SHIRE PLC: Strong Q3 and increased Non GAAP earnings expectations

SHIRE PLC: Strong Q3 and increased Non GAAP earnings expectations
Strong third quarter and increased Non GAAP earnings expectations 
October 24, 2013 - Shire (LSE: SHP, NASDAQ: SHPG) announces results for the
three months to September 30, 2013. 
Financial Highlights                                     Q3 2013 Growth(1) 
                                                                      
Product sales                                     $1,195 million      +13% 
                                                                      
Total revenues                                    $1,237 million      +12% 


                                                                          
                                                                          


                                                                      
Non GAAP operating income                           $422 million      +30% 
                                                                      
US GAAP operating income                            $341 million      +25% 


                                                                          
                                                                          


                                                                      
Non GAAP diluted earnings per ADS                          $1.77      +30% 
                                                                      
US GAAP diluted earnings per ADS                           $1.46      +23% 


                                                                          
                                                                          


                                                                      
Non GAAP cash generation                            $482 million      +36% 
                                                                      
Non GAAP free cash flow                             $388 million      +49% 
                                                                      
US GAAP net cash provided by operating activities   $434 million      +50% 


                                                                          
                                                                          
                                                                          
    (1)Percentages compare to equivalent 2012 period.


The Non GAAP financial measures included within this release are explained on
page 24, and are reconciled to the most directly comparable financial measures
prepared in accordance with US GAAP on pages 19 - 23. 
STRONG RESULTS DEMONSTRATING GOOD PROGRESS 
- Product sales +13% - with eight of our products delivering double digit 
growth
  in the quarter - including VYVANSE® (+21%), LIALDA®/MEZAVANT® (+36%) and
  FIRAZYR®(+107%) 
- Non GAAP operating income +30% reflecting strong operating leverage 
- Non GAAP earnings per ADS +30% 
- Non GAAP cash generation +36% 
- Guidance increased to mid-to-high teens Non GAAP earnings growth for the full
  year in 2013 
STRATEGY EXECUTION 
Focused on growth: excellence in commercial execution and investment in newly
prioritized pipeline 
'One Shire' reorganization well underway driving greater efficiencies and
resetting cost base to deliver sustainable improved operating leverage 
Revenue growth and effective cost management underpins increased guidance for
2013 


    Flemming Ornskov, M.D., Chief Executive Officer, commented:

"This has been a strong quarter with good growth in revenues, earnings and cash
generation.

We're demonstrating execution of our strategy, which is putting Shire on a path
of sustainable growth. Our focus on commercial excellence is improving product
sales and we're excited about the opportunities in our pipeline.

We're confident in our prospects for the longer term as we continue to execute
on commercial delivery, progress our prioritized pipeline and focus on targeted
M&A. The benefits of our 'One Shire' reorganization are already evident in our
year to date performance, we have a simpler, more efficient business and now
expect Non GAAP R&D and SG&A spend to be lower than current consensus
expectations for this year and in 2014 and 20151.

I am delighted to be increasing our 2013 full year earnings guidance to
delivering mid-to-high teens Non GAAP earnings growth and guiding to continuing
operating leverage for 2014 and 20151. This strong performance has been
overseen by a management team with long term tenure at Shire, supplemented by
some recent new senior appointments."

1 For full guidance, refer to Outlook statement on page 3.


FINANCIAL SUMMARY

Third Quarter 2013 Unaudited Results
                                 Q3 2013                       Q3 2012          


                  US GAAP Adjustments Non GAAP  US GAAP Adjustments Non 
GAAP 
                       $M          $M       $M       $M          $M       
$M 
                                                                             
Total revenues         1,237           -    1,237    1,100           -    1,100  


                                                                                

Operating income         341          81      422      273          52      325 
                                                                                
                                                                                
                                                                                

Diluted earnings per   $1.46       $0.31    $1.77    $1.19       $0.17    $1.36 


      
ADS                      


                                                                                
                                                                                
                                                                                


Product sales in Q3 2013 grew strongly (up 13% to $1,195 million). On a
Constant Exchange Rate ("CER") basis, which is a Non GAAP measure, product
sales were up 13%. 
Eight of our products delivered double digit growth including VYVANSE(up 21% to
$299 million), LIALDA/MEZAVANT (up 36% to $142 million), ELAPRASE® (up 17% to
$129 million), VPRIV® (up 17% to $88 million), INTUNIV® (up 17% to $81 
million)
and FIRAZYR (up 107% to $63 million). LIALDA/MEZAVANTsales in Q3 2013 were
particularly strong, primarily due to growth in US market share. 
Growth in total product sales was moderated by DERMAGRAFT® (down 29% to $24
million), ADDERALL XR® (down 20% to $81 million) and REPLAGAL® (down 11% to
$109 million). REPLAGAL product sales continue to be impacted by the return of
competition to the Fabry market. 
Total revenues were up 12% to $1,237 million (Q3 2012: $1,100 million) as the
growth in product sales was partially offset by lower royalties. 
On a Non GAAP basis: 
Operating income was up 30% to $422 million (Q3 2012: $325 million), as total
operating costs in Q3 2013 increased at a lower rate (up 5%) than total
revenues (up 12%) demonstrating our focus on delivering efficient growth.
Research and Development expenditure was up 2% and Selling, General and
Administrative expenditure was up 1%. 
On a US GAAP basis: 
Operating income was up 25% to $341 million (Q3 2012: $273 million), a lower
rate of increase than on a Non GAAP basis as Q3 2013 included higher
acquisition and integration costs as compared to Q3 2012 and reorganization
costs of $14 million not incurred in Q3 2012. Research and Development
expenditure was up 2% and Selling, General and Administrative expenditure was
up 1%. 
Non GAAP diluted earnings per American Depository Share ("ADS") increased 30%
to $1.77 (Q3 2012: $1.36) primarily due to higher Non GAAP operating income. 
On a US GAAP basis, diluted earnings per ADS increased 23% to $1.46 (Q3 2012:
$1.19), primarily due to higher US GAAP operating income. 
Cash generation, a Non GAAP measure, increased by 36% to $482 million (Q3 2012:
$355 million) due to both higher cash receipts from product sales and lower
operating expense payments in Q3 2013 as compared to Q3 2012. Cash generation
partially benefited from the timing of some receipts from large distributors in
the US. 
Free cash flow, also a Non GAAP measure, increased by 49% to $388 million (Q3
2012: $261 million) primarily due to higher cash generation and lower tax
payments, partially offset by higher capital expenditure payments in Q3 2013 as
compared to Q3 2012. 
On a US GAAP basis, net cash provided by operating activities was up 50% to
$434 million (Q3 2012: $288 million). 
Net cash, which is a Non GAAP measure, was $577 million at September 30, 2013
(December 31, 2012: $373 million). 
On a US GAAP basis, cash and cash equivalents were $1,686 million at September
30, 2013 (December 31, 2012: $1,482 million). 
STRATEGIC EXECUTION 
Shire continues to focus on its strategic priorities of growing sales of the
existing portfolio, bringing new innovative treatments to market through both R
&D and business development, while driving greater efficiency and increased
operating leverage. 
The business has been simplified. Prior to May 2013 Shire had three autonomous
divisions, each with their own R&D, supply chain, technical operations and
commercial infrastructures. These three divisions have been reorganized so they
are now one business, with much reduced overlap. 
Shire now has greater collaboration and focus in its commercial operations and
this is showing positive results, as evident in the increased product sales.
With a single R&D organization now in place, Shire has a more effective process
to evaluate holistically all pipeline opportunities as well as business
development prospects. Our pipeline has been prioritized to focus on
development programs that have the best chance of clinical and commercial
success together with early stage research in rare diseases. We believe that
these measures will ensure Shire is optimally positioned to enable the
continued development of products that serve unmet patient need and to sustain
the track record of high growth. 
OUTLOOK 
We are increasing our guidance to mid-to-high teens Non GAAP earnings growth
for the full year in 2013 (previous guidance: double digit Non GAAP earnings
growth) as we continue to see operating costs benefit from our reorganization
efforts. 
We anticipate a similar level of product sales growth in the fourth quarter as
we delivered in the third quarter, and continue to expect full year product
sales growth in the mid-to-high single digits. 
We continue to expect royalties and other revenues to be 35-40% lower than
2012. 
Our Non GAAP gross margin for the full year is expected to remain at a similar
level to 2012. 
With investment prioritized behind our promising pipeline and our late stage
clinical trials, we now expect Non GAAP R&D to be 5-7% higher for the full year
than in 2012 (previous guidance: growth in the low double digits). 
Non GAAP SG&A for the full year is now anticipated to be 5-7% lower than 2012
(previous guidance: 2-4% lower). Non GAAP SG&A in the fourth quarter is
expected to be slightly higher than in the third quarter as we provide targeted
support to our commercial team to invest behind our key products. 
As a result, we now expect combined Non GAAP R&D and SG&A to be 1-3% lower than
2012 (previous guidance: only marginally higher). This translates to a reduced
spend of $250 million compared with our guidance forecasts in February 20131. 
Our core effective tax rate on Non GAAP income is anticipated to remain in the
range of 18-20%. 
Taken together, we are increasing our guidance to reflect our expectation of
delivering mid-to-high teens Non GAAP earnings growth for the full year in 2013
(previous guidance: double digit Non GAAP earnings growth). 
Looking forward, we anticipate continuing operating leverage in 2014 and 2015,
from reduced combined Non GAAP R&D and SG&A. We expect this to be around $250
million lower than current consensus in 2014 and $300 million lower than
current consensus in 20152. 
1 Improvements of approximately $250 million for full year 2013, based on the
difference between initial guidance for full year 2013 of high single digit
growth in combined Non GAAP R&D and SG&A (guidance provided February 14, 2013)
and current guidance expectations of combined Non GAAP R&D and SG&A to be 1-3%
lower than 2012. 
2 Based on the most recent consensus estimates compiled by Consensus Forecast
Ltd, as of the date of this release, of combined Non GAAP R&D and SG&A of
$2,662 million and $2,683 million for the years ending December 31, 2014 and
2015 respectively, available on Shire's website (http://www.shire.com/shireplc/
en/investors/forecasts). 
THIRD QUARTER 2013 AND RECENT PIPELINE DEVELOPMENTS 


    Pipeline
    ABH001 - for the treatment of Epidermolysis Bullosa


- This program has been discontinued as part of the prioritization of Shire's 
pipeline. 
OTHER DEVELOPMENTS 
Decision to discontinue the construction of the new manufacturing facility in 
San Diego 
On October 22, 2013 Shire announced that it had decided to discontinue the
construction of its new manufacturing facility in San Diego. Shire will
continue to manufacture DERMAGRAFT in its existing facility in La Jolla, and
Shire's ability to meet expected future demand for DERMAGRAFT is not impacted
by this decision.  Shire is currently assessing possible disposal opportunities
in relation to this facility. 
Share Buy-Back Program 
In Q4 2012 Shire commenced a share buy-back program, for the purpose of
returning funds to shareholders, of up to $500 million, through both direct
purchases of Ordinary Shares and through the purchase of Ordinary Shares
underlying American Depositary Receipts. As of October 22, 2013 Shire had made
on-market repurchases totaling 9,807,835 Ordinary Shares at a cost of $299
million (excluding transaction costs). 
BOARD AND COMMITTEE CHANGES 
On October 23, 2013 Shire announced that Dominic Blakemore will join the Shire
Board of Directors effective January 1, 2014.  On joining the Board, Dominic
will become a member of the Shire Audit, Compliance & Risk Committee. Dominic's
career experience includes finance and strategy roles with global
corporations.  He is currently Group Finance Director of Compass Group plc. 
ADDITIONAL INFORMATION 


    The following additional information is included in this press release:
                                                 Page


                                                 
Overview of Third Quarter 2013 Financial Results  6   
                                                 
Financial Information                             10  
                                                 
Non GAAP Reconciliation                           19  
                                                 
Notes to Editors                                  23  
                                                 
Safe Harbor Statement                             24  
                                                 
Explanation of Non GAAP Measures                  24  
                                                 
Trade Marks                                       25  
                                                  
For further information please contact: 
Investor Relations                                          
- Eric Rojas       erojas@shire.com       +1 781 482 0999
  - Sarah Elton-Farr seltonfarr@shire.com  +44 1256 894 157 
                                                       
Media                                                       
                                                       
  - Jessica Mann     jmann@shire.com       +44 1256 894 280
  - Gwen Fisher      gfisher@shire.com      +1 484 595 9836
  - Jessica Cotrone  jcotrone@shire.com     +1 781 482 9538 


                                                           
    


Dial in details for the live conference call for investors at 14:00 BST / 09:00
EDT on October 24, 2013: 
UK dial in:                                             0808 237 0030 or 0203
139 4830 
US dial in:                                             1 866 928 7517 or 1 718
873 9077 
International Access     
Numbers:                          
http://wpc.1726.planetstream.net/001726/FEL_Events_International_Access_List.pdf 
                                                                              
Password/Conf ID:                                 71566006# 
Live Webcast:                                     
http://www.shire.com/shireplc/en/investors 
The quarterly earnings presentation will be available today at 13:00 BST / 08:
00 EDT on: 
- Shire's IR Briefcase in the iTunes Store 
- Shire.com Investors section 
OVERVIEW OF THIRD QUARTER 2013 FINANCIAL RESULTS 
1.         Product sales 
For the three months to September 30, 2013 product sales increased by 13% to
$1,195 million (Q3 2012: $1,055 million) and represented 97% of total revenues
(Q3 2012: 96%). 


                               Year on year growth            
                                                    US Exit


                             Non GAAP            Market
Product sales   Sales $M Sales        CER US Rx(1) Share(1) 


                                                           
                                                           


                                                       
VYVANSE(2)        299.2   +21%       +21%      +7%      17% 
                                                       
LIALDA/MEZAVANT   141.9   +36%       +36%     +23%      27% 
                                                       
ELAPRASE          129.1   +17%       +17%   n/a(3)   n/a(3) 
                                                       
REPLAGAL          108.5   -11%       -10%   n/a(4)   n/a(4) 
                                                       
VPRIV              87.8   +17%       +17%   n/a(3)   n/a(3) 
                                                       
ADDERALL XR        81.4   -20%       -20%      -2%       5% 
                                                       
INTUNIV            80.8   +17%       +17%      +8%       4% 
                                                       
PENTASA®           70.6    +5%        +5%      +1%      14% 
                                                       
FIRAZYR            62.6  +107%      +106%   n/a(3)   n/a(3) 
                                                       
DERMAGRAFT         23.9   -29%       -29%   n/a(3)   n/a(3) 
                                                       
OTHER             109.1   +16%       +15%      n/a      n/a 
                                                       
Total           1,194.9   +13%       +13%                   


                                                           
                                                           
                                                           


Data provided by IMS Health National Prescription Audit ("IMS NPA") relates
solely to US-based prescriptions. Exit market share represents the average
monthly US market share in the month ended September 30, 2013. 
Lisdexamfetamine ("LDX") currently marketed as VYVANSE in the US & Canada,
VENVANSE® in Latin America and ELVANSE® in certain territories in the EU. 
IMS NPA Data not available. 
Not sold in the US in Q3 2013. 
VYVANSE - ADHD 
VYVANSE product sales showed strong growth (up 21%) in Q3 2013 compared to Q3
2012 due to higher prescription demand, which was up 7% in the quarter in
addition to the benefit of price increases taken since Q3 2012. 
LIALDA/MEZAVANT - Ulcerative Colitis 
Product sales for LIALDA/MEZAVANT in Q3 2013 were up 36% primarily due to
higher prescription demand (up 23%) and stocking in Q3 2013 compared to a
slight destocking in Q3 2012, the benefit of which was partially offset by
higher sales deductions in Q3 2013 as compared to Q3 2012. 
ELAPRASE - Hunter syndrome 
ELAPRASE product sales in Q3 2013 were up 17% compared to Q3 2012 driven
primarily by continued growth in the number of patients and higher utilization.
Quarterly sales of ELAPRASE can be volatile due to the timings of large orders
to certain markets which order less frequently. This accounts for the decline
in sales from Q2 2013 to Q3 2013. The underlying number of patients being
treated with ELAPRASE continues to grow. 
REPLAGAL - Fabry disease 
REPLAGAL sales were down 11% as compared to Q3 2012 primarily due to lower
volume in Europe due to the return of competition to the Fabry market and the
timing of large orders in Q3 2012 from markets that order less frequently. 
VPRIV - Gaucher disease 
VPRIV product sales were up 17% in Q3 2013 compared to Q3 2012 as the number of
patients on therapy continues to grow. 
ADDERALL XR - ADHD 
ADDERALL XR product sales decreased (down 20%) in Q3 2013 primarily due to
higher sales deductions as a percentage of sales in Q3 2013 as compared to Q3
2012. 
INTUNIV - ADHD 
The strong growth in INTUNIV product sales (up 17%) in Q3 2013 was driven by a
combination of increased US prescription demand (up 8%) and the effect of price
increases taken since Q3 2012. The benefit of these increases was partially
offset by higher sales deductions in Q3 2013 as compared to Q3 2012. 


    PENTASA - Ulcerative Colitis

PENTASA product sales (up 5%) benefited from price increases taken since Q3
2012 partially offset by higher sales deductions in Q3 2013 as compared to Q3
2012.
    FIRAZYR - Hereditary Angioedema


FIRAZYR product sales growth (up 107%) was primarily driven by the US market,
where the number of new patients on therapy continues to grow strongly. 


    DERMAGRAFT -Diabetic Foot Ulcers

DERMAGRAFT product sales were down 29% compared to Q3 2012.
    2.         Royalties
                                 Year on year growth
                                                 


             Royalties to                    
Product            Shire $M   Royalties      CER  


                                                 
                                                 


                                             
FOSRENOL®           13.8         -1%         -2%  
                                             
3TC® and ZEFFIX®    10.1         -5%         -5%  
                                             
ADDERALL XR          6.2         -45%        -45% 
                                             
Other                7.5        +25%        +23%  
                                             
Total               37.6         -10%        -10% 


                                                 
                                                 
                                                 


3.         Financial details
    Cost of product sales
                                                                   
                                                                
                                 Q3 2013    % of Q3 2012    % of
                                         product         product
                                      $M   sales      $M   sales


                                                            
Cost of product sales (US GAAP)   197.1      16%  167.9      16% 
                                                            
Depreciation                      (11.0)           (9.4)         
                                                            
Cost of product sales (Non GAAP)  186.1      16%  158.5      15% 


                                                                
                                                                
                                                                


Cost of product sales as a percentage of product sales remained broadly
constant in Q3 2013 as compared to Q3 2012. 


    Research and Development ("R&D")
                                                 
                                              
               Q3 2013    % of Q3 2012    % of
                       product         product
                    $M   sales      $M   sales


                                          
R&D (US GAAP)   229.1      19%  224.7      21% 
                                          
Depreciation     (6.3)           (5.5)         
                                          
R&D (Non GAAP)  222.8      19%  219.2      21% 


                                              
                                              
                                              


Non GAAP R&D increased by $3.6 million, or 2%1, due to the continued investment
in our R&D pipeline, primarily on non-ADHD programs for LDX, on SHP602
(formerly known as SPD602) for iron overload and on development programs
acquired through business development in 2013, including Lifitegrast. This
growth was offset by reduced costs in relation to programs which have been
discontinued following our pipeline prioritization review. 
US GAAP R&D increased by $4.4 million, or 2%, as compared to Q3 2012. 


    Selling, General and Administrative ("SG&A")
                                                              
                                                           
                               2013     % of  2012     % of
                                     product        product
                                  $M   sales     $M   sales


                                                       
SG&A (US GAAP)                441.1      37% 437.4      41% 
                                                       
Intangible asset amortization (44.4)         (50.0)         
                                                       
Legal and litigation costs     (8.5)          (4.5)         
                                                       
Depreciation                  (16.5)         (14.2)         
                                                       
SG&A (Non GAAP)               371.7      31% 368.7      35% 


                                                           
                                                           
                                                           


Non GAAP SG&A increased by $3.0 million, or 1%, a slower rate than the increase
in product sales as we continue to focus on simplifying our business and
delivering efficient growth. 
US GAAP SG&A increased by $3.7 million, or 1%, as compared to Q3 2013. 
For the nine months to September 30, 2013 Non GAAP SG&A decreased by $85.1
million, or 7%1; US GAAP SG&A decreased by $111.0 million, or 8%. 
1 For the full year guidance, refer to Outlook statement on page 3. 
Gain on sale of product rights 
For the three months to September 30, 2013 Shire recorded a gain on sale of
product rights of $3.6 million (2012: $5.7 million) following re-measurement of
the contingent consideration receivable from the divestment of DAYTRANA®. 


    Reorganization costs

For the three months to September 30, 2013 Shire recorded reorganization costs
of $13.7 million (Q3 2012: $nil) primarily relating to the "One Shire"
reorganization as we transition to a new operating structure.
    Integration and acquisition costs


For the three months to September 30, 2013 Shire recorded integration and
acquisition costs of $18.4 million primarily related to the change in fair
value of contingent consideration and the costs of integrating SARcode
Biosciences Inc. ("SARcode") and Premacure AB ("Premacure"). In Q3 2012
integration and acquisition costs ($2.7 million) primarily related to the
acquisition of FerroKin Biosciences, Inc. ("FerroKin") and the integration of
Advanced BioHealing Inc. ("ABH"). 
Interest expense 
For the three months to September 30, 2013 Shire incurred interest expense of
$9.0 million (Q3 2012: $9.2 million), which principally relates to the coupon
on Shire's $1,100 million 2.75% convertible bonds due May 2014. 
Taxation 
The effective rate of tax on Non GAAP income in Q3 2013 was 19% (Q3 2012: 18%),
and on a US GAAP basis the effective rate of tax was 16% (Q3 2012: 15%). 
The effective rate of tax in Q3 2013 on both a Non GAAP and a US GAAP basis is
higher than the same period in 2012 due primarily to adverse changes in profit
mix and changes in provisions for uncertain tax positions, partially offset by
changes in estimates of the amount of certain tax liabilities following the
finalisation of various tax returns. 
FINANCIAL INFORMATION 


    TABLE OF CONTENTS
                                                                Page
                                                                 
                                                                 


                                                             
Unaudited US GAAP Consolidated Balance Sheets                  11 


                                                                 
                                                                 


                                                             
Unaudited US GAAP Consolidated Statements of Income            12 


                                                                 
                                                                 


                                                             
Unaudited US GAAP Consolidated Statements of Cash Flows        14 


                                                                 
                                                                 


                                                             
Selected Notes to the Unaudited US GAAP Financial Statements      


                                                                 
     (1) Earnings per share                                    16
                                                                 
     (2) Analysis of revenues                                  17
                                                                 
                                                                 


                                                             
Non GAAP reconciliation                                        19 


                                                                 


Unaudited US GAAP financial position as of September 30, 2013
Consolidated Balance Sheets
                                                            September December
                                                                  30,      31,
                                                                 2013     2012 
                                                                   $M       $M


                                                                           
ASSETS                                                                          
                                                                           
Current assets:                                                                 
                                                                           
Cash and cash equivalents                                     1,686.1  1,482.2  
                                                                           
Restricted cash                                                  16.6     17.1  
                                                                           
Accounts receivable, net                                      1,037.8    824.2  
                                                                           
Inventories                                                     480.5    436.9  
                                                                           
Deferred tax asset                                              210.6    229.9  
                                                                           
Prepaid expenses and other current assets                       282.3    221.8  


                                                                               
                                                                               


                                                                           
Total current assets                                          3,713.9  3,212.1  


                                                                               
                                                                               


                                                                           
Non-current assets:                                                             
                                                                           
Investments                                                      36.7     38.7  
                                                                           
Property, plant and equipment ("PP&E"), net                     965.1    955.8  
                                                                           
Goodwill                                                        621.3    644.5  
                                                                           
Other intangible assets, net                                  2,976.0  2,388.1  
                                                                           
Deferred tax asset                                               40.4     46.5  
                                                                           
Other non-current assets                                         34.5     31.5  


                                                                               
                                                                               


                                                                           
Total assets                                                  8,387.9  7,317.2  


                                                                               
                                                                               


                                                                           
LIABILITIES AND EQUITY                                                          
                                                                           
Current liabilities:                                                            
                                                                           
Accounts payable and accrued expenses                         1,581.6  1,501.5  
                                                                           
Convertible bonds                                             1,100.0        -  
                                                                           
Other current liabilities                                       163.2    144.1  


                                                                               
                                                                               


                                                                           
Total current liabilities                                     2,844.8  1,645.6  


                                                                               
                                                                               


                                                                           
Non-current liabilities:                                                        
                                                                           
Convertible bonds                                                   -  1,100.0  
                                                                           
Deferred tax liability                                          722.0    520.8  
                                                                           
Other non-current liabilities                                   652.3    241.6  


                                                                               
                                                                               


                                                                           
Total liabilities                                             4,219.1  3,508.0  


                                                                               
                                                                               


                                                                           
Equity:                                                                         
                                                                           
Common stock of 5p par value; 1,000 million shares                             
authorized; and 562.9 million shares issued and outstanding                    
(2012: 1,000 million shares authorized; and 562.5 million                      
shares issued and outstanding)                                   55.8     55.7  
                                                                           
Additional paid-in capital                                    3,045.6  2,981.5  
                                                                           
Treasury stock: 14.5 million shares (2012: 10.7 million)       (466.6)  (310.4) 
                                                                           
Accumulated other comprehensive income                          101.3     86.9  
                                                                           
Retained earnings                                             1,432.7    995.5  


                                                                               
                                                                               


                                                                           
Total equity                                                  4,168.8  3,809.2  


                                                                               
                                                                               


                                                                           
Total liabilities and equity                                  8,387.9  7,317.2  


                                                                               


Unaudited US GAAP results for the three months and nine months to September 30,
2013
Consolidated Statements of Income
                                           3 months  3 months  9 months  9 months
                                              to        to        to        to
                                       September September September September
                                             30,       30,       30,       30,
                                            2013      2012      2013      2012 
                                              $M        $M        $M        $M


                                                                           
Revenues:                                                                       
                                                                           
Product sales                            1,194.9   1,054.5   3,541.8   3,309.1  
                                                                           
Royalties                                   37.6      41.8     112.4     154.4  
                                                                           
Other revenues                               4.1       4.1      18.8      16.5  
                                                                           
Total revenues                           1,236.6   1,100.4   3,673.0   3,480.0  


                                                                               
                                                                               


                                                                           
Costs and expenses:                                                             
                                                                           
Cost of product sales                      197.1     167.9     528.7     478.8  
                                                                           
R&D(1)                                     229.1     224.7     713.4     683.6  
                                                                           
SG&A(1)                                    441.1     437.4   1,337.4   1,448.4  
                                                                           
Goodwill impairment charge                     -         -     198.9         -  
                                                                           
Gain on sale of product rights              (3.6)     (5.7)    (14.6)    (16.5) 
                                                                           
Reorganization costs                        13.7         -      57.6         -  
                                                                           
Integration and acquisition costs           18.4       2.7      39.9      15.1  
                                                                           
Total operating expenses                   895.8     827.0   2,861.3   2,609.4  


                                                                               
                                                                               


                                                                           
Operating income                           340.8     273.4     811.7     870.6  


                                                                               
                                                                               


                                                                           
Interest income                              0.4       0.9       1.6       2.3  
                                                                           
Interest expense                            (9.0)     (9.2)    (27.0)    (29.0) 
                                                                           
Other income/(expense), net                  0.6       3.5      (1.9)      3.6  
                                                                           
Total other expense, net                    (8.0)     (4.8)    (27.3)    (23.1) 


                                                                               
                                                                               


                                                                           
Income before income taxes and equity                                          
in (losses)/earnings of equity method                                          
investees                                  332.8     268.6     784.4     847.5  
                                                                           
Income taxes                               (54.3)    (41.6)   (183.9)   (144.6) 
                                                                           
Equity in (losses)/earnings of equity                                          
method investees, net of taxes              (0.3)      0.2       0.6       0.5  
                                                                           
Net income                                 278.2     227.2     601.1     703.4  
                                                                            
R&D includes intangible asset impairment charges of $19.9 million for the nine
months to September 30, 2013 (2012: $27.0 million). SG&A costs include
amortization and impairment charges of intangible assets relating to
intellectual property rights acquired of $44.4 million for the three months to
September 30, 2013 (2012: $50.0 million) and $136.1 million for the nine months
to September 30, 2013 (2012: $146.6 million). 
Unaudited US GAAP results for the three months and nine months to September 30,
2013
Consolidated Statements of Income (continued) 


    
                                3 months to 3 months to 9 months to 9 months to
                                  September   September   September   September
                                        30,         30,         30,         30,
                                       2013        2012        2013        2012 


                                                                           
Earnings per ordinary share -                                                  
basic                                                                           


                                                                               
                                                                               


                                                                           
Earnings per Ordinary Share -                                                  
basic                                 50.7c       40.9c      109.3c      126.6c 


                                                                               
                                                                               


                                                                           
Earnings per ADS - basic             152.1c      122.7c      327.9c      379.8c 


                                                                               
                                                                               


                                                                           
Earnings per Ordinary Share -                                                  
diluted                               48.8c       39.6c      106.2c      122.4c 


                                                                               
                                                                               


                                                                           
Earnings per ADS - diluted           146.4c      118.8c      318.6c      367.2c 


                                                                               
                                                                               


                                                                           
Weighted average number of                                                     
shares:                                                                         


                                                                               
                                   Millions    Millions    Millions    Millions
                                                                               
                                                                               


                                                                           
Basic                                548.4       555.9       549.8       555.5  
                                                                           
Diluted                              585.7       593.1       587.5       594.0  


                                                                               


Unaudited US GAAP results for the three months and nine months to September 30,
2013
Consolidated Statements of Cash Flows
                                                   3 months to        9 months to   
                                                September 30,      September 30,  
                                                                                 
                                              2013     2012    2013       2012 
                                                                               
                                                $M       $M      $M         $M


                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES:                                           


                                                                               
                                                                               


                                                                           
Net income                                   278.2    227.2   601.1      703.4  
                                                                           
Adjustments to reconcile net income to net                                     
cash provided by operating activities:                                          
                                                                           
  Depreciation and amortization               78.2     79.1   229.4      231.5  
                                                                           
  Share based compensation                    18.8     21.6    55.2       65.0  
                                                                           
  Change in fair value of contingent                                           
  consideration                               14.7      1.2    28.4        3.3  
                                                                           
  Impairment of intangible assets                -        -    19.9       27.0  
                                                                           
  Goodwill impairment charge                     -        -   198.9          -  
                                                                           
  Gain on sale of product rights              (3.6)    (5.7)  (14.6)     (16.5) 
                                                                           
  Other, net                                  (2.8)    (0.7)    4.4        1.8  
                                                                           
Movement in deferred taxes                    (5.1)    (6.3)   16.1      (30.4) 
                                                                           
Equity in losses/(earnings) of equity                                          
method investees                               0.3     (0.2)   (0.6)      (0.5) 
                                                                           
Changes in operating assets and                                                
liabilities:                                                                    
                                                                           
  Increase in accounts receivable           (112.6)   (45.4) (215.2)     (23.0) 
                                                                           
  Increase in sales deduction accrual         68.7      8.5   108.7       36.1  
                                                                           
  Decrease/(increase) in inventory            14.0    (14.9)  (39.9)     (81.9) 
                                                                           
  (Increase)/decrease in prepayments and                                       
  other assets                                (4.4)   (14.3)  (70.9)      17.8  
                                                                           
  Increase/(decrease) in accounts payable                                      
  and other liabilities                       89.3     38.3   (71.4)      72.7  
                                                                           
Returns on investment from joint venture         -        -     3.2        4.9  
                                                                           
Net cash provided by operating activities                                      
(A)                                          433.7    288.4   852.7    1,011.2  


                                                                               
    CASH FLOWS FROM INVESTING ACTIVITIES:                                          
                                                                               
                                                                               


                                                                           
Movements in restricted cash                  1.0     (4.5)      0.5       1.7  
                                                                           
Purchases of subsidiary undertakings and                                       
businesses, net of cash acquired                -        -    (227.8)    (97.0) 
                                                                           
Purchases of non-current investments         (3.1)    (7.4)     (9.9)    (12.1) 
                                                                           
Purchases of PP&E                           (45.3)   (27.2)   (110.3)    (91.6) 
                                                                           
Purchases of intangible assets                  -        -         -     (43.5) 
                                                                           
Proceeds received on sale of product rights   4.7      3.3      15.0      13.7  
                                                                           
Other, net                                    1.0      0.1      11.5      13.2  
                                                                           
Net cash used in investing activities(B)    (41.7)   (35.7)   (321.0)   (215.6) 


                                                                               


Unaudited US GAAP results for the three months and nine months to September 30,
2013
Consolidated Statements of Cash Flows (continued)
                                                 3 months to         9 months to   
                                               September 30,       September 30,  
                                             2013       2012     2013       2012 
                                             $M         $M       $M         $M
                                                                               
                                                                               


                                                                           
CASH FLOWS FROM FINANCING ACTIVITIES:                                           


                                                                               
                                                                               


                                                                           
Payments to acquire shares under the                                           
share buy-back program                    (12.8)         -   (190.5)         -  
                                                                           
Payment of dividend                           -          -    (79.2)     (70.7) 
                                                                           
Payments to acquire shares by the                                              
Employee Benefit Trust ("EBT")                -      (40.2)   (50.3)     (50.9) 
                                                                           
Excess tax benefit associated with                                             
exercise of stock options                   3.4        3.5      9.5       38.6  
                                                                           
Contingent consideration payments          (2.5)      (3.0)   (11.3)      (3.0) 
                                                                           
Other, net                                  1.7       (0.3)    (5.5)      (2.6) 
                                                                           
Net cash used in financing activities                                          
(C)                                       (10.2)     (40.0)  (327.3)     (88.6) 
                                                                           
Effect of foreign exchange rate changes                                        
on cash and cash equivalents (D)            2.4       (3.5)    (0.5)      (5.1) 
                                                                           
Net increase in cash and cash                                                  
equivalents(A) +(B) +(C) +(D)             384.2      209.2    203.9      701.9  
                                                                           
Cash and cash equivalents at beginning                                         
of period                               1,301.9    1,112.7  1,482.2      620.0  
                                                                           
Cash and cash equivalents at end of                                            
period                                  1,686.1    1,321.9  1,686.1    1,321.9  
                                                                            
Unaudited US GAAP results for the three months and nine months to September 30,
2013 
Selected Notes to the Financial Statements 
 (1)  Earnings Per Share ("EPS") 
                                3 months to 3 months to 9 months to 9 months 
to 
                               September   September   September   
September 
                                     30,         30,         30,         
30, 
                                    2013        2012        2013        
2012  
                                      $M          $M          $M          
$M 


                                                                                
                                                                                  


                                                                               
Numerator for basic EPS                278.2       227.2       601.1       
703.4  
                                                                             
Interest on convertible bonds,                                                   
net of tax                               7.6         7.5        22.7        
23.7  


                                                                                
                                                                                  


                                                                               
Numerator for diluted EPS              285.8       234.7       623.8       
727.1  


                                                                                
                                                                                  
                                                                                  
                                                                                  


                                                                               
Weighted average number of                                                       
shares:                                                                          
                                                                               
                                   Millions    Millions    Millions    
Millions 
                                                                             
Basic(1)                               548.4       555.9       549.8       
555.5  
                                                                             
Effect of dilutive shares:                                                       
                                                                               
Share based awards to employees                                                  
(2)                                      3.5         3.7         3.9         
5.0  
                                                                             
Convertible bonds 2.75% due 2014                                                 
(3)                                     33.8        33.5        33.8        
33.5  


                                                                                
                                                                                  


                                                                               
Diluted                                585.7       593.1       587.5       
594.0  
                                                                             
Excludes shares purchased by the EBT and under the share buy-back program and
presented by Shire as treasury stock. 
Calculated using the treasury stock method. 
Calculated using the "if converted" method. 
The share equivalents not included in the calculation of the diluted weighted
average number of shares are shown below: 


                                 3 months to 3 months to 9 months to 9 months to
                                September   September   September   September
                                      30,         30,         30,         30,
                                     2013        2012        2013        2012 
                                 Millions    Millions    Millions    Millions


                                                                          
Share based awards to                                                         
employees(1)                          0.5         6.6         4.5         4.9  
                                                                           
Certain stock options have been excluded from the calculation of diluted EPS
because (a) their exercise prices exceeded Shire's average share price during
the calculation period or (b) the required performance conditions were not
satisfied as at the balance sheet date. 
Unaudited US GAAP results for the three months to September 30, 2013 
Selected Notes to the Financial Statements 
(2)  Analysis of revenues 


    3 months to September 30,    2013     2012    2013       2013 
                                                 % % of total
                               $M       $M  change    revenue


                                                         
Net product sales:                                            
                                                         
VYVANSE                     299.2    247.1     21%        24% 
                                                         
LIALDA/MEZAVANT             141.9    104.4     36%        11% 
                                                         
ELAPRASE                    129.1    110.5     17%        10% 
                                                         
REPLAGAL                    108.5    121.7    -11%         9% 
                                                         
VPRIV                        87.8     74.9     17%         7% 
                                                         
ADDERALL XR                  81.4    102.2    -20%         7% 
                                                         
INTUNIV                      80.8     69.0     17%         7% 
                                                         
PENTASA                      70.6     67.0      5%         6% 
                                                         
FIRAZYR                      62.6     30.3    107%         5% 
                                                         
FOSRENOL                     51.9     38.1     36%         4% 
                                                         
XAGRID®                      24.2     22.0     10%         2% 
                                                         
DERMAGRAFT                   23.9     33.7    -29%         2% 
                                                         
Other product sales          33.0     33.6     -2%         3% 
                                                         
Total product sales       1,194.9  1,054.5     13%        97% 


                                                             
                                                             


                                                         
Royalties:                                                    
                                                         
FOSRENOL                     13.8     14.0     -1%         1% 
                                                         
3TC and ZEFFIX               10.1     10.6     -5%         1% 
                                                         
ADDERALL XR                   6.2     11.2    -45%        <1% 
                                                         
Other                         7.5      6.0     25%         1% 
                                                         
Total royalties              37.6     41.8    -10%         3% 


                                                             
                                                             


                                                         
Other revenues                4.1      4.1      0%        <1% 


                                                             
                                                             


                                                         
Total revenues            1,236.6  1,100.4     12%       100% 


                                                             


Unaudited US GAAP results for the nine months to September 30, 2013

Selected Notes to the Financial Statements

(2)  Analysis of revenues
    9 months to September 30,     2013      2012    2013       2013 
                                                   % % of total
                                $M        $M  change    revenue


                                                           
Net product sales:                                              
                                                           
VYVANSE                      897.9     773.3     16%        24% 
                                                           
LIALDA/MEZAVANT              379.9     288.5     32%        10% 
                                                           
ELAPRASE                     392.6     358.3     10%        11% 
                                                           
REPLAGAL                     336.6     379.3    -11%         9% 
                                                           
VPRIV                        251.9     229.3     10%         7% 
                                                           
ADDERALL XR                  293.5     347.5    -16%         8% 
                                                           
INTUNIV                      248.9     206.6     20%         7% 
                                                           
PENTASA                      215.2     196.7      9%         6% 
                                                           
FIRAZYR                      153.8      81.7     88%         4% 
                                                           
FOSRENOL                     136.3     126.8      7%         4% 
                                                           
XAGRID                        74.1      70.7      5%         2% 
                                                           
DERMAGRAFT                    64.7     134.9    -52%         2% 
                                                           
Other product sales           96.4     115.5    -17%         2% 
                                                           
Total product sales        3,541.8   3,309.1      7%        96% 


                                                               
                                                               


                                                           
Royalties:                                                      
                                                           
FOSRENOL                      33.6      37.0     -9%         1% 
                                                           
3TC and ZEFFIX                33.9      34.8     -3%         1% 
                                                           
ADDERALL XR                   19.2      62.2    -69%        <1% 
                                                           
Other                         25.7      20.4     26%         1% 
                                                           
Total royalties              112.4     154.4    -27%         3% 


                                                               
                                                               


                                                           
Other revenues                18.8      16.5     14%         1% 


                                                               
                                                               


                                                           
Total revenues             3,673.0   3,480.0      6%       100% 
                                                            
Unaudited results for the three months to September 30, 2013 
Non GAAP reconciliation 
3 months to September 30,                                                      
2013                         US GAAP            Adjustments            Non GAAP 


                                                                               
                                      (a)    (b)    (c)   (d)    (e)         
                                 $M   $M     $M     $M    $M     $M         $M


                                                                           
Total revenues              1,236.6    -      -      -     -      -    1,236.6  


                                                                               
                                                                               


                                                                           
Costs and expenses:                                                             
                                                                           
Cost of product sales         197.1    -      -      -     -    (11.0)   186.1  
                                                                           
R&D                           229.1    -      -      -     -     (6.3)   222.8  
                                                                           
SG&A                          441.1  (44.4)   -      -    (8.5) (16.5)   371.7  
                                                                           
Gain on sale of product                                                        
rights                         (3.6)   -      -      3.6   -      -        -    
                                                                           
Reorganization costs           13.7    -      -    (13.7)  -      -        -    
                                                                           
Integration and acquisition                                                    
costs                          18.4    -    (18.4)   -     -      -        -    
                                                                           
Depreciation                    -      -      -      -     -     33.8     33.8  
                                                                           
Total operating expenses      895.8  (44.4) (18.4) (10.1) (8.5)   -      814.4  


                                                                               
                                                                               


                                                                           
Operating income              340.8   44.4   18.4   10.1   8.5    -      422.2  


                                                                               
                                                                               


                                                                           
Interest income                 0.4    -      -      -     -      -        0.4  
                                                                           
Interest expense               (9.0)   -      -      -     -      -       (9.0) 
                                                                           
Other income, net               0.6    -      -      -     -      -        0.6  
                                                                           
Total other expense, net       (8.0)   -      -      -     -      -       (8.0) 
                                                                           
Income before income taxes                                                     
and equity in losses of                                                        
equity method investees       332.8   44.4   18.4   10.1   8.5    -      414.2  
                                                                           
Income taxes                  (54.3) (14.1)  (1.0)  (4.2) (3.1)   -      (76.7) 
                                                                           
Equity in losses of equity                                                     
method investees, net of                                                       
tax                            (0.3)   -      -      -     -      -       (0.3) 
                                                                           
Net income                    278.2   30.3   17.4    5.9   5.4    -      337.2  
                                                                           
Impact of convertible debt,                                                    
net of tax                      7.6    -      -      -     -      -        7.6  
                                                                           
Numerator for diluted EPS     285.8   30.3   17.4    5.9   5.4    -      344.8  
                                                                           
Weighted average number of                                                     
shares (millions) - diluted   585.7    -      -      -     -      -      585.7  
                                                                           
Diluted earnings per ADS      146.4c  15.6c   9.0c   3.0c  2.7c   -      176.7c 
                                                                            
The following items are included in Adjustments: 
Amortization and asset impairments: Amortization of intangible assets relating
to intellectual property rights acquired ($44.4 million), and tax effect of
adjustments; 
Acquisition and integration activities: Costs primarily associated with the
integration of SARcode and Premacure ($3.7 million), charges related to the
change in fair value of contingent consideration ($14.7 million), and tax
effect of adjustments; 
Divestments, reorganizations and discontinued operations: Re-measurement of
DAYTRANA contingent consideration to higher fair value ($3.6 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
($13.7 million), and tax effect of adjustments; 
Legal and litigation costs: Costs related to litigation, government
investigations, other disputes and external legal costs ($8.5 million), and tax
effect of adjustments; and 
Depreciation reclassification: Depreciation of $33.8 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 results for the three months to September 30, 2012 
Non GAAP reconciliation 
3 months to September 30,                                                      
2012                          US GAAP           Adjustments            Non GAAP 


                                                                               
                                       (a)   (b)    (c)   (d)    (e)         
                                  $M   $M    $M     $M    $M     $M         $M


                                                                           
Total revenues               1,100.4    -     -      -     -      -    1,100.4  


                                                                               
                                                                               


                                                                           
Costs and expenses:                                                             
                                                                           
Cost of product sales          167.9    -     -      -     -     (9.4)   158.5  
                                                                           
R&D                            224.7    -     -      -     -     (5.5)   219.2  
                                                                           
SG&A                           437.4  (50.0)  -      -    (4.5) (14.2)   368.7  
                                                                           
Gain on sale of product                                                        
rights                          (5.7)   -     -      5.7   -      -        -    
                                                                           
Integration and acquisition                                                    
costs                            2.7    -    (2.7)   -     -      -        -    
                                                                           
Depreciation                     -      -     -      -     -     29.1     29.1  
                                                                           
Total operating expenses       827.0  (50.0) (2.7)   5.7  (4.5)   -      775.5  


                                                                               
                                                                               


                                                                           
Operating income               273.4   50.0   2.7   (5.7)  4.5    -      324.9  


                                                                               
                                                                               


                                                                           
Interest income                  0.9    -     -      -     -      -        0.9  
                                                                           
Interest expense                (9.2)   -     -      -     -      -       (9.2) 
                                                                           
Other income, net                3.5    -     -      -     -      -        3.5  
                                                                           
Total other expense, net        (4.8)   -     -      -     -      -       (4.8) 
                                                                           
Income before income taxes                                                     
and equity in earnings of                                                      
equity method investees        268.6   50.0   2.7   (5.7)  4.5    -      320.1  
                                                                           
Income taxes                   (41.6) (14.3) (1.1)   -    (1.5)   -      (58.5) 
                                                                           
Equity in earnings of equity                                                   
method investees, net of tax     0.2    -     -      -     -      -        0.2  
                                                                           
Net income                     227.2   35.7   1.6   (5.7)  3.0    -      261.8  
                                                                           
Impact of convertible debt,                                                    
net of tax                       7.5    -     -      -     -      -        7.5  
                                                                           
Numerator for diluted EPS      234.7   35.7   1.6   (5.7)  3.0    -      269.3  
                                                                           
Weighted average number of                                                     
shares (millions) - diluted    593.1    -     -      -     -      -      593.1  
                                                                           
Diluted earnings per ADS       118.8c  18.0c  0.9c (3.0c)  1.5c   -      136.2c 
                                                                            
The following items are included in Adjustments: 
Amortization and asset impairments: Amortization of intangible assets relating
to intellectual property rights acquired ($50.0 million), and tax effect of
adjustments; 
Acquisition and integration activities: Costs associated with the acquisition
of FerroKin and the integration of ABH ($1.5 million), charges related to the
change in fair value of contingent consideration ($1.2 million), and tax effect
of adjustments; 
Divestments, reorganizations and discontinued operations: Re-measurement of
DAYTRANA contingent consideration to higher fair value ($5.7 million); 
Legal and litigation costs: Costs related to litigation, government
investigations, other disputes and external legal costs ($4.5 million), and tax
effect of adjustments; and 
Depreciation reclassification: Depreciation of $29.1 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 results for the nine months to September 30, 2013 
Non GAAP reconciliation 
9 months  to September                                                         
30, 2013                   US GAAP             Adjustments             Non GAAP 


                                                                               
                                     (a)    (b)    (c)    (d)    (e)         
                               $M    $M     $M     $M     $M     $M         $M


                                                                           
Total revenues            3,673.0     -      -      -      -      -    3,673.0  


                                                                                
                                                                              


                                                                           
Costs and expenses:                                                             
                                                                           
Cost of product sales       528.7     -      -      -      -    (28.8)   499.9  
                                                                           
R&D                         713.4   (19.9)   -      -      -    (15.2)   678.3  
                                                                           
SG&A                      1,337.4  (136.1)   -      -    (18.0) (49.3) 1,134.0  
                                                                           
Goodwill impairment                                                            
charge                      198.9  (198.9)   -      -      -      -        -    
                                                                           
Gain on sale of product                                                        
rights                      (14.6)    -      -     14.6    -      -        -    
                                                                           
Reorganization costs         57.6     -      -    (57.6)   -      -        -    
                                                                           
Integration and                                                                
acquisition costs            39.9     -    (39.9)   -      -      -        -    
                                                                           
Depreciation                  -       -      -      -      -     93.3     93.3  
                                                                           
Total operating expenses  2,861.3  (354.9) (39.9) (43.0) (18.0)   -    2,405.5  


                                                                               
                                                                               


                                                                           
Operating income            811.7   354.9   39.9   43.0   18.0    -    1,267.5  


                                                                               
                                                                               


                                                                           
Interest income               1.6     -      -      -      -      -        1.6  
                                                                           
Interest expense            (27.0)    -      -      -      -      -      (27.0) 
                                                                           
Other expense, net           (1.9)    -      -      -      -      -       (1.9) 
                                                                           
Total other expense, net    (27.3)    -      -      -      -      -      (27.3) 
                                                                           
Income before income                                                           
taxes and equity in                                                            
earnings of equity method                                                      
investees                   784.4   354.9   39.9   43.0   18.0    -    1,240.2  
                                                                           
Income taxes               (183.9)  (43.2)  (3.1) (13.1)  (6.5)   -     (249.8) 
                                                                           
Equity in earnings of                                                          
equity method investees,                                                       
net of tax                    0.6     -      -      -      -      -        0.6  
                                                                           
Net income                  601.1   311.7   36.8   29.9   11.5    -      991.0  
                                                                           
Impact of convertible                                                          
debt, net of tax             22.7     -      -      -      -      -       22.7  
                                                                           
Numerator for diluted EPS   623.8   311.7   36.8   29.9   11.5    -    1,013.7  
                                                                           
Weighted average number                                                        
of shares (millions) -                                                         
diluted                     587.5     -      -      -      -      -      587.5  
                                                                           
Diluted earnings per ADS    318.6c  159.1c  18.7c  15.1c   6.0c   -      517.5c 
                                                                            
The following items are included in Adjustments: 
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 ($198.9 million), amortization of
intangible assets relating to intellectual property rights acquired ($136.1
million), and tax effect of adjustments; 
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; 
Divestments, reorganizations and discontinued operations: 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
($57.6 million), and tax effect of adjustments; 
Legal and litigation costs: Costs related to litigation, government
investigations, other disputes and external legal costs ($18.0 million), and
tax effect of adjustments; and 
Depreciation reclassification: Depreciation of $93.3 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 results for the nine months to September 30, 2012 
Non GAAP reconciliation 
9 months to September 30,                                                      
2012                       US GAAP             Adjustments             Non GAAP 


                                                                               
                                     (a)    (b)    (c)    (d)    (e)         
                               $M    $M     $M     $M     $M     $M         $M


                                                                           
Total revenues            3,480.0     -      -      -      -      -    3,480.0  


                                                                               
                                                                               


                                                                           
Costs and expenses:                                                             
                                                                           
Cost of product sales       478.8     -      -      -      -    (23.6)   455.2  
                                                                           
R&D                         683.6   (27.0) (23.0)   -      -    (18.3)   615.3  
                                                                           
SG&A                      1,448.4  (146.6)   -      -    (40.4) (42.3) 1,219.1  
                                                                           
Gain on sale of product                                                        
rights                      (16.5)    -      -     16.5    -      -        -    
                                                                           
Integration and                                                                
acquisition costs            15.1     -    (15.1)   -      -      -        -    
                                                                           
Depreciation                  -       -      -      -      -     84.2     84.2  
                                                                           
Total operating expenses  2,609.4  (173.6) (38.1)  16.5  (40.4)   -    2,373.8  


                                                                               
                                                                               


                                                                           
Operating income            870.6   173.6   38.1  (16.5)  40.4    -    1,106.2  


                                                                               
                                                                               


                                                                           
Interest income               2.3     -      -      -      -      -        2.3  
                                                                           
Interest expense            (29.0)    -      -      -      -      -      (29.0) 
                                                                           
Other income, net             3.6     -      -      -      -      -        3.6  
                                                                           
Total other expense, net    (23.1)    -      -      -      -      -      (23.1) 
                                                                           
Income before income                                                           
taxes and equity in                                                            
earnings of equity method                                                      
investees                   847.5   173.6   38.1  (16.5)  40.4    -    1,083.1  
                                                                           
Income taxes               (144.6)  (42.0) (10.1)   -    (14.5)   -     (211.2) 
                                                                           
Equity in earnings of                                                          
equity method investees,                                                       
net of tax                    0.5     -      -      -      -      -        0.5  
                                                                           
Net income                  703.4   131.6   28.0  (16.5)  25.9    -      872.4  
                                                                           
Impact of convertible                                                          
debt, net of tax             23.7     -      -      -      -      -       23.7  
                                                                           
Numerator for diluted EPS   727.1   131.6   28.0  (16.5)  25.9    -      896.1  
                                                                           
Weighted average number                                                        
of shares (millions) -                                                         
diluted                     594.0     -      -      -      -      -      594.0  
                                                                           
Diluted earnings per ADS    367.2c   66.6c  14.1c (8.4c)  13.2c   -      452.7c 
                                                                            
The following items are included in Adjustments: 
Amortization and asset impairments: Impairment of IPR&D intangible assets for
RESOLOR ($27.0 million), amortization of intangible assets relating to
intellectual property rights acquired ($146.6 million), and tax effect of
adjustments; 
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
associated with acquisition of FerroKin and the integration of ABH ($11.8
million), charges related to the change in fair value of contingent
consideration ($3.3 million), and tax effect of adjustments; 
Divestments, reorganizations and discontinued operations: Re-measurement of
DAYTRANA contingent consideration to fair value ($16.5 million); 
Legal and litigation costs: Costs related to the litigation, government
investigations, other disputes and external legal costs ($40.4 million), and
tax effect of adjustments; and 
Depreciation reclassification: Depreciation of $84.2 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 results for the three months and nine months to September 30, 2013 
Non GAAP reconciliation 
The following table reconciles US GAAP net cash provided by operating
activities to Non GAAP cash generation: 


                                               3 months to         9 months to    
                                           September 30,       September 30,   
                                          2013        2012     2013       2012 
                                            $M          $M       $M         $M


                                                                           
Net cash provided by operating                                                 
activities                               433.7       288.4    852.7    1,011.2  
                                                                           
Tax and interest payments, net            48.1        66.8    260.6      150.9  
                                                                           
Up-front payments in respect of                                                
in-licensed and acquired products            -           -        -       23.0  
                                                                           
Non GAAP cash generation                 481.8       355.2  1,113.3    1,185.1  
                                                                            


    

The following table reconciles US GAAP net cash provided by operating
activities to Non GAAP free cash flow:
                                               3 months to         9 months to    
                                           September 30,       September 30,   
                                           2013       2012     2013       2012 
                                             $M         $M       $M         $M


                                                                           
Net cash provided by operating                                                 
activities                                433.7      288.4    852.7    1,011.2  
                                                                           
Up-front payments in respect of                                                
in-licensed and acquired products             -          -        -       23.0  
                                                                           
Capital expenditure                       (45.3)     (27.2)  (110.3)     (91.6) 
                                                                           
Non GAAP free cash flow                   388.4      261.2    742.4      942.6  


                                                                               
    Non GAAP net cash comprises:
                          September 30, December 31,
                                  2013         2012 
                                    $M           $M


                                                
Cash and cash equivalents      1,686.1      1,482.2  


                                                    
                                                    


                                                
Convertible bonds             (1,100.0)    (1,100.0) 
                                                
Other debt                        (8.9)        (9.3) 
                                                
Non GAAP net cash                577.2        372.9  


                                                    
    
    
    

NOTES TO EDITORS
    Shire enables people with life-altering conditions to lead better lives.


Our strategy is to focus on developing and marketing innovative specialty
medicines to meet significant unmet patient needs. 
We provide treatments in Neuroscience, Rare Diseases, Gastrointestinal,
Internal Medicine and Regenerative Medicine and we are developing treatments
for symptomatic conditions treated by specialist physicians in other targeted
therapeutic areas. 
www.shire.com 
FORWARD - LOOKING STATEMENTS - "SAFE HARBOR" STATEMENT UNDER THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995 
Statements included in this announcement that are not historical facts are
forward-looking statements. Forward-looking statements involve a number of
risks and uncertainties and are subject to change at any time. In the event
such risks or uncertainties materialize, Shire's results could be materially
adversely affected. The risks and uncertainties include, but are not limited
to, 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 of
reimbursement, by third-party payors in a timely manner for Shire's products
may impact future revenues and earnings;

Shire relies on a single source for manufacture of certain of its products and
a disruption to the supply chain for those products may result in Shire being
unable to continue marketing or developing a product or may result in Shire
being unable to do so on a commercially viable basis;

Shire uses third party manufacturers to manufacture many of its products and is
reliant upon third party contractors for certain goods and services, and any
inability of these third party manufacturers to manufacture products, or any
failure of these third party contractors to provide these goods and services,
in each case in accordance with its respective contractual obligations, could
adversely affect Shire's ability to manage its manufacturing processes or to
operate its business;

the development, approval and manufacturing of Shire's products is subject to
extensive oversight by various regulatory agencies and regulatory approvals or
interventions associated with changes to manufacturing sites, ingredients or
manufacturing processes could lead to significant delays, increase in operating
costs, lost product sales, an interruption of research activities or the delay
of new product launches;

the actions of certain customers could affect Shire's ability to sell or market
products profitably and fluctuations in buying or distribution patterns by such
customers could adversely impact Shire's revenues, financial conditions or
results of operations;

investigations or enforcement action by regulatory authorities or law
enforcement agencies relating to Shire's activities in the highly regulated
markets in which it operates may result in the distraction of senior
management, significant legal costs and the payment of substantial compensation
or fines;

adverse outcomes in legal matters and other disputes, including Shire's ability
to obtain, maintain, enforce and defend patents and other intellectual property
rights required for its business, could have a material adverse effect on
Shire's revenues, financial condition or results of operations;

and other risks and uncertainties detailed from time to time in Shire's filings
with the U.S. Securities and Exchange Commission, including its most recent
Annual Report on Form 10-K.
    NON GAAP MEASURES


This press release contains financial measures not prepared in accordance with
US GAAP. These measures are referred to as "Non GAAP" measures and include: Non
GAAP 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 GAAP
cost of product sales; Non GAAP research and development; Non GAAP selling,
general and administrative; Non GAAP other income/expense; Non GAAP cash
generation; Non GAAP free cash flow and Non GAAP net cash/(debt). These Non
GAAP measures exclude the effect of certain cash and non-cash items, that
Shire's management believes are not related to the core performance of Shire's
business. 
These Non GAAP financial measures are used by Shire's management to make
operating decisions because they facilitate internal comparisons of Shire's
performance to historical results and to competitors' results. Shire's
Remuneration Committee uses certain key Non GAAP measures when assessing the
performance and compensation of employees, including Shire's executive
directors. 
The Non GAAP measures are presented in this press release as Shire's management
believe that they will provide investors with a means of evaluating, and an
understanding of how Shire's management evaluates, Shire's performance and
results on a comparable basis that is not otherwise apparent on a US GAAP
basis, since many non-recurring, infrequent or non-cash items that Shire's
management believe are not indicative of the core performance of the business
may not be excluded when preparing financial measures under US GAAP. 
These Non GAAP measures should not be considered in isolation from, as
substitutes for, or superior to financial measures prepared in accordance with
US GAAP. 
Where applicable the following items, including their tax effect, have been
excluded when calculating Non GAAP earnings for both 2013 and 2012, and from
our Outlook: 
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 acquired
products; 
Costs associated with acquisitions, including transaction costs, fair value
adjustments 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, government
investigations and other disputes (excluding internal legal team costs). 
Depreciation, which is included in Cost of product sales, R&D and SG&A costs in
our US GAAP results, has been separately disclosed for the presentation of 2013
and 2012 Non GAAP earnings. 
Cash generation represents net cash provided by operating activities, excluding
up-front and milestone payments for in-licensed and acquired products, tax and
interest payments. 
Free cash flow represents net cash provided by operating activities, excluding
up-front and milestone payments for in-licensed and acquired products, but
including capital expenditure in the ordinary course of business. 
A reconciliation of Non GAAP financial measures to the most directly comparable
measure under US GAAP is presented on pages 19 to 23. 
Growth at CER, which is a Non GAAP measure, is computed by restating 2013
results using average 2012 foreign exchange rates for the relevant period. 
Average exchange rates for the nine months to September 30, 2013 were $1.55:£
1.00 and $1.31:€1.00 (2012: $1.58:£1.00 and $1.29:€1.00). Average exchange
rates for Q3 2013 were $1.53:£1.00 and $1.32:€1.00 (2012: $1.58:£1.00 and
$1.25:€1.00). 
TRADE MARKS 
All trade marks designated ® and ™ used in this press release are trade 
marks
of Shire plc or companies within the Shire group except for 3TC® and ZEFFIX®
which are trade marks of GlaxoSmithKline, PENTASA® which is a registered trade
mark of FERRING B.V., LIALDA® and MEZAVANT® which are trade marks of Nogra
Pharma Limited, and DAYTRANA® which is a trade mark of Noven Therapeutics, 
LLC.
Certain trade marks of Shire plc or companies within the Shire group are set
out in Shire's Annual Report on Form 10-K for the year ended December 31, 2012
and the Quarterly Report on Form 10-Q for the three months and six months ended
June 30, 2013. 

END 
-0- Oct/24/2013 11:00 GMT
 
 
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