 | |||||||||||||||||||||||||||||
General and administrative expenses, other indirect costs and other adjustments | 854.4 | 594.6 | 525.3 | |||||||||||||||||||||||||||||
Amortization of intangible assets (a) | 106.5 | 107.4 | 66.7 | |||||||||||||||||||||||||||||
Impairment of intangible assets and related costs | — | 11.4 | 22.3 | |||||||||||||||||||||||||||||
Restructuring charges | 245 | 5.5 | 1.5 | |||||||||||||||||||||||||||||
Total operating income | $ | 2,009.30 | $ | 1,809.30 | $ | 1,611.00 | ||||||||||||||||||||||||||
—————————— | ||||||||||||||||||||||||||||||||
(a) | Represents amortization of certain identifiable intangible assets related to business combinations and asset acquisitions and related capitalized licensing costs, as applicable. | |||||||||||||||||||||||||||||||
Product net sales for the Company’s various global product portfolios are presented below. The Company’s principal geographic markets are the United States, Europe, Latin America and Asia Pacific. The U.S. information is presented separately as it is the Company’s headquarters country. U.S. sales represented 63.4%, 62.0% and 60.9% of the Company’s total consolidated product net sales in 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||||||||
Sales to two customers in the Company’s specialty pharmaceuticals segment each generated over 10% of the Company’s total consolidated product net sales. Sales to McKesson Drug Company for the years ended December 31, 2014, 2013 and 2012 were 14.2%, 15.0% and 14.6%, respectively, of the Company’s total consolidated product net sales. Sales to Cardinal Health, Inc. for the years ended December 31, 2014, 2013 and 2012 were 10.7%, 13.0% and 14.7%, respectively, of the Company’s total consolidated product net sales. No other country or single customer generates over 10% of the Company’s total consolidated product net sales. Other medical devices product net sales represent sales made pursuant to certain transitional manufacturing and distribution service agreements with Apollo related to the sale of the Company's obesity intervention business unit. Net sales for the Europe region also include sales to customers in Africa and the Middle East, and net sales in the Asia Pacific region include sales to customers in Australia and New Zealand. | ||||||||||||||||||||||||||||||||
Product Net Sales by Product Line | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Specialty Pharmaceuticals: | ||||||||||||||||||||||||||||||||
Eye Care Pharmaceuticals | $ | 3,257.90 | $ | 2,890.30 | $ | 2,692.20 | ||||||||||||||||||||||||||
Botox®/Neuromodulators | 2,230.60 | 1,982.20 | 1,766.30 | |||||||||||||||||||||||||||||
Skin Care and Other | 523.6 | 466.5 | 326.1 | |||||||||||||||||||||||||||||
Total Specialty Pharmaceuticals | 6,012.10 | 5,339.00 | 4,784.60 | |||||||||||||||||||||||||||||
Medical Devices: | ||||||||||||||||||||||||||||||||
Breast Aesthetics | 406.7 | 377.9 | 377.1 | |||||||||||||||||||||||||||||
Facial Aesthetics | 661.8 | 477.5 | 387.6 | |||||||||||||||||||||||||||||
Core Medical Devices | 1,068.50 | 855.4 | 764.7 | |||||||||||||||||||||||||||||
Other | 45.5 | 3.1 | — | |||||||||||||||||||||||||||||
Total Medical Devices | 1,114.00 | 858.5 | 764.7 | |||||||||||||||||||||||||||||
Total product net sales | $ | 7,126.10 | $ | 6,197.50 | $ | 5,549.30 | ||||||||||||||||||||||||||
Geographic Information | ||||||||||||||||||||||||||||||||
Product Net Sales | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
United States | $ | 4,520.50 | $ | 3,839.40 | $ | 3,379.10 | ||||||||||||||||||||||||||
Europe | 1,410.30 | 1,237.80 | 1,095.50 | |||||||||||||||||||||||||||||
Latin America | 382 | 383 | 386.3 | |||||||||||||||||||||||||||||
Asia Pacific | 512.3 | 464.1 | 432.3 | |||||||||||||||||||||||||||||
Other | 301 | 273.2 | 256.1 | |||||||||||||||||||||||||||||
Total product net sales | $ | 7,126.10 | $ | 6,197.50 | $ | 5,549.30 | ||||||||||||||||||||||||||
Long-lived Assets | Depreciation and | Capital Expenditures | ||||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
United States | $ | 4,497.00 | $ | 4,274.70 | $ | 187.3 | $ | 181.2 | $ | 153.5 | $ | 98.4 | $ | 82.3 | $ | 75.7 | ||||||||||||||||
Europe | 627.1 | 569.9 | 48.5 | 49.6 | 48.1 | 136.4 | 79.7 | 59.5 | ||||||||||||||||||||||||
Latin America | 49.4 | 52.2 | 7.1 | 7.7 | 8.1 | 6.9 | 7.6 | 6 | ||||||||||||||||||||||||
Asia Pacific | 47.3 | 51.2 | 4.8 | 5 | 4.6 | 2.2 | 2.3 | 2 | ||||||||||||||||||||||||
Other | 1.9 | 1.4 | 0.4 | 0.6 | 0.8 | — | — | 0.1 | ||||||||||||||||||||||||
Total | $ | 5,222.70 | $ | 4,949.40 | $ | 248.1 | $ | 244.1 | $ | 215.1 | $ | 243.9 | $ | 171.9 | $ | 143.3 | ||||||||||||||||
The increase in long-lived assets in the United States at December 31, 2014 compared to December 31, 2013 is primarily due to an increase in intangible assets and goodwill related to the acquisition of LiRIS completed in the third quarter of 2014. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | Note 17: Earnings Per Share | |||||||||||
The table below presents the computation of basic and diluted earnings per share: | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions, except per share amounts) | ||||||||||||
Net earnings attributable to Allergan, Inc.: | ||||||||||||
Earnings from continuing operations attributable to Allergan, Inc.: | ||||||||||||
Earnings from continuing operations | $ | 1,532.60 | $ | 1,272.50 | $ | 1,100.70 | ||||||
Less net earnings attributable to noncontrolling interest | 4.6 | 3.6 | 3.7 | |||||||||
Earnings from continuing operations attributable to Allergan, Inc. | 1,528.00 | 1,268.90 | 1,097.00 | |||||||||
(Loss) earnings from discontinued operations | (3.8 | ) | (283.8 | ) | 1.8 | |||||||
Net earnings attributable to Allergan, Inc. | $ | 1,524.20 | $ | 985.1 | $ | 1,098.80 | ||||||
Weighted average number of shares outstanding | 297.6 | 296.8 | 301.5 | |||||||||
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price | 6.4 | 5 | 5.6 | |||||||||
Diluted shares | 304 | 301.8 | 307.1 | |||||||||
Basic earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||
Continuing operations | $ | 5.13 | $ | 4.28 | $ | 3.64 | ||||||
Discontinued operations | (0.01 | ) | (0.96 | ) | — | |||||||
Net basic earnings per share attributable to Allergan, Inc. stockholders | $ | 5.12 | $ | 3.32 | $ | 3.64 | ||||||
Diluted earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||
Continuing operations | $ | 5.03 | $ | 4.2 | $ | 3.57 | ||||||
Discontinued operations | (0.02 | ) | (0.94 | ) | 0.01 | |||||||
Net diluted earnings per share attributable to Allergan, Inc. stockholders | $ | 5.01 | $ | 3.26 | $ | 3.58 | ||||||
For the year ended December 31, 2014, options to purchase 2.7 million shares of common stock at exercise prices ranging from $104.77 to $172.43 per share were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. | ||||||||||||
For the year ended December 31, 2013, options to purchase 5.5 million shares of common stock at exercise prices ranging from $81.06 to $113.55 per share were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. | ||||||||||||
For the year ended December 31, 2012, options to purchase 5.5 million shares of common stock at exercise prices ranging from $75.58 to $92.90 per share were outstanding but were not included in the computation of diluted earnings per share because the effect from the assumed exercise of these options calculated under the treasury stock method would be anti-dilutive. |
Schedule_II_VALUATION_AND_QUAL
Schedule II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Valuation and Qualifying Accounts | SCHEDULE II | ||||||||||||||||
ALLERGAN, INC. | |||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS | |||||||||||||||||
Years Ended December 31, 2014, 2013 and 2012 | |||||||||||||||||
Allowance for Doubtful Accounts Deducted from Trade Receivables | Balance at | Additions (a) | Deductions (b) | Balance | |||||||||||||
Beginning | at End | ||||||||||||||||
of Year | of Year | ||||||||||||||||
(in millions) | |||||||||||||||||
2014 | $ | 24.2 | $ | 51.3 | $ | (8.8 | ) | $ | 66.7 | ||||||||
2013 | 24.2 | 6.2 | (6.2 | ) | 24.2 | ||||||||||||
2012 | 27.6 | 0.8 | (4.2 | ) | 24.2 | ||||||||||||
—————————— | |||||||||||||||||
(a) | Provision charged to earnings. Includes provision of $37.3 million charged in the third quarter of 2014 for certain estimated uncollectible U.S. dollar denominated trade receivables from customers in Venezuela. | ||||||||||||||||
(b) | Accounts written off, net of recoveries. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Consolidation | The consolidated financial statements include the accounts of Allergan, Inc. (“Allergan” or the “Company”) and all of its subsidiaries. All significant intercompany transactions and balances among the consolidated entities have been eliminated from the consolidated financial statements. |
Use of Estimates | Use of Estimates |
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States and, as such, include amounts based on informed estimates and judgments of management. Actual results could differ materially from those estimates. | |
Foreign Currency Translation | Foreign Currency Translation |
The financial position and results of operations of the Company’s foreign subsidiaries are generally determined using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each year end. Income statement accounts are translated at the average rate of exchange prevailing during the year. Adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in equity. Aggregate net realized and unrealized gains (losses) resulting from foreign currency transactions and derivative contracts of approximately $44.9 million, $(7.4) million and $(23.4) million for the years ended December 31, 2014, 2013 and 2012, respectively, are included in “Other, net” in the Company’s consolidated statements of earnings. | |
Cash and Equivalents | Cash and Equivalents |
The Company considers cash in banks, repurchase agreements, commercial paper, money-market funds and deposits with financial institutions with maturities of three months or less when purchased and that can be liquidated without prior notice or penalty, to be cash and equivalents. | |
Short-Term Investments | Short-Term Investments |
Short-term investments consist primarily of investment grade commercial paper and time deposits with financial institutions with maturities from three months to one year when purchased and are classified as available-for-sale. Short-term investments are valued at cost, which approximates fair value due to their short-term maturities. | |
Investments | Investments |
The Company has both marketable and non-marketable equity investments in conjunction with its various collaboration arrangements. The Company classifies its marketable equity investments as available-for-sale securities with net unrealized gains or losses recorded as a component of accumulated other comprehensive loss. The non-marketable equity investments represent investments in start-up companies and are recorded at cost. Marketable and non-marketable equity investments are evaluated periodically for impairment. If it is determined that a decline of any investment is other than temporary, then the investment basis would be written down to fair value and the write-down would be included in earnings as a loss. | |
Inventories | Inventories |
Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. | |
Long-Lived Assets | Long-Lived Assets |
Property, plant and equipment are stated at cost. Additions, major renewals and improvements are capitalized, while maintenance and repairs are expensed. Upon disposition, the net book value of assets is relieved and resulting gains or losses are reflected in earnings. For financial reporting purposes, depreciation is generally provided on the straight-line method over the useful life of the related asset. The useful lives for buildings, including building improvements, range from seven years to 40 years and, for machinery and equipment, three years to 15 years. | |
Leasehold improvements are amortized over the shorter of their economic lives or lease terms. Accelerated depreciation methods are generally used for income tax purposes. | |
All long-lived assets are reviewed for impairment in value when changes in circumstances dictate, based upon undiscounted future operating cash flows, and appropriate losses are recognized and reflected in current earnings, to the extent the carrying amount of an asset exceeds its estimated fair value determined by the use of appraisals, discounted cash flow analyses or comparable fair values of similar assets. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets |
Goodwill represents the excess of acquisition cost over the fair value of the net assets of acquired businesses. Goodwill has an indefinite useful life and is not amortized, but instead tested for impairment annually. Intangible assets include developed technology, customer relationships, licensing agreements, trademarks, technology-related assets and other rights, which are being amortized over their estimated useful lives ranging from three years to 21 years, and in-process research and development assets with indefinite useful lives that are not amortized, but instead tested for impairment until the successful completion and commercialization or abandonment of the associated research and development efforts, at which point the in-process research and development assets are either amortized over their estimated useful lives or written-off immediately. | |
Treasury Stock | Treasury Stock |
Treasury stock is accounted for by the cost method. The Company maintains an evergreen stock repurchase program. The evergreen stock repurchase program authorizes management to repurchase the Company’s common stock for the primary purpose of funding its stock-based benefit plans. Under the stock repurchase program, the Company may maintain up to 18.4 million repurchased shares in its treasury account at any one time. As of December 31, 2014 and 2013, the Company held approximately 8.4 million and 9.9 million treasury shares, respectively, under this program. | |
Revenue Recognition | Revenue Recognition |
The Company recognizes revenue from product sales when goods are shipped and title and risk of loss transfer to its customers. A portion of the Company’s revenue is generated from consigned inventory of breast implants maintained at physician, hospital and clinic locations. These customers are contractually obligated to maintain a specific level of inventory and to notify the Company upon use. Revenue for consigned inventory is recognized at the time the Company is notified by the customer that the product has been used. Notification is usually through the replenishing of the inventory, and the Company periodically reviews consignment inventories to confirm the accuracy of customer reporting. | |
The Company generally offers cash discounts to customers for the early payment of receivables. Those discounts are recorded as a reduction of revenue and accounts receivable in the same period that the related sale is recorded. The amounts reserved for cash discounts were $7.5 million and $6.3 million at December 31, 2014 and 2013, respectively. The Company permits returns of product from most product lines by any class of customer if such product is returned in a timely manner, in good condition and from normal distribution channels. Return policies in certain international markets and for certain medical device products, primarily breast implants, provide for more stringent guidelines in accordance with the terms of contractual agreements with customers. Estimated allowances for sales returns are based upon the Company’s historical patterns of product returns matched against sales, and management’s evaluation of specific factors that may increase the risk of product returns. The amount of allowances for sales returns recognized in the Company’s consolidated balance sheets at December 31, 2014 and 2013 were $83.4 million and $84.4 million, respectively, and are recorded in “Other accrued expenses” and “Trade receivables, net” in the Company’s consolidated balance sheets. (See Note 5, “Composition of Certain Financial Statement Captions.”) Actual historical allowances for cash discounts and product returns have been consistent with the amounts reserved or accrued. | |
The Company participates in various U.S. federal and state government rebate programs, the largest of which are Medicaid, Medicare and the U.S. Department of Veterans Affairs. The Company also has contracts with various managed care and group purchasing organizations that provide for sales rebates and other contractual discounts. In the United States, the Company also incurs chargebacks, which are reimbursements to wholesalers for honoring contracted prices to third parties. Outside of the United States, the Company incurs sales allowances based on contractual provisions and legislative mandates. The Company also offers rebate and other incentive programs directly to customers for its aesthetic products and certain therapeutic products, including Botox® for both therapeutic and cosmetic uses, the Juvéderm® franchise, Latisse®, Natrelle®, Acuvail®, Aczone® and Restasis®, and for certain other skin care products. Sales rebates and incentive accruals reduce revenue in the same period that the related sale is recorded and are included in “Other accrued expenses” in the Company's consolidated balance sheets. (See Note 5, “Composition of Certain Financial Statement Captions.”) The amounts accrued for sales rebates and other incentive programs were $372.1 million and $279.3 million at December 31, 2014 and 2013, respectively. | |
The Company’s procedures for estimating amounts accrued for sales rebates and other incentive programs at the end of any period are based on available quantitative data and are supplemented by management’s judgment with respect to many factors, including but not limited to, current market dynamics, changes in contract terms, changes in sales trends, an evaluation of current laws and regulations and product pricing. Quantitatively, the Company uses historical sales, product utilization and rebate data and applies forecasting techniques in order to estimate the Company’s liability amounts. Qualitatively, management’s judgment is applied to these items to modify, if appropriate, the estimated liability amounts. Additionally, there is a significant time lag between the date the Company determines the estimated liability and when the Company actually pays the liability. Due to this time lag, the Company records adjustments to its estimated liabilities over several periods, which can result in a net increase to earnings or a net decrease to earnings in those periods. | |
The Company recognizes license fees, royalties and reimbursement income for services provided as other revenues based on the facts and circumstances of each contractual agreement. In general, the Company recognizes income upon the signing of a contractual agreement that grants rights to products or technology to a third party if the Company has no further obligation to provide products or services to the third party after entering into the contract. The Company recognizes contingent consideration earned from the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. The Company defers income under contractual agreements when it has further obligations that indicate that a separate earnings process has not been completed. | |
Contingent Consideration | Contingent Consideration |
Contingent consideration liabilities represent future amounts the Company may be required to pay in conjunction with various business combinations. The ultimate amount of future payments is based on specified future criteria, such as sales performance and the achievement of certain future development, regulatory and sales milestones and other contractual performance conditions. The Company estimates the fair value of the contingent consideration liabilities related to sales performance using the income approach, which involves forecasting estimated future net cash flows and discounting the net cash flows to their present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities related to the achievement of future development and regulatory milestones by assigning an achievement probability to each potential milestone and discounting the associated cash payment to its present value using a risk-adjusted rate of return. The Company estimates the fair value of the contingent consideration liabilities associated with sales milestones by employing Monte Carlo simulations to estimate the volatility and systematic relative risk of revenues subject to sales milestone payments and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. The fair value of other contractual performance conditions is measured by assigning an achievement probability to each payment and discounting the payment to its present value using the Company's estimated cost of borrowing. The Company evaluates its estimates of the fair value of contingent consideration liabilities on a periodic basis. Any changes in the fair value of contingent consideration liabilities are recorded through earnings as “Selling, general and administrative” in the Company’s consolidated statements of earnings. The total estimated fair value of contingent consideration liabilities was $365.9 million and $225.2 million at December 31, 2014 and 2013, respectively, and was included in "Other accrued expenses" and "Other liabilities" in the consolidated balance sheets. | |
Share-Based Compensation | Share-Based Compensation |
The Company recognizes compensation expense for all share-based awards made to employees and directors. The fair value of share-based awards is estimated at the grant date. The fair value of stock option awards that vest based on a service condition is estimated using the Black-Scholes option-pricing model. The fair value of share-based awards that contain a market condition is generally estimated using a Monte Carlo simulation model, and the fair value of modifications to share-based awards is generally estimated using a lattice model. Compensation expense for share-based awards based solely on a service condition is recognized over the requisite service period only for those awards that are ultimately expected to vest. Compensation expense for share-based awards that contain a market condition is recognized over the requisite service period. | |
Advertising Expenses | Advertising Expenses |
Advertising expenses relating to production costs are expensed as incurred and the costs of television time, radio time and space in publications are expensed when the related advertising occurs. Advertising expenses were approximately $247.5 million, $179.7 million and $158.5 million in 2014, 2013 and 2012, respectively. | |
Product Liability Self-Insurance | Product Liability Self-Insurance |
The Company is largely self-insured for future product liability losses related to all of its products. The Company has historically been and continues to be self-insured for any product liability losses related to its breast implant products. Future product liability losses are, by their nature, uncertain and are based upon complex judgments and probabilities. The factors to consider in developing product liability reserves include the merits and jurisdiction of each claim, the nature and the number of other similar current and past claims, the nature of the product use and the likelihood of settlement. In addition, the Company accrues for certain potential product liability losses estimated to be incurred, but not reported, to the extent they can be reasonably estimated. The Company estimates these accruals for potential losses based primarily on historical claims experience and data regarding product usage. | |
Income Taxes | Income Taxes |
The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities along with net operating loss and tax credit carryovers. The Company records a valuation allowance against its deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. | |
Valuation allowances against the Company’s deferred tax assets were $39.1 million and $48.9 million at December 31, 2014 and December 31, 2013, respectively. Changes in the valuation allowances are generally recognized in the provision for income taxes as a component of the estimated annual effective tax rate. | |
The Company has not provided for withholding and U.S. taxes for the unremitted earnings of certain non-U.S. subsidiaries because it has currently reinvested these earnings indefinitely in these foreign operations. At December 31, 2014, the Company had approximately $4,485.3 million in unremitted earnings outside the United States for which withholding and U.S. taxes were not provided. Income tax expense would be incurred if these earnings were remitted to the United States. It is not practicable to estimate the amount of the deferred tax liability on such unremitted earnings. Upon remittance, certain foreign countries impose withholding taxes that are then available, subject to certain limitations, for use as credits against the Company’s U.S. tax liability, if any. | |
Acquisitions | Acquisitions |
The accounting for acquisitions requires extensive use of estimates and judgments to measure the fair value of the identifiable tangible and intangible assets acquired, including in-process research and development, and liabilities assumed. Additionally, the Company must determine whether an acquired entity is considered to be a business or a set of net assets, because the excess of the purchase price over the fair value of net assets acquired can only be recognized as goodwill in a business combination. | |
On August 13, 2014, the Company acquired LiRIS Biomedical, Inc. for $67.5 million in cash and estimated contingent consideration of $170.5 million as of the acquisition date. On March 1, 2013, the Company acquired MAP Pharmaceuticals, Inc. for an aggregate purchase price of approximately $871.7 million, net of cash acquired. On April 12, 2013, the Company acquired Exemplar Pharma, LLC for an aggregate purchase price of approximately $16.1 million, net of cash acquired. The Company accounted for these acquisitions as business combinations. In March 2014, the Company completed the acquisition of certain assets related to technology under development for use as a dermal filler from Aline Aesthetics, LLC and Tautona Group, L.P. for an upfront payment of $10.0 million and potential future payments for certain milestone events. The Company accounted for this acquisition as a purchase of net assets. The tangible and intangible assets acquired and liabilities assumed in connection with these acquisitions were recognized based on their estimated fair values at the acquisition dates. The determination of estimated fair values requires significant estimates and assumptions including, but not limited to, determining the timing and estimated costs to complete the in-process projects, projecting regulatory approvals, estimating future cash flows and developing appropriate discount rates. The Company believes the estimated fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions. | |
Comprehensive Income (Loss) | Comprehensive Income (Loss) |
Comprehensive income (loss) encompasses all changes in equity other than those with stockholders and consists of net earnings (losses), foreign currency translation adjustments, certain pension and other postretirement benefit plan adjustments, unrealized gains or losses on marketable equity investments and unrealized and realized gains or losses on derivative instruments, if applicable. The Company does not recognize U.S. income taxes on foreign currency translation adjustments since it does not provide for such taxes on undistributed earnings of foreign subsidiaries. | |
Reclassifications | Reclassifications |
Certain reclassifications of prior year amounts have been made to conform with the current year presentation. | |
New Accounting Pronouncements | Recently Adopted Accounting Standards |
In July 2013, the Financial Accounting Standards Board (FASB) issued an accounting standards update that requires the netting of unrecognized tax benefits against a deferred tax asset for a loss or other carryforward that would apply in settlement of the uncertain tax positions. This guidance became effective for fiscal years beginning after December 15, 2013, with early adoption permitted. The Company adopted the provisions of the guidance in the first quarter of 2014. The adoption did not have a material impact on the Company’s consolidated financial statements. | |
In March 2013, the FASB issued an accounting standards update that provides guidance on the accounting for the cumulative translation adjustment (CTA) upon derecognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. Under this guidance, an entity should recognize the CTA in earnings based on meeting certain criteria, including when it ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity or upon a sale or transfer that results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets resides. This guidance became effective for fiscal years beginning on or after December 15, 2013, with early adoption permitted. The Company adopted the provisions of the guidance in the first quarter of 2014. The adoption did not have a material impact on the Company’s consolidated financial statements. | |
New Accounting Standards Not Yet Adopted | |
In June 2014, the FASB issued an accounting standards update that requires a performance target that affects vesting of a share-based payment award and that could be achieved after the requisite service period to be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized over the required service period, if it is probable that the performance target will be achieved. This guidance will be effective for fiscal years beginning after December 15, 2015, which will be the Company's fiscal year 2016, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's consolidated financial statements. | |
In May 2014, the FASB issued an accounting standards update that creates a single source of revenue guidance for companies in all industries. The new standard provides guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers, unless the contracts are within the scope of other accounting standards. It also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets. This guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach and will be effective for fiscal years beginning after December 15, 2016, which will be the Company's fiscal year 2017. The Company has not yet evaluated the potential impact of adopting the guidance on the Company's consolidated financial statements. | |
In April 2014, the FASB issued an accounting standards update that raises the threshold for disposals to qualify as discontinued operations and allows companies to have significant continuing involvement with and continuing cash flows from or to the discontinued operation. It also requires additional disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This guidance will be effective for fiscal years beginning after December 15, 2014, which will be the Company's fiscal year 2015, with early adoption permitted. The Company does not expect the adoption of the guidance will have a material impact on the Company's consolidated financial statements. |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||
Results of Operations from Discontinued Operations | The following table summarizes the results of operations from discontinued operations for the years ended December 31, 2013 and 2012, respectively: | |||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Product net sales | $ | 114.4 | $ | 159.5 | ||||
Operating costs and expenses: | ||||||||
Cost of sales (excludes amortization of intangible assets) | 20.2 | 24.3 | ||||||
Selling, general and administrative | 57.9 | 75.3 | ||||||
Research and development | 5 | 12.3 | ||||||
Amortization of intangible assets | 10.3 | 41.1 | ||||||
Restructuring charges | — | 4.2 | ||||||
Earnings from discontinued operations before income taxes | 21 | 2.3 | ||||||
Provision for income taxes | (6.9 | ) | (0.5 | ) | ||||
Earnings from discontinued operations, net of income taxes | $ | 14.1 | $ | 1.8 | ||||
Restructuring_Charges_and_Inte1
Restructuring Charges and Integration Costs (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||
Restructuring Charges Related to the July 2014 Restructuring Plan | The following table presents the restructuring charges related to the July 2014 restructuring plan during the year ended December 31, 2014: | ||||||||||||||||
Employee Severance | Contract Termination Costs | Other | Total | ||||||||||||||
(in millions) | |||||||||||||||||
Restructuring charges during 2014 | $ | 150.4 | $ | 39.7 | $ | 29.3 | $ | 219.4 | |||||||||
Spending | (52.7 | ) | (5.2 | ) | (19.7 | ) | (77.6 | ) | |||||||||
Balance at December 31, 2014 (included in "Accounts payable," "Other accrued expenses" and "Other liabilities") | $ | 97.7 | $ | 34.5 | $ | 9.6 | $ | 141.8 | |||||||||
Restructuring Charges Related to the January 2014 Restructuring Plan | The following table presents the restructuring charges related to the January 2014 restructuring plan during the year ended December 31, 2014: | ||||||||||||||||
Employee Severance | Other | Total | |||||||||||||||
(in millions) | |||||||||||||||||
Restructuring charges during 2014 | $ | 21.7 | $ | 2.8 | $ | 24.5 | |||||||||||
Spending | (15.5 | ) | (2.4 | ) | (17.9 | ) | |||||||||||
Balance at December 31, 2014 (included in "Other accrued expenses") | $ | 6.2 | $ | 0.4 | $ | 6.6 | |||||||||||
Composition_of_Certain_Financi1
Composition of Certain Financial Statement Captions (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Composition of Certain Financial Statement Captions [Abstract] | ||||||||
Composition of Certain Financial Statement Captions | Composition of Certain Financial Statement Captions | |||||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Trade receivables, net | ||||||||
Trade receivables | $ | 1,004.20 | $ | 935.4 | ||||
Less allowance for sales returns — medical device products | (23.0 | ) | (27.9 | ) | ||||
Less allowance for doubtful accounts | (66.7 | ) | (24.2 | ) | ||||
$ | 914.5 | $ | 883.3 | |||||
Inventories | ||||||||
Finished products | $ | 188.3 | $ | 180 | ||||
Work in process | 50.5 | 44.1 | ||||||
Raw materials | 57.2 | 61.2 | ||||||
$ | 296 | $ | 285.3 | |||||
Other current assets | ||||||||
Prepaid expenses | $ | 218.4 | $ | 157.1 | ||||
Deferred taxes | 343.5 | 277.9 | ||||||
Foreign currency derivative assets | 75.1 | 20.4 | ||||||
Other | 57.3 | 37.6 | ||||||
$ | 694.3 | $ | 493 | |||||
Investments and other assets | ||||||||
Deferred executive compensation investments | $ | 112.9 | $ | 100.7 | ||||
Capitalized software | 37 | 36.8 | ||||||
Prepaid pensions | 11.1 | 5.6 | ||||||
Debt issuance costs | 8.6 | 10.8 | ||||||
Equity investments | 47.2 | 20.8 | ||||||
Other | 55.1 | 38.5 | ||||||
$ | 271.9 | $ | 213.2 | |||||
Property, plant and equipment, net | ||||||||
Land | $ | 71.2 | $ | 62.2 | ||||
Buildings | 1,066.10 | 962.8 | ||||||
Machinery and equipment | 844 | 784.8 | ||||||
1,981.30 | 1,809.80 | |||||||
Less accumulated depreciation | (975.0 | ) | (886.6 | ) | ||||
$ | 1,006.30 | $ | 923.2 | |||||
December 31, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Other accrued expenses | ||||||||
Sales rebates and other incentive programs | $ | 372.1 | $ | 279.3 | ||||
Royalties | 27.3 | 26.2 | ||||||
Interest | 22 | 22 | ||||||
Sales returns — specialty pharmaceutical products | 60.4 | 56.5 | ||||||
Product warranties — breast implant products | 7.7 | 7.6 | ||||||
Contingent consideration | 53.8 | 9.9 | ||||||
Investment bank advisory fees | 24 | — | ||||||
Annual branded prescription drug fee | 34.1 | 6.1 | ||||||
Restructuring charges | 109.6 | — | ||||||
Other | 194 | 189.9 | ||||||
$ | 905 | $ | 597.5 | |||||
Other liabilities | ||||||||
Postretirement benefit plan | $ | 56.5 | $ | 44.3 | ||||
Qualified and non-qualified pension plans | 267.3 | 194.5 | ||||||
Deferred executive compensation | 116.3 | 105.3 | ||||||
Deferred income | 72.8 | 67 | ||||||
Contingent consideration | 312.1 | 215.3 | ||||||
Product warranties — breast implant products | 28.5 | 26 | ||||||
Unrecognized tax benefit liabilities | 82.6 | 67.7 | ||||||
Other | 74 | 42.1 | ||||||
$ | 1,010.10 | $ | 762.2 | |||||
Accumulated other comprehensive loss | ||||||||
Foreign currency translation adjustments | $ | (149.0 | ) | $ | (29.7 | ) | ||
Deferred holding gains on derivative instruments, net of taxes of $0.7 million and $1.2 million for 2014 and 2013, respectively | 1 | 1.8 | ||||||
Unrealized gain on marketable equity investments, net of taxes of $3.3 million | 5.8 | — | ||||||
Actuarial losses not yet recognized as a component of pension and postretirement benefit plan costs, net of taxes of $100.4 million and $83.5 million for 2014 and 2013, respectively | (266.4 | ) | (198.7 | ) | ||||
$ | (408.6 | ) | $ | (226.6 | ) |
Intangibles_and_Goodwill_Table
Intangibles and Goodwill (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||
Intangibles | Intangibles | |||||||||||||||||||
At December 31, 2014 and 2013, the components of intangibles and certain other related information were as follows: | ||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||||||||||
Gross | Accumulated | Weighted | Gross | Accumulated | Weighted | |||||||||||||||
Amount | Amortization | Average | Amount | Amortization | Average | |||||||||||||||
Amortization | Amortization | |||||||||||||||||||
Period | Period | |||||||||||||||||||
(in millions) | (in years) | (in millions) | (in years) | |||||||||||||||||
Amortizable Intangible Assets: | ||||||||||||||||||||
Developed technology | $ | 648.5 | $ | (394.9 | ) | 11.1 | $ | 647.7 | $ | (343.8 | ) | 11.1 | ||||||||
Customer relationships | 54.2 | (41.9 | ) | 2.7 | 54.7 | (21.8 | ) | 2.7 | ||||||||||||
Licensing | 190.5 | (167.7 | ) | 9.3 | 185.8 | (164.8 | ) | 9.3 | ||||||||||||
Trademarks | 89.1 | (33.8 | ) | 12.4 | 89.6 | (29.7 | ) | 12.4 | ||||||||||||
Technology-related assets | 335.3 | (86.3 | ) | 14.9 | 327.5 | (66.9 | ) | 14.8 | ||||||||||||
Other | 29 | (14.6 | ) | 7.7 | 30.7 | (12.8 | ) | 7.6 | ||||||||||||
1,346.60 | (739.2 | ) | 11.5 | 1,336.00 | (639.8 | ) | 11.4 | |||||||||||||
Unamortizable Intangible Assets: | ||||||||||||||||||||
In-process research and development | 1,179.10 | — | 953.8 | — | ||||||||||||||||
$ | 2,525.70 | $ | (739.2 | ) | $ | 2,289.80 | $ | (639.8 | ) | |||||||||||
Amortization Expense of Intangible Assets | The following table provides amortization expense by major categories of intangible assets for the years ended December 31, 2014, 2013 and 2012, respectively: | |||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
Developed technology | $ | 59.1 | $ | 57.2 | $ | 53.4 | ||||||||||||||
Customer relationships | 20.5 | 20.5 | 1.1 | |||||||||||||||||
Licensing | 3 | 7.4 | 20.4 | |||||||||||||||||
Trademarks | 4.4 | 4.4 | 0.4 | |||||||||||||||||
Technology-related assets | 22.3 | 19.4 | 6.5 | |||||||||||||||||
Other | 3.1 | 7.8 | 8.4 | |||||||||||||||||
$ | 112.4 | $ | 116.7 | $ | 90.2 | |||||||||||||||
Goodwill | Goodwill | |||||||||||||||||||
Changes in the carrying amount of goodwill by operating segment for the years ended December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||
Specialty | Medical | Total | ||||||||||||||||||
Pharmaceuticals | Devices | |||||||||||||||||||
(in millions) | ||||||||||||||||||||
Balance at December 31, 2012 | $ | 299.8 | $ | 1,834.00 | $ | 2,133.80 | ||||||||||||||
MAP acquisition | 175 | — | 175 | |||||||||||||||||
Exemplar acquisition | 14 | — | 14 | |||||||||||||||||
SkinMedica acquisition adjustments | 17.6 | — | 17.6 | |||||||||||||||||
Foreign exchange translation effects and other | (5.2 | ) | 4.2 | (1.0 | ) | |||||||||||||||
Balance at December 31, 2013 | 501.2 | 1,838.20 | 2,339.40 | |||||||||||||||||
LiRIS acquisition | 69.8 | — | 69.8 | |||||||||||||||||
Foreign exchange translation effects | (3.9 | ) | (12.4 | ) | (16.3 | ) | ||||||||||||||
Balance at December 31, 2014 | $ | 567.1 | $ | 1,825.80 | $ | 2,392.90 | ||||||||||||||
Notes_Payable_and_LongTerm_Deb1
Notes Payable and Long-Term Debt (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||
Notes Payable and Long-Term Debt | ||||||||||||||
2014 | 31-Dec-14 | 2013 | 31-Dec-13 | |||||||||||
Average | Average | |||||||||||||
Effective | Effective | |||||||||||||
Interest | Interest | |||||||||||||
Rate | Rate | |||||||||||||
(in millions) | (in millions) | |||||||||||||
Bank loans | 8.83 | % | $ | 72.1 | 6.07 | % | $ | 55.6 | ||||||
Real estate mortgage; maturing 2017 | 5.65 | % | 20 | 5.65 | % | 20 | ||||||||
Senior notes due 2016 | 3.94 | % | 817.5 | 3.94 | % | 831 | ||||||||
Senior notes due 2018 | 1.39 | % | 249.7 | 1.39 | % | 249.5 | ||||||||
Senior notes due 2020 | 3.41 | % | 648.9 | 3.41 | % | 648.7 | ||||||||
Senior notes due 2023 | 2.83 | % | 349.2 | 2.83 | % | 349.1 | ||||||||
2,157.40 | 2,153.90 | |||||||||||||
Less current maturities | 72.1 | 55.6 | ||||||||||||
Total long-term debt | $ | 2,085.30 | $ | 2,098.30 | ||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of Earnings Before Income Taxes | The components of earnings from continuing operations before income taxes were: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions) | ||||||||||||
U.S. | $ | 922.5 | $ | 890.1 | $ | 846.8 | ||||||
Non-U.S. | 1,066.80 | 840.7 | 684.2 | |||||||||
Total | $ | 1,989.30 | $ | 1,730.80 | $ | 1,531.00 | ||||||
Provision for Income Taxes | The provision for income taxes consists of the following: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions) | ||||||||||||
Current | ||||||||||||
U.S. federal | $ | 352.9 | $ | 342.4 | $ | 378.3 | ||||||
U.S. state | 16.2 | 24.7 | 20.4 | |||||||||
Non-U.S. | 167.4 | 152.7 | 103.9 | |||||||||
Total current | 536.5 | 519.8 | 502.6 | |||||||||
Deferred | ||||||||||||
U.S. federal | (31.6 | ) | (34.8 | ) | (72.7 | ) | ||||||
U.S. state | (25.3 | ) | (12.6 | ) | 0.1 | |||||||
Non-U.S. | (22.9 | ) | (14.1 | ) | 0.3 | |||||||
Total deferred | (79.8 | ) | (61.5 | ) | (72.3 | ) | ||||||
Total | $ | 456.7 | $ | 458.3 | $ | 430.3 | ||||||
Reconciliation of the US Federal Statutory Tax Rate to Effective Tax Rate | The reconciliations of the U.S. federal statutory tax rate to the combined effective tax rate follow: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Statutory rate of tax expense | 35 | % | 35 | % | 35 | % | ||||||
State taxes, net of U.S. tax benefit | 0.4 | 0.9 | 1.1 | |||||||||
Tax differential on foreign earnings | (10.8 | ) | (9.0 | ) | (8.8 | ) | ||||||
Other credits (R&D) | (2.9 | ) | (3.0 | ) | (0.9 | ) | ||||||
Tax audit settlements/adjustments | 0.7 | 0.8 | 1.3 | |||||||||
Other | 0.6 | 1.8 | 0.4 | |||||||||
Effective tax rate | 23 | % | 26.5 | % | 28.1 | % | ||||||
Significant Components of Deferred Tax Assets and Liabilities | Temporary differences and carryforwards/carrybacks which give rise to a significant portion of deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows: | |||||||||||
2014 | 2013 | |||||||||||
(in millions) | ||||||||||||
Deferred tax assets | ||||||||||||
Net operating losses | $ | 144.9 | $ | 179.7 | ||||||||
Accrued expenses | 173.6 | 130 | ||||||||||
Capitalized expenses | 161.1 | 176.5 | ||||||||||
Deferred compensation | 52.1 | 47.4 | ||||||||||
Medicare, Medicaid and other accrued health care rebates | 110.1 | 80 | ||||||||||
Postretirement medical benefits | 21.9 | 16.6 | ||||||||||
Capitalized intangible assets | 31.5 | 38.9 | ||||||||||
Deferred revenue | 19.2 | 19.2 | ||||||||||
Inventory reserves and adjustments | 14.2 | 14.5 | ||||||||||
Share-based compensation awards | 94.8 | 101.6 | ||||||||||
Unbilled costs | 28.1 | 28.3 | ||||||||||
Pension plans | 69.9 | 52.6 | ||||||||||
R&D credits | 37.2 | 26.2 | ||||||||||
All other | 57.4 | 46.3 | ||||||||||
1,016.00 | 957.8 | |||||||||||
Less: valuation allowance | (39.1 | ) | (48.9 | ) | ||||||||
Total deferred tax assets | 976.9 | 908.9 | ||||||||||
Deferred tax liabilities | ||||||||||||
Depreciation | (13.1 | ) | 0.1 | |||||||||
Developed and technology-related intangible assets | 131.3 | 153.5 | ||||||||||
In-process R&D | 428.3 | 348.6 | ||||||||||
Total deferred tax liabilities | 546.5 | 502.2 | ||||||||||
Net deferred tax assets | $ | 430.4 | $ | 406.7 | ||||||||
Reconciliation of Unrecognized Tax Benefits | A tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of 2014, 2013 and 2012 is as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions) | ||||||||||||
Balance, beginning of year | $ | 77.3 | $ | 61.9 | $ | 53 | ||||||
Gross increase as a result of positions taken in a prior year | 8.4 | 8.7 | 20.9 | |||||||||
Gross decrease as a result of positions taken in a prior year | (32.7 | ) | (14.6 | ) | (12.7 | ) | ||||||
Gross increase as a result of positions taken in current year | 39.1 | 23.3 | 3.4 | |||||||||
Gross decrease as a result of positions taken in current year | (2.1 | ) | — | — | ||||||||
Increases (decreases) related to settlements | 1.8 | (2.0 | ) | (2.7 | ) | |||||||
Decreases due to lapse in statute of limitations | (0.2 | ) | — | — | ||||||||
Balance, end of year | $ | 91.6 | $ | 77.3 | $ | 61.9 | ||||||
Tax Years Remaining Subject to Examination by Taxing Authorities | The following tax years remain subject to examination: | |||||||||||
Major Jurisdictions | Open Years | |||||||||||
U.S. Federal | 2007 - 2013 | |||||||||||
California | 2005 - 2013 | |||||||||||
Brazil | 2009 - 2013 | |||||||||||
Canada | 2007 - 2013 | |||||||||||
France | 2011 - 2013 | |||||||||||
Germany | 2012 - 2013 | |||||||||||
Italy | 2009 - 2013 | |||||||||||
Ireland | 2007 - 2013 | |||||||||||
Spain | 2010 - 2013 | |||||||||||
United Kingdom | 2011 - 2013 |
Employee_Retirement_and_Other_1
Employee Retirement and Other Benefit Plans (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | Net Periodic Benefit Cost | |||||||||||||||||||||||
Components of net periodic benefit cost for the years ended 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Service cost | $ | 29.4 | $ | 28.5 | $ | 25.7 | $ | 1.5 | $ | 1.8 | $ | 1.7 | ||||||||||||
Interest cost | 52 | 46.2 | 43.8 | 2.3 | 2 | 1.9 | ||||||||||||||||||
Expected return on plan assets | (52.8 | ) | (45.0 | ) | (43.4 | ) | — | — | — | |||||||||||||||
Plan curtailment | — | — | — | (1.8 | ) | — | — | |||||||||||||||||
Loss on plan settlements | 13.9 | — | — | — | — | — | ||||||||||||||||||
Amortization of prior service costs (credits) | — | — | — | (2.7 | ) | (2.7 | ) | (2.7 | ) | |||||||||||||||
Recognized net actuarial losses | 15.7 | 31 | 27 | 0.8 | 1.4 | 1.3 | ||||||||||||||||||
Net periodic benefit cost | $ | 58.2 | $ | 60.7 | $ | 53.1 | $ | 0.1 | $ | 2.5 | $ | 2.2 | ||||||||||||
Change in Projected Benefit Obligation, Change in Plan Assets and Funded Status of Plans | Benefit Obligation, Change in Plan Assets and Funded Status | |||||||||||||||||||||||
The table below presents components of the change in projected benefit obligation, change in plan assets and funded status at December 31, 2014 and 2013. | ||||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Change in Projected Benefit Obligation | ||||||||||||||||||||||||
Projected benefit obligation, beginning of year | $ | 1,125.60 | $ | 1,084.60 | $ | 45.8 | $ | 47.9 | ||||||||||||||||
Service cost | 29.4 | 28.5 | 1.5 | 1.8 | ||||||||||||||||||||
Interest cost | 52 | 46.2 | 2.3 | 2 | ||||||||||||||||||||
Participant contributions | 1.5 | 1.5 | — | — | ||||||||||||||||||||
Plan changes | (112.4 | ) | (1.0 | ) | (1.9 | ) | — | |||||||||||||||||
Plan settlements | (65.8 | ) | — | — | — | |||||||||||||||||||
Actuarial losses (gains) | 313.5 | (25.7 | ) | 11.3 | (5.4 | ) | ||||||||||||||||||
Benefits paid | (25.8 | ) | (19.8 | ) | (1.0 | ) | (0.5 | ) | ||||||||||||||||
Impact of foreign currency translation | (39.3 | ) | 11.3 | — | — | |||||||||||||||||||
Projected benefit obligation, end of year | 1,278.70 | 1,125.60 | 58 | 45.8 | ||||||||||||||||||||
Change in Plan Assets | ||||||||||||||||||||||||
Fair value of plan assets, beginning of year | 933.9 | 869.3 | — | — | ||||||||||||||||||||
Actual return on plan assets | 155.1 | 31.3 | — | — | ||||||||||||||||||||
Company contributions | 51.9 | 42.3 | 1 | 0.5 | ||||||||||||||||||||
Participant contributions | 1.5 | 1.5 | — | — | ||||||||||||||||||||
Plan settlements | (65.8 | ) | — | — | — | |||||||||||||||||||
Benefits paid | (25.8 | ) | (19.8 | ) | (1.0 | ) | (0.5 | ) | ||||||||||||||||
Impact of foreign currency translation | (31.1 | ) | 9.3 | — | — | |||||||||||||||||||
Fair value of plan assets, end of year | 1,019.70 | 933.9 | — | — | ||||||||||||||||||||
Funded status of plans | $ | (259.0 | ) | $ | (191.7 | ) | $ | (58.0 | ) | $ | (45.8 | ) | ||||||||||||
Net Accrued Benefit Costs Reported in the Consolidated Balance Sheet | Net accrued benefit costs for pension plans and other postretirement benefits are reported in the following components of the Company’s consolidated balance sheet at December 31, 2014 and 2013: | |||||||||||||||||||||||
Pension Benefits | Other Postretirement Benefits | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Investments and other assets | $ | 11.1 | $ | 5.6 | $ | — | $ | — | ||||||||||||||||
Accrued compensation | (2.8 | ) | (2.8 | ) | (1.5 | ) | (1.5 | ) | ||||||||||||||||
Other liabilities | (267.3 | ) | (194.5 | ) | (56.5 | ) | (44.3 | ) | ||||||||||||||||
Net accrued benefit costs | $ | (259.0 | ) | $ | (191.7 | ) | $ | (58.0 | ) | $ | (45.8 | ) | ||||||||||||
Benefit Obligations in Excess of Fair Value of Plan Assets | The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of the fair value of plan assets and pension plans with accumulated benefit obligations in excess of the fair value of plan assets at December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||
Projected Benefit | Accumulated | |||||||||||||||||||||||
Obligation | Benefit | |||||||||||||||||||||||
Exceeds | Obligation | |||||||||||||||||||||||
the Fair Value of | Exceeds the Fair | |||||||||||||||||||||||
Plan Assets | Value of | |||||||||||||||||||||||
Plan Assets | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Projected benefit obligation | $ | 1,144.10 | $ | 1,098.40 | $ | 1,144.10 | $ | 327.5 | ||||||||||||||||
Accumulated benefit obligation | 1,138.00 | 992.3 | 1,138.00 | 283.5 | ||||||||||||||||||||
Fair value of plan assets | 873.9 | 901.1 | 873.9 | 156.6 | ||||||||||||||||||||
Fair Values of the Plan Assets by Investment Category | The table below presents total plan assets by investment category as of December 31, 2014 and 2013 and the classification of each investment category within the fair value hierarchy with respect to the inputs used to measure fair value: | |||||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Cash and Equivalents | $ | 24.5 | $ | — | $ | 24.5 | $ | — | ||||||||||||||||
Equity Securities | ||||||||||||||||||||||||
U.S. small-cap growth | 26.8 | — | 26.8 | — | ||||||||||||||||||||
U.S. large-cap index | 76.8 | — | 76.8 | — | ||||||||||||||||||||
International equities | 217.3 | 217.3 | — | — | ||||||||||||||||||||
Fixed Income Securities | ||||||||||||||||||||||||
U.S. Treasury bonds | 90.8 | — | 90.8 | — | ||||||||||||||||||||
Global corporate bonds | 413.7 | — | 413.7 | — | ||||||||||||||||||||
International bond funds | 111.7 | — | 111.7 | — | ||||||||||||||||||||
Global corporate bond funds | 17.3 | 17.3 | — | — | ||||||||||||||||||||
International government bond funds | 40.8 | 40.8 | — | — | ||||||||||||||||||||
$ | 1,019.70 | $ | 275.4 | $ | 744.3 | $ | — | |||||||||||||||||
December 31, 2013 | ||||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Cash and Equivalents | $ | 16.9 | $ | — | $ | 16.9 | $ | — | ||||||||||||||||
Equity Securities | ||||||||||||||||||||||||
U.S. small-cap growth | 26.1 | — | 26.1 | — | ||||||||||||||||||||
U.S. large-cap index | 65.3 | — | 65.3 | — | ||||||||||||||||||||
International equities | 212.7 | 212.7 | — | — | ||||||||||||||||||||
Fixed Income Securities | ||||||||||||||||||||||||
U.S. Treasury bonds | 86.5 | — | 86.5 | — | ||||||||||||||||||||
Global corporate bonds | 385.1 | — | 385.1 | — | ||||||||||||||||||||
International bond funds | 91.4 | — | 91.4 | — | ||||||||||||||||||||
Global corporate bond funds | 20.4 | 20.4 | — | — | ||||||||||||||||||||
International government bond funds | 29.5 | 29.5 | — | — | ||||||||||||||||||||
$ | 933.9 | $ | 262.6 | $ | 671.3 | $ | — | |||||||||||||||||
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost and Projected Benefit Obligations | Assumptions | |||||||||||||||||||||||
The weighted-average assumptions used to determine net periodic benefit cost and projected benefit obligation were as follows: | ||||||||||||||||||||||||
Pension Benefits | Other | |||||||||||||||||||||||
Postretirement Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||
For Determining Net Periodic Benefit Cost | ||||||||||||||||||||||||
U.S. Plans: | ||||||||||||||||||||||||
Discount rate | 5.05 | % | 4.23 | % | 4.63 | % | 5.02 | % | 4.21 | % | 4.6 | % | ||||||||||||
Expected return on plan assets | 6.25 | % | 6.25 | % | 6.75 | % | — | — | — | |||||||||||||||
Rate of compensation increase | 4 | % | 4 | % | 4 | % | — | — | — | |||||||||||||||
Non-U.S. Pension Plans: | ||||||||||||||||||||||||
Discount rate | 4.19 | % | 4.55 | % | 5.14 | % | ||||||||||||||||||
Expected return on plan assets | 4.56 | % | 4.36 | % | 4.8 | % | ||||||||||||||||||
Rate of compensation increase | 2.94 | % | 2.89 | % | 3.04 | % | ||||||||||||||||||
For Determining Projected Benefit Obligation | ||||||||||||||||||||||||
U.S. Plans: | ||||||||||||||||||||||||
Discount rate | 4.21 | % | 5.05 | % | 4.21 | % | 5.02 | % | ||||||||||||||||
Rate of compensation increase | — | 4 | % | — | — | |||||||||||||||||||
Non-U.S. Pension Plans: | ||||||||||||||||||||||||
Discount rate | 2.64 | % | 4.19 | % | ||||||||||||||||||||
Rate of compensation increase | 2.92 | % | 2.94 | % | ||||||||||||||||||||
Estimated Benefit Payments Over the Next 10 Years | Estimated Future Benefit Payments | |||||||||||||||||||||||
Estimated benefit payments over the next 10 years for the Company’s U.S. and major non-U.S. pension plans and retiree health plan are as follows: | ||||||||||||||||||||||||
Pension | Other | |||||||||||||||||||||||
Benefits | Postretirement | |||||||||||||||||||||||
Benefits | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2015 | $ | 26.1 | $ | 1.5 | ||||||||||||||||||||
2016 | 28.7 | 2.2 | ||||||||||||||||||||||
2017 | 31.4 | 2.6 | ||||||||||||||||||||||
2018 | 34.1 | 2.8 | ||||||||||||||||||||||
2019 | 37.4 | 2.9 | ||||||||||||||||||||||
2020 – 2024 | 226.6 | 17.1 | ||||||||||||||||||||||
$ | 384.3 | $ | 29.1 | |||||||||||||||||||||
Employee_Stock_Plans_Tables
Employee Stock Plans (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Stock Option Activity | The following table summarizes the Company’s stock option activity: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||||||
of | Average | of | Average | of | Average | ||||||||||||||||
Shares | Exercise | Shares | Exercise | Shares | Exercise | ||||||||||||||||
Price | Price | Price | |||||||||||||||||||
(in thousands, except option exercise price and fair value data) | |||||||||||||||||||||
Outstanding, beginning of year | 22,017 | $ | 73.41 | 21,567 | $ | 65 | 22,651 | $ | 57.47 | ||||||||||||
Options granted | 3,653 | 125.27 | 4,511 | 105.38 | 4,372 | 88.01 | |||||||||||||||
Options exercised | (7,629 | ) | 68.05 | (3,187 | ) | 57.36 | (4,928 | ) | 50.02 | ||||||||||||
Options cancelled | (357 | ) | 103.22 | (874 | ) | 89.29 | (528 | ) | 72.39 | ||||||||||||
Outstanding, end of year | 17,684 | 85.83 | 22,017 | 73.41 | 21,567 | 65 | |||||||||||||||
Exercisable, end of year | 9,517 | 67.96 | 12,051 | 59.52 | 10,906 | 56.25 | |||||||||||||||
Weighted average per share fair value of options granted during the year | $ | 38.62 | $ | 27.58 | $ | 22.45 | |||||||||||||||
Restricted Share Activity | The following table summarizes the Company’s restricted share activity: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Number | Weighted | Number | Weighted | Number | Weighted | ||||||||||||||||
of | Average | of | Average | of | Average | ||||||||||||||||
Shares | Grant-Date | Shares | Grant-Date | Shares | Grant-Date | ||||||||||||||||
Fair Value | Fair Value | Fair Value | |||||||||||||||||||
(in thousands, except fair value data) | |||||||||||||||||||||
Restricted share awards, beginning of year | 875 | $ | 76.59 | 1,165 | $ | 67.08 | 1,035 | $ | 57.38 | ||||||||||||
Shares granted | 283 | 155.49 | 178 | 104.66 | 360 | 88.75 | |||||||||||||||
Shares vested | (287 | ) | 70.53 | (406 | ) | 48.2 | (198 | ) | 57.22 | ||||||||||||
Shares cancelled | (55 | ) | 94.63 | (62 | ) | 78.69 | (32 | ) | 59.87 | ||||||||||||
Restricted share awards, end of year | 816 | 104.85 | 875 | 76.59 | 1,165 | 67.08 | |||||||||||||||
Share-Based Compensation Expense by Award Type | The following table summarizes share-based compensation expense by award type for the years ended December 31, 2014, 2013 and 2012, respectively: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in millions) | |||||||||||||||||||||
Employee and director stock options | $ | 133.4 | $ | 90.1 | $ | 81.1 | |||||||||||||||
Employee and director restricted share awards | 20.5 | 16.4 | 19.4 | ||||||||||||||||||
Stock contributed to employee benefit plans | 5.8 | 6.2 | 6.1 | ||||||||||||||||||
Pre-tax share-based compensation expense | 159.7 | 112.7 | 106.6 | ||||||||||||||||||
Income tax benefit | (50.6 | ) | (35.8 | ) | (34.6 | ) | |||||||||||||||
Net share-based compensation expense | $ | 109.1 | $ | 76.9 | $ | 72 | |||||||||||||||
Share-Based Compensation Expense by Expense Category | The following table summarizes pre-tax share-based compensation expense by expense category for the years ended December 31, 2014, 2013 and 2012, respectively: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(in millions) | |||||||||||||||||||||
Cost of sales | $ | 10.9 | $ | 9.4 | $ | 9 | |||||||||||||||
Selling, general and administrative | 103 | 74.1 | 70.1 | ||||||||||||||||||
Research and development | 45.8 | 29.2 | 27.5 | ||||||||||||||||||
Pre-tax share-based compensation expense | $ | 159.7 | $ | 112.7 | $ | 106.6 | |||||||||||||||
Share- Based Awards Fair Value Assumptions | The determination of fair value using the Black-Scholes, Monte Carlo simulation and lattice models is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility, risk-free interest rate, expected dividends and projected employee stock option exercise behaviors. Stock options granted during 2014, 2013 and 2012 were valued using the Black-Scholes option-pricing model with the following weighted-average assumptions: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected volatility | 29.71 | % | 26.22 | % | 25.65 | % | |||||||||||||||
Risk-free interest rate | 1.78 | % | 1.05 | % | 1.07 | % | |||||||||||||||
Expected dividend yield | 0.18 | % | 0.2 | % | 0.26 | % | |||||||||||||||
Expected option life (in years) | 5.72 | 5.73 | 5.73 | ||||||||||||||||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||
Notional Principal and Fair Value of Foreign Currency Derivative Instruments | At December 31, 2014 and 2013, the notional principal and fair value of the Company’s outstanding foreign currency derivative financial instruments were as follows: | |||||||||||||||
2014 | 2013 | |||||||||||||||
Notional | Fair | Notional | Fair | |||||||||||||
Principal | Value | Principal | Value | |||||||||||||
(in millions) | ||||||||||||||||
Foreign currency forward exchange contracts | $ | 32.8 | $ | (2.8 | ) | $ | 35 | $ | 0.1 | |||||||
(Receive U.S. dollar/pay foreign currency) | ||||||||||||||||
Foreign currency forward exchange contracts | 37.5 | (1.1 | ) | 41.3 | 0.1 | |||||||||||
(Pay U.S. dollar/receive foreign currency) | ||||||||||||||||
Foreign currency sold — put options | 849.3 | 75.1 | 560.8 | 20.2 | ||||||||||||
Carrying Amount and Estimated Fair Value of Other Financial Instruments | The carrying amount and estimated fair value of the Company’s other financial instruments at December 31, 2014 and 2013 were as follows: | |||||||||||||||
2014 | 2013 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Amount | Value | Amount | Value | |||||||||||||
(in millions) | ||||||||||||||||
Cash and equivalents | $ | 4,911.40 | $ | 4,911.40 | $ | 3,046.10 | $ | 3,046.10 | ||||||||
Short-term investments | 55 | 55 | 603 | 603 | ||||||||||||
Non-current investments: | ||||||||||||||||
Marketable equity | 20.7 | 20.7 | — | — | ||||||||||||
Non-marketable equity | 26.5 | 26.5 | 20.8 | 20.8 | ||||||||||||
Notes payable | 72.1 | 72.1 | 55.6 | 55.6 | ||||||||||||
Long-term debt | 2,085.30 | 2,095.50 | 2,098.30 | 2,163.80 | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 55 | $ | — | $ | 55 | $ | — | ||||||||
Foreign time deposits | 47.7 | — | 47.7 | — | ||||||||||||
Other cash equivalents | 4,173.90 | — | 4,173.90 | — | ||||||||||||
Marketable equity securities | 20.7 | 20.7 | — | — | ||||||||||||
Foreign currency derivative assets | 75.1 | — | 75.1 | — | ||||||||||||
Deferred executive compensation investments | 112.9 | 90.3 | 22.6 | — | ||||||||||||
$ | 4,485.30 | $ | 111 | $ | 4,374.30 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Foreign currency derivative liabilities | $ | 3.9 | $ | — | $ | 3.9 | $ | — | ||||||||
Deferred executive compensation liabilities | 105.7 | 83.1 | 22.6 | — | ||||||||||||
Contingent consideration liabilities | 365.9 | — | — | 365.9 | ||||||||||||
$ | 475.5 | $ | 83.1 | $ | 26.5 | $ | 365.9 | |||||||||
December 31, 2013 | ||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||
(in millions) | ||||||||||||||||
Assets | ||||||||||||||||
Commercial paper | $ | 2,016.80 | $ | — | $ | 2,016.80 | $ | — | ||||||||
Foreign time deposits | 370.3 | — | 370.3 | — | ||||||||||||
Other cash equivalents | 1,080.40 | — | 1,080.40 | — | ||||||||||||
Foreign currency derivative assets | 20.4 | — | 20.4 | — | ||||||||||||
Deferred executive compensation investments | 100.7 | 80.4 | 20.3 | — | ||||||||||||
$ | 3,588.60 | $ | 80.4 | $ | 3,508.20 | $ | — | |||||||||
Liabilities | ||||||||||||||||
Deferred executive compensation liabilities | 93 | 72.7 | 20.3 | — | ||||||||||||
Contingent consideration liabilities | 225.2 | — | — | 225.2 | ||||||||||||
$ | 318.2 | $ | 72.7 | $ | 20.3 | $ | 225.2 | |||||||||
Reconciliation of the Change in the Contingent Consideration Liabilities | The following table provides a reconciliation of the change in the contingent consideration liabilities for the years ended December 31, 2014 and 2013: | |||||||||||||||
2014 | 2013 | |||||||||||||||
(in million) | ||||||||||||||||
Balance, beginning of year | $ | 225.2 | $ | 224.3 | ||||||||||||
Additions during the period related to business combinations | 170.5 | — | ||||||||||||||
Change in the estimated fair value of the contingent consideration liabilities | (15.1 | ) | 70.7 | |||||||||||||
Payments made during the period | (10.2 | ) | (61.2 | ) | ||||||||||||
Foreign exchange translation effects | (4.5 | ) | (8.6 | ) | ||||||||||||
Balance, end of year | $ | 365.9 | $ | 225.2 | ||||||||||||
Product_Warranties_Tables
Product Warranties (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Product Warranties Disclosures [Abstract] | ||||||||
Change in Estimated Product Warranty Liabilities | The following table provides a reconciliation of the change in estimated product warranty liabilities for the years ended December 31, 2014 and 2013: | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Balance, beginning of year | $ | 33.6 | $ | 34.4 | ||||
Provision for warranties issued during the year | 12 | 8 | ||||||
Settlements made during the year | (9.4 | ) | (8.1 | ) | ||||
Decreases in warranty estimates | — | (0.7 | ) | |||||
Balance, end of year | $ | 36.2 | $ | 33.6 | ||||
Current portion | $ | 7.7 | $ | 7.6 | ||||
Non-current portion | 28.5 | 26 | ||||||
Total | $ | 36.2 | $ | 33.6 | ||||
Business_Segment_Information_T
Business Segment Information (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||
Operating Segments | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Product net sales: | ||||||||||||||||||||||||||||||||
Specialty pharmaceuticals | $ | 6,012.10 | $ | 5,339.00 | $ | 4,784.60 | ||||||||||||||||||||||||||
Medical devices | 1,114.00 | 858.5 | 764.7 | |||||||||||||||||||||||||||||
Total product net sales | 7,126.10 | 6,197.50 | 5,549.30 | |||||||||||||||||||||||||||||
Other revenues | 111.8 | 102.9 | 97.3 | |||||||||||||||||||||||||||||
Total revenues | $ | 7,237.90 | $ | 6,300.40 | $ | 5,646.60 | ||||||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||||||||
Specialty pharmaceuticals | $ | 2,832.30 | $ | 2,282.00 | $ | 1,997.70 | ||||||||||||||||||||||||||
Medical devices | 382.9 | 246.2 | 229.1 | |||||||||||||||||||||||||||||
Total segments | 3,215.20 | 2,528.20 | 2,226.80 | |||||||||||||||||||||||||||||
General and administrative expenses, other indirect costs and other adjustments | 854.4 | 594.6 | 525.3 | |||||||||||||||||||||||||||||
Amortization of intangible assets (a) | 106.5 | 107.4 | 66.7 | |||||||||||||||||||||||||||||
Impairment of intangible assets and related costs | — | 11.4 | 22.3 | |||||||||||||||||||||||||||||
Restructuring charges | 245 | 5.5 | 1.5 | |||||||||||||||||||||||||||||
Total operating income | $ | 2,009.30 | $ | 1,809.30 | $ | 1,611.00 | ||||||||||||||||||||||||||
—————————— | ||||||||||||||||||||||||||||||||
(a) | Represents amortization of certain identifiable intangible assets related to business combinations and asset acquisitions and related capitalized licensing costs, as applicable. | |||||||||||||||||||||||||||||||
Product Net Sales by Product Line | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Specialty Pharmaceuticals: | ||||||||||||||||||||||||||||||||
Eye Care Pharmaceuticals | $ | 3,257.90 | $ | 2,890.30 | $ | 2,692.20 | ||||||||||||||||||||||||||
Botox®/Neuromodulators | 2,230.60 | 1,982.20 | 1,766.30 | |||||||||||||||||||||||||||||
Skin Care and Other | 523.6 | 466.5 | 326.1 | |||||||||||||||||||||||||||||
Total Specialty Pharmaceuticals | 6,012.10 | 5,339.00 | 4,784.60 | |||||||||||||||||||||||||||||
Medical Devices: | ||||||||||||||||||||||||||||||||
Breast Aesthetics | 406.7 | 377.9 | 377.1 | |||||||||||||||||||||||||||||
Facial Aesthetics | 661.8 | 477.5 | 387.6 | |||||||||||||||||||||||||||||
Core Medical Devices | 1,068.50 | 855.4 | 764.7 | |||||||||||||||||||||||||||||
Other | 45.5 | 3.1 | — | |||||||||||||||||||||||||||||
Total Medical Devices | 1,114.00 | 858.5 | 764.7 | |||||||||||||||||||||||||||||
Total product net sales | $ | 7,126.10 | $ | 6,197.50 | $ | 5,549.30 | ||||||||||||||||||||||||||
Geographic Information | Geographic Information | |||||||||||||||||||||||||||||||
Product Net Sales | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
United States | $ | 4,520.50 | $ | 3,839.40 | $ | 3,379.10 | ||||||||||||||||||||||||||
Europe | 1,410.30 | 1,237.80 | 1,095.50 | |||||||||||||||||||||||||||||
Latin America | 382 | 383 | 386.3 | |||||||||||||||||||||||||||||
Asia Pacific | 512.3 | 464.1 | 432.3 | |||||||||||||||||||||||||||||
Other | 301 | 273.2 | 256.1 | |||||||||||||||||||||||||||||
Total product net sales | $ | 7,126.10 | $ | 6,197.50 | $ | 5,549.30 | ||||||||||||||||||||||||||
Long-lived Assets | Depreciation and | Capital Expenditures | ||||||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
United States | $ | 4,497.00 | $ | 4,274.70 | $ | 187.3 | $ | 181.2 | $ | 153.5 | $ | 98.4 | $ | 82.3 | $ | 75.7 | ||||||||||||||||
Europe | 627.1 | 569.9 | 48.5 | 49.6 | 48.1 | 136.4 | 79.7 | 59.5 | ||||||||||||||||||||||||
Latin America | 49.4 | 52.2 | 7.1 | 7.7 | 8.1 | 6.9 | 7.6 | 6 | ||||||||||||||||||||||||
Asia Pacific | 47.3 | 51.2 | 4.8 | 5 | 4.6 | 2.2 | 2.3 | 2 | ||||||||||||||||||||||||
Other | 1.9 | 1.4 | 0.4 | 0.6 | 0.8 | — | — | 0.1 | ||||||||||||||||||||||||
Total | $ | 5,222.70 | $ | 4,949.40 | $ | 248.1 | $ | 244.1 | $ | 215.1 | $ | 243.9 | $ | 171.9 | $ | 143.3 | ||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Computation of Basic and Diluted Earnings Per Share | The table below presents the computation of basic and diluted earnings per share: | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(in millions, except per share amounts) | ||||||||||||
Net earnings attributable to Allergan, Inc.: | ||||||||||||
Earnings from continuing operations attributable to Allergan, Inc.: | ||||||||||||
Earnings from continuing operations | $ | 1,532.60 | $ | 1,272.50 | $ | 1,100.70 | ||||||
Less net earnings attributable to noncontrolling interest | 4.6 | 3.6 | 3.7 | |||||||||
Earnings from continuing operations attributable to Allergan, Inc. | 1,528.00 | 1,268.90 | 1,097.00 | |||||||||
(Loss) earnings from discontinued operations | (3.8 | ) | (283.8 | ) | 1.8 | |||||||
Net earnings attributable to Allergan, Inc. | $ | 1,524.20 | $ | 985.1 | $ | 1,098.80 | ||||||
Weighted average number of shares outstanding | 297.6 | 296.8 | 301.5 | |||||||||
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price | 6.4 | 5 | 5.6 | |||||||||
Diluted shares | 304 | 301.8 | 307.1 | |||||||||
Basic earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||
Continuing operations | $ | 5.13 | $ | 4.28 | $ | 3.64 | ||||||
Discontinued operations | (0.01 | ) | (0.96 | ) | — | |||||||
Net basic earnings per share attributable to Allergan, Inc. stockholders | $ | 5.12 | $ | 3.32 | $ | 3.64 | ||||||
Diluted earnings per share attributable to Allergan, Inc. stockholders: | ||||||||||||
Continuing operations | $ | 5.03 | $ | 4.2 | $ | 3.57 | ||||||
Discontinued operations | (0.02 | ) | (0.94 | ) | 0.01 | |||||||
Net diluted earnings per share attributable to Allergan, Inc. stockholders | $ | 5.01 | $ | 3.26 | $ | 3.58 | ||||||
Schedule_II_VALUATION_AND_QUAL1
Schedule II - VALUATION AND QUALIFYING ACCOUNTS (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||
Valuation and Qualifying Accounts | VALUATION AND QUALIFYING ACCOUNTS | ||||||||||||||||
Years Ended December 31, 2014, 2013 and 2012 | |||||||||||||||||
Allowance for Doubtful Accounts Deducted from Trade Receivables | Balance at | Additions (a) | Deductions (b) | Balance | |||||||||||||
Beginning | at End | ||||||||||||||||
of Year | of Year | ||||||||||||||||
(in millions) | |||||||||||||||||
2014 | $ | 24.2 | $ | 51.3 | $ | (8.8 | ) | $ | 66.7 | ||||||||
2013 | 24.2 | 6.2 | (6.2 | ) | 24.2 | ||||||||||||
2012 | 27.6 | 0.8 | (4.2 | ) | 24.2 | ||||||||||||
—————————— | |||||||||||||||||
(a) | Provision charged to earnings. Includes provision of $37.3 million charged in the third quarter of 2014 for certain estimated uncollectible U.S. dollar denominated trade receivables from customers in Venezuela. | ||||||||||||||||
(b) | Accounts written off, net of recoveries. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounting Policies [Abstract] | |||
Aggregate net realized and unrealized (losses) gains resulting from foreign currency transactions and derivative contracts | $44.90 | ($7.40) | ($23.40) |
Number of shares the Company may maintain in its treasury account at any one time under the evergreen stock repurchase program (in shares) | 18,400,000 | ||
Number of treasury shares (in shares) | 8,373,176 | 9,947,345 | |
Amounts reserved for cash discounts | 7.5 | 6.3 | |
Amount of allowances for sales returns | 83.4 | 84.4 | |
Amounts accrued for sales rebates and other incentive programs | 372.1 | 279.3 | |
Advertising expenses | 247.5 | 179.7 | 158.5 |
Deferred tax assets valuation allowances | 39.1 | 48.9 | |
Unremitted earnings outside the United States | $4,485.30 | ||
Cash amount in exchange for each share of Allergan common stock | 129.22 | ||
Actavis share in exchange for each share of Allergan common stock | 0.3683 | ||
Building and Building Improvements [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 7 years | ||
Building and Building Improvements [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 40 years | ||
Machinery and Equipment [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Machinery and Equipment [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, useful life | 15 years |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Intangible Assets) (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 3 years |
Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 21 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Acquisitions) (Details) (USD $) | 3 Months Ended | ||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Mar. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 13, 2014 |
Business Acquisition [Line Items] | |||||||
Fair value of contingent consideration | $365.90 | $225.20 | |||||
LiRIS Acquisition [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Date of acquisition | 13-Aug-14 | ||||||
Business combination, cash payments to acquire businesses | 67.5 | ||||||
Fair value of contingent consideration | 164.8 | 170.5 | |||||
MAP Acquisition [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Date of acquisition | 1-Mar-13 | ||||||
Business combination, total consideration | 871.7 | ||||||
Exemplar Acquisition [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Date of acquisition | 12-Apr-13 | ||||||
Business combination, total consideration | 16.1 | ||||||
Aline Asset Acquisition [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Date of acquisition | 31-Mar-14 | ||||||
Upfront payment to acquire certain assets | $10 |
Acquisitions_and_Collaboration1
Acquisitions and Collaborations (Details) (USD $) | 12 Months Ended | 3 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Mar. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 13, 2014 | Mar. 01, 2013 | Apr. 12, 2013 |
Business Acquisition [Line Items] | |||||||||||
Fair value of contingent consideration | $365.90 | $225.20 | $225.20 | ||||||||
Goodwill | 2,392.90 | 2,339.40 | 2,133.80 | 2,339.40 | |||||||
Estimated useful life of the intangible asset | 11 years 6 months | 11 years 5 months | |||||||||
Purchase of noncontrolling interest in a subsidiary | 0 | 18 | 0 | ||||||||
LiRIS Acquisition [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Date of acquisition | 13-Aug-14 | ||||||||||
Business combination, cash payments to acquire businesses | 67.5 | ||||||||||
Payments contingent upon achieving certain development milestones | 295 | ||||||||||
Payments contingent upon achieving certain commercial milestones | 225 | ||||||||||
Fair value of contingent consideration | 164.8 | 170.5 | |||||||||
Fair value of assets acquired | 307.8 | ||||||||||
Intangible assets | 238 | ||||||||||
Goodwill | 69.8 | ||||||||||
Deferred tax liabilities | 69.8 | ||||||||||
LiRIS Acquisition [Member] | In Process Research and Development [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 225.3 | ||||||||||
LiRIS Acquisition [Member] | Technology-related Assets [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 12.7 | ||||||||||
Estimated useful life of the intangible asset | 16 years | ||||||||||
MAP Acquisition [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Date of acquisition | 1-Mar-13 | ||||||||||
Business combination, total consideration | 871.7 | ||||||||||
Fair value of assets acquired | 1,233.60 | ||||||||||
Current assets | 2.3 | ||||||||||
Property, plant, and equipment | 7.7 | ||||||||||
Other non-current assets | 0.3 | ||||||||||
Deferred tax assets | 132.7 | ||||||||||
Intangible assets | 915.6 | ||||||||||
Goodwill | 175 | ||||||||||
Liabilities assumed | 361.9 | ||||||||||
Current liabilities | 27.3 | ||||||||||
Deferred tax liabilities | 334.6 | ||||||||||
MAP Acquisition [Member] | In Process Research and Development [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 683.5 | ||||||||||
MAP Acquisition [Member] | Technology-related Assets [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Intangible assets | 232.1 | ||||||||||
Estimated useful life of the intangible asset | 15 years | ||||||||||
Exemplar Acquisition [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Date of acquisition | 12-Apr-13 | ||||||||||
Business combination, total consideration | 16.1 | ||||||||||
Pre-existing payable to Exemplar | 1.9 | ||||||||||
Fair value of assets acquired | 16.6 | ||||||||||
Current assets | 0.5 | ||||||||||
Property, plant, and equipment | 2.1 | ||||||||||
Goodwill | 14 | ||||||||||
Current liabilities | 0.5 | ||||||||||
Aline Asset Acquisition [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Date of acquisition | 31-Mar-14 | ||||||||||
Upfront payment to acquire certain assets | 10 | ||||||||||
Purchase of Noncontrolling Interest in a Subsidiary [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Date of purchase of noncontrolling interest | 30-Nov-13 | ||||||||||
Purchase of noncontrolling interest in a subsidiary | 18 | ||||||||||
Decrease in APIC due to the purchase of noncontrolling interest | $1.30 |
Acquisitions_and_Collaboration2
Acquisitions and Collaborations (Collaborations) (Details) (USD $) | 1 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Jan. 31, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2014 |
Business Collaborations [Line Items] | ||||
Potential future milestone receipts | $45.90 | |||
Potential future development milestone receipts | 3.5 | |||
Potential future regulatory milestone receipts | 17 | |||
Potential future commercial sales milestone receipts | 25.4 | |||
Collaborative Arrangement with Medytox [Member] | ||||
Business Collaborations [Line Items] | ||||
Date of collaboration agreement | 25-Sep-13 | |||
Upfront payment | 65 | |||
Development milestone payment | 15 | |||
Potential future development milestone payments | 116.5 | |||
Potential future sales milestone payments | 180.5 | |||
Collaborative Arrangement With A Third Party [Member] | ||||
Business Collaborations [Line Items] | ||||
Date of collaboration agreement | 10-Sep-13 | |||
Upfront payment | 6.5 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 02, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of discontinued operations, cash consideration | $75 | |||
Sale of discontinued operations, additional consideration - minority equity interest | 15 | |||
Sale of discontinued operations, contingent consideration from the buyer | 20 | |||
Inventories held outside of the United States that reduces the cash consideration | 7.6 | |||
Net accounts receivable and payable that reduces the cash consideration | 19.4 | |||
Loss on sale of discontinued operations before income taxes | -2.5 | -408.2 | ||
Loss on sale of discontinued operation, net of income taxes | -3.8 | -297.9 | 0 | |
Transaction costs related to the sale of discontinued operations | 2.6 | |||
Transitional period to provide administrative and distribution services | 12 months | |||
Transitional period to manufacture and supply products | 24 months | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Product net sales | 114.4 | 159.5 | ||
Costs of sales (excludes amortization of intangible assets) | 20.2 | 24.3 | ||
Selling, general and administrative | 57.9 | 75.3 | ||
Research and development | 5 | 12.3 | ||
Amortization of intangible assets | 10.3 | 41.1 | ||
Restructuring charges | 0 | 4.2 | ||
Earnings from discontinued operations before income taxes | 21 | 2.3 | ||
Provision for income taxes | 0 | -6.9 | -0.5 | |
Earnings from discontinued operations, net of income taxes | $0 | $14.10 | $1.80 |
Restructuring_Charges_and_Inte2
Restructuring Charges and Integration Costs (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 |
Restructuring and Related Cost [Line Items] | ||||
Restructuring charges | $245 | $5.50 | $1.50 | |
Realignment of business functions, SG&A expenses | 0.1 | 1.7 | 1.5 | |
Realignment of business functions, R&D expenses | 0.5 | 1.1 | 0.3 | |
Integration and transaction costs, cost of sales | 0.1 | 0.1 | ||
Integration and transaction costs, SG&A expenses | 2.3 | 20.6 | 2.3 | |
Integration and transaction costs, R&D expenses | 0.4 | |||
July 2014 Restructuring Plan [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Estimated total costs, lower range | 325 | |||
Estimated total costs, upper range | 375 | |||
Estimated total non-cash charges, lower range | 80 | |||
Estimated total non-cash charges, upper range | 90 | |||
Number of positions eliminated | 1,500 | |||
Number of positions eliminated, as a percentage of gloabl headcount | 13.00% | |||
Number of vacant positions eliminated | 250 | |||
Restructuring charges | 219.4 | |||
Accelerated share-based compensation costs | 28.4 | |||
Asset write-offs and accelerated depreciation costs | 36.5 | |||
Other costs | 15.6 | |||
July 2014 Restructuring Plan [Member] | Cost of Sales [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Accelerated share-based compensation costs | 1 | |||
Asset write-offs and accelerated depreciation costs | 0.3 | |||
Other costs | 0.7 | |||
July 2014 Restructuring Plan [Member] | Selling, General and Administrative Expenses [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Accelerated share-based compensation costs | 16.2 | |||
Asset write-offs and accelerated depreciation costs | 27.9 | |||
Other costs | 13.4 | |||
July 2014 Restructuring Plan [Member] | Research and Development Expense [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Accelerated share-based compensation costs | 11.2 | |||
Asset write-offs and accelerated depreciation costs | 8.3 | |||
Other costs | 1.5 | |||
January 2014 Restructuring Plan [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Number of positions eliminated | 250 | |||
Restructuring charges | 24.5 | |||
Additional costs related to the restructuring plan | 11.4 | |||
January 2014 Restructuring Plan [Member] | Cost of Sales [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Additional costs related to the restructuring plan | 3.2 | |||
January 2014 Restructuring Plan [Member] | Selling, General and Administrative Expenses [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Additional costs related to the restructuring plan | 6 | |||
January 2014 Restructuring Plan [Member] | Research and Development Expense [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Additional costs related to the restructuring plan | 2.2 | |||
MAP, SkinMedica and Exemplar Acquisitions Restructuring [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Number of positions eliminated | 111 | |||
Restructuring charges | 4.5 | 0.4 | ||
Realignment of Business Functions [Member] | ||||
Restructuring and Related Cost [Line Items] | ||||
Restructuring charges | $0.70 | $1 | $1.50 |
Restructuring_Charges_and_Inte3
Restructuring Charges and Integration Costs Restructuring Reserve Rollforward (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | $245 | $5.50 | $1.50 |
July 2014 Restructuring Plan [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 219.4 | ||
Spending | -77.6 | ||
Balance, end of period | 141.8 | ||
July 2014 Restructuring Plan [Member] | Employee Severance [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 150.4 | ||
Spending | -52.7 | ||
Balance, end of period | 97.7 | ||
July 2014 Restructuring Plan [Member] | Contract Termination Costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 39.7 | ||
Spending | -5.2 | ||
Balance, end of period | 34.5 | ||
July 2014 Restructuring Plan [Member] | Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 29.3 | ||
Spending | -19.7 | ||
Balance, end of period | 9.6 | ||
January 2014 Restructuring Plan [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 24.5 | ||
Spending | -17.9 | ||
Balance, end of period | 6.6 | ||
January 2014 Restructuring Plan [Member] | Employee Severance [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 21.7 | ||
Spending | -15.5 | ||
Balance, end of period | 6.2 | ||
January 2014 Restructuring Plan [Member] | Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring charges | 2.8 | ||
Spending | -2.4 | ||
Balance, end of period | $0.40 |
Composition_of_Certain_Financi2
Composition of Certain Financial Statement Captions (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Trade receivables, net [Abstract] | ||
Trade receivables | $1,004.20 | $935.40 |
Less allowance for sales returns - medical device products | -23 | -27.9 |
Less allowance for doubtful accounts | -66.7 | -24.2 |
Trade receivables, net | 914.5 | 883.3 |
Inventories [Abstract] | ||
Finished products | 188.3 | 180 |
Work in process | 50.5 | 44.1 |
Raw materials | 57.2 | 61.2 |
Inventories | 296 | 285.3 |
Other currents assets [Abstract] | ||
Prepaid expenses | 218.4 | 157.1 |
Deferred taxes | 343.5 | 277.9 |
Foreign currency derivative assets | 75.1 | 20.4 |
Other | 57.3 | 37.6 |
Other currents assets | 694.3 | 493 |
Investments and other assets [Abstract] | ||
Deferred executive compensation investments | 112.9 | 100.7 |
Capitalized software | 37 | 36.8 |
Prepaid pensions | 11.1 | 5.6 |
Debt issuance costs | 8.6 | 10.8 |
Equity investments | 47.2 | 20.8 |
Other | 55.1 | 38.5 |
Investments and other assets | 271.9 | 213.2 |
Property, plant and equipment, net [Abstract] | ||
Land | 71.2 | 62.2 |
Buildings | 1,066.10 | 962.8 |
Machinery and equipment | 844 | 784.8 |
Property, plant and equipment, gross | 1,981.30 | 1,809.80 |
Less accumulated depreciation | -975 | -886.6 |
Property, plant and equipment, net | 1,006.30 | 923.2 |
Other accrued expenses [Abstract] | ||
Sales rebates and other incentive programs | 372.1 | 279.3 |
Royalties | 27.3 | 26.2 |
Interest | 22 | 22 |
Sales returns - specialty pharmaceutical products | 60.4 | 56.5 |
Product warranties - breast implant products | 7.7 | 7.6 |
Contingent consideration | 53.8 | 9.9 |
Investment bank advisory fees | 24 | 0 |
Annual branded prescription drug fee | 34.1 | 6.1 |
Restructuring charges | 109.6 | 0 |
Other | 194 | 189.9 |
Other accrued expenses | 905 | 597.5 |
Other liabilities [Abstract] | ||
Postretirement benefit plan | 56.5 | 44.3 |
Qualified and non-qualified pension plans | 267.3 | 194.5 |
Deferred executive compensation | 116.3 | 105.3 |
Deferred income | 72.8 | 67 |
Contingent consideration | 312.1 | 215.3 |
Product warranties - breast implant products | 28.5 | 26 |
Unrecognized tax benefit liabilities | 82.6 | 67.7 |
Other | 74 | 42.1 |
Other liabilities | 1,010.10 | 762.2 |
Accumulated other comprehensive loss [Abstract] | ||
Foreign currency translation adjustments | -149 | -29.7 |
Deferred holding gains on derivative instruments, net of taxes | 1 | 1.8 |
Unrealized gain on marketable equity investments, net of taxes | 5.8 | 0 |
Actuarial losses not yet recognized as a component of pension and postretirement benefit plan costs, net of taxes | -266.4 | -198.7 |
Accumulated other comprehensive loss | -408.6 | -226.6 |
Deferred holding gains on derivative instruments, taxes | 0.7 | 1.2 |
Unrealized gain on marketable equity investments, taxes | 3.3 | 0 |
Actuarial losses not yet recognized as a component of pension and postretirement benefit plan costs, taxes | 100.4 | 83.5 |
Inventories under consignment | 13 | 11.7 |
Reserves for sales returns related to certain eye care pharmaceutical products genericized | $9.90 | $10.30 |
Intangibles_and_Goodwill_Detai
Intangibles and Goodwill (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | $1,336 | $1,346.60 | $1,336 | ||
Accumulated amortization | -639.8 | -739.2 | -639.8 | ||
Weighted average amortization period | 11 years 6 months | 11 years 5 months | |||
Intangible Assets, Net (Excluding Goodwill) (Abstract) | |||||
Total intangible assets - gross | 2,289.80 | 2,525.70 | 2,289.80 | ||
Total intangible assets - accumulated amortization | -639.8 | -739.2 | -639.8 | ||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 112.4 | 116.7 | 90.2 | ||
Impairment of an intangible asset for distribution rights | 11.4 | ||||
Impairment of in-process research and development assets | 17 | ||||
Estimated amortization expense [Abstract] | |||||
Estimated amortization expense, 2015 | 97.7 | ||||
Estimated amortization expense, 2016 | 77.5 | ||||
Estimated amortization expense, 2017 | 59.6 | ||||
Estimated amortization expense, 2018 | 57.6 | ||||
Estimated amortization expense, 2019 | 55.6 | ||||
Developed Technology [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | 647.7 | 648.5 | 647.7 | ||
Accumulated amortization | -343.8 | -394.9 | -343.8 | ||
Weighted average amortization period | 11 years 1 month | 11 years 1 month | |||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 59.1 | 57.2 | 53.4 | ||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | 54.7 | 54.2 | 54.7 | ||
Accumulated amortization | -21.8 | -41.9 | -21.8 | ||
Weighted average amortization period | 2 years 8 months | 2 years 8 months | |||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 20.5 | 20.5 | 1.1 | ||
Licensing [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | 185.8 | 190.5 | 185.8 | ||
Accumulated amortization | -164.8 | -167.7 | -164.8 | ||
Weighted average amortization period | 9 years 4 months | 9 years 4 months | |||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 3 | 7.4 | 20.4 | ||
Trademarks [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | 89.6 | 89.1 | 89.6 | ||
Accumulated amortization | -29.7 | -33.8 | -29.7 | ||
Weighted average amortization period | 12 years 5 months | 12 years 5 months | |||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 4.4 | 4.4 | 0.4 | ||
Technology-related Assets [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | 327.5 | 335.3 | 327.5 | ||
Accumulated amortization | -66.9 | -86.3 | -66.9 | ||
Weighted average amortization period | 14 years 11 months | 14 years 10 months | |||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 22.3 | 19.4 | 6.5 | ||
Other [Member] | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross amount | 30.7 | 29 | 30.7 | ||
Accumulated amortization | -12.8 | -14.6 | -12.8 | ||
Weighted average amortization period | 7 years 8 months | 7 years 7 months | |||
Amortization expense [Abstract] | |||||
Amortization expense of intangible assets | 3.1 | 7.8 | 8.4 | ||
In-Process Research and Development [Member] | |||||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||||
Unamortizable intangible assets | $953.80 | $1,179.10 | $953.80 |
Intangibles_and_Goodwill_Goodw
Intangibles and Goodwill (Goodwill) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Balance, beginning | $2,339.40 | $2,133.80 |
MAP acquisition | 175 | |
Exemplar acquisition | 14 | |
SkinMedica acquisition adjustments | 17.6 | |
Foreign exchange translation effects and other | -1 | |
LiRIS acquisition | 69.8 | |
Foreign exchange translation effects | -16.3 | |
Balance, ending | 2,392.90 | 2,339.40 |
SkinMedica contractual purchase price adjustment | 2.8 | |
Specialty Pharmaceuticals [Member] | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 501.2 | 299.8 |
MAP acquisition | 175 | |
Exemplar acquisition | 14 | |
SkinMedica acquisition adjustments | 17.6 | |
Foreign exchange translation effects and other | -5.2 | |
LiRIS acquisition | 69.8 | |
Foreign exchange translation effects | -3.9 | |
Balance, ending | 567.1 | 501.2 |
Medical Devices [Member] | ||
Goodwill [Roll Forward] | ||
Balance, beginning | 1,838.20 | 1,834 |
MAP acquisition | 0 | |
Exemplar acquisition | 0 | |
SkinMedica acquisition adjustments | 0 | |
Foreign exchange translation effects and other | 4.2 | |
LiRIS acquisition | 0 | |
Foreign exchange translation effects | -12.4 | |
Balance, ending | $1,825.80 | $1,838.20 |
Notes_Payable_and_LongTerm_Deb2
Notes Payable and Long-Term Debt (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Instrument [Line Items] | |||
Total debt | $2,157.40 | $2,153.90 | |
Current maturities | 72.1 | 55.6 | |
Total long-term debt | 2,085.30 | 2,098.30 | |
Maximum borrowing limit - committed long-term credit facility and commercial paper program combined | 800 | ||
Long-term Debt, by Maturity [Abstract] | |||
2015 | 72.1 | ||
2016 | 799.7 | ||
2017 | 20 | ||
2018 | 249.7 | ||
2019 | 0 | ||
Thereafter | 998.1 | ||
Interest capitalized in property, plant and equipment | 5.6 | 1.8 | 0.9 |
Bank Loans [Member] | |||
Debt Instrument [Line Items] | |||
Average effective interest rate (in hundredths) | 8.83% | 6.07% | |
Total debt | 72.1 | 55.6 | |
Real Estate Mortgage; Maturing 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Average effective interest rate (in hundredths) | 5.65% | 5.65% | |
Total debt | 20 | 20 | |
Senior Notes Due 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Average effective interest rate (in hundredths) | 3.94% | 3.94% | |
Total debt | 817.5 | 831 | |
Debt instrument, issuance date | 12-Apr-06 | ||
Debt instrument, interest rate, stated percentage (in hundredths) | 5.75% | ||
Debt instrument, face amount | 800 | ||
Debt instrument, sales price as percentage of par value (in hundredths) | 99.72% | ||
Debt instrument, maturity date | 1-Apr-16 | ||
Debt instrument, unamortized discount | 2.3 | ||
Debt instruments, amortization period for debt discount and deferred debt issuance costs | 10 years | ||
Senior Notes Due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Average effective interest rate (in hundredths) | 1.39% | 1.39% | |
Total debt | 249.7 | 249.5 | |
Debt instrument, issuance date | 12-Mar-13 | ||
Debt instrument, interest rate, stated percentage (in hundredths) | 1.35% | ||
Debt instrument, face amount | 250 | ||
Debt instrument, sales price as percentage of par value (in hundredths) | 99.79% | ||
Debt instrument, maturity date | 15-Mar-18 | ||
Debt instrument, unamortized discount | 0.5 | ||
Debt instruments, amortization period for debt discount and deferred debt issuance costs | 5 years | ||
Senior Notes Due 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Average effective interest rate (in hundredths) | 3.41% | 3.41% | |
Total debt | 648.9 | 648.7 | |
Debt instrument, issuance date | 14-Sep-10 | ||
Debt instrument, interest rate, stated percentage (in hundredths) | 3.38% | ||
Debt instrument, face amount | 650 | ||
Debt instrument, sales price as percentage of par value (in hundredths) | 99.70% | ||
Debt instrument, maturity date | 15-Sep-20 | ||
Debt instrument, unamortized discount | 2 | ||
Debt instruments, amortization period for debt discount and deferred debt issuance costs | 10 years | ||
Senior Notes Due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Average effective interest rate (in hundredths) | 2.83% | 2.83% | |
Total debt | 349.2 | 349.1 | |
Debt instrument, issuance date | 12-Mar-13 | ||
Debt instrument, interest rate, stated percentage (in hundredths) | 2.80% | ||
Debt instrument, face amount | 350 | ||
Debt instrument, sales price as percentage of par value (in hundredths) | 99.71% | ||
Debt instrument, maturity date | 15-Mar-23 | ||
Debt instrument, unamortized discount | 1 | ||
Debt instruments, amortization period for debt discount and deferred debt issuance costs | 10 years | ||
Committed Long-Term Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing limit - committed long-term credit facility | 800 | ||
Debt instrument, maturity date | 31-Oct-16 | ||
Commercial Paper [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing limit - commercial paper program | $800 |
Notes_Payable_and_LongTerm_Deb3
Notes Payable and Long-Term Debt (Derivative Instruments) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2006 |
Three Hundred Million Notional Amount Interest Rate Swap [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap, inception date | 31-Jan-07 | ||||
Derivative, termination date | 30-Sep-12 | ||||
Derivative term | nine-year, two month | ||||
Interest rate derivative, notional amount | $300 | ||||
Interest rate swap, fixed interest rate (in hundredths) | 5.75% | ||||
Interest rate swap, variable interest rate basis | 3-month LIBOR | ||||
Interest rate swap, variable interest rate (in hundredths) | 0.37% | ||||
Proceeds upon termination of an interest rate swap | 54.7 | ||||
Accrued interest received upon termination of an interest rate swap | 3.7 | ||||
Net proceeds upon termination of an interest rate swap | 51 | ||||
Unamortized amount of the terminated interest rate swap | 17.8 | 31.5 | |||
Gains recognized in income on interest rate swap | 13.7 | 13.1 | 13.8 | ||
Eight Hundred Million Notional Amount Interest Rate Swap [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap, inception date | 28-Feb-06 | ||||
Derivative, termination date | 30-Apr-06 | ||||
Interest rate swap term | 10 years | ||||
Interest rate derivative, notional amount | 800 | ||||
Interest rate swap, fixed interest rate (in hundredths) | 5.20% | ||||
Amortization of deferred gains on derivatives designated as cash flow hedges from accumulated OCI | 1.3 | 1.3 | 1.3 | ||
Remaining unrecognized gain on interest rate swap cash flow hedge included in accumulated other comprehensive loss | 1.7 | 13 | |||
Remaining unrecognized gain on interest rate swap cash flow hedge included in accumulated other comprehensive loss, net of tax | 1 | ||||
Interest rate cash flow hedge pretax gain to be reclassified as a reduction to interest expense during 2015 | $1.30 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Components of earnings before income taxes [Abstract] | |||||
U.S. | $922.50 | $890.10 | $846.80 | ||
Non-U.S. | 1,066.80 | 840.7 | 684.2 | ||
Earnings from continuing operations before income taxes | 1,989.30 | 1,730.80 | 1,531 | ||
Current [Abstract] | |||||
U.S. federal | 352.9 | 342.4 | 378.3 | ||
U.S. state | 16.2 | 24.7 | 20.4 | ||
Non-U.S. | 167.4 | 152.7 | 103.9 | ||
Total current | 536.5 | 519.8 | 502.6 | ||
Deferred [Abstract] | |||||
U.S. federal | -31.6 | -34.8 | -72.7 | ||
U.S. state | -25.3 | -12.6 | 0.1 | ||
Non-U.S. | -22.9 | -14.1 | 0.3 | ||
Total deferred | -79.8 | -61.5 | -72.3 | ||
Total income tax expense | 456.7 | 458.3 | 430.3 | ||
Excess tax benefits from share-based compensation | 167.5 | 37.7 | 45.7 | ||
Reconciliation of US federal statutory tax rate to combined effective tax rate [Abstract] | |||||
Statutory rate of tax expense (in hundredths) | 35.00% | 35.00% | 35.00% | ||
State taxes, net of U.S. tax benefit (in hundredths) | 0.40% | 0.90% | 1.10% | ||
Tax differential on foreign earnings (in hundredths) | -10.80% | -9.00% | -8.80% | ||
Other credits (R&D) (in hundredths) | -2.90% | -3.00% | -0.90% | ||
Tax audit settlements/adjustments (in hundredths) | 0.70% | 0.80% | 1.30% | ||
Other (in hundredths) | 0.60% | 1.80% | 0.40% | ||
Effective tax rate (in hundredths) | 23.00% | 26.50% | 28.10% | ||
U.S. R&D tax credit for fiscal year 2014 recognized | 19.8 | ||||
Unremitted earnings outside the United States | 4,485.30 | 4,485.30 | |||
Refund related to the settlement of U.S. federal income tax audit for tax year 2005 for acquired subsidiary, Inamed | 3.6 | ||||
Refund related to final settlement of U.S. federal income tax audit related to tax years 2005 and 2006 | 1.4 | ||||
Tax deposit paid to the IRS | 19.5 | ||||
Tax refund related to a final agreement wiht the IRS for certain transfer pricing issues covering tax years 2009 through 2013 | 1.4 | ||||
Tax credit carryforwards | 38.1 | 38.1 | |||
Tax credit carryforward with a valuation allowance | 3.1 | 3.1 | |||
Deferred tax assets [Abstract] | |||||
Net operating losses | 144.9 | 179.7 | 144.9 | 179.7 | |
Accrued expenses | 173.6 | 130 | 173.6 | 130 | |
Capitalized expenses | 161.1 | 176.5 | 161.1 | 176.5 | |
Deferred compensation | 52.1 | 47.4 | 52.1 | 47.4 | |
Medicare, Medicaid and other accrued health care rebates | 110.1 | 80 | 110.1 | 80 | |
Postretirement medical benefits | 21.9 | 16.6 | 21.9 | 16.6 | |
Capitalized intangible assets | 31.5 | 38.9 | 31.5 | 38.9 | |
Deferred revenue | 19.2 | 19.2 | 19.2 | 19.2 | |
Inventory reserves and adjustments | 14.2 | 14.5 | 14.2 | 14.5 | |
Share-based compensation awards | 94.8 | 101.6 | 94.8 | 101.6 | |
Unbilled costs | 28.1 | 28.3 | 28.1 | 28.3 | |
Pension plans | 69.9 | 52.6 | 69.9 | 52.6 | |
R&D credits | 37.2 | 26.2 | 37.2 | 26.2 | |
All other | 57.4 | 46.3 | 57.4 | 46.3 | |
Deferred tax assets, gross | 1,016 | 957.8 | 1,016 | 957.8 | |
Less: valuation allowance | -39.1 | -48.9 | -39.1 | -48.9 | |
Total deferred tax assets | 976.9 | 908.9 | 976.9 | 908.9 | |
Deferred tax liabilities [Abstract] | |||||
Depreciation | -13.1 | 0.1 | -13.1 | 0.1 | |
Developed and core technology intangible assets | 131.3 | 153.5 | 131.3 | 153.5 | |
In-process R&D | 428.3 | 348.6 | 428.3 | 348.6 | |
Total deferred tax liabilities | 546.5 | 502.2 | 546.5 | 502.2 | |
Net deferred tax assets | 430.4 | 406.7 | 430.4 | 406.7 | |
Net current deferred tax assets | 343.5 | 277.9 | 343.5 | 277.9 | |
Net non-current deferred tax assets | 86.9 | 128.8 | 86.9 | 128.8 | |
Reconciliation of unrecognized tax benefits [Roll Forward] | |||||
Balance, beginning of period | 77.3 | 61.9 | 53 | ||
Gross increase as a result of positions taken in a prior year | 8.4 | 8.7 | 20.9 | ||
Gross decrease as a result of positions taken in a prior year | -32.7 | -14.6 | -12.7 | ||
Gross increase as a result of positions taken in current year | 39.1 | 23.3 | 3.4 | ||
Gross decrease as a result of positions taken in current year | -2.1 | 0 | 0 | ||
Increases (decreases) related to settlements | 1.8 | -2 | -2.7 | ||
Decrease due to lapse in statute of limitations | -0.2 | 0 | 0 | ||
Balance, end of period | 91.6 | 77.3 | 91.6 | 77.3 | 61.9 |
Unrecognized tax benefit that, if recognized, would affect the effective tax rate | 84.1 | 70.5 | 84.1 | 70.5 | 55.2 |
Interest (income) expense related to uncertainty in income taxes recognized | -2.8 | 4.3 | 2.2 | ||
Accrued interest expense related to uncertainty in income taxes | 10.8 | 9.8 | 10.8 | 9.8 | |
Reasonably possible decrease in unrecognized tax benefit liabilities during the next 12 months, lower range of change | 5 | 5 | |||
Reasonably possible decrease in unrecognized tax benefit liabilities during the next 12 months, upper range of change | $6 | $6 | |||
US Federal [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2007 - 2013 | ||||
California [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2005 - 2013 | ||||
Brazil [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2009 - 2013 | ||||
Canada [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2007 - 2013 | ||||
France [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2011 - 2013 | ||||
Germany [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2012 - 2013 | ||||
Italy [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2009 - 2013 | ||||
Ireland [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2007 - 2013 | ||||
Spain [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2010 - 2013 | ||||
United Kingdom [Member] | |||||
Tax years still subject to examination by tax jurisdiction [Line Items] | |||||
Open tax years | 2011 - 2013 |
Income_Taxes_Operating_Loss_Ca
Income Taxes (Operating Loss Carryforwards) (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Foreign Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $39.80 |
U.S. Federal and State Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 694.1 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards with a valuation allowance | $329.30 |
Employee_Retirement_and_Other_2
Employee Retirement and Other Benefit Plans (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 01, 2015 |
Amounts recognized in accumulated other comprehensive loss (income) [Abstract] | ||||
Settlement charge related to the plan amendments, the additional year of service credit and the related impact from severance actions in 2014 | $0.90 | |||
Plan settlement payments related to the plan amendments, the additional year of service credit and the related impact from severance actions in 2014 | 2.2 | |||
Settlement charge related to voluntary lump-sum pension payouts | 13 | |||
Plan payments related to voluntary lump-sum pension payouts | 63.6 | |||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, beginning of year | 933.9 | |||
Fair value of plan assets, end of year | 1,019.70 | 933.9 | ||
Information for pension plans with a projected benefit obligation exceeding the fair value of plan assets [Abstract] | ||||
Projected benefit obligation | 1,144.10 | 1,098.40 | ||
Accumulated benefit obligation | 1,138 | 992.3 | ||
Fair value of plan assets | 873.9 | 901.1 | ||
Information for pension plans with an accumulated benefit obligation in excess of plan assets [Abstract] | ||||
Projected benefit obligation | 1,144.10 | 327.5 | ||
Accumulated benefit obligation | 1,138 | 283.5 | ||
Fair value of plan assets | 873.9 | 156.6 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 1,019.70 | 933.9 | ||
Savings and Investment plan [Abstract] | ||||
Maximum contribution amount as a percentage of an employee's contribution that are subject to Company matching contribution (in hundredths) | 4.00% | 4.00% | 4.00% | 5.00% |
Employer percentage of match of employee contributions up to maximum level (in hundredths) | 100.00% | 100.00% | 100.00% | |
Employer cost of the plan | 21.1 | 23 | 19.9 | |
Employer percentage of contributions of employees compensation into a sponsored retirement program (in hundredths) | 5.00% | 5.00% | 5.00% | |
Employer cost of the retirement contribution program | 24.6 | 25.6 | 23 | |
Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 275.4 | 262.6 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 275.4 | 262.6 | ||
Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 744.3 | 671.3 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 744.3 | 671.3 | ||
Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Cash and Cash Equivalents [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 24.5 | 16.9 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 24.5 | 16.9 | ||
Cash and Cash Equivalents [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Cash and Cash Equivalents [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 24.5 | 16.9 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 24.5 | 16.9 | ||
Cash and Cash Equivalents [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. small-cap growth [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 26.8 | 26.1 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 26.8 | 26.1 | ||
U.S. small-cap growth [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. small-cap growth [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 26.8 | 26.1 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 26.8 | 26.1 | ||
U.S. small-cap growth [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. large-cap index [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 76.8 | 65.3 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 76.8 | 65.3 | ||
U.S. large-cap index [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. large-cap index [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 76.8 | 65.3 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 76.8 | 65.3 | ||
U.S. large-cap index [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
International equities [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 217.3 | 212.7 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 217.3 | 212.7 | ||
International equities [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 217.3 | 212.7 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 217.3 | 212.7 | ||
International equities [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
International equities [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. treasury bonds [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 90.8 | 86.5 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 90.8 | 86.5 | ||
U.S. treasury bonds [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
U.S. treasury bonds [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 90.8 | 86.5 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 90.8 | 86.5 | ||
U.S. treasury bonds [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Global corporate bonds [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 413.7 | 385.1 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 413.7 | 385.1 | ||
Global corporate bonds [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Global corporate bonds [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 413.7 | 385.1 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 413.7 | 385.1 | ||
Global corporate bonds [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
International bond funds [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 111.7 | 91.4 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 111.7 | 91.4 | ||
International bond funds [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
International bond funds [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 111.7 | 91.4 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 111.7 | 91.4 | ||
International bond funds [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Global corporate bond funds [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 17.3 | 20.4 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 17.3 | 20.4 | ||
Global corporate bond funds [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 17.3 | 20.4 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 17.3 | 20.4 | ||
Global corporate bond funds [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Global corporate bond funds [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
International government bond funds [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 40.8 | 29.5 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 40.8 | 29.5 | ||
International government bond funds [Member] | Level I [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 40.8 | 29.5 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 40.8 | 29.5 | ||
International government bond funds [Member] | Level II [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
International government bond funds [Member] | Level III [Member] | ||||
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, end of year | 0 | 0 | ||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | ||
Pension Plan [Member] | ||||
Amounts recognized in accumulated other comprehensive loss (income) [Abstract] | ||||
Unrecognized actuarial loss | 337.8 | 288.7 | ||
Amount of actuarial loss expected to be recognized in net periodic benefit cost in next fiscal year | 8.1 | |||
Components of net periodic benefit cost (credit) [Abstract] | ||||
Service cost | 29.4 | 28.5 | 25.7 | |
Interest cost | 52 | 46.2 | 43.8 | |
Expected return on plan assets | -52.8 | -45 | -43.4 | |
Plan curtailment | 0 | 0 | 0 | |
Loss on plan settlements | 13.9 | 0 | 0 | |
Amortization of prior service costs (credits) | 0 | 0 | 0 | |
Recognized net actuarial losses | 15.7 | 31 | 27 | |
Net periodic benefit cost | 58.2 | 60.7 | 53.1 | |
Change in projected benefit obligation [Roll Forward] | ||||
Projected benefit obligation, beginning of year | 1,125.60 | 1,084.60 | ||
Service cost | 29.4 | 28.5 | 25.7 | |
Interest cost | 52 | 46.2 | 43.8 | |
Participant contributions | 1.5 | 1.5 | ||
Plan changes | -112.4 | -1 | ||
Plan settlements | -65.8 | 0 | ||
Actuarial losses (gains) | 313.5 | -25.7 | ||
Benefits paid | -25.8 | -19.8 | ||
Impact of foreign currency translation | -39.3 | 11.3 | ||
Projected benefit obligation, end of year | 1,278.70 | 1,125.60 | 1,084.60 | |
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, beginning of year | 933.9 | 869.3 | ||
Actual return on plan assets | 155.1 | 31.3 | ||
Company contributions | 51.9 | 42.3 | ||
Participant contributions | 1.5 | 1.5 | ||
Plan settlements | -65.8 | 0 | ||
Benefits paid | -25.8 | -19.8 | ||
Impact of foreign currency translation | -31.1 | 9.3 | ||
Fair value of plan assets, end of year | 1,019.70 | 933.9 | 869.3 | |
Funded status of plans | -259 | -191.7 | ||
Amounts Recognized in Balance Sheet for Defined Benefit Plans [Abstract] | ||||
Investments and other assets | 11.1 | 5.6 | ||
Accrued compensation | -2.8 | -2.8 | ||
Other liabilities | -267.3 | -194.5 | ||
Net accrued benefit costs | -259 | -191.7 | ||
Accumulated benefit obligations for U.S. and major non-U.S. pension plans | 1,272.60 | 1,018 | ||
Information for pension plans with an accumulated benefit obligation in excess of plan assets [Abstract] | ||||
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, lower range | 10 | |||
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, upper range | 15 | |||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 1,019.70 | 933.9 | 869.3 | |
Projected future benefit payments for qualified and non-qualified defined benefit plans [Abstract] | ||||
2015 | 26.1 | |||
2016 | 28.7 | |||
2017 | 31.4 | |||
2018 | 34.1 | |||
2019 | 37.4 | |||
2020-2024 | 226.6 | |||
Total | 384.3 | |||
Pension Plan [Member] | Equity securities [Member] | ||||
Fair Value Of Plan Assets [Abstract] | ||||
Company's target allocation in equity securities for U.S. and non-U.S. pension plans (in hundredths) | 30.00% | |||
Pension Plan [Member] | Debt securities [Member] | ||||
Fair Value Of Plan Assets [Abstract] | ||||
Company's target allocation in equity securities for U.S. and non-U.S. pension plans (in hundredths) | 70.00% | |||
U.S. Pension Plans [Member] | ||||
For Determining Net Periodic Benefit Cost [Abstract] | ||||
Discount rate (in hundredths) | 5.05% | 4.23% | 4.63% | |
Expected return on plan assets (in hundredths) | 6.25% | 6.25% | 6.75% | |
Rate of compensation increase (in hundredths) | 4.00% | 4.00% | 4.00% | |
Expected long-term rate of return on plan assets for next fiscal year (in hundredths) | 6.25% | |||
For Determining Projected Benefit Obligations [Abstract] | ||||
Discount rate (in hundredths) | 4.21% | 5.05% | ||
Rate of compensation increase (in hundredths) | 0.00% | 4.00% | ||
Non-U.S. Pension Plans [Member] | ||||
For Determining Net Periodic Benefit Cost [Abstract] | ||||
Discount rate (in hundredths) | 4.19% | 4.55% | 5.14% | |
Expected return on plan assets (in hundredths) | 4.56% | 4.36% | 4.80% | |
Rate of compensation increase (in hundredths) | 2.94% | 2.89% | 3.04% | |
Expected long-term rate of return on plan assets for next fiscal year (in hundredths) | 3.70% | |||
For Determining Projected Benefit Obligations [Abstract] | ||||
Discount rate (in hundredths) | 2.64% | 4.19% | ||
Rate of compensation increase (in hundredths) | 2.92% | 2.94% | ||
Retiree Health Plan [Member] | ||||
Amounts recognized in accumulated other comprehensive loss (income) [Abstract] | ||||
Unrecognized actuarial loss | 20.6 | 12.1 | ||
Amount of actuarial loss expected to be recognized in net periodic benefit cost in next fiscal year | 1.6 | |||
Prior service credits | 12.5 | 17 | ||
Amount of unrecognized prior service credits expected to be recognized in net periodic benefit cost in next fiscal year | 2.4 | |||
Components of net periodic benefit cost (credit) [Abstract] | ||||
Service cost | 1.5 | 1.8 | 1.7 | |
Interest cost | 2.3 | 2 | 1.9 | |
Expected return on plan assets | 0 | 0 | 0 | |
Plan curtailment | -1.8 | 0 | 0 | |
Loss on plan settlements | 0 | 0 | 0 | |
Amortization of prior service costs (credits) | -2.7 | -2.7 | -2.7 | |
Recognized net actuarial losses | 0.8 | 1.4 | 1.3 | |
Net periodic benefit cost | 0.1 | 2.5 | 2.2 | |
Change in projected benefit obligation [Roll Forward] | ||||
Projected benefit obligation, beginning of year | 45.8 | 47.9 | ||
Service cost | 1.5 | 1.8 | 1.7 | |
Interest cost | 2.3 | 2 | 1.9 | |
Participant contributions | 0 | 0 | ||
Plan changes | -1.9 | 0 | ||
Plan settlements | 0 | 0 | ||
Actuarial losses (gains) | 11.3 | -5.4 | ||
Benefits paid | -1 | -0.5 | ||
Impact of foreign currency translation | 0 | 0 | ||
Projected benefit obligation, end of year | 58 | 45.8 | 47.9 | |
Change in Plan Assets [Roll Forward] | ||||
Fair value of plan assets, beginning of year | 0 | 0 | ||
Actual return on plan assets | 0 | 0 | ||
Company contributions | 1 | 0.5 | ||
Participant contributions | 0 | 0 | ||
Plan settlements | 0 | 0 | ||
Benefits paid | -1 | -0.5 | ||
Impact of foreign currency translation | 0 | 0 | ||
Fair value of plan assets, end of year | 0 | 0 | 0 | |
Funded status of plans | -58 | -45.8 | ||
Amounts Recognized in Balance Sheet for Defined Benefit Plans [Abstract] | ||||
Investments and other assets | 0 | 0 | ||
Accrued compensation | -1.5 | -1.5 | ||
Other liabilities | -56.5 | -44.3 | ||
Net accrued benefit costs | -58 | -45.8 | ||
Information for pension plans with an accumulated benefit obligation in excess of plan assets [Abstract] | ||||
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, lower range | 1 | |||
Estimated future employer contributions to U.S. and non-U.S. pension plans and other postretirement plan, upper range | 2 | |||
Fair Value Of Plan Assets [Abstract] | ||||
Fair value of plan assets | 0 | 0 | 0 | |
For Determining Net Periodic Benefit Cost [Abstract] | ||||
Discount rate (in hundredths) | 5.02% | 4.21% | 4.60% | |
For Determining Projected Benefit Obligations [Abstract] | ||||
Discount rate (in hundredths) | 4.21% | 5.02% | ||
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract] | ||||
Company's assumed ultimate health care trend (in hundredths) | 3.00% | |||
Maximum annual increase in benefits under Other Postretirement Plan | 3.00% | |||
Projected future benefit payments for qualified and non-qualified defined benefit plans [Abstract] | ||||
2015 | 1.5 | |||
2016 | 2.2 | |||
2017 | 2.6 | |||
2018 | 2.8 | |||
2019 | 2.9 | |||
2020-2024 | 17.1 | |||
Total | $29.10 |
Employee_Stock_Plans_Details
Employee Stock Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Aggregate number of shares available for future grant under the incentive award plan (in shares) | 15,700,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning of year (in shares) | 22,017,000 | 21,567,000 | 22,651,000 |
Options granted (in shares) | 3,653,000 | 4,511,000 | 4,372,000 |
Options exercised (in shares) | -7,629,000 | -3,187,000 | -4,928,000 |
Options cancelled (in shares) | -357,000 | -874,000 | -528,000 |
Outstanding, end of year (in shares) | 17,684,000 | 22,017,000 | 21,567,000 |
Exercisable, end of year (in shares) | 9,517,000 | 12,051,000 | 10,906,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Options outstanding, beginning of year, weighted average exercise price (in dollars per share) | $73.41 | $65 | $57.47 |
Options granted, weighted average exercise price (in dollars per share) | $125.27 | $105.38 | $88.01 |
Options exercised, weighted average exercise price (in dollars per share) | $68.05 | $57.36 | $50.02 |
Options cancelled, weighted average exercise price (in dollars per share) | $103.22 | $89.29 | $72.39 |
Options outstanding, end of year, weighted average exercise price (in dollars per share) | $85.83 | $73.41 | $65 |
Options exercisable, end of year, weighted average exercise price (in dollars per share) | $67.96 | $59.52 | $56.25 |
Weighted average per share fair value of options granted during the year (in dollars per share) | $38.62 | $27.58 | $22.45 |
Aggregate intrinsic value of stock options exercised | $652.30 | $149.70 | $202.40 |
Weighted average remaining contractual life of options outstanding | 6 years 1 month | ||
Weighted average remaining contractual life of options exercisable | 4 years 5 months | ||
The Company's closing year-end stock price (in dollars per share) | $212.59 | ||
Aggregate intrinsic value of options outstanding | 2,241.70 | ||
Aggregate intrinsic value of options exercisable | 1,376.40 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | |||
Restricted share awards, beginning of year (in shares) | 875,000 | 1,165,000 | 1,035,000 |
Shares granted (in shares) | 283,000 | 178,000 | 360,000 |
Shares vested (in shares) | -287,000 | -406,000 | -198,000 |
Shares cancelled (in shares) | -55,000 | -62,000 | -32,000 |
Restricted share awards, end of year (in shares) | 816,000 | 875,000 | 1,165,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Restricted share awards, beginning of year, weighted average grant-date fair value (in dollars per share) | $76.59 | $67.08 | $57.38 |
Shares granted, weighted average grant-date fair value (in dollars per share) | $155.49 | $104.66 | $88.75 |
Shares vested, weighted average grant-date fair value (in dollars per share) | $70.53 | $48.20 | $57.22 |
Shares cancelled, weighted average grant-date fair value (in dollars per share) | $94.63 | $78.69 | $59.87 |
Restricted share awards, end of year, weighted average grant-date fair value (in dollars per share) | $104.85 | $76.59 | $67.08 |
Fair value of special performance-based restricted stock units granted | 18 | ||
Restricted stock units granted to the Chief Executive Officer (in shares) | 165,000 | ||
Restricted stock units granted to the Chief Executive Officer, requisite service period | 5 years | ||
Total fair value of restricted shares that vested | 41.4 | 43 | 17.9 |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected volatility (in hundredths) | 29.71% | 26.22% | 25.65% |
Risk-free interest rate (in hundredths) | 1.78% | 1.05% | 1.07% |
Expected dividend yield (in hundredths) | 0.18% | 0.20% | 0.26% |
Expected option life | 5 years 8 months 20 days | 5 years 8 months 23 days | 5 years 8 months 23 days |
Total unrecognized compensation cost related to non-vested stock options and restricted stock | $224.50 | ||
Months to recognize compensation costs related to non-vested stock options and restricted stock | 46 months | ||
Weighted average months to recognize compensation costs related to non-vested stock options and restricted stock | 32 months |
Employee_Stock_Plans_Sharedbas
Employee Stock Plans (Shared-based Compensation Expense by Award Type) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based compensation expense by award type [Line Items] | |||
Pre-tax share-based compensation expense | $159.70 | $112.70 | $106.60 |
Income tax benefit | -50.6 | -35.8 | -34.6 |
Net share-based compensation expense | 109.1 | 76.9 | 72 |
Employee and director stock options [Member] | |||
Share-based compensation expense by award type [Line Items] | |||
Pre-tax share-based compensation expense | 133.4 | 90.1 | 81.1 |
Employee and director restricted share awards [Member] | |||
Share-based compensation expense by award type [Line Items] | |||
Pre-tax share-based compensation expense | 20.5 | 16.4 | 19.4 |
Stock contributed to employee benefit plans [Member] | |||
Share-based compensation expense by award type [Line Items] | |||
Pre-tax share-based compensation expense | $5.80 | $6.20 | $6.10 |
Employee_Stock_Plans_Sharebase
Employee Stock Plans (Share-based Compensation, Allocation of Recognized Period Costs by Report Line) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Pre-tax share-based compensation expense | $159.70 | $112.70 | $106.60 |
Cost of Sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Pre-tax share-based compensation expense | 10.9 | 9.4 | 9 |
Selling, General and Administrative Expenses [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Pre-tax share-based compensation expense | 103 | 74.1 | 70.1 |
Research and Development Expense [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Pre-tax share-based compensation expense | $45.80 | $29.20 | $27.50 |
Financial_Instruments_Details
Financial Instruments (Details) (Other, Net [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Settled Foreign Exchange Option Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) recognized in income on derivative instruments | $16.50 | $6.40 | $14.20 |
Open Foreign Exchange Option Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) recognized in income on derivative instruments | 37.2 | 10.4 | -15.3 |
Foreign Exchange Forward Contracts [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gains (losses) recognized in income on derivative instruments | $2 | $5.30 | ($0.90) |
Financial_Instruments_Fair_Val
Financial Instruments (Fair Values Derivatives, Balance Sheet Location) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Foreign Exchange Option Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | $75.10 | $20.20 |
Foreign Exchange Forward Contracts [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative asset | 0.2 | |
Foreign Exchange Forward Contracts [Member] | Accounts Payable [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair value of derivative liability | $3.90 |
Financial_Instruments_Foreign_
Financial Instruments (Foreign Currency Derivative Insturments Notional Principal and Fair Value) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Foreign Exchange Forward Contract Receive U.S. Dollar [Member] | ||
Foreign Currency Derivative Instruments Notional Principal And Fair Value [Line Items] | ||
Notional principal | $32.80 | $35 |
Fair value | -2.8 | 0.1 |
Foreign Exchange Forward Contract Pay U.S. Dollar [Member] | ||
Foreign Currency Derivative Instruments Notional Principal And Fair Value [Line Items] | ||
Notional principal | 37.5 | 41.3 |
Fair value | -1.1 | 0.1 |
Foreign Exchange Contract Put Option [Member] | ||
Foreign Currency Derivative Instruments Notional Principal And Fair Value [Line Items] | ||
Notional principal | 849.3 | 560.8 |
Fair value | $75.10 | $20.20 |
Financial_Instruments_Fair_Val1
Financial Instruments (Fair Value by Balance Sheet Grouping) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Non-current marketable equity investments | $20.70 | |
Other than temporary impairment charge, non-marketable equity investment | 3.1 | 3.7 |
Allowance for doubtful accounts | 66.7 | 24.2 |
Allowances for estimated uncollectible trade receivables in Venezuela | 37.3 | |
Percentage of trade receivables from McKesson Drug Company (in hundredth) | 11.00% | |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and equivalents | 4,911.40 | 3,046.10 |
Short-term investments | 55 | 603 |
Non-current marketable equity investments | 20.7 | 0 |
Non-current non-marketable equity investments | 26.5 | 20.8 |
Notes payable | 72.1 | 55.6 |
Long-term debt | 2,085.30 | 2,098.30 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and equivalents | 4,911.40 | 3,046.10 |
Short-term investments | 55 | 603 |
Non-current marketable equity investments | 20.7 | 0 |
Non-current non-marketable equity investments | 26.5 | 20.8 |
Notes payable | 72.1 | 55.6 |
Long-term debt | $2,095.50 | $2,163.80 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Assets [Abstract] | ||
Commercial paper | $55 | $2,016.80 |
Foreign time deposits | 47.7 | 370.3 |
Other cash equivalents | 4,173.90 | 1,080.40 |
Available-for-sale securities | 20.7 | |
Foreign exchange derivative assets | 75.1 | 20.4 |
Deferred executive compensation investments | 112.9 | 100.7 |
Assets measured at fair value on a recurring basis | 4,485.30 | 3,588.60 |
Liabilities [Abstract] | ||
Foreign exchange derivative liabilities | 3.9 | |
Deferred executive compensation liabilities | 105.7 | 93 |
Contingent consideration liabilities | 365.9 | 225.2 |
Liabilities measured at fair value on a recurring basis | 475.5 | 318.2 |
Reconciliation of the change in the contingent consideration liabilities [Roll Forward] | ||
Balance, beginning of year | 225.2 | 224.3 |
Additions during the period related to business combinations | 170.5 | 0 |
Change in the estimated fair value of the contingent consideration liabilities | -15.1 | 70.7 |
Payments made during the period | -10.2 | -61.2 |
Foreign exchange translation effects | -4.5 | -8.6 |
Balance, end of year | 365.9 | 225.2 |
Probability of success in meeting development milestones, lower range (in hundredths) | 30.00% | |
Probability of success in meeting development milestones, higher range (in hundredths) | 80.00% | |
Level 1 [Member] | ||
Assets [Abstract] | ||
Commercial paper | 0 | 0 |
Foreign time deposits | 0 | 0 |
Other cash equivalents | 0 | 0 |
Available-for-sale securities | 20.7 | |
Foreign exchange derivative assets | 0 | 0 |
Deferred executive compensation investments | 90.3 | 80.4 |
Assets measured at fair value on a recurring basis | 111 | 80.4 |
Liabilities [Abstract] | ||
Foreign exchange derivative liabilities | 0 | |
Deferred executive compensation liabilities | 83.1 | 72.7 |
Contingent consideration liabilities | 0 | 0 |
Liabilities measured at fair value on a recurring basis | 83.1 | 72.7 |
Level 2 [Member] | ||
Assets [Abstract] | ||
Commercial paper | 55 | 2,016.80 |
Foreign time deposits | 47.7 | 370.3 |
Other cash equivalents | 4,173.90 | 1,080.40 |
Available-for-sale securities | 0 | |
Foreign exchange derivative assets | 75.1 | 20.4 |
Deferred executive compensation investments | 22.6 | 20.3 |
Assets measured at fair value on a recurring basis | 4,374.30 | 3,508.20 |
Liabilities [Abstract] | ||
Foreign exchange derivative liabilities | 3.9 | |
Deferred executive compensation liabilities | 22.6 | 20.3 |
Contingent consideration liabilities | 0 | 0 |
Liabilities measured at fair value on a recurring basis | 26.5 | 20.3 |
Level 3 [Member] | ||
Assets [Abstract] | ||
Commercial paper | 0 | 0 |
Foreign time deposits | 0 | 0 |
Other cash equivalents | 0 | 0 |
Available-for-sale securities | 0 | |
Foreign exchange derivative assets | 0 | 0 |
Deferred executive compensation investments | 0 | 0 |
Assets measured at fair value on a recurring basis | 0 | 0 |
Liabilities [Abstract] | ||
Foreign exchange derivative liabilities | 0 | |
Deferred executive compensation liabilities | 0 | 0 |
Contingent consideration liabilities | 365.9 | 225.2 |
Liabilities measured at fair value on a recurring basis | $365.90 | $225.20 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rental expense | $73.40 | $79 | $67 |
Operating Leases, Future Minimum Payments Due [Abstract] | |||
2015 | 60.2 | ||
2016 | 47.1 | ||
2017 | 32.7 | ||
2018 | 20.6 | ||
2019 | 15.5 | ||
Thereafter | $51.10 |
Product_Warranties_Details
Product Warranties (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Reconciliation of the change in estimated product warranty liabilities [Roll Forward] | ||
Balance, beginning of year | $33.60 | $34.40 |
Provision for warranties issued during the year | 12 | 8 |
Settlements made during the year | -9.4 | -8.1 |
Decreases in warranty estimates | 0 | -0.7 |
Balance, end of year | 36.2 | 33.6 |
Product Warranty Accrual, Balance Sheet Classification [Abstract] | ||
Current portion | 7.7 | 7.6 |
Non-current portion | 28.5 | 26 |
Total | $36.20 | $33.60 |
Business_Segment_Information_D
Business Segment Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues [Abstract] | |||
Product net sales | $7,126.10 | $6,197.50 | $5,549.30 |
Other revenues | 111.8 | 102.9 | 97.3 |
Total revenues | 7,237.90 | 6,300.40 | 5,646.60 |
Operating income [Abstract] | |||
Total segments | 3,215.20 | 2,528.20 | 2,226.80 |
General and administrative expenses, other indirect costs and other adjustments | 854.4 | 594.6 | 525.3 |
Amortization of intangible assets | 106.5 | 107.4 | 66.7 |
Impairment of intangible assets and related costs | 0 | 11.4 | 22.3 |
Restructuring charges | 245 | 5.5 | 1.5 |
Operating income | 2,009.30 | 1,809.30 | 1,611 |
U.S. sales as a percentage of total consolidated product net sales (in hundredths) | 63.40% | 62.00% | 60.90% |
Specialty Pharmaceuticals [Member] | |||
Revenues [Abstract] | |||
Product net sales | 6,012.10 | 5,339 | 4,784.60 |
Operating income [Abstract] | |||
Total segments | 2,832.30 | 2,282 | 1,997.70 |
Medical Devices [Member] | |||
Revenues [Abstract] | |||
Product net sales | 1,114 | 858.5 | 764.7 |
Operating income [Abstract] | |||
Total segments | $382.90 | $246.20 | $229.10 |
Business_Segment_Information_M
Business Segment Information (Major Customers) (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cardinal Health, Inc. [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of product net sales by major customer (in hundredths) | 10.70% | 13.00% | 14.70% |
McKesson Drug Company [Member] | |||
Revenue, Major Customer [Line Items] | |||
Percentage of product net sales by major customer (in hundredths) | 14.20% | 15.00% | 14.60% |
Business_Segment_Information_P
Business Segment Information (Product Net Sales by Product Line) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from External Customer [Line Items] | |||
Product net sales | $7,126.10 | $6,197.50 | $5,549.30 |
Specialty Pharmaceuticals [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 6,012.10 | 5,339 | 4,784.60 |
Specialty Pharmaceuticals [Member] | Eye Care Pharmaceuticals [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 3,257.90 | 2,890.30 | 2,692.20 |
Specialty Pharmaceuticals [Member] | Botox/Neuromodulators [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 2,230.60 | 1,982.20 | 1,766.30 |
Specialty Pharmaceuticals [Member] | Skin Care and Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 523.6 | 466.5 | 326.1 |
Medical Devices [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 1,114 | 858.5 | 764.7 |
Medical Devices [Member] | Breast Aesthetics [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 406.7 | 377.9 | 377.1 |
Medical Devices [Member] | Facial Aesthetics [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 661.8 | 477.5 | 387.6 |
Medical Devices [Member] | Core Medical Devices [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | 1,068.50 | 855.4 | 764.7 |
Medical Devices [Member] | Other [Member] | |||
Revenue from External Customer [Line Items] | |||
Product net sales | $45.50 | $3.10 | $0 |
Business_Segment_Information_G
Business Segment Information (Geographic Information) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product net sales | $7,126.10 | $6,197.50 | $5,549.30 |
Long-lived assets | 5,222.70 | 4,949.40 | |
Depreciation and Amortization | 248.1 | 244.1 | 215.1 |
Capital Expenditure | 243.9 | 171.9 | 143.3 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product net sales | 4,520.50 | 3,839.40 | 3,379.10 |
Long-lived assets | 4,497 | 4,274.70 | |
Depreciation and Amortization | 187.3 | 181.2 | 153.5 |
Capital Expenditure | 98.4 | 82.3 | 75.7 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product net sales | 1,410.30 | 1,237.80 | 1,095.50 |
Long-lived assets | 627.1 | 569.9 | |
Depreciation and Amortization | 48.5 | 49.6 | 48.1 |
Capital Expenditure | 136.4 | 79.7 | 59.5 |
Latin America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product net sales | 382 | 383 | 386.3 |
Long-lived assets | 49.4 | 52.2 | |
Depreciation and Amortization | 7.1 | 7.7 | 8.1 |
Capital Expenditure | 6.9 | 7.6 | 6 |
Asia Pacific [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product net sales | 512.3 | 464.1 | 432.3 |
Long-lived assets | 47.3 | 51.2 | |
Depreciation and Amortization | 4.8 | 5 | 4.6 |
Capital Expenditure | 2.2 | 2.3 | 2 |
Other [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Product net sales | 301 | 273.2 | 256.1 |
Long-lived assets | 1.9 | 1.4 | |
Depreciation and Amortization | 0.4 | 0.6 | 0.8 |
Capital Expenditure | $0 | $0 | $0.10 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share Disclosure [Abstract] | |||
Earnings from continuing operations | $1,532.60 | $1,272.50 | $1,100.70 |
Less net earnings attributable to noncontrolling interest | 4.6 | 3.6 | 3.7 |
Earnings from continuing operations attributable to Allergan, Inc. | 1,528 | 1,268.90 | 1,097 |
(Loss) earnings from discontinued operations | -3.8 | -283.8 | 1.8 |
Net earnings attributable to Allergan, Inc. | $1,524.20 | $985.10 | $1,098.80 |
Weighted average number of shares outstanding (in shares millions) | 297.6 | 296.8 | 301.5 |
Net shares assumed issued using the treasury stock method for options and non-vested equity shares and share units outstanding during each period based on average market price (in shares millions) | 6.4 | 5 | 5.6 |
Diluted shares (in shares millions) | 304 | 301.8 | 307.1 |
Basic earnings per share attributable to Allergan, Inc. stockholders: | |||
Continuing operations (in dollars per share) | $5.13 | $4.28 | $3.64 |
Discontinued operations (in dollars per share) | ($0.01) | ($0.96) | $0 |
Net basic earnings per share attributable to Allergan, Inc. stockholders (in dollars per share) | $5.12 | $3.32 | $3.64 |
Diluted earnings per share attributable to Allergan, Inc. stockholders: | |||
Continuing operations (in dollars per share) | $5.03 | $4.20 | $3.57 |
Discontinued operations (in dollars per share) | ($0.02) | ($0.94) | $0.01 |
Net diluted earnings per share attributable to Allergan, Inc. stockholder (in dollars per share) | $5.01 | $3.26 | $3.58 |
Stock Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from earnings per share calculation (in shares millions) | 2.7 | 5.5 | 5.5 |
Stock option exercise price lower range (in dollars per share) | $104.77 | $81.06 | $75.58 |
Stock option exercise price upper range (in dollars per share) | $172.43 | $113.55 | $92.90 |
Schedule_II_VALUATION_AND_QUAL2
Schedule II - VALUATION AND QUALIFYING ACCOUNTS (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts Deducted from Trade Receivables [Roll Forward] | ||||
Provision for losses on certain estimated uncollectible trade receivables in Venezuela | $37.30 | |||
Allowance for Doubtful Accounts Deducted from Trade Receivables [Member] | ||||
Allowance for Doubtful Accounts Deducted from Trade Receivables [Roll Forward] | ||||
Balance at beginning of year | 24.2 | 24.2 | 27.6 | |
Additions | 51.3 | 6.2 | 0.8 | |
Deductions | -8.8 | -6.2 | -4.2 | |
Balance at end of year | $66.70 | $24.20 | $24.20 |