Valeant Business Office Xiii: Channeling Jeff Skilling - Or Trying To Reconstruct Valeant's Ease Sheet

There was a very famous conference call once where Highfields Capital analyst Richard Grubman asked for a residue canvas alongside Enron's earnings statement. Jeff Skilling's answer is a fundamental business office of the Enron legend.

Grubman: You’re the entirely fiscal establishment that can’t create a residue canvas or cash catamenia controversy alongside their earnings. 

Skilling: You…you…you. Well, uh…thank you lot real much. We appreciate it. Asshole.

The "asshole" quip disappeared from the conference telephone telephone transcript simply everyone remembered it.

Well today Valeant produced a earnings number alongside entirely cursory residue canvas information in addition to no residue sheet. Linked here is the SEC release.  And hither is all they say virtually residue sheet.

Valeant Pharmaceuticals International, Inc.

Table 5

Consolidated Balance Sheet in addition to Other Data

(In millions)

5.1 Cash

		As of				As of
		September 30,				December 31,
		2014				2013
Cash in addition to cash equivalents		$	808.8			$	600.3
Marketable securities			—				—
Total cash in addition to marketable securities		$	808.8			$	600.3
Debt
Series A-1 Tranche H5N1 Term Loan Facility		$	182.3			$	259.0
Series A-2 Tranche H5N1 Term Loan Facility			166.3				228.1
Series A-3 Tranche H5N1 Term Loan Facility			1,813.9				1,935.7
Series D-2 Tranche B Term Loan Facility			1,088.6				1,256.7
Series C-2 Tranche B Term Loan Facility			837.5				966.8
Series E-1 Tranche B Term Loan Facility			2,544.8				3,090.5
Senior Notes			9,629.5				9,618.9
Other			12.0				12.0
			16,274.9				17,367.7
Less: electrical current portion			(191.7	)			(204.8	)
Total long-term debt		$	16,083.2			$	17,162.9

Okay - cyberspace debt was $15,466.1 ane one m thousand (being $16,274.9 minus 808.8).

Lets instruct dorsum a quarter ago. Here is the residue canvas from the 10Q:

VALEANT PHARMACEUTICALS INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

(All dollar amounts expressed inwards millions of US of America dollars)

(Unaudited)

	As of June 30,  2014				As of December 31,  2013
Assets
Current assets:
Cash in addition to cash equivalents	$	531.2			$	600.3
Trade receivables, net	1,770.7				1,676.4
Inventories, net	942.5				883.0
Prepaid expenses in addition to other electrical current assets	452.6				343.4
Assets held for sale	1,156.9				15.9
Deferred revenue enhancement assets, net	309.8				366.9
Total electrical current assets	5,163.7				3,885.9
Property, constitute in addition to equipment, net	1,319.6				1,234.2
Intangible assets, net	11,751.4				12,848.2
Goodwill	9,436.3				9,752.1
Deferred revenue enhancement assets, net	18.3				54.9
Other long-term assets, net	206.3				195.5
Total assets	$	27,895.6			$	27,970.8
Liabilities
Current liabilities:
Accounts payable	$	327.7			$	327.0
Accrued in addition to other electrical current liabilities	1,774.9				1,800.2
Acquisition-related contingent consideration	88.9				114.5
Current component of long-term debt	266.7				204.8
Liability held for sale	27.1				—
Deferred revenue enhancement liabilities, net	11.0				66.0
Total electrical current liabilities	2,496.3				2,512.5
Acquisition-related contingent consideration	238.1				241.3
Long-term debt	17,058.8				17,162.9
Pension in addition to other arrive at goodness liabilities	165.5				172.0
Liabilities for uncertain revenue enhancement positions	115.8				169.1
Deferred revenue enhancement liabilities, net	2,238.8				2,319.2
Other long-term liabilities	215.0				160.5
Total liabilities	22,528.3				22,737.5
Commitments in addition to contingencies (note 17)
Equity
Common shares, no par value, unlimited shares authorized, 333,777,181 and
333,036,637 issued in addition to outstanding at June 30, 2014 in addition to Dec 31, 2013, respectively	8,325.9				8,301.2
Additional paid-in capital	212.2				228.8
Accumulated deficit	(3,175.3		)		(3,278.5		)
Accumulated other comprehensive loss	(104.7		)		(132.8		)
Total Valeant Pharmaceuticals International, Inc. shareholders’ equity	5,258.1				5,118.7
Noncontrolling interest	109.2				114.6
Total equity	5,367.3				5,233.3
Total liabilities in addition to equity	$	27,895.6			$	27,970.8

Cash in addition to equivalents was $531 million. Long term debt was $17058 million. Current debt was $266.7 million.

Net debt was therefore $16793 million.

Net debt therefore dropped $1327 ane one m thousand inwards the quarter. That looks pretty good.

Except that they sold the Aesthetics trouble concern during the quarter.

Slide 165 of this presentation (reproduced below) indicates cyberspace proceeds of $1240 million.

Net of this they generated entirely $88 ane one m thousand of cash inwards the quarter.

Which given they had $2 billion of sales in addition to everyone thinks their cash margin is virtually l per centum does non seem to compute.

We could of course of pedagogy run it out alongside a residue canvas in addition to cash catamenia statement. It is in all probability all sweetness in addition to innocent.

So at the endangerment of beingness called an "asshole" delight Mr Pearson volition you lot laissez passer on me a residue canvas in addition to a cash catamenia controversy alongside your earnings?





John