2019 Q4 Form 10-K Financial Statement

#000110465920025009 Filed on February 26, 2020

View on sec.gov

Income Statement

Concept 2019 Q4 2019 Q3 2019 Q2
Revenue $311.1M $401.5M $373.6M
YoY Change -18.43% -2.71% -15.95%
Cost Of Revenue $28.80M $33.00M $26.70M
YoY Change -9.72% -36.42% -56.73%
Gross Profit $282.3M $368.5M $346.9M
YoY Change -19.23% 2.13% -9.38%
Gross Profit Margin 90.74% 91.78% 92.85%
Selling, General & Admin $105.2M $99.40M $39.60M
YoY Change 32.83% -9.72% -52.35%
% of Gross Profit 37.27% 26.97% 11.42%
Research & Development $113.6M $85.70M $85.90M
YoY Change -18.16% -15.23% 4.37%
% of Gross Profit 40.24% 23.26% 24.76%
Depreciation & Amortization $12.50M $12.70M $10.40M
YoY Change 19.05% 35.11% 28.4%
% of Gross Profit 4.43% 3.45% 3.0%
Operating Expenses $218.8M $85.70M $85.90M
YoY Change 0.37% -15.23% 4.37%
Operating Profit $63.50M $183.4M $221.4M
YoY Change -51.71% 22.59% 1.84%
Interest Expense $3.400M $11.70M $12.20M
YoY Change -22.73% 185.37% 320.69%
% of Operating Profit 5.35% 6.38% 5.51%
Other Income/Expense, Net $1.400M -$16.50M $29.00M
YoY Change -148.28% 73.68% 5700.0%
Pretax Income $68.30M $166.9M $250.4M
YoY Change -25.68% 19.13% 14.92%
Income Tax $15.70M $34.50M $45.30M
% Of Pretax Income 22.99% 20.67% 18.09%
Net Earnings $52.60M $132.4M $205.1M
YoY Change -19.45% 24.32% 18.62%
Net Earnings / Revenue 16.91% 32.98% 54.9%
Basic Earnings Per Share $1.20 $3.02 $4.68
Diluted Earnings Per Share $1.20 $3.01 $4.66
COMMON SHARES
Basic Shares Outstanding 43.88M 43.90M shares 43.80M shares
Diluted Shares Outstanding 44.00M shares 44.00M shares

Balance Sheet

Concept 2019 Q4 2019 Q3 2019 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.486B $1.570B $1.786B
YoY Change 4.94% 26.86% 47.25%
Cash & Equivalents $738.4M $719.7M $881.3M
Short-Term Investments $747.5M $850.3M $904.9M
Other Short-Term Assets $133.8M $85.70M $75.70M
YoY Change 77.45% 56.1% 32.34%
Inventory $93.40M $94.10M $96.90M
Prepaid Expenses
Receivables $151.4M $183.6M $181.0M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.865B $1.933B $2.140B
YoY Change 5.46% 20.18% 31.74%
LONG-TERM ASSETS
Property, Plant & Equipment $738.5M $678.3M $709.3M
YoY Change 5.55% 1.97% 13.29%
Goodwill $28.00M $28.00M $31.50M
YoY Change -11.11%
Intangibles
YoY Change
Long-Term Investments $767.5M $730.4M $420.7M
YoY Change 73.41% 22.57% -27.25%
Other Assets $154.6M $231.0M $202.9M
YoY Change -31.04% -38.33% -45.27%
Total Long-Term Assets $2.049B $2.066B $1.759B
YoY Change 25.47% 14.57% 8.54%
TOTAL ASSETS
Total Short-Term Assets $1.865B $1.933B $2.140B
Total Long-Term Assets $2.049B $2.066B $1.759B
Total Assets $3.913B $4.000B $3.899B
YoY Change 15.07% 17.22% 20.15%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $9.900M $161.1M $163.9M
YoY Change -57.14% -21.34% -24.12%
Accrued Expenses $138.5M $1.900M $2.900M
YoY Change -3.15%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $250.0M $250.0M $250.0M
YoY Change
Total Short-Term Liabilities $463.0M $469.9M $463.5M
YoY Change 67.39% 26.18% 32.43%
LONG-TERM LIABILITIES
Long-Term Debt $600.0M $750.0M $800.0M
YoY Change 140.0% 200.0% 220.0%
Other Long-Term Liabilities $70.00M $63.90M $68.60M
YoY Change 5.11% -17.76% 14.14%
Total Long-Term Liabilities $70.00M $63.90M $68.60M
YoY Change 5.11% -80.5% -77.88%
TOTAL LIABILITIES
Total Short-Term Liabilities $463.0M $469.9M $463.5M
Total Long-Term Liabilities $70.00M $63.90M $68.60M
Total Liabilities $1.133B $1.284B $1.332B
YoY Change 91.0% 83.37% 101.8%
SHAREHOLDERS EQUITY
Retained Earnings $3.325B $3.273B $3.140B
YoY Change -3.19%
Common Stock $2.049B $2.027B $2.002B
YoY Change 5.55%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $2.780B $2.716B $2.558B
YoY Change
Total Liabilities & Shareholders Equity $3.913B $4.000B $3.899B
YoY Change 15.07% 17.22% 20.15%

Cashflow Statement

Concept 2019 Q4 2019 Q3 2019 Q2
OPERATING ACTIVITIES
Net Income $52.60M $132.4M $205.1M
YoY Change -19.45% 24.32% 18.62%
Depreciation, Depletion And Amortization $12.50M $12.70M $10.40M
YoY Change 19.05% 35.11% 28.4%
Cash From Operating Activities $102.5M $185.4M $132.9M
YoY Change 20.02% -21.94% -26.08%
INVESTING ACTIVITIES
Capital Expenditures -$24.70M -$13.60M -$20.30M
YoY Change -52.32% -67.23% -62.06%
Acquisitions
YoY Change
Other Investing Activities $90.90M -$285.1M -$22.30M
YoY Change -545.59% -1.14% -92.72%
Cash From Investing Activities $66.20M -$298.7M -$42.60M
YoY Change -191.69% -9.46% -88.16%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -150.0M -48.30M 400.0K
YoY Change -150100.0% -2112.5% -105.88%
NET CHANGE
Cash From Operating Activities 102.5M 185.4M 132.9M
Cash From Investing Activities 66.20M -298.7M -42.60M
Cash From Financing Activities -150.0M -48.30M 400.0K
Net Change In Cash 18.70M -161.6M 90.70M
YoY Change 40.6% 79.56% -148.55%
FREE CASH FLOW
Cash From Operating Activities $102.5M $185.4M $132.9M
Capital Expenditures -$24.70M -$13.60M -$20.30M
Free Cash Flow $127.2M $199.0M $153.2M
YoY Change -7.29% -28.67% -34.33%

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<p style="font-family:'Times New Roman';font-size:10pt;font-weight:bold;line-height:1.19;margin:0pt 0pt 6pt 0pt;">1. Organization and Business Description</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of innovative products to address the unmet medical needs of patients with chronic and life-threatening conditions.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">We have approval from the U.S. Food and Drug Administration (FDA) to market the following therapies: Remodulin<sup style="font-size:7.5pt;line-height:100%;top:0pt;vertical-align:top;">®</sup> (treprostinil) Injection (Remodulin), Tyvaso<sup style="font-size:7.5pt;line-height:100%;top:0pt;vertical-align:top;">®</sup> (treprostinil) Inhalation Solution (Tyvaso), Orenitram<sup style="font-size:7.5pt;line-height:100%;top:0pt;vertical-align:top;">®</sup> (treprostinil) Extended-Release Tablets (Orenitram), Unituxin<sup style="font-size:7.5pt;line-height:100%;top:0pt;vertical-align:top;">®</sup> (dinutuximab) Injection (Unituxin) and Adcirca<sup style="font-size:7.5pt;line-height:100%;top:0pt;vertical-align:top;">®</sup> (tadalafil) Tablets (Adcirca). Our only significant revenues outside the United States are derived from sales of Remodulin in Europe.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 12pt 0pt;">As used in these notes to our consolidated financial statements, unless the context otherwise requires, the terms “we”, “us”, “our”, and similar terms refer to United Therapeutics Corporation and its consolidated subsidiaries.</p>
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<p style="font-family:'Times New Roman';font-size:10pt;font-style:italic;font-weight:bold;line-height:1.19;margin:12pt 0pt 6pt 18pt;">Use of Estimates</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 12pt 0pt;">The preparation of our consolidated financial statements in accordance with GAAP requires our management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of our consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We base our estimates on assumptions regarding historical experience, currently available information and anticipated developments that we believe are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. Estimates are used for, but not limited to, revenue recognition, share-based compensation, determining the fair value of assets acquired and liabilities assumed in business combinations, marketable investments, fair value measurements (including those related to contingent consideration), inventory reserves, investments in privately-held companies, income taxes, goodwill and other intangible assets, and obligations related to our Supplemental Executive Retirement Plan.</p>
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CY2019 us-gaap Description Of New Accounting Pronouncements Not Yet Adopted
DescriptionOfNewAccountingPronouncementsNotYetAdopted
<p style="font-family:'Times New Roman';font-size:10pt;font-weight:bold;line-height:1.19;margin:0pt 0pt 6pt 0pt;">3. Recently Issued Accounting Standards</p><p style="font-family:'Times New Roman';font-size:10pt;font-style:italic;line-height:1.19;margin:6pt 0pt 6pt 18pt;">Accounting Standards Adopted</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, <i style="font-style:italic;">Leases</i> (Topic 842) (ASU 2016-02), which requires that assets and liabilities arising under leases be recognized on the balance sheets. ASU 2016-02 also requires additional quantitative and qualitative disclosures of the amount, timing and uncertainty of cash flows relating to lease arrangements. ASU 2016-02 was effective for annual reporting periods beginning after December 15, 2018. In July 2018, the FASB issued ASU No. 2018-11, <i style="font-style:italic;">Leases (Topic 842)—Targeted Improvements</i> (ASU 2018-11). ASU 2018-11 allows entities to elect a simplified transition method, allowing for application of ASU 2016-02 at the adoption date, with recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We adopted this standard on January 1, 2019 using the simplified transition method, allowing us to not restate comparative periods and apply ASC 842 on a prospective basis, resulting in a balance sheet presentation that, in certain respects, is not comparable to the prior period in the first year of adoption. We elected the practical expedient package permitted under the transition guidance within the new standard, which among other things, allows us to carry forward historical lease classifications. We also elected to use the lessee component election, allowing us to account for the lease and non-lease components as a single lease component. As the majority of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. We made an accounting policy election to keep leases with an initial term of 12 months or less off of our consolidated balance sheets. We recognize lease payments for such leases in our consolidated statements of operations on a straight-line basis over the lease term.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">Upon adoption of this standard, we recognized a right-of-use asset of $8.2 million, and a corresponding lease liability of the same amount, related to our operating leases as of January 1, 2019. In addition, we recognized a cumulative-effect adjustment for the de-recognition of our build-to-suit leases as these leases no longer qualify for build-to-suit accounting and have instead been recognized as operating leases under ASC 842. The adjustment resulted in a decrease to retained earnings of $5.1 million, which is net of a tax benefit. At adoption, our weighted average remaining lease term was <span style="white-space:pre-wrap;">3.0</span><span style="white-space:pre-wrap;"> years and our weighted-average discount rate was 4.9%.</span></p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt;">Supplemental balance sheet information related to operating leases was as follows (in millions):</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt;"><span style="font-size:6pt;visibility:hidden;">​</span></p><table style="border-collapse:collapse;font-size:16pt;margin-left:auto;margin-right:auto;padding-left:0pt;padding-right:0pt;width:100%;"><tr style="height:1pt;"><td style="vertical-align:bottom;width:32.51%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.82%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:11.34%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:1.82%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td><td style="vertical-align:bottom;white-space:nowrap;width:11.34%;margin:0pt;padding:0pt;"><div style="height:1pt;overflow:hidden;overflow-wrap:break-word;position:relative;"><div style="bottom:0pt;position:absolute;width:100%;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:1pt;margin-bottom:0pt;visibility:hidden;">​</span></p></div></div></td></tr><tr><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:center;margin:0pt 0pt 0.05pt 0pt;"><span style="font-family:'Calibri';font-size:8pt;margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">    </b></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">Financial Statement Line Item on our</b></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">    </b></p></td><td colspan="2" style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:13.16%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;text-align:center;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">December 31,</b></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">    </b></p></td><td colspan="2" style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:13.16%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;text-align:center;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;white-space:pre-wrap;">January 1, </b></p></td></tr><tr><td style="background-color:auto;vertical-align:bottom;width:32.51%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">Operating Leases</b></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:8pt;font-weight:bold;margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:32.51%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">Consolidated Balance Sheets</b></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:8pt;font-weight:bold;margin-bottom:0pt;visibility:hidden;">​</span></p></td><td colspan="2" style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:13.16%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;text-align:center;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">2019</b></p></td><td style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="font-size:8pt;font-weight:bold;margin-bottom:0pt;visibility:hidden;">​</span></p></td><td colspan="2" style="background-color:auto;vertical-align:bottom;white-space:nowrap;width:13.16%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:8pt;line-height:1.28;text-align:center;margin:0pt 0pt 0.05pt 0pt;"><b style="font-weight:bold;">2019</b></p></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 6pt;">Right-of-use assets</p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"> </p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="-sec-ix-hidden:Tc_ETzPq41cQkWny2lKfRG5NA_3_2"><span style="-sec-ix-hidden:Tc_ETzPq41cQkWny2lKfRG5NA_3_2_2"><span style="color:#000000;font-family:'Times New Roman';font-size:10pt;font-style:normal;font-weight:normal;line-height:1.28;text-align:left;">Other non-current assets</span></span></span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.82%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;">$</p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:11.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 4.8</p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.82%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;">$</p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:11.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 8.2</p></td></tr><tr><td style="vertical-align:bottom;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 6pt;">Current lease liabilities</p></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"> </p></td><td style="vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="-sec-ix-hidden:Tc_YJXN6C5RDUaQMlIzxrsjUA_4_2"><span style="-sec-ix-hidden:Tc_YJXN6C5RDUaQMlIzxrsjUA_4_2_2"><span style="color:#000000;font-family:'Times New Roman';font-size:10pt;font-style:normal;font-weight:normal;line-height:1.28;text-align:left;">Other current liabilities</span></span></span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:1.82%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;">$</p></td><td style="vertical-align:bottom;white-space:nowrap;width:11.34%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 1.8</p></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:1.82%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;">$</p></td><td style="vertical-align:bottom;white-space:nowrap;width:11.34%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 4.1</p></td></tr><tr><td style="background-color:#cceeff;vertical-align:bottom;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 6pt;">Non-current lease liabilities</p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"> </p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="-sec-ix-hidden:Tc_6HCyBN6FqUmtqhou7G1xnA_5_2"><span style="-sec-ix-hidden:Tc_6HCyBN6FqUmtqhou7G1xnA_5_2_2"><span style="color:#000000;font-family:'Times New Roman';font-size:10pt;font-style:normal;font-weight:normal;line-height:1.28;text-align:left;">Other non-current liabilities</span></span></span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.82%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:11.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 3.0</p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:1.82%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"> </p></td><td style="background-color:#cceeff;vertical-align:bottom;white-space:nowrap;width:11.34%;border-bottom:1px solid #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 4.1</p></td></tr><tr><td style="vertical-align:bottom;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 12pt;"><span style="-sec-ix-hidden:Tc_T-Oesr7Am0SYr9YEBrIrCQ_6_0"><span style="-sec-ix-hidden:Tc_T-Oesr7Am0SYr9YEBrIrCQ_6_0_2"><span style="color:#000000;font-family:'Times New Roman';font-size:10pt;font-style:normal;font-weight:normal;line-height:1.28;text-align:left;">Total operating lease liabilities</span></span></span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:32.51%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:1.82%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;">$</p></td><td style="vertical-align:bottom;white-space:nowrap;width:11.34%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 4.8</p></td><td style="vertical-align:bottom;white-space:nowrap;width:2.87%;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p></td><td style="vertical-align:bottom;white-space:nowrap;width:1.82%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 0.05pt 0pt;">$</p></td><td style="vertical-align:bottom;white-space:nowrap;width:11.34%;border-bottom:3px double #000000;margin:0pt;padding:0pt;"><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-align:right;margin:0pt 3pt 0.05pt 0pt;"> 8.2</p></td></tr></table><p style="font-family:'Times New Roman';font-size:10pt;min-height:0.0pt;margin:0pt;"><span style="font-size:0pt;line-height:1.28;visibility:hidden;">​</span></p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:6pt 0pt 6pt 0pt;">In connection with completion of construction in the third quarter of 2019 of a building we own, we leased part of the space in the building to another entity as part of a broader collaboration. The lease is accounted for as a sales-type lease. In 2019, we reclassified $23.7 million of property, plant and equipment, net to other non-current assets on our consolidated balance sheets. Our activities under the broader collaboration were immaterial for the year ended December 31, 2019.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:0pt;margin:0pt 0pt 6pt 0pt;"><b style="font-weight:bold;">3. Recently Issued Accounting Standards (Continued)</b></p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In February 2018, the FASB issued ASU No. 2018-02, <i style="font-style:italic;">Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</i> (ASU 2018-02). The standard provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect (or portion thereof) of the change in the U.S. federal corporate income tax rate under the Tax Cuts and Jobs Act (Tax Reform) is recorded. We adopted the new standard on January 1, 2019. Adoption of this standard did not have a material impact on our financial statements.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, to eliminate or modify certain disclosure rules that are redundant, outdated, or duplicative of U.S. GAAP or other regulatory requirements. Among other changes, the amendments eliminated the annual requirement to disclose the high and low trading prices of our common stock. In addition, the amendments expanded the disclosure requirements related to the analysis of shareholders’ equity for interim financial statements. An analysis of the changes in each caption of shareholders’ equity presented in the balance sheet must be provided in a note or separate statement, and we provided this disclosure in a separate statement (Consolidated Statements of Stockholders’ Equity) beginning in the first quarter of 2019.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 12pt 0pt;">In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, <i style="font-style:italic;">Revenue from Contracts with Customers (Topic 606)</i> (ASU 2014-09). The new standard supersedes the revenue recognition requirements in Topic 605, <i style="font-style:italic;">Revenue Recognition (Topic 605)</i>, and requires entities to recognize revenue when control of the promised goods or services is transferred to customers. Revenue is recognized in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted the new standard on January 1, 2018, using the modified retrospective approach, applied only to contracts in effect as of January 1, 2018. Upon adoption, we changed the timing of revenue recognition for sales of Adcirca to recognize revenue when control of Adcirca is transferred to a distributor, which occurs at the time Adcirca is shipped from a Lilly distribution center. Previously, we recognized sales of Adcirca when Adcirca was delivered to distributors. This change did not result in an adjustment to amounts previously recognized as revenue under Topic 605 as all shipments had reached the distributor as of December 31, 2017. Overall, adoption of the new standard did not have a material impact on the amounts reported in our financial statements and there were no other significant changes impacting the timing or measurement of our revenue or our business processes and controls. We have included additional disclosures related to our adoption of Topic 606 in Note 2—<i style="font-style:italic;">Summary of Significant Accounting Policies</i>—<i style="font-style:italic;">Revenue Recognition</i>.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;"><i style="font-style:italic;">Accounting Standards Not Yet Adopted</i></p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In June 2016, the FASB issued ASU No. 2016-13, <i style="font-style:italic;">Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i> (ASU 2016-13), which introduces new guidance for estimating credit losses on certain types of financial instruments based on expected losses and the timing of the recognition of such losses. ASU 2016-13 will be effective for interim and annual reporting periods beginning after December 15, 2019. We identified all of our financial instruments that could be impacted by the new standard as well as gathered data required to comply with the guidance. We updated our internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance with, the new guidance. Although we are still finalizing our evaluation of the standard update and the quantification of its impact, we do not expect its adoption will have a material impact.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:0pt;margin:0pt 0pt 6pt 0pt;"><b style="font-weight:bold;">3. Recently Issued Accounting Standards (Continued)</b></p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In January 2017, the FASB issued ASU No. 2017-04, <i style="font-style:italic;">Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment</i> (ASU 2017-04), which simplifies how an entity is required to test goodwill for impairment. A goodwill impairment will be measured by the amount by which a reporting unit’s carrying value exceeds its fair value, with the amount of impairment not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019, and for interim periods within those fiscal years, and must be adopted on a prospective basis. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our financial statements.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In August 2018, the FASB issued ASU No. 2018-13, <i style="font-style:italic;">Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement</i> (ASU 2018-13), which eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our financial statements.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 6pt 0pt;">In August 2018, the FASB issued ASU No. 2018-14, <i style="font-style:italic;">Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715-20): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans</i> (ASU 2018-14). The standard modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ASU 2018-14 is effective for fiscal years beginning after December 15, 2020. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our financial statements.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;text-indent:18pt;margin:0pt 0pt 12pt 0pt;">In December 2019, the FASB issued ASU 2019-12, <i style="font-style:italic;">Simplifying the Accounting for Income Taxes </i>(ASU 2019-12)<i style="font-style:italic;">,</i> which simplifies the accounting for income taxes by removing certain exceptions to the general principles of Topic 740, Income Taxes and also improves consistent application by clarifying and amending existing guidance. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of this guidance on our financial statements.</p><p style="font-family:'Times New Roman';font-size:10pt;line-height:1.28;margin:0pt 0pt 6pt 0pt;"><span style="margin-bottom:0pt;visibility:hidden;">​</span></p>
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