Valeant Pharmaceuticals Reports 2012 Fourth Quarter Financial Results

Valeant Pharmaceuticals Reports 2012 Fourth Quarter Financial Results 
MONTREAL, Feb. 28, 2013 /CNW/ - 
Fourth Quarter 2012 


    --  2012 Fourth Quarter Total Revenue $986 million; an increase of
        43% over the prior year
        o Organic growth (same store sales) was approximately 7%
        o Pro forma organic growth was approximately 9%
    --  2012 Fourth Quarter GAAP EPS Loss of $0.29; Cash EPS $1.22, an
        increase of 30% over the prior year;
        o Excluding Medicis interest expense Cash EPS $1.34, an
          increase of 43% over the prior year
    --  2012 Fourth Quarter GAAP Operating Cash Flow $68 million;
        Adjusted Operating Cash Flow $423 million

Full Year 2012
    --  Total 2012 revenue was $3.55 billion; an increase of 44% over
        the prior year
        o Organic growth (same store sales) was approximately 8%
        o Pro forma organic growth was approximately 10%
    --  Total 2012 GAAP EPS Loss of $0.38; Cash EPS $4.51, an increase
        of 54% over the prior year
    --  Total 2012 GAAP Operating Cash Flow $657 million; Adjusted
        Operating Cash Flow $1.3 billion

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) announces 
fourth quarter financial results for 2012.

"We are pleased with our financial results for the fourth quarter and the full 
year," said J. Michael Pearson, chairman and chief executive officer. "The 
continued overall robust organic growth of our business, coupled with our 
strong cash flow generation, puts us in a solid position for another 
outstanding year in 2013."

Revenue

Valeant's business continued to perform well in the fourth quarter of 2012 
with all businesses achieving results at or above expectations. Same store 
organic growth was approximately 7% and pro forma organic growth was 
approximately 9% for the fourth quarter of 2012. (See Table 6) Total revenue 
was $986 million in the fourth quarter of 2012, as compared to $688 million in 
the fourth quarter of 2011, an increase of 43%.  Product sales were $947 
million in the fourth quarter of 2012, as compared to $654 million in the 
year-ago quarter, an increase of 45%.

For the full year, total revenue was $3.55 billion in 2012, as compared to 
$2.46 billion in 2011, an increase of 44%. Product sales were $3.31 billion in 
2012, as compared to $2.26 billion in 2011, an increase of 47%. These growth 
rates were realized even in the face of approximately $161 million of negative 
impact from generic competition and over $100 million of negative impact from 
currency translation in 2012.

Valeant's U.S. Dermatology business continued its strong product sales growth 
performance in the fourth quarter.  Key contributors to organic growth 
included Zovirax®, Retin-A Micro®, Acanya®, Carac® and CeraVe®.

Our U.S. Neurology and Other portfolio delivered positive product sales growth 
in the quarter, reflecting the diminishing  year over year negative impact 
from generic competitors of Wellbutrin XL®, Ultram® ER and Cardizem® CD.  
Wellbutrin XL® scripts leveled off and product sales increased, as compared 
to the fourth quarter of 2011. We expect that U.S. Neurology and Other will 
continue to report positive organic growth in 2013.

The Canadian and Australian segment delivered negative organic product sales 
growth this quarter, as expected, due to the rapid genericization of Cesamet® 
in Canada that began in March 2012. Excluding Cesamet, the Canadian and 
Australian segment delivered 5% organic growth (same store sales).

Finally, our Emerging Markets segment provided pro forma organic product sales 
growth of 15%, driven by strong growth in all of the regions in which we 
operate.

Financial Performance

The Company reported a net loss of $89 million for the fourth quarter of 2012, 
or a loss of $0.29 per diluted share.  On a Cash EPS basis, adjusted income 
was $380 million, or $1.22 per diluted share, an increase of 30% over the 
fourth quarter of 2011.  On December 11, 2012, Valeant completed the 
acquisition of Medicis Corporation, whose operations had no material impact on 
the results for the fourth quarter of 2012.  Excluding the interest expense 
related to the acquisition of Medicis, Cash EPS for the fourth quarter of 2012 
was $1.34, an increase of 43% over the fourth quarter of 2011. On a Cash EPS 
basis for the full year 2012, adjusted income was $1.41 billion, or $4.51 per 
diluted share, an increase of 54% over the full year 2011. Excluding the 
interest expense related to the acquisition of Medicis, Cash EPS for 2012 was 
$4.63, an increase of 58% over 2011.

GAAP cash flow from operations was $68 million in the fourth quarter of 2012, 
and adjusted cash flow from operations was $423 million.  GAAP cash flow from 
operations for the full year 2012 was $657 million, and adjusted cash flow 
from operations was $1.29 billion, an increase of 40% year over year.

The Company's cost of goods sold (COGS) was $275 million in the fourth quarter 
of 2012.  After backing out the fair value adjustment to inventory, 
amortization expense and other items related to acquisitions, COGS represented 
25% of product sales, comparable with the fourth quarter of 2011. On a 
sequential basis, COGS for the fourth quarter of 2012 increased 2% primarily 
due to a one-time write-off of obsolete inventory in Brazil. COGS for the full 
year 2012 represented 24% of product sales as compared to 27% in 2011.

Selling, General and Administrative expenses were $204.7 million in the fourth 
quarter of 2012, which includes a $2.7 million step-up in stock based 
compensation expenses related to the acquisition of Legacy Valeant and $3.7 
million loss on the disposal of fixed assets.  Excluding these items, SG&A was 
approximately 20% of revenue. Research and Development expenses were $20.2 
million in the fourth quarter of 2012, or approximately 2% of revenue.

Conference Call and Webcast Information

The Company will host a conference call and a live Internet webcast along with 
a slide presentation today at 8:00 a.m. ET (5:00 a.m. PT), February 28, 2013 
to discuss its fourth quarter financial results for 2012. The dial-in number 
to participate on this call is (877) 295-5743 confirmation code 94189232. 
International callers should dial (973) 200-3961, confirmation code 94189232. 
A replay will be available approximately two hours following the conclusion of 
the conference call through March 7, 2013 and can be accessed by dialing (855) 
859-2056, or (404) 537-3406, confirmation code 94189232. The live webcast of 
the conference call may be accessed through the investor relations section of 
the Company's corporate website at www.valeant.com.

About Valeant

Valeant Pharmaceuticals International, Inc. (NYSE/TSX:VRX) is a multinational 
specialty pharmaceutical company that develops, manufactures and markets a 
broad range of pharmaceutical products primarily in the areas of dermatology, 
neurology and branded generics. More information about Valeant can be found at 
www.valeant.com.

Forward-looking Statements

This press release may contain forward-looking statements, including, but not 
limited to, statements regarding our performance for 2013 and expected organic 
growth.  Forward-looking statements may generally be identified by the use of 
the words "anticipates," "expects," "intends," "plans," "should," "could," 
"would," "may," "will," "believes," "estimates," "potential," "target", or 
"continue" and variations or similar expressions. These statements are based 
upon the current expectations and beliefs of management and are subject to 
certain risks and uncertainties that could cause actual results to differ 
materially from those described in the forward-looking statements. These risks 
and uncertainties include, but are not limited to, risks and uncertainties 
discussed in the Company's most recent annual or quarterly report and detailed 
from time to time in Valeant's other filings with the Securities and Exchange 
Commission and the Canadian Securities Administrators, which factors are 
incorporated herein by reference. Readers are cautioned not to place undue 
reliance on any of these forward-looking statements. These forward-looking 
statements speak only as of the date hereof.  Valeant undertakes no obligation 
to update any of these forward-looking statements to reflect events or 
circumstances after the date of this press release or to reflect actual 
outcomes.

Non-GAAP Information

To supplement the financial measures prepared in accordance with generally 
accepted accounting principles (GAAP), the company uses non-GAAP financial 
measures that exclude certain items, such as amortization of inventory 
step-up, amortization of alliance product assets & pp&e step up, stock-based 
compensation step-up, contingent consideration fair value adjustments, 
restructuring, acquisition-related and other costs, acquired in-process 
research and development ("IPR&D"), legal settlements outside the ordinary 
course of business, the impact of currency fluctuations, amortization and 
other non-cash charges, amortization of deferred financing costs, debt 
discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of 
debt, (gain) loss on assets held for sale/impairment, net, (gain) loss on 
investments, net, and adjusts tax expense to cash taxes. Management uses 
non-GAAP financial measures internally for strategic decision making, 
forecasting future results and evaluating current performance. By disclosing 
non-GAAP financial measures, management intends to provide investors with a 
meaningful, consistent comparison of the company's core operating results and 
trends for the periods presented. Non-GAAP financial measures are not prepared 
in accordance with GAAP.  Therefore, the information is not necessarily 
comparable to other companies and should be considered as a supplement to, not 
a substitute for, or superior to, the corresponding measures calculated in 
accordance with GAAP.

Financial Tables follow.
    Valeant Pharmaceuticals International, Inc.                 Table 1

Condensed Consolidated Statement of Income

For the Three and Twelve Months Ended December 31, 2012
and 2011
                        Three Months Ended     Twelve Months Ended
                        December 31,           December 31,

(In thousands, except   2012        2011       2012         2011
per share data)



Product sales           $ 946,669   $ 654,171  $ 3,309,895  $ 2,255,050

Alliance and royalty    23,493      25,600     171,841      172,473

Service and other (a)   16,131      8,682      64,890       35,927

Total revenues          986,293     688,453    3,546,626    2,463,450



Cost of goods sold
(exclusive of
amortization of         275,138     181,983    921,533      683,750
intangible assets
shown separately
below)

Cost of services        10,629      2,628      47,269       12,311

Cost of alliances       894         36         69,714       30,771

Selling, general and
administrative          204,697     148,508    756,083      572,472
("SG&A")

Research and            20,165      16,777     79,052       65,687
development

Contingent
consideration fair      (28,464)    (20,028)   (5,266)      (10,986)
value adjustments

Acquired in-process
research and            40,033      105,200    189,901      109,200
development

Legal settlements       -           9,441      56,779       11,841

Restructuring,
acquisition-related     261,801     56,718     422,991      130,631
and other costs

Amortization of         299,485     192,798    928,885      557,814
intangible assets
                        1,084,378   694,061    3,466,941    2,163,491

Operating income        (98,085)    (5,608)    79,685       299,959
(loss)



Interest expense, net   (160,228)   (94,055)   (475,610)    (330,442)

Loss on extinguishment  (17,625)    (3,519)    (20,080)     (36,844)
of debt

Gain (loss) on          32          (11)       2,056        22,776
investments, net

Other income
(expense), net          1,263       26,487     19,721       26,551
including translation
and exchange



Income (loss) before
(recovery) provision    (274,643)   (76,706)   (394,228)    (18,000)
for income taxes



Recovery of income      (185,501)   (132,561)  (278,203)    (177,559)
taxes



Net income (loss)       $ (89,142)  $ 55,855   $ (116,025)  $ 159,559



Earnings per share:



Basic:

Net income (loss)       $ (0.29)    $ 0.18     $ (0.38)     $ 0.52

Shares used in per      305,131     308,706    305,446      304,655
share computation



Diluted:

Net income (loss)       $ (0.29)    $ 0.18     $ (0.38)     $ 0.49

Shares used in per      305,131     317,390    305,446      326,119
share computation

 __________________________________________________________________
|(a) Service and Other revenue includes contract manufacturing     |
|revenue of $9.5 million and $39.6 million for the three and twelve|
|months ended December 31, 2012, respectively.                     |
|__________________________________________________________________|

Valeant Pharmaceuticals International, Inc.                   Table 2

Reconciliation of GAAP EPS to Cash EPS

For the Three and Twelve Months Ended December 31, 2012 and
2011
                          Three Months Ended     Twelve Months Ended
                          December 31,           December 31,

(In thousands, except     2012        2011       2012         2011
per share data)



Net income (loss)         $ (89,142)  $ 55,855   $ (116,025)  $ 159,559



Non-GAAP adjustments(a):

Inventory step-up (b)     29,421      10,317     78,822       59,256

Alliance product assets   (336)       214        50,434       19,692
& pp&e step-up/down(c)

Stock-based compensation  2,720       12,936     27,344       63,492
step-up (d)

Contingent consideration  (28,464)    (20,028)   (5,266)      (10,986)
fair value adjustment(e)

Acquired in-process
research and development  40,033      105,200    189,901      109,200
(IPR&D)(f)

Legal settlements(g)      -           9,441      56,779       11,841

Restructuring,
acquisition-related and   261,801     56,718     422,991      130,631
other costs(h)

Amortization and other    311,834     198,080    965,388      569,977
non-gaap charges(i)
                          617,009     372,878    1,786,393    953,103

Amortization of deferred
financing costs, debt
discounts and ASC 470-20  22,188      8,069      36,402       27,103
(FSP APB 14-1) interest
(j)

Loss on extinguishment    17,625      3,519      20,080       36,844
of debt

(Gain) loss on disposal
of fixed assets and
assets held for           3,701       3,199      4,703        3,199
sale/impairment,

net (k)(l)

(Gain) loss on            -           -          -            (1,769)
investments, net

Tax(m)                    (191,801)   (145,861)  (319,603)    (222,959)

Total adjustments         468,722     241,804    1,527,975    795,521



Adjusted income           $ 379,580   $ 297,659  $ 1,411,950  $ 955,080



GAAP earnings per share   $ (0.29)    $ 0.18     $ (0.38)     $ 0.49
- diluted



Cash earnings per share   $ 1.22      $ 0.94     $ 4.51       $ 2.93
- diluted



Cash earnings per share
excluding one-time items  $ 1.22      $ 0.87     $ 4.14       $ 2.64
- diluted



Shares used in diluted
per share calculation -   311,739     317,390    313,123      326,119
Cash earnings per share

(a) See footnote (a) to Table 2a.

(b) See footnote (b) to Table 2a and Table 2b.

(c) See footnote (c) to Table 2a and footnotes (c) (e) to Table 2b.

(d) See footnote (e) to Table 2a and footnote (f) to Table 2b.

(e) See footnote (g) to Table 2a and footnote (h) to Table 2b.

(f) See footnote (h) to Table 2a and footnote (i) to Table 2b.

(g) See footnote (i) Table 2a and footnote (j) to Table 2b.

(h) See footnotes (j) (k) to Table 2a and footnotes (k) (l) to Table
2b.

(i) See footnote (d) to Table 2a and Table 2b.

(j) See footnote (l) to Table 2a and footnote (m) to Table 2b.

(k) See footnote (g) Table 2b.

(l) See footnote (f) Table 2a and footnote (g) Table 2b.

(m) See footnote (m) to Table 2a and footnote (n) Table 2b.

Valeant Pharmaceuticals International, Inc.            Table 2a

Reconciliation of GAAP EPS to Cash EPS

For the Three Months Ended December 31, 2012 and 2011
                                   Non-GAAP Adjustments((a) )for
                                   Three Months Ended
                                   December 31,

(In thousands, except per share    2012                2011
data)



Product sales                      $ -                 $ -

Alliance and royalty               -                   268

Service and other                  -                   -

Total revenues                     -                   268



Cost of goods sold (exclusive of
amortization of intangible assets  (41,838)  (b)(c)(d) (18,297)  (b)(c)
shown separately below)

Cost of services                   -                   -

Cost of alliances                  -                   -

Selling, general and               (6,017)   (c)(e)(f) (13,383)  (c)(e)
administrative ("SG&A")

Research and development           -                   -

Contingent consideration fair      28,464    (g)       20,028    (g)
value adjustments

Acquired in-process research and   (40,033)  (h)       (105,200) (h)
development

Legal settlements                  -                   (9,441)   (i)

Restructuring,
acquisition-related and other      (261,801) (j)       (56,718)  (k)
costs

Amortization of intangible assets  (299,485)           (192,798)
                                   (620,710)           (375,809)

Operating income                   620,710             376,077



Interest expense, net              22,188    (l)       8,069     (l)

(Gain) loss on extinguishment of   17,625              3,519
debt

Gain (loss) on investments, net    -                   -

Other income (expense), net
including translation and          -                   -
exchange



Income before (recovery of)        660,523             387,665
provision for income taxes



Provision for income taxes         191,801   (m)       145,861   (m)



Total Adjustments to Net income    $ 468,722           $ 241,804



Earnings per share:



Diluted:

Total Adjustments to Net income    $ 1.50              $ 0.76

Shares used in per share           311,739             317,390
computation

(a) To supplement the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), the company
uses non-GAAP financial measures that exclude certain items, such
as amortization of inventory step-up, amortization of alliance
product assets & pp&e step up, stock-based compensation step-up,
contingent consideration fair value adjustments, restructuring,
acquisition-related and other costs, acquired in-process research
and development ("IPR&D"), legal settlements outside the ordinary
course of business, the impact of currency fluctuations,
amortization and other non-cash charges, amortization of deferred
financing costs, debt discounts and ASC 470-20 (FSP APB 14-1)
interest, loss on extinguishment of debt, (gain) loss on assets
held for sale/impairment, net, (gain) loss on investments, net,
and adjusts tax expense to cash taxes.



Management uses non-GAAP financial measures internally for
strategic decision making, forecasting future results and
evaluating current performance. By disclosing non-GAAP financial
measures, management intends to provide investors with a
meaningful, consistent comparison of the company's core operating
results and trends for the periods presented. Non-GAAP financial
measures are not prepared in accordance with GAAP. Therefore, the
information is not necessarily comparable to other companies and
should be considered as a supplement to, not a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP.



(b) ASC 805, accounting for business combinations requires an
inventory fair value step-up whose total impact for the three
months ended December 31, 2012 is $29.4 million primarily relating
to the acquisitions of Afexa on October 17, 2011, Pedinol
Pharmacal, Inc. on April 11, 2012, BC Pharma B.V. on July 1, 2012
and Medicis Pharmaceutical Corporation on December 11, 2012. For
the three months ended December 31, 2011 the impact of inventory
fair value step-up is $10.3 million primarily relating to the
acquisition of Sanitas on August 19, 2011, Afexa on October 17,
2011 and Ortho Dermatologics on December 12, 2011.



(c) PP&E step-up/down represents the step-up/down to fair market
value from Legacy Valeant's original cost resulting from the
merger of Legacy Valeant into Legacy Biovail and subsequent
acquisitions.



(d) Costs associated with integration related tech transfers,
$10.1 million.



(e) For the three months ended December 31, 2012 SG&A includes
$2.7 million of Stock-based compensation which reflects the
amortization of the fair value step-up increment resulting from
the merger of Legacy Valeant into Legacy Biovail. For the three
months ended December 31, 2011 SG&A primarily includes $12.9
million of Stock-based compensation which reflects the
amortization of the fair value step-up increment resulting from
the merger of Legacy Valeant into Legacy Biovail.



(f) SG&A includes loss on disposals of fixed assets.



(g) Net expenses from the changes in fair value of contingent
consideration for the three months ended December 31, 2012 and
2011 of $28.5 million and $20.0 million, respectively.



(h) Total Acquired IPR&D for the three months ended December 31,
2012 of $40.0 million relates primarily to an impairment of $24.7
million related to Xerese ® life-cycle management project, $5.0
million related to upfront payment to acquire North America rights
to Emervel ® and $5.0 million related to the IDP-108 program.
Total Acquired IPR&D for the three months ended December 31, 2011
of $105.2 million relates to the impairment of acquired IPR&D
assets relating to A002, A004 and A006 programs acquired as part
of Aton acquisition, IDP-109 and IDP-115.



(i) For the three months ended December 31, 2011 Legal settlement
costs of $9.4 million primarily due to the litigation and disputes
related to revenue-sharing arrangements with, or other payment
obligations to, third parties.



(j) Restructuring, acquisition-related and other costs of $261.8
million represent costs related to the acquisitions of Medicis,
internal Valeant restructuring and integration initiatives, iNova,
Dermik, OraPharma, Sanitas, Visudyne and Swiss Herbal. These
include $52.6 million related to acquisition costs, $98.2 million
related to employee severance costs, $77.3 million of stock base
compensation, $30.5 million related to integration consulting,
duplicative labor, transition services, and other, and $3.2
million related to facility closure costs.



(k) Restructuring, acquisition-related and other costs of $56.7
million represent costs related to the merger of Legacy Valeant
into Legacy Biovail and include $5.9 million related to facility
closure costs, $12.9 million related to contract cancellation
fees, consulting, legal and other costs, $15.0 million related to
severance, $20.1 million related to acquisition costs, and $2.8
million related to manufacturing integration.



(l) Non cash interest expense associated with amortization and
write-down of deferred financing costs, debt discounts and ASC
470-20 (FSP APB 14-1) interest totals for the three months ended
December 31, 2012 and December 31, 2011 $22.2 million and $8.1
million, respectively.



(m) Total tax effect of non-GAAP pre-tax adjustments, resolution
of uncertain tax positions and change in valuation allowance
associated with deferred tax asset.

Valeant Pharmaceuticals International, Inc.            Table 2b

Reconciliation of GAAP EPS to Cash EPS

For the Twelve Months Ended December 31,
2012 and 2011
                                 Non-GAAP Adjustments((a) )for
                                 Twelve Months Ended
                                 December 31,

(In thousands, except per share  2012                  2011
data)



Product sales                    $ -                   $ -

Alliance and royalty             -                     1,072

Service and other                -                     -

Total revenues                   -                     1,072



Cost of goods sold (exclusive
of amortization of intangible    (112,273)   (b)(c)(d) (74,189)  (b)(c)
assets shown separately below)

Cost of services                 -                     -

Cost of alliances                (50,958)    (e)       (18,835)  (e)

Selling, general and             (34,575)    (c)(f)(g) (63,706)  (c)(f)
administrative ("SG&A")

Research and development         -                     -

Contingent consideration fair    5,266       (h)       10,986    (h)
value adjustments

Acquired in-process research     (189,901)   (i)       (109,200) (i)
and development

Legal settlements                (56,779)    (j)       (11,841)  (j)

Restructuring,
acquisition-related and other    (422,991)   (k)       (130,631) (l)
costs

Amortization of intangible       (928,885)             (557,814)
assets
                                 (1,791,096)           (955,230)

Operating income                 1,791,096             956,302



Interest expense, net            36,402      (m)       27,103    (m)

(Gain) loss on extinguishment    20,080                36,844
of debt

Gain (loss) on investments, net  -                     (1,769)

Other income (expense), net
including translation and        -                     -
exchange



Income before (recovery of)      1,847,578             1,018,480
provision for income taxes



Provision for income taxes       319,603     (n)       222,959   (n)



Total Adjustments to Net income  $ 1,527,975           $ 795,521



Earnings per share:



Diluted:

Total Adjustments to Net income  $ 4.88                $ 2.44

Shares used in per share         313,123               326,119
computation

(a) See footnote (a) to Table 2a.



(b) ASC 805, accounting for business combinations requires an
inventory fair value step-up whose total impact for the twelve
months ended December 31, 2012 is $78.8 million primarily relating
to the acquisitions of Afexa on October 17, 2011, Ortho
Dermatologics on December 12, 2011, Dermik on December 16, 2011,
iNova on December 21, 2011, Pedinol Pharmacal, Inc. on April 11,
2012 and Medicis Pharmaceutical Corporation on December 11, 2012.
For the twelve months ended December 31, 2011 the impact of
inventory fair value step-up is $59.3 million primarily relating
to the merger of Legacy Valeant into Legacy Biovail, the
acquisition of PharmaSwiss SA on March 10, 2011 and the
acquisition of Sanitas on August 19th, 2011.



(c) PP&E step-up/down represents the step-up/down to fair market
value from Legacy Valeant's original cost resulting from the
merger of Legacy Valeant into Legacy Biovail and subsequent
acquisitions.



(d) Costs associated with integration related tech transfers,
$28.9 million.



(e) Cost of Alliances represents the divestiture of 5FU and
IDP-111 resulting from the acquisition of Dermik, $50.9 million
for the twelve months ended December 31, 2012 and the divestiture
of Cloderm resulting from the Legacy Valeant into Legacy Biovail
merger, $18.8 million for the twelve months ended December 31,
2011.



(f) For the twelve months ended December 31, 2012 SG&A primarily
includes $29.5 million of Stock-based compensation which reflects
the amortization of the fair value step-up increment resulting
from the merger of Legacy Valeant into Legacy Biovail,
acceleration of certain equity instruments and the expense
associated with certain award modifications. For the twelve months
ended December 31, 2011 SG&A primarily includes $63.5 million of
Stock-based compensation which reflects the amortization of the
fair value step-up increment resulting from the merger of Legacy
Valeant into Legacy Biovail.



(g) SG&A includes loss on assets held for sale/impairment and loss
on disposals of fixed assets.



(h) Net expenses from the changes in fair value of contingent
consideration for the twelve months ended December 31, 2012 and
2011 of $5.3 million and $11.0 million, respectively.



(i) Total Acquired IPR&D for the twelve months ended December 31,
2012 of $189.9 million relates primarily to the write-off of the
IPR&D asset related to the IDP-107 dermatology program, $133.4
million, an impairment of $24.7 million related to Xerese (®
)life-cycle management project,( )a $12.0 million payment to
terminate a research and development commitment with a third
party, $5.0 million related to upfront payment to acquire North
America rights to Emervel ®, $5.0 million related to the IDP-108
program and $4.3 million related to the termination of the MC5
program acquired from Ortho Dermatologics. Total Acquired IPR&D
for the twelve months ended December 31, 2011 of $109.2 million
relates to the impairment of acquired IPR&D assets relating to
A002, A004 and A006 programs acquired as part of Aton acquisition,
IDP-109 and IDP-115, $105.2 million, and the acquisition of the
Canadian rights to Lodalis (TM, )$4.0 million.



(j) For the twelve months ended December 31, 2012 Legal settlement
costs of $56.8 million primarily relate to the litigation
settlement and associated legal fees with respect to a class
action antitrust complaint regarding Wellbutrin XL ®. For the
twelve months ended December 31, 2011 Legal settlement costs of
$11.8 million primarily due to the litigation and disputes related
to revenue-sharing arrangements with, or other payment obligations
to, third parties.



(k) Restructuring, acquisition-related and other costs of $423.0
million represent costs related to the acquisitions of Medicis,
internal Valeant restructuring and integration initiatives, iNova,
Dermik, OraPharma, Sanitas, Pedinol, Ortho Dermatologics,
University Medical, Afexa, Swiss Herbal and Eyetech. These include
$78.6 million related to acquisition costs, $144.5 million related
to employee severance costs, $77.3 million stock base
compensation, $73.6 million related to integration consulting,
duplicative labor, transition services, and other, $30.8 million
related to facility closure costs, $14.0 million related to other,
and $4.2 million related to non-personnel manufacturing
integration costs.



(l) Restructuring, acquisition-related and other costs of $130.6
million represent costs related to the merger of Legacy Valeant
into Legacy Biovail and the acquisitions of Sanitas, Dermik,
Afexa, Ortho Dermatologics, PharmaSwiss SA and Inova. These costs
include $23.9 million related to facility closure costs, $37.2
million related to contract cancellation fees, consulting, legal
and other costs, $29.3 million related to severance, $33.0 million
related to acquisition costs, and $7.2 million related to
manufacturing integration.



(m) Non cash interest expense associated with amortization and
write-down of deferred financing costs, debt discounts and ASC
470-20 (FSP APB 14-1) interest totals for the twelve months ended
December 31, 2012 and December 31, 2011 $36.4 million and $27.1
million, respectively.



(n) Total tax effect of non-GAAP pre-tax adjustments, resolution
of uncertain tax positions and change in valuation allowance
associated with deferred tax asset.
    Valeant Pharmaceuticals International, Inc.                         Table
                                                                    3

Statement of Revenue - by Segment

For the Three and Twelve Months Ended December 31, 2012
and 2011

(In thousands)
                 Three Months Ended
                 December 31,
                                                         2012


                                   %       2012      excluding  %
Revenue (a)(b)   2012       2011       Change  currency  currency   Change 
             GAAP       GAAP               impact    impact 


                                                         non-GAAP

U.S. Dermatology $ 335,886  $ 175,965  91%     $ -       $ 335,886  91%

U.S. Neurology & 201,921    201,030    0%      -         201,921    0%
Other

Canada/Australia 142,127    101,352    40%     (4,034)   138,093    36%

Emerging Markets 306,360    210,106    46%     6,884     313,244    49%

Total Revenue    $ 986,293  $ 688,453  43%     $ 2,850   $ 989,144  44%
                 Twelve Months Ended
                 December 31,
                                                         2012


                                   %       2012      excluding  %
Revenue (a)(b)   2012       2011       Change  currency  currency   Change 
             GAAP       GAAP               impact    impact 
                                                     non-GAAP 
U.S. Dermatology $          $ 575,798  101%    $ -       $          101% 
             1,158,600                               1,158,600 
U.S. Neurology & 793,503    821,789    -3%     -         793,503    -3%
Other 
Canada/Australia 544,128    340,240    60%     2,745     546,873    61% 
Emerging Markets 1,050,395  725,623    45%     99,020    1,149,415  58% 
Total Revenue    $          $          44%     $         $          48% 
             3,546,626  2,463,450          101,765   3,648,391 
(a) Note: Currency effect for constant currency sales is
determined by comparing 2012 reported amounts adjusted to
exclude currency impact, calculated using 2011 monthly
average exchange rates, to the actual 2011 reported
amounts. Constant currency sales is not a GAAP-defined
measure of revenue growth. Constant currency sales as
defined and presented by us may not be comparable to
similar measures reported by other companies. 
(b) See footnote (a) to Table 2a. 
Valeant Pharmaceuticals International, Inc.                                Table 
                                                                       4 
Reconciliation of GAAP Cost of Goods Sold to Non-GAAP Cost of
Goods Sold - by Segment 
For the Three and Twelve Months Ended December 31, 2012 and
2011 
(In thousands) 


                      Three Months Ended

4.1 Cost of goods     December 31,
    sold (a)
                                         2012        2012
                                         fair value  excluding
                      2012      %        step-up     fair value  %
                      as        of       adjustment  step-up     of
                      reported  product  to          adjustment  product
                      GAAP      sales    inventory   to          sales
                                         and Other   inventory
                                         non-GAAP    and Other
                                         (b)         non-GAAP
    U.S. Dermatology  $ 63,478  19%      $ 29,540    $ 33,938    10%
    U.S. Neurology &  37,434    19%      1,755       35,679      18%
    Other
    Canada/Australia  34,412    26%      1,045       33,367      26%
    (d)
    Emerging Markets  139,814   48%      9,498       130,316     45%
    Corporate/other   -                  -           -
                      $         29%      $ 41,838    $ 233,300   25%
                      275,138
                      Twelve Months Ended
                      December 31,
                                         2012        2012
                                         fair value  excluding
                      2012      %        step-up     fair value  %
                      as        of       adjustment  step-up     of
                      reported  product  to          adjustment  product
                      GAAP      sales    inventory   to          sales
                                         and Other   inventory
                                         non-GAAP    and Other
                                         (c)         non-GAAP
    U.S. Dermatology  $         14%      $ 47,705    $ 104,507   10%
                      152,212
    U.S. Neurology &  139,580   19%      7,675       131,905     18%
    Other
    Canada/Australia  163,789   33%      34,701      129,088     26%
    (d)
    Emerging Markets  465,952   45%      22,192      443,760     43%
    Corporate/other   -                  -           -
                      $         28%      $ 112,273   $ 809,260   24%
                      921,533

(a) See footnote (a) to Table 2a.



(b) U.S. Dermatology includes $28.2 million of fair value
step-up adjustment to inventory and $1.3 million of
integration related tech transfer costs. U.S. Neurology and
Other includes $1.8 million of integration related tech
transfer costs. Canada/Australia includes $0.4 million of
fair value step up adjustment to inventory, -$0.1 million
PP&E step-down, $0.8M of integration related tech transfer
costs. Emerging Markets includes $0.8 million of fair value
step up adjustment to inventory, $6.2M of integration related
tech transfer costs, $2.3 million BMS fair value inventory
adjustment and $0.1 million of PP&E step up.



(c) U.S. Dermatology includes $43.0 million of fair value
step-up adjustment to inventory, $4.7 million of integration
related tech transfer costs. U.S. Neurology and Other
includes $5.1 million of integration related tech transfer
costs and $2.6 million of amortization. Canada/Australia
includes $32.9 million of fair value step up adjustment to
inventory, -$0.7 million PP&E step-down, $2.5M of integration
related tech transfer costs. Emerging Markets includes $3.0
million of fair value step up adjustment to inventory, $16.4M
of integration related tech transfer costs, $2.3 million BMS
inventory fair value adjustment and $0.4 million of PP&E step
up.



(d) Cost of Goods Sold excludes contract manufacturing costs
currently reported in Cost of Services.
    Valeant Pharmaceuticals                                     Table 5
    International, Inc.
    Consolidated Balance Sheet and
    Other Data
    (In thousands)
                                   As of         As of
                                   December 31,  December 31,

5.1 Cash                           2012          2011
    Cash and cash equivalents      $ 916,091     $ 164,111
    Marketable securities          4,410         6,338
    Total cash and marketable      $ 920,501     $ 170,449
    securities
    Debt
    New Revolving Credit Facility  $ -           $ 220,000
    Term loan A Facility           2,083,462     2,185,520
    New Term Loan B Facility       1,275,167     -
    Incremental Term Loan B        973,988       -
    Facility
    Senior notes                   6,448,317     4,228,480
    Convertible notes              233,793       17,011
    Other                          898           -
                                   11,015,625    6,651,011
    Less: Current portion          (480,182)     (111,250)
                                   $ 10,535,443  $ 6,539,761
    5.2 Summary of Cash Flow Statement Three Months Ended
                                   December 31,
                                   2012          2011
    Cash flow provided by (used
    in):
    Net cash provided by (used in) $ 67,920      $ 189,780
    operating activities (GAAP)
    Restructuring and              261,801       56,718
    acquisition-related costs((c))
    Payment of accrued legal       -             9,441
    settlements
    Payment of Accreted Interest   -             1,390
    on Convertible Debt
    Tax Benefit from Stock Options 6,699         (7,125)
    Exercised ((a))
    Working Capital change related
    to Business Development        18,391        21,434
    Activities
    Non-Cash adjustments to Income -             -
    Taxes Payable
    Changes in working capital
    related to restructuring and   68,580        (18,510)
    acquisition-related costs((c))
    Adjusted cash flow from        $ 423,391     $ 253,128
    operations (Non-GAAP)((b))
    Proceeds from sale of          -             -
    intangible assets
    Adjusted cash flow from        $ 423,391     $ 253,128
    operations (Non-GAAP)((b))
    

 ___________________________________________________________________
|(a) Includes stock option tax benefit which will reduce taxes in   |
|future periods.                                                    |
|___________________________________________________________________|
|                                                                   |
|___________________________________________________________________|
|(b) See footnote (a) to Table 2a.                                  |
|___________________________________________________________________|
|                                                                   |
|___________________________________________________________________|
|(c) Total Restructuring and Acquisition-related costs cash payments|
|of $330,381 are broken down as follows:                            |
|___________________________________________________________________|

Project Type                                       Amount Paid



Medicis                                            286,944     (d)

Intellectual Property Migration                    9,198

Manufacturing Integration (Various Deals)          6,944

Europe                                             4,742

US Restructuring                                   4,103

Other                                              3,895

OraPharma                                          2,925

Swiss Herbal                                       2,160

Ophthalmology (QLT and Eyetech)                    2,106

Systems Integration (various deals US/Canada)      1,828

Dermik                                             1,635

University Medical                                 1,416

iNova                                              1,282

J & J Consumer Products                            1,203



Total                                              $ 330,381



Expense Type                                       Amount Paid



Stock Based Compensation                           119,931

Severance Payments                                 105,367

Acquisition Related Costs Paid to 3rd Parties      76,750

Integration related consulting, duplicative labor, 24,628
transition services, and other

Facility Closure Costs, Other Manufacturing        3,704
integration, and Other



Total                                              $ 330,381   (d)

 ________________________________________________________________
|(d) Includes Medicis advisory and legal fees of $47 million and |
|payment of Medicis stock appreciation rights and other accrued  |
|compensation of $58 million that was accrued by Medicis prior to|
|close and paid post close.                                      |
|________________________________________________________________|

Valeant Pharmaceuticals International, Inc.                                                                 Table
                                                                                                            6

Organic Growth - by Segment

For the Three and Twelve Months Ended December 31, 2012

(In thousands)
                 For the Three Months Ended December 31, 2012
                                                                                                     Organic
                                                                                                     growth
                                                                (a)      (b)                         (b)    (b)
                                                                                                     Pro    Same
                                (3)              (5)   (6)      (7)      (8)                         Forma  store
                 (1)     (2)    QTD      (4)     Pro   Pro      Currency Currency  (9)               (1)+   (3)+
                 QTD     Acq    Same     QTD     Forma Forma    impact   impact    Divestitures /    (7)+   (7) /
                 2012    impact store    2011    Adj   2011     Same     Acq       Discontinuations  (8)+   (4)-
                                                                store                                (9) /  (9)
                                                                                                     (6)



U.S. Dermatology 329.9   156.6  173.3    153.2   138.1 291.3    -        -         4.6               15%    17%

U.S. Neurology & 199.4   0.5    198.9    194.0   0.5   194.5    -        -         0.0               3%     3%
Other (c)

Canada/Australia 132.9   40.8   92.1     101.1   37.1  138.2    (2.7)    (1.0)     0.0               -6%    -12%
(d) (e)

Emerging Markets
-                171.8   15.4   156.5    140.9   14.5  155.4    2.5      0.8       (0.1)             13%    13%
Central/Eastern
Europe

Emerging Markets 95.1    24.7   70.3     65.8    16.9  82.7     0.6      2.5       0.7               20%    9%
- Latin America

Emerging Markets
- Southeast      21.6    20.2   1.4      0.3     18.7  18.9     0.1      0.3       -                 16%    -
Asia/Africa

Emerging Markets 288.6   60.4   228.2    206.9   50.1  257.0    3.2      3.5       0.6               15%    12%

Total product    950.8   258.3  692.5    655.3   225.8 881.0    0.5      2.6       5.2               9%     7%
sales
                 For the Twelve Months Ended December 31, 2012
                                                                                                     Organic
                                                                                                     growth
                                                                (a)      (b)                         (b)    (b)
                                                                                                     Pro    Same
                                (3)              (5)   (6)      (7)      (8)                         Forma  store
                 (1)     (2)    YTD      (4)     Pro   Pro      Currency Currency  (9)               (1)+   (3)+
                 YTD     Acq    Same     YTD     Forma Forma    impact   impact    Divestitures /    (7)+   (7) /
                 2012    impact store    2011    Adj   2011     Same     Acq       Discontinuations  (8)+   (4)-
                                                                store                                (9) /  (9)
                                                                                                     (6)



U.S. Dermatology 1,061.2 492.3  568.9    445.3   416.8 862.0    -        -         13.4              25%    32%

U.S. Neurology & 729.5   2.6    726.9    759.6   1.6   761.2    -        -         1.2               -4%    -4%
Other (c)

Canada/Australia 504.9   172.2  332.8    338.1   164.0 502.1    2.0      0.2       1.2               1%     -1%
(d) (e)

Emerging Markets
-                613.9   164.1  449.9    460.3   163.2 623.5    43.9     16.9      12.5              10%    10%
Central/Eastern
Europe

Emerging Markets 320.1   68.7   251.3    254.8   53.7  308.6    21.2     11.0      10.7              18%    12%
- Latin America

Emerging Markets
- Southeast      92.2    90.1   2.0      0.3     80.7  80.9     0.1      5.2       -                 20%    -
Asia/Africa

Emerging Markets 1,026.1 322.9  703.2    715.4   297.6 1,013.0  65.2     33.2      23.2              13%    11%

Total product    3,321.7 989.9  2,331.8  2,258.3 879.9 3,138.3  67.2     33.3      39.0              10%    8%
sales

 _____________________________________________________________________
|(a) Note: Currency effect for constant currency sales is determined  |
|by comparing 2012 reported amounts adjusted to exclude currency      |
|impact, calculated using 2011 monthly average exchange rates, to the |
|actual 2011 reported amounts. Constant currency sales is not a       |
|GAAP-defined measure of revenue growth. Constant currency sales as   |
|defined and presented by us may not be comparable to similar measures|
|reported by other companies.                                         |
|_____________________________________________________________________|
|                                                                     |
|_____________________________________________________________________|
|(b) See footnote (a) to Table 2a.                                    |
|_____________________________________________________________________|
|                                                                     |
|_____________________________________________________________________|
|(c) Includes Valeant's attributable portion of revenue from joint    |
|ventures (JV) - $1.6M Q4'12 and $3.5M Q4'12 YTD.                     |
|_____________________________________________________________________|
|                                                                     |
|_____________________________________________________________________|
|(d) Includes Valeant's attributable portion of revenue from joint    |
|ventures (JV) - $1.1M Q4'11 and $2.5M Q4'12 and $3.3M Q4'11 YTD and  |
|$8.2M Q4'12 YTD.                                                     |
|_____________________________________________________________________|
|                                                                     |
|_____________________________________________________________________|
|(e) Includes Cesamet revenue of $17.6M Q4'11 and $1.6M Q4'12 and     |
|$64.4M Q4'11 YTD and $29.4M Q4'12 YTD. Excluding Cesamet, the        |
|Canadian/Australian segment delivered Q4 5% organic growth (same     |
|store) and 6% (pro forma). Excluding Cesamet, the Canadian/Australian|
|segment delivered 2012 12% organic growth (same store) and 9% (pro   |
|forma).                                                              |
|_____________________________________________________________________|

Contact Information: Laurie W. Little  949-461-6002  laurie.little@valeant.com

(Logo: http://photos.prnewswire.com/prnh/20101025/LA87217LOGO)

http://www.valeant.com

http://photos.prnewswire.com/prnh/20101025/LA87217LOGO

PRN Photo Desk, photodesk@prnewswire.com

SOURCE: Valeant Pharmaceuticals International, Inc.

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/February2013/28/c9163.html

CO: Valeant Pharmaceuticals International, Inc.
NI: HEA MTC ERN CONF EST ERN 

-0- Feb/28/2013 11:09 GMT


 
Press spacebar to pause and continue. Press esc to stop.