Become a Member
  • Track your favourite stocks
  • Create & monitor portfolios
  • Daily portfolio value
Sign Up
Quickpicks
Add shares to your
quickpicks to
display them here!

Historical income statements recast for DERMAGRAFT

4th Feb 2014 07:00

SHIRE PLC - Historical income statements recast for DERMAGRAFT

SHIRE PLC - Historical income statements recast for DERMAGRAFT

PR Newswire

London, February 3

Historical income statements recast for DERMAGRAFT discontinued operations DUBLIN, Ireland, February 04, 2014 - Shire plc (LSE: SHP, NASDAQ: SHPGY), theglobal specialty biopharmaceutical company, today releases historical incomestatements on both a US GAAP and Non GAAP basis for 2012 and the nine monthsended September 30, 2013, recast to show the impact of DERMAGRAFT operations asdiscontinued. On January 17, 2014 Shire announced that it had entered into a definitiveagreement pursuant to which it has sold certain of its DERMAGRAFT assets toOrganogenesis Inc. comprising the key operating assets relating to development,manufacture and sale of DERMAGRAFT product. From the agreement dateOrganogenesis Inc. assumed all further financial and management responsibilityfor DERMAGRAFT. As a result of this divestment DERMAGRAFT operations will be presented asdiscontinued operations, net of tax, in Shire's fourth quarter and 2013 fullyear Earnings Release. Shire will also provide in its Earnings Release, as amemo, Non GAAP financial information including DERMAGRAFT, which managementbelieves will be useful to investors for comparing total company performanceagainst guidance previously issued by Shire. The format of this memoinformation can be found on pages 9 and 10 of this release. Shire's historical statements of operations for all periods in 2013, 2012 and2011 will also be adjusted to present DERMAGRAFT operations as discontinued. For further information please contact: Investor Relations Eric Rojas erojas@shire.com +1 781 482 0999 Sarah Elton-Farr seltonfarr@shire.com +44 1256 894157 Media Jessica Mann jmann@shire.com +44 1256 894 280 Gwen Fisher gfisher@shire.com +1 484 595 9836 NOTES TO EDITORS Shire enables people with life-altering conditions to lead better lives. Our strategy is to focus on developing and marketing innovative specialtymedicines to meet significant unmet patient needs. We provide treatments in Neuroscience, Rare Diseases, Gastrointestinal andInternal Medicine and we are developing treatments for symptomatic conditionstreated by specialist physicians in other targeted therapeutic areas. FORWARD - LOOKING STATEMENTS - "SAFE HARBOR" STATEMENT UNDER THE PRIVATESECURITIES LITIGATION REFORM ACT OF 1995 Statements included in this announcement that are not historical facts areforward-looking statements. Forward-looking statements involve a number ofrisks and uncertainties and are subject to change at any time. In the eventsuch risks or uncertainties materialize, Shire's results could be materiallyadversely affected. The risks and uncertainties include, but are not limitedto, that: Shire's products may not be a commercial success; revenues from ADDERALL XR are subject to generic erosion; the failure to obtain and maintain reimbursement, or an adequate level ofreimbursement, by third-party payors in a timely manner for Shire's productsmay impact future revenues and earnings; Shire relies on a single source for manufacture of certain of its products anda disruption to the supply chain for those products may result in Shire beingunable to continue marketing or developing a product or may result in Shirebeing unable to do so on a commercially viable basis; Shire uses third party manufacturers to manufacture many of its products and isreliant upon third party contractors for certain goods and services, and anyinability of these third party manufacturers to manufacture products, or anyfailure of these third party contractors to provide these goods and services,in each case in accordance with its respective contractual obligations, couldadversely affect Shire's ability to manage its manufacturing processes or tooperate its business; the development, approval and manufacturing of Shire's products is subject toextensive oversight by various regulatory agencies and regulatory approvals orinterventions associated with changes to manufacturing sites, ingredients ormanufacturing processes could lead to significant delays, increase in operatingcosts, lost product sales, an interruption of research activities or the delayof new product launches; the actions of certain customers could affect Shire's ability to sell or marketproducts profitably and fluctuations in buying or distribution patterns by suchcustomers could adversely impact Shire's revenues, financial conditions orresults of operations; investigations or enforcement action by regulatory authorities or lawenforcement agencies relating to Shire's activities in the highly regulatedmarkets in which it operates may result in the distraction of seniormanagement, significant legal costs and the payment of substantial compensationor fines; adverse outcomes in legal matters and other disputes, including Shire's abilityto obtain, maintain, enforce and defend patents and other intellectual propertyrights required for its business, could have a material adverse effect onShire's revenues, financial condition or results of operations; failure to achieve Shire's strategic objectives with respect to the acquisitionof ViroPharma Incorporated, may adversely affect Shire's financial conditionand results of operations; and other risks and uncertainties detailed from time to time in Shire's filingswith the U.S. Securities and Exchange Commission, including its most recentAnnual Report on Form 10-K. Unaudited US GAAP results for the nine months to September 30, 2013 recast forDERMAGRAFT as a discontinued operation Recast Recast Recast Recast Sep YTD Q1 2013 Q2 2013 Q3 2013 2013 $'M $'M $'M $'M Revenues: ___________ ___________ ___________ ___________ Product sales 1,098.2 1,207.9 1,171.0 3,477.1 Royalties 38.5 36.3 37.6 112.4 Other revenues 6.7 8.0 4.1 18.8 ___________ ___________ ___________ ___________ Total revenues 1,143.4 1,252.2 1,212.7 3,608.3 ___________ ___________ ___________ ___________ Costs and expenses: Cost of product sales 147.4 164.3 180.5 492.2 Research and development 220.6 256.5 226.2 703.3 Selling, general andadministrative 391.7 410.0 396.3 1,198.0 Goodwill impairment charge 7.1 - - 7.1 Gain on sale of product rights (6.5) (4.5) (3.6) (14.6) Reorganization costs 17.5 17.7 12.0 47.2 Integration and acquisition costs 4.1 17.4 18.4 39.9 ___________ ___________ ___________ ___________ Total operating expenses 781.9 861.4 829.8 2,473.1 ___________ ___________ ___________ ___________ Operating income 361.5 390.8 382.9 1,135.2 Interest income 0.7 0.5 0.4 1.6 Interest expense (9.2) (9.1) (9.2) (27.5) Other (expense)/income, net (1.0) (1.3) 0.7 (1.6) ___________ ___________ ___________ ___________ Total other expense, net (9.5) (9.9) (8.1) (27.5) ___________ ___________ ___________ ___________ Income from continuing operationsbefore income taxes and equity inearnings/(losses) of equity methodinvestees 352.0 380.9 374.8 1,107.7 Income taxes (71.4) (90.5) (73.4) (235.3) Equity in earnings/(losses) ofequity method investees, net of tax 0.4 0.5 (0.3) 0.6 ___________ ___________ ___________ ___________ Income from continuing operations 281.0 290.9 301.1 873.0 Loss from discontinued operations (216.2) (32.8) (22.9) (271.9) ___________ ___________ ___________ ___________ Net Income 64.8 258.1 278.2 601.1 ___________ ___________ ___________ ___________ Impact of convertible debt, net oftax 7.6 7.5 7.6 22.7 Numerator for diluted EPS 72.4 265.6 285.8 623.8 ___________ ___________ ___________ ___________ Weighted average number of share 588.9 586.0 585.7 587.5(millions) - diluted Diluted earnings per ADS 36.9c 135.9c 146.4c 318.6c ___________ ___________ ___________ ___________ Unaudited Non GAAP results for the nine months to September 30, 2013 recast forDERMAGRAFT as a discontinued operation Recast Recast Recast Recast Sep YTD Q1 2013 Q2 2013 Q3 2013 2013 $'M $'M $'M $'M Revenues: ___________ ___________ ___________ ___________ Product sales 1,098.2 1,207.9 1,171.0 3,477.1 Royalties 38.5 36.3 37.6 112.4 Other revenues 6.7 8.0 4.1 18.8 ___________ ___________ ___________ ___________ Total revenues 1,143.4 1,252.2 1,212.7 3,608.3 ___________ ___________ ___________ ___________ Costs and expenses: Cost of product sales 140.3 155.1 170.3 465.7 Research and development 216.0 232.3 219.9 668.2 Selling, general andadministrative 337.9 356.7 341.2 1,035.8 Depreciation 27.8 29.1 32.4 89.3 ___________ ___________ ___________ ___________ Total operating expenses 722.0 773.2 763.8 2,259.0 ___________ ___________ ___________ ___________ Operating income 421.4 479.0 448.9 1,349.3 Interest income 0.7 0.5 0.4 1.6 Interest expense (9.2) (9.1) (9.2) (27.5) Other (expense)/income, net (1.0) (1.3) 0.7 (1.6) ___________ ___________ ___________ ___________ Total other expense, net (9.5) (9.9) (8.1) (27.5) ___________ ___________ ___________ ___________ Income from continuingoperations before incometaxes and equity inearnings/(losses) ofequity method investees 411.9 469.1 440.8 1,321.8 Income taxes (83.5) (109.5) (90.3) (283.3) Equity in earnings/(losses)of equity method investees,net of tax 0.4 0.5 (0.3) 0.6 ___________ ___________ ___________ ___________ Net Income 328.8 360.1 350.2 1,039.1 ___________ ___________ ___________ ___________ Impact of convertible debt,net of tax 7.6 7.5 7.6 22.7 Numerator for diluted EPS 336.4 367.6 357.8 1,061.8 ___________ ___________ ___________ ___________ Weighted average number of 588.9 586.0 585.7 587.5share (millions) - diluted Diluted earnings per ADS 171.6c 188.1c 183.3c 542.1c ___________ ___________ ___________ ___________ Memo: Previously reported NonGAAP EPS per ADS (prior totreatment of DERMAGRAFToperation as a discontinuedoperation) 162.9c 178.8c 176.7c 517.5c Unaudited Non GAAP results for the nine months to September 30, 2013 for theDERMAGRAFT discontinued operations The table below shows the 2013 loss related to DERMAGRAFT operations that hasbeen reclassified to discontinued operations: Sep YTD Q1 2013 Q2 2013 Q3 2013 2013 $'M $'M $'M $'M ___________ ___________ ___________ ___________ Total revenues 18.5 22.3 23.9 64.7 ___________ ___________ ___________ ___________ Cost of product sales 7.8 10.6 15.8 34.2 Research and development 3.6 3.6 2.9 10.1 Selling, general and administrative 34.0 33.7 30.5 98.2 Depreciation 1.3 1.3 1.4 4.0 ___________ ___________ ___________ ___________ Total operating expenses 46.7 49.2 50.6 146.5 Total other income, net - 0.1 0.1 0.2 ___________ ___________ ___________ ___________ Loss from discontinued operations before incometaxes (28.2) (26.8) (26.6) (81.6) Income taxes 11.7 8.2 13.6 33.5 ___________ ___________ ___________ ___________ Non GAAP net loss from discontinued operations (16.5) (18.6) (13.0) (48.1) ___________ ___________ ___________ ___________ Amortization and asset impairments, net of taxes (198.0) (6.3) (6.3) (210.6) Divestments, reorganizations and discontinuedoperations, net of taxes - (5.6) (1.1) (6.7) Legal and litigation costs, net of taxes (1.7) (2.3) (2.5) (6.5) ___________ ___________ ___________ ___________ US GAAP net loss from discontinued operations (216.2) (32.8) (22.9) (271.9) ___________ ___________ ___________ ___________ Unaudited US GAAP results for 2012 recast for DERMAGRAFT as a discontinuedoperation Recast Recast Recast Recast Recast Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 $'M $'M $'M $'M $'M Revenues: ___________ ___________ ___________ ___________ ___________ Product sales 1,058.1 1,095.3 1,020.8 1,078.7 4,252.9 Royalties 56.3 56.3 41.8 87.2 241.6 Other revenues 8.6 3.8 4.1 16.4 32.9 ___________ ___________ ___________ ___________ ___________ Total revenues 1,123.0 1,155.4 1,066.7 1,182.3 4,527.4 ___________ ___________ ___________ ___________ ___________ Costs and expenses: Cost of product sales 148.4 135.5 151.9 150.0 585.8 Research and development 217.3 235.8 221.0 278.9 953.0 Selling, general andadministrative 458.1 467.7 396.9 625.3 1,948.0 Gain on sale of product rights (7.2) (3.6) (5.7) (1.6) (18.1) Integration and acquisition costs 1.5 3.1 1.5 7.4 13.5 ___________ ___________ ___________ ___________ ___________ Total operating expenses 818.1 838.5 765.6 1,060.0 3,482.2 ___________ ___________ ___________ ___________ ___________ Operating income 304.9 316.9 301.1 122.3 1,045.2 Interest income 0.8 0.6 0.9 0.7 3.0 Interest expense (10.2) (9.6) (9.2) (9.2) (38.2) Other income/(expense), net 1.9 (1.8) 3.5 (5.8) (2.2) ___________ ___________ ___________ ___________ ___________ Total other expense, net (7.5) (10.8) (4.8) (14.3) (37.4) ___________ ___________ ___________ ___________ ___________ Income from continuing operationsbefore income taxes and equity inearnings/(losses) of equity methodinvestees 297.4 306.1 296.3 108.0 1,007.8 Income taxes (52.5) (57.0) (53.1) (40.5) (203.1) Equity in earnings/(losses) ofequity method investees, net of tax 0.9 (0.6) 0.2 0.5 1.0 ___________ ___________ ___________ ___________ ___________ Income from continuing operations 245.8 248.5 243.4 68.0 805.7 Loss from discontinued operations (7.4) (10.7) (16.2) (26.0) (60.3) ___________ ___________ ___________ ___________ ___________ Net Income 238.4 237.8 227.2 42.0 745.4 ___________ ___________ ___________ ___________ ___________ Impact of convertible debt, net oftax 8.4 7.8 7.5 - 31.3 Numerator for diluted EPS 246.8 245.6 234.7 42.0 776.7 ___________ ___________ ___________ ___________ ___________ Weighted average number of share 595.6 594.9 593.1 558.5 593.5(millions) - diluted Diluted earnings per ADS 124.2c 123.9c 118.8c 22.5c 392.7c ___________ ___________ ___________ ___________ ___________ Unaudited Non GAAP results for 2012 recast for DERMAGRAFT as a discontinuedoperation Recast Recast Recast Recast Recast Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 $'M $'M $'M $'M $'M Revenues: ___________ ___________ ___________ ___________ ___________ Product sales 1,058.1 1,095.3 1,020.8 1,078.7 4,252.9 Royalties 56.3 56.3 41.8 87.2 241.6 Other revenues 8.6 3.8 4.1 16.4 32.9 ___________ ___________ ___________ ___________ ___________ Total revenues 1,123.0 1,155.4 1,066.7 1,182.3 4,527.4 ___________ ___________ ___________ ___________ ___________ Costs and expenses: Cost of product sales 141.8 129.1 143.2 142.7 556.8 Research and development 187.9 202.4 215.5 230.5 836.3 Selling, general andadministrative 409.4 380.3 341.5 384.9 1,516.1 Depreciation 25.9 26.7 27.9 28.5 109.0 ___________ ___________ ___________ ___________ ___________ Total operating expenses 765.0 738.5 728.1 786.6 3,018.2 ___________ ___________ ___________ ___________ ___________ Operating income 358.0 416.9 338.6 395.7 1,509.2 Interest income 0.8 0.6 0.9 0.7 3.0 Interest expense (10.2) (9.6) (9.2) (9.2) (38.2) Other income/(expense), net 1.9 (1.8) 3.5 (1.8) 1.8 ___________ ___________ ___________ ___________ ___________ Total other expense, net (7.5) (10.8) (4.8) (10.3) (33.4) ___________ ___________ ___________ ___________ ___________ Income from continuingoperations before incometaxes and equity inearnings/(losses) ofequity method investees 350.5 406.1 333.8 385.4 1,475.8 Income taxes (67.3) (80.6) (64.9) (66.3) (279.1) Equity in earnings/(losses)of equity method investees,net of tax 0.9 (0.6) 0.2 0.5 1.0 ___________ ___________ ___________ ___________ ___________ Net Income 284.1 324.9 269.1 319.6 1,197.7 ___________ ___________ ___________ ___________ ___________ Impact of convertible debt,net of tax 8.4 7.8 7.5 7.6 31.3 Numerator for diluted EPS 292.5 332.7 276.6 327.2 1,229.0 ___________ ___________ ___________ ___________ ___________ Weighted average number of 595.6 594.9 593.1 592.0 593.5share (millions) - diluted Diluted earnings per ADS 147.3c 167.7c 139.8c 165.6c 621.0c ___________ ___________ ___________ ___________ ___________ Memo: Previously reported NonGAAP EPS per ADS (prior totreatment of DERMAGRAFToperation as a discontinuedoperation) 147.9c 168.0c 136.2c 157.8c 610.5c Unaudited Non GAAP results for 2012 for the DERMAGRAFT discontinued operations The table below shows the 2012 income/(loss) related to DERMAGRAFT operationsthat has been reclassified to discontinued operations: Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 2012 $'M $'M $'M $'M $'M ___________ ___________ ___________ ___________ ___________ Total revenues 48.8 52.4 33.7 18.9 153.8 ___________ ___________ ___________ ___________ ___________ Cost of product sales 9.4 16.4 15.3 16.0 57.1 Research and development 3.0 2.8 3.7 3.0 12.5 Selling, general and administrative 31.4 29.3 27.2 26.8 114.7 Depreciation 1.3 1.2 1.2 1.1 4.8 ___________ ___________ ___________ ___________ ___________ Total operating expenses 45.1 49.7 47.4 46.9 189.1 Total other expense, net - - - (0.4) (0.4) ___________ ___________ ___________ ___________ ___________ Income/(loss) from discontinued operations beforeincome taxes 3.7 2.7 (13.7) (28.4) (35.7) Income taxes (2.5) (2.3) 6.4 12.8 14.4 ___________ ___________ ___________ ___________ ___________ Non GAAP net income/(loss) from discontinuedoperations 1.2 0.4 (7.3) (15.6) (21.3) ___________ ___________ ___________ ___________ ___________ Amortization and asset impairments, net of taxes (6.2) (6.4) (6.7) (6.7) (26.0) Acquisition and Integration activities , net of taxes (2.4) (2.5) (0.7) (1.9) (7.5) Legal and litigation costs, net of taxes - (2.2) (1.5) (1.8) (5.5) ___________ ___________ ___________ ___________ ___________ US GAAP net loss from discontinued operations (7.4) (10.7) (16.2) (26.0) (60.3) ___________ ___________ ___________ ___________ ___________ Unaudited US GAAP to Non GAAP reconciliation for the nine months to September30, 2013 recast for DERMAGRAFT as a discontinued operation Memo Non GAAP including US GAAP Non GAAP DERMAGRAFT Reported Adjustments Reported operations DERMAGRAFT (a) (b) (c) (d) (e) operations Total $M $M $M $M $M $M $M $M $M Product sales 3,477.1 - - - - - 3,477.1 64.7 3,541.8 Royalties 112.4 - - - - - 112.4 - 112.4 Other revenues 18.8 - - - - - 18.8 - 18.8 Total revenues 3,608.3 - - - - - 3,608.3 64.7 3,673.0 Costs and expenses:Cost of product sales 492.2 - - - - (26.5) 465.7 34.2 499.9 R&D 703.3 (19.9) - - - (15.2) 668.2 10.1 678.3 SG&A 1,198.0 (106.5) - - (8.1) (47.6) 1,035.8 98.2 1,134.0 Goodwill impairment charge 7.1 (7.1) - - - - - - - Gain on sale of product rights (14.6) - - 14.6 - - - - - Reorganization costs 47.2 - - (47.2) - - - - - Integration and acquisition costs 39.9 - (39.9) - - - - - - Depreciation - - - - - 89.3 89.3 4.0 93.3 Total operating expenses 2,473.1 (133.5) (39.9) (32.6) (8.1) - 2,259.0 146.5 2,405.5 Operating income 1,135.2 133.5 39.9 32.6 8.1 - 1,349.3 (81.8) 1,267.5 Interest income 1.6 - - - - - 1.6 - 1.6 Interest expense (27.5) - - - - - (27.5) 0.5 (27.0) Other expense, net (1.6) - - - - - (1.6) (0.3) (1.9) Total other (expense)/income, net (27.5) - - - - - (27.5) 0.2 (27.3) Income/(loss) from continuing operations beforeincome taxes and equity in earnings of equity 1,107.7 133.5 39.9 32.6 8.1 - 1,321.8 (81.6) 1,240.2method investees Income taxes (235.3) (32.4) (3.1) (9.4) (3.1) - (283.3) 33.5 (249.8) Equity in earnings of equity method investees, 0.6 - - - - - 0.6 - 0.6net of tax Income/(loss) from continuing operations 873.0 101.1 36.8 23.2 5.0 - 1,039.1 (48.1) 991.0 Loss from discontinued operations (271.9) - - 271.9 - - - - - Net income/(loss) 601.1 101.1 36.8 295.1 5.0 - 1,039.1 (48.1) 991.0 Impact of convertible debt, net of tax 22.7 - - - - - 22.7 - 22.7 Numerator for diluted EPS 623.8 101.1 36.8 295.1 5.0 - 1,061.8 (48.1) 1,013.7 Weighted average number of shares (millions) 587.5 - - - - - 587.5 - 587.5 - diluted Diluted earnings per ADS 318.6c 51.6c 18.8c 150.6c 2.5c - 542.1c (24.6c) 517.5c The following items are included in Adjustments:(a) Amortization and asset impairments: Impairment of IPR&D intangible assets acquired with Movetis ($19.9 million), impairment of goodwill relating to Shire's Regenerative Medicine Business ($7.1 million), amortization of intangible assets relating to intellectual property rights acquired ($106.5 million), and tax effect of adjustments;(b) Acquisitions and integration activities: Costs primarily associated with acquisition of SARcode, Lotus and Premacure ($11.5 million), charges related to the change in fair value of contingent consideration ($28.4 million), and tax effect of adjustments;(c) Re-measurement of DAYTRANA contingent consideration to higher fair value ($14.6 million), costs relating to the "One Shire" reorganization announced at Q1 2013 and the collective dismissal and closure of Shire's facility at Turnhout, Belgium ($47.2 million), tax effect of adjustments and loss from discontinued operations, net of tax ($271.9m);(d) Legal and litigation costs: Costs related to litigation, government investigations, other disputes and external legal costs ($8.1 million), and tax effect of adjustments; and(e) Depreciation reclassification: Depreciation of $89.3 million included in Cost of product sales, R&D costs and SG&A costs for US GAAP separately disclosed for the presentation of Non GAAP earnings. Unaudited US GAAP to Non GAAP reconciliation for full year 2012 recast forDERMAGRAFT as a discontinued operation Memo Non GAAP including US GAAP Non GAAP DERMAGRAFT Reported Adjustments Reported operations DERMAGRAFT (a) (b) (c) (d) (e) operations Total $M $M $M $M $M $M $M $M $M Product sales 4,252.9 - - - - - 4,252.9 153.8 4,406.7 Royalties 241.6 - - - - - 241.6 - 241.6 Other revenues 32.9 - - - - - 32.9 - 32.9 Total revenues 4,527.4 - - - - - 4,527.4 153.8 4,681.2 Costs and expenses:Cost of product sales 585.8 - - - - (29.0) 556.8 57.1 613.9 R&D 953.0 (71.2) (23.0) - - (22.5) 836.3 12.5 848.8 SG&A 1,948.0 (280.3) - - (94.1) (57.5) 1,516.1 114.7 1,630.8 Goodwill impairment charge - - - - - - - - - Gain on sale of product rights (18.1) - - 18.1 - - - - - Reorganization costs - - - - - - - - - Integration and acquisition costs 13.5 - (13.5) - - - - - - Depreciation - - - - - 109.0 109.0 4.8 113.8 Total operating expenses 3,482.2 (351.5) (36.5) 18.1 (94.1) - 3,018.2 189.1 3,207.3 Operating income 1,045.2 351.5 36.5 (18.1) 94.1 - 1,509.2 (35.3) 1,473.9 Interest income 3.0 - - - - - 3.0 0.1 3.1 Interest expense (38.2) - - - - - (38.2) - (38.2) Other expense, net (2.2) 4.0 - - - - 1.8 (0.5) 1.3 Total other income/(expense), net (37.4) 4.0 - - - - (33.4) (0.4) (33.8) Income/(loss) from continuing operations beforeincome taxes and equity in earnings of equity 1,007.8 355.5 36.5 (18.1) 94.1 - 1,475.8 (35.7) 1,440.1method investees Income taxes (203.1) (45.0) (5.7) - (25.3) - (279.1) 14.4 (264.7) Equity in earnings of equity method investees, 1.0 - - - - - 1.0 - 1.0net of tax Income/(loss) from continuing operations 805.7 310.5 30.8 (18.1) 68.8 - 1,197.7 (21.3) 1,176.4 Loss from discontinued operations (60.3) - - 60.3 - - - - - Net income/(loss) 745.4 310.5 30.8 42.2 68.8 - 1,197.7 (21.3) 1,176.4 Impact of convertible debt, net of tax 31.3 - - - - - 31.3 - 31.3 Numerator for diluted EPS 776.7 310.5 30.8 42.2 68.8 - 1,229.0 (21.3) 1,207.7 Weighted average number of shares (millions) 593.5 - - - - - 593.5 - 593.5 - dilutedDiluted earnings per ADS 392.7c 156.7c 15.5c 21.3c 34.8c - 621.0c (10.5c) 610.5c The following items are included in Adjustments:(a) Amortization and asset impairments: Impairment of IPR&D intangible assets for RESOLOR in the EU ($71.2 million), impairment charges of intellectual property rights acquired for RESOLOR in the EU ($126.7 million), amortization of intangible assets relating to intellectual property rights acquired ($153.6 million), impairment of available for sale securities ($4.0 million), and tax effect of adjustments;(b) Acquisitions and integration activities: Up-front payments made to Sangamo Biosciences Inc. and for the acquisition of the US rights to prucalopride (marketed in certain countries in Europe as RESOLOR) ($23.0 million), costs primarily associated with the acquisition of FerroKin ($4.3 million), charges related to the change in fair value of deferred contingent consideration ($9.2 million), and tax effect of adjustments;(c) Divestments, reorganizations and discontinued operations: Re-measurement of DAYTRANA contingent consideration to fair value ($18.1 million), tax effect of adjustments and loss from discontinued operations, net of tax ($60.3m);(d) Legal and litigation costs: Costs related to litigation, government investigations, other disputes and external legal costs ($94.1 million), and tax effect of adjustments; and(e) Depreciation reclassification: Depreciation of $109.0 million included in Cost of product sales, R&D costs and SG&A costs for US GAAP separately disclosed for the presentation of Non GAAP earnings. NON GAAP MEASURES This press release contains financial measures not prepared in accordance withUS GAAP. These measures are referred to as "Non GAAP" measures and include: NonGAAP operating income; Non GAAP net income; Non GAAP diluted earnings per ADS;effective tax rate on Non GAAP income before income taxes and earnings/(losses)of equity method investees ("effective tax rate on Non GAAP income"); Non GAAPcost of product sales; Non GAAP research and development; Non GAAP selling,general and administrative; Non GAAP other income/expense; Non GAAP cashgeneration; Non GAAP free cash flow and Non GAAP net cash/(debt). These NonGAAP measures exclude the effect of certain cash and non-cash items, thatShire's management believes are not related to the core performance of Shire'sbusiness. This press release also reports Non GAAP Memo financial information - includingDERMAGRAFT operations. Subsequent to December 31, 2013 Shire entered into anagreement to sell its DERMAGRAFT assets to Organogenesis. As a result, Shire'sfinancial information prepared on the basis of US GAAP presents DERMAGRAFToperations as discontinued. Shire's management believes that the Non GAAP Memofinancial information is useful to investors since it provides an understandingof what Shire's performance would have been had DERMAGRAFT not been disposedof, which permits investors to compare that performance against guidancepreviously issued by Shire to investors. These Non GAAP financial measures are used by Shire's management to makeoperating decisions because they facilitate internal comparisons of Shire'sperformance to historical results and to competitors' results. Shire'sRemuneration Committee uses certain key Non GAAP measures when assessing theperformance and compensation of employees, including Shire's executivedirectors. The Non GAAP measures are presented in this press release as Shire's managementbelieve that they will provide investors with a means of evaluating, and anunderstanding of how Shire's management evaluates, Shire's performance andresults on a comparable basis that is not otherwise apparent on a US GAAPbasis, since many non-recurring, infrequent or non-cash items that Shire'smanagement believe are not indicative of the core performance of the businessmay not be excluded when preparing financial measures under US GAAP. These Non GAAP measures should not be considered in isolation from, assubstitutes for, or superior to financial measures prepared in accordance withUS GAAP. Where applicable the following items, including their tax effect, have beenexcluded when calculating Non GAAP earnings for both 2013 and 2012: Amortization and asset impairments: Intangible asset amortization and impairment charges; and Other than temporary impairment of investments. Acquisitions and integration activities: Up-front payments and milestones in respect of in-licensed and acquiredproducts; Costs associated with acquisitions, including transaction costs, fair valueadjustments on contingent consideration and acquired inventory; Costs associated with the integration of companies; and Noncontrolling interests in consolidated variable interest entities. Divestments, reorganizations and discontinued operations: Gains and losses on the sale of non-core assets; Costs associated with restructuring and reorganization activities; Termination costs; and Income/(losses) from discontinued operations. Legal and litigation costs: Net legal costs related to the settlement of litigation, governmentinvestigations and other disputes (excluding internal legal team costs). Depreciation, which is included in Cost of product sales, R&D and SG&A costs inour US GAAP results, has been separately disclosed for the presentation of 2013and 2012 Non GAAP earnings. A reconciliation of Non GAAP financial measures to the most directly comparablemeasure under US GAAP is presented on pages 9 to 10.

Related Shares:

Shire
FTSE 100 Latest
Value8,938.32
Change-59.74