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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`_____________________________
`
`FORM 10-K
`
`ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2015
`OR
`o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from to
`
`Commission file number 001-14956
`VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
`(Exact Name of Registrant as Specified in its Charter)
`
`BRITISH COLUMBIA, CANADA
`State or other jurisdiction of
`incorporation or organization
`
`98-0448205
`(I.R.S. Employer Identification No.)
`
`2150 St. Elzéar Blvd. West
`Laval, Quebec
`Canada, H7L 4A8
`(Address of principal executive offices)
`
`Registrant's telephone number, including area code (514) 744-6792
`
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Shares, No Par Value
`Securities registered pursuant to section 12(g) of the Act:
`
`Name of each exchange on which registered
`New York Stock Exchange, Toronto Stock Exchange
`
`None
`(Title of class)
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý
`
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý
`
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the
`preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
`90 days. Yes ý No o
`
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
`posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý
` No o
`
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s
`knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
`“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
`
`Large accelerated filer ý
`
`Non-accelerated filer o
`Accelerated filer o
`(Do not check if a smaller reporting company)
`
`Smaller reporting company o
`
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
`
`The aggregate market value of the common shares held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal
`quarter was $75,445,451,000 based on the last reported sale price on the New York Stock Exchange on June 30, 2015.
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`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1553(a)
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

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`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`_____________________________
`
`FORM 10-K
`
`ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2015
`OR
`o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from to
`
`Commission file number 001-14956
`VALEANT PHARMACEUTICALS INTERNATIONAL, INC.
`(Exact Name of Registrant as Specified in its Charter)
`
`BRITISH COLUMBIA, CANADA
`State or other jurisdiction of
`incorporation or organization
`
`98-0448205
`(I.R.S. Employer Identification No.)
`
`2150 St. Elzéar Blvd. West
`Laval, Quebec
`Canada, H7L 4A8
`(Address of principal executive offices)
`
`Registrant's telephone number, including area code (514) 744-6792
`
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Shares, No Par Value
`Securities registered pursuant to section 12(g) of the Act:
`
`Name of each exchange on which registered
`New York Stock Exchange, Toronto Stock Exchange
`
`None
`(Title of class)
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý
`
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý
`
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the
`preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
`90 days. Yes ý No o
`
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and
`posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý
` No o
`
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s
`knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
`
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
`“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
`
`Large accelerated filer ý
`
`Non-accelerated filer o
`Accelerated filer o
`(Do not check if a smaller reporting company)
`
`Smaller reporting company o
`
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý
`
`The aggregate market value of the common shares held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal
`quarter was $75,445,451,000 based on the last reported sale price on the New York Stock Exchange on June 30, 2015.
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`The number of outstanding shares of the registrant’s common stock as of April 22, 2016 was 343,019,770.
`
`DOCUMENTS INCORPORATED BY REFERENCE
`
`Part III incorporates certain information by reference from the registrant’s proxy statement for the 2016 Annual Meeting of Shareholders. Such proxy statement will
`be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2015.
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`EXPLANATORY NOTE
`
`This Annual Report on Form 10-K for the year ended December 31, 2015 includes consolidated financial statements for the years
`ended December 31, 2013, 2014 and 2015. The audited consolidated financial statements for the year ended December 31, 2014 are restated.
`Valeant Pharmaceuticals International, Inc. and its subsidiaries (the “Company”) has also restated certain unaudited quarterly results related
`to the three months ended December 31, 2014, the three months ended March 31, 2015, the six months ended June 30, 2015, and the nine
`months ended September 30, 2015.
`
`Restatement Background
`
`On October 26, 2015, in light of allegations regarding the Company’s relationship with the Philidor Rx Services, LLC (“Philidor”)
`pharmacy network, the Company’s Board of Directors (the “Board”) established an ad hoc committee of independent directors of the Board
`(the “Ad Hoc Committee”) to review these allegations and related matters (the “AHC Review”). The scope of the review conducted by the
`Ad Hoc Committee was subsequently broadened to encompass other areas of potential concern, unrelated to Philidor, raised during the
`course of the review. The Ad Hoc Committee was chaired by Robert Ingram, the Company’s current independent chairman of the board (and
`formerly the Company’s lead independent director). Other members included Norma Provencio, chairperson of the Audit and Risk
`Committee (the “ARC”), Colleen Goggins, and Mason Morfit. The Ad Hoc Committee engaged the law firm of Kirkland & Ellis LLP to
`assist and advise in carrying out the AHC Review. On February 22, 2016, the Company announced that, based on the work of the Ad Hoc
`Committee, as well as additional work and analysis performed by the Company, the Company had preliminarily identified certain revenue
`on sales transactions to Philidor during the second half of 2014, prior to the Company entering into a purchase option to acquire Philidor,
`that should have been recognized when product was dispensed to patients rather than on delivery to Philidor.
`
`On March 21, 2016, management of the Company, the ARC and the Board concluded that the Company’s audited financial statements
`for the year ended, and unaudited financial information for the quarter ended, December 31, 2014 included in the Company’s Annual Report
`on Form 10-K for the year ended December 31, 2014 and the unaudited financial statements for the quarter ended March 31, 2015 included
`in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 should no longer be relied upon due to the
`misstatements and other qualitative factors described below. In addition, due to the fact that the first quarter 2015 results are included within
`the financial statements for the six-month period ended June 30, 2015 included in the Quarterly Report on Form 10-Q for the quarter ended
`June 30, 2015 and the financial statements for the nine-month period ended September 30, 2015 included in the Quarterly Report on Form
`10-Q for the quarter ended September 30, 2015, management, the ARC and the Board also concluded that the financial statements for such
`six-month and nine-month periods reflected in those Quarterly Reports should no longer be relied upon. This determination was based on
`the AHC Review and additional work and analysis performed by the Company. Based on this work, the Company determined that the
`earnings impact of certain revenue transactions should have been recognized at a later date than when originally recognized.
`
`As previously disclosed, on December 15, 2014, the Company entered into a purchase option agreement with Philidor and its
`members in which the Company received an exclusive option to acquire 100% of the equity interest in Philidor, and as of which time
`Philidor was consolidated with the Company for accounting purposes as a variable interest entity for which the Company was the primary
`beneficiary. Prior to consolidation, revenue on sales to Philidor was recognized by the Company on a sell-in basis (i.e., recorded when the
`Company delivered product to Philidor). In connection with the work of the Ad Hoc Committee, the Company determined that certain sales
`transactions for deliveries to Philidor in the second half of 2014 leading up to the execution of the purchase option agreement were not
`executed in the normal course of business under applicable accounting standards and included actions taken by the Company (including
`fulfillment of unusually large orders with extended payment terms and increased pricing, an emphasis on delivering product prior to the
`execution of the purchase option agreement and seeking and filling a substitute order of equivalent value for an unavailable product) in
`contemplation of the purchase option agreement. As a result of these actions, revenue for certain transactions completed prior to entry into
`the purchase option agreement should have been recognized on a sell-through basis (i.e., record revenue when Philidor dispensed the
`products to patients) rather than incorrectly recognized on the sell-in basis utilized by the Company. Additionally, related to these and certain
`earlier transactions, the Company has now concluded that collectability was not reasonably assured at the time the revenue was originally
`recognized, and, thus, these transactions should have been recognized at a later date (when collectability was reasonably assured which the
`Company determined coincides with when the inventory is sold through to the end customer) instead of on a sell-in basis. Following the
`consolidation of Philidor on the date of entry into the purchase option agreement, the Company began recognizing revenue as Philidor
`dispensed product to patients.
`
`On April 5, 2016, the Company announced that the Ad Hoc Committee had determined that its review was complete, and that the Ad
`Hoc Committee had not identified any additional items that would require restatement beyond those required by matters previously
`disclosed. In addition, the Company announced that, given the completion of the AHC Review, the Board had determined to dissolve the Ad
`Hoc Committee and that the 12 independent directors on the Board, including the members of the ARC, would assume oversight
`responsibility for remaining work, including work associated with the completion of the Company's current and restated financial statements
`and disclosures, as well as its assessment of related internal controls and remediation matters.
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`Impact of Restatement
`
`The Company has identified misstatements that reduce previously reported fiscal year 2014 revenue by approximately $58 million, net
`income attributable to Valeant Pharmaceuticals International, Inc. by approximately $33 million, and basic and diluted earnings per share by
`$0.09 (as compared to the previously reported amounts for fiscal year 2014 of $8,264 million for revenue, $914 million for net income
`attributable to Valeant Pharmaceuticals International, Inc. and $2.72 and $2.67 for basic and diluted earnings per share, respectively). A
`substantial part of the earnings impact of these misstatements reversed in the first quarter of 2015. The Company has also identified
`misstatements in the first quarter of 2015, consisting primarily of the reversing effect on earnings of the 2014 misstatements, which reduce
`revenue by approximately $21 million (due to timing of recognition of and impact of consolidation for managed care rebates), increase net
`income attributable to Valeant Pharmaceuticals International, Inc. by approximately $24 million and increase basic and diluted earnings per
`share by $0.07 (as compared to the previously reported first quarter 2015 amounts of $2,191 million for revenue, $74 million for net income
`attributable to Valeant Pharmaceuticals International, Inc. and $0.22 and $0.21 for basic and diluted earnings per share, respectively).
`
`Internal Control Over Financial Reporting and Disclosure Controls and Procedures
`
`Based on the results of the AHC Review, the Company's review of its financial records, and other work completed by management,
`the Company and the ARC have concluded that material weaknesses in the Company's internal control over financial reporting existed that
`contributed to the material misstatements in the consolidated financial statements described above. These material weaknesses relate to the
`tone at the top of the organization and the accounting and disclosure for non-standard revenue transactions particularly at or near quarter
`ends. The improper conduct of the Company’s former Chief Financial Officer and former Corporate Controller, which resulted in the
`provision of incorrect information to the ARC and the Company’s independent registered public accounting firm, contributed to the
`misstatement of financial results. In addition, as part of this assessment of internal control over financial reporting, the Company has
`determined that the tone at the top of the organization, with its performance-based environment, in which challenging targets were set and
`achieving those targets was a key performance expectation, may have been a contributing factor resulting in the Company’s improper
`revenue recognition and the conduct described above.
`
`In connection with the Ad Hoc Committee’s work, certain remediation actions have been recommended, and the Company is in the
`process of implementing them. For further information regarding management’s assessment of internal control over financial reporting and
`disclosure controls and procedures, as well as the related remediation actions, refer to Item 9A "Controls and Procedures" of this Form 10-K.
`
`More Information
`
`Note 2 titled “RESTATEMENT” to the Company's consolidated financial statements discloses the nature of the restatement matters
`and adjustments and shows the impact of the restatement matters on the Company's consolidated financial statements for 2014. Note 25
`titled "SUMMARY QUARTERLY INFORMATION (UNAUDITED)" to the Company's consolidated financial statements discloses the
`nature of the restatement matters and adjustments and shows the impact of the restatement matters on the Company's consolidated financial
`information for the three months ended December 31, 2014 and on the Company's consolidated financial statements for the three months
`ended March 31, 2015, the six months ended June 30, 2015, and the nine months ended September 30, 2015. This footnote also discloses the
`impact of related revisions to the Company's consolidated financial statements for the three months and nine months ended September 30,
`2014.
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`TABLE OF CONTENTS
`
`GENERAL INFORMATION
`
`PART I
`
`Business
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
`Mine Safety Disclosures
`
`PART II
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
`Selected Financial Data
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Quantitative and Qualitative Disclosures About Market Risk
`Financial Statements and Supplementary Data
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Controls and Procedures
`Other Information
`
`PART III
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accounting Fees and Services
`
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
`
`Item 5.
`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
`
`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
`
`Item 15.
`SIGNATURES
`
`Exhibits and Financial Statement Schedules
`
`PART IV
`
`i
`
`Page
`
`1
`11
`32
`33
`33
`34
`
`35
`38
`40
`78
`78
`78
`78
`81
`
`82
`82
`82
`82
`82
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`Basis of Presentation
`
`General
`
`Except where the context otherwise requires, all references in this Annual Report on Form 10-K (“Form 10-K”) to the “Company”,
`“we”, “us”, “our” or similar words or phrases are to Valeant Pharmaceuticals International, Inc. and its subsidiaries, taken together. In this
`Form 10-K, references to “$” are to United States (“U.S.”) dollars, references to “€” are to Euros, and references to RUR are to Russian
`rubles. Unless otherwise indicated, the statistical and financial data contained in this Form 10-K are presented as of December 31, 2015 .
`
`Trademarks
`
`The following words are some of the trademarks in our Company’s trademark portfolio and are the subject of either registration, or
`application for registration, in one or more of Canada, the United States of America (the “U.S.”) or certain other jurisdictions: ACANYA®,
`ADDYI®, AERGEL®, AFEXA®, AKREOS®, ALREX®, AMYTAL®, ANTI-ANGIN®, ANTIGRIPPIN®, APRISO®, ARESTIN®,
`ARTELAC®, ATRALIN®, B&L®, B+L®, BAUSCH & LOMB®, BAUSCH + LOMB®, BAUSCH + LOMB ULTRA®, BEDOYECTA®,
`BEPREVE®, BESIVANCE®, BIOTRUE®, BIOVAIL®, BOSTON®, CARAC®, CARDIZEM®, CERAVE®, CLEAR + BRILLIANT®,
`CLINDAGEL®, COLD-FX®, COMFORTMOIST®, CONDITION & ENHANCE®, CRYSTALENS®, CUPRIMINE®, ELASTIDERM®,
`ENVISTA®, FRAXEL®, GLUMETZA®, GRIFULVIN®, IPRIVASK®, ISTALOL®, JUBLIA®, KINERASE®, LACRISERT®,
`LIPOSONIX®, LOTEMAX®, LUMINESSE™, LUZU®, MACUGEN®, MAXAIR®, MEDICIS®, MOISTURESEAL®, NU-DERM®,
`OBAGI®, OBAGI CLENZIDERM®, OBAGI-C®, OBAGI NU-DERM®, OCUVITE®, ONEXTON®, PRESERVISION®,
`PROLENSA®, PROVENGE®, PUREVISION®, RELISTOR®, RENU®, RENU MULTIPLUS®, RETIN-A®, RETIN-A MICRO®,
`SECONAL®, SECONAL SODIUM®, SOFLENS®, SOLODYN®, SOLTA MEDICAL®, STELLARIS®, STORZ®, SYNERGETICS®,
`SYPRINE®, TARGRETIN®, TASMAR®, THERMAGE®, THERMAGE CPT®, TIAZAC®, TRULIGN®, UCERIS®, VALEANT®,
`VALEANT V & DESIGN®, VALEANT PHARMACEUTICALS & DESIGN®, VANOS®, VICTUS®, VIRAZOLE®, VITESSE™,
`XENAZINE®, ZEGERID®, ZELAPAR®, ZIANA®, ZYCLARA® and ZYLET®.
`
`WELLBUTRIN®, WELLBUTRIN XL® and ZOVIRAX® are trademarks of The GlaxoSmithKline Group of Companies and are
`used by us under license. MVE® is a registered trademark of DFB Technology Ltd. and is used by us under license. ELIDEL® and
`XERESE® are registered trademarks of Meda Pharma SARL and are used by us under license. VISUDYNE® is a registered trademark of
`Novartis Pharma AG and is used by us under license. EMERADE® is a registered trademark of Medeca Pharma AB and is used by us under
`license. DEFLUX® and SOLESTA® are registered trademarks of Galderma S.A. and are used by us under license. ISUPREL® and
`NITROPRESS® are registered trademarks of Hospira, Inc. and are used by us under license. XIFAXAN® is a registered trademark of Alfa
`Wasserman S.P.A. and is used by us under license. ZIRGAN® is a registered trademark of Laboratoires Théa Corporation and is used by us
`under license. PEPCID® is a registered trademark of Johnson & Johnson and is used by us under license. MOVIPREP® is a registered
`trademark of Velinor AG and is used by us under license. LOCOID® is a registered trademark of Astellas Pharma Europe B.V. and is used
`by us under license.
`
`In addition to the trademarks noted above, we have filed trademark applications and/or obtained trademark registrations for many of
`our other trademarks in the U.S., Canada and in other jurisdictions and have implemented, on an ongoing basis, a trademark protection
`program for new trademarks.
`
`Forward-Looking Statements
`
`Caution regarding forward-looking information and statements and “Safe-Harbor” statements under the U.S. Private Securities
`Litigation Reform Act of 1995:
`
`To the extent any statements made in this Form 10-K contain information that is not historical, these statements are forward-looking
`statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
`1934, as amended, and may be forward-looking information within the meaning defined under applicable Canadian securities legislation
`(collectively, “forward-looking statements”).
`
`These forward-looking statements relate to, among other things: our business strategy, business plans and prospects, product pipeline,
`prospective products or product approvals, product development and distribution plans, future performance or results of current and
`anticipated products; the expected benefits of our acquisitions and other transactions, such as cost savings, operating synergies and growth
`potential of the Company; the impact of material weaknesses in our internal control over financial reporting; the impact of delayed
`securities filings under the agreements governing our outstanding indebtedness; our liquidity and our ability to cover our debt maturities as
`they become due; the impact of our distribution, fulfillment and other third party arrangements; changes in management; our ability to
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`reduce wholesaler inventory levels; exposure to foreign currency exchange rate changes and interest rate changes; the outcome of
`contingencies, such as litigation, subpoenas, investigations, reviews, audits and regulatory
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`ii
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`proceedings; general market conditions; and our expectations regarding our financial performance, including revenues, expenses, gross
`margins, liquidity and income taxes.
`
`Forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”,
`“estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “should”, “target”, “potential”, “opportunity”, “tentative”,
`“positioning”, “designed”, “create”, “predict”, “project”, “forecast”, “seek”, “ongoing”, “increase”, or “upside” and variations or
`other similar expressions. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future
`events or circumstances are forward-looking statements. These forward-looking statements may not be appropriate for other purposes.
`Although we have indicated above certain of these statements set out herein, all of the statements in this Form 10-K that contain forward-
`looking statements are qualified by these cautionary statements. These statements are based upon the current expectations and beliefs of
`management. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements
`involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are
`applied in making forward-looking statements, including, but not limited to, factors and assumptions regarding the items outlined above.
`Actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to
`differ materially from these expectations include, among other things, the following:
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`•
`
`the expense, timing and outcome of legal and governmental proceedings, investigations and information requests relating to our
`distribution, marketing, pricing, disclosure and accounting practices (including with respect to our former relationship with
`Philidor), including pending investigations by the U.S. Attorney's Office for the District of Massachusetts, the U.S. Attorney's
`Office for the Southern District of New York and the State of North Carolina Department of Justice, the pending investigation by
`the U.S. Securities and Exchange Commission (the “SEC”) of the Company, pending investigations by the U.S. Senate Special
`Committee on Aging and the U.S. House Committee on Oversight and Government Reform, the request for documents and
`information received by the Company from the Autorité des marchés financiers (the “AMF”) (the Company’s principal securities
`regulator in Canada), the document subpoena from the New Jersey State Bureau of Securities and a number of pending purported
`class action securities litigations in the U.S. and Canada and other claims, investigations or proceedings that may be initiated or
`that may be asserted;
`
`our ability to manage the transition to the individual identified to succeed our current chief executive officer, the success of such
`individual in assuming the roles of chairman and chief executive officer and the ability of such individual to implement and achieve
`the strategies and goals of the Company as they develop;
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`potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of management
`time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm that may result from the
`completed review by the Ad Hoc Committee;
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`the effect of the misstatements identified in our previously issued financial statements for the year ended December 31, 2014, the
`financial information for the quarter ended December 31, 2014 (included in our Annual Report for the year ended December 31,
`2014) and the financial statements for the quarter ended March 31, 2015 (included in our Quarterly Report on Form 10-Q for the
`quarter ended March 31, 2015), as well as the financial statements for the six-month period ended June 30, 2015 (included in our
`Quarterly Report on Form 10-Q for the quarter ended June 30, 2015) and the nine-month period ended September 30, 2015
`(included in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015), due to the fact that the financial
`results for the quarter ended March 31, 2015 are included within the financial statements for these periods; the resultant
`restatement of the affected financial statements; the material weaknesses in our internal control over financial reporting identified
`by the Company; and any claims, investigations or proceedings (and any costs, expenses, use of resources, diversion of
`management time and efforts, liability and damages that may result therefrom), negative publicity or reputational harm that may
`arise as a result;
`
`the effectiveness of the remediation measures and actions to be taken to remediate the material weaknesses in our internal control
`over financial reporting identified by the Company, our deficient control environment and the contributing factors leading to the
`misstatement of our results and the impact such measures may have on the Company and our businesses;
`
`any default under the terms of our senior notes indentures or Credit Agreement and our ability, if any, to cure or obtain waivers of
`such default;
`
`any delay in the filing of any subsequent financial statements or other filings (including the expected delay in the filing of the
`Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2016 (the “First Quarter 2016 Form 10-Q”) and any
`default under the terms of our senior notes indentures or Credit Agreement as a result of such delays;
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`potential additional litigation and regulatory investigations (and any costs, expenses, use of resources, diversion of management
`time and efforts, liability and damages that may result therefrom), negative publicity and reputational harm
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`on our Company, products and business that may result from the recent public scrutiny of our distribution, marketing, pricing,
`disclosure and accounting practices and from our former relationship with Philidor, including any claims, proceedings,
`investigations and liabilities we may face as a result of any alleged wrongdoing by Philidor;
`
`the current scrutiny of our business practices including with respect to pricing (including the investigations by the U.S. Attorney's
`Offices for the District of Massachusetts and the Southern District of New York, the U.S. Senate Special Committee on Aging, the
`U.S. House Committee on Oversight and Government Reform and the State of North Carolina Department of Justice) and any
`pricing controls or price reductions that may be sought or imposed on our products as a result thereof;
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`our substantial debt (and potential future indebtedness) and current and future debt service obligations and their impact on our
`financial condition, cash flows and results of op