Kris King - Vice President-Global Investor Relations Robert J. Coury - Executive Chairman Heather M. Bresch - Chief Executive Officer & Executive Director Rajiv Malik - President & Executive Director John D. Sheehan - Executive VP, Chief Financial & Accounting Officer.

Marc Goodman - UBS Securities LLC Gregg Gilbert - Deutsche Bank Securities, Inc. Sumant S. Kulkarni - Bank of America Merrill Lynch Andrew Finkelstein - Susquehanna Financial Group LLLP Ronny Gal - Sanford C. Bernstein & Co. LLC Umer Raffat - International Strategy & Investment Group LLC.

Good day, ladies and gentlemen, and welcome to the Mylan Third Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded.

I will now turn the call over to your host, Kris King. Please go ahead..

Thank you, Stephanie. Good morning, everyone. Welcome to Mylan's conference call to discuss our third quarter 2015 earnings and our offer to acquire Perrigo Company. Joining me for today's call are Mylan's Executive Chairman, Robert Coury; Chief Executive, Heather Bresch; President, Rajiv Malik; and Executive Vice President and CFO, John Sheehan.

During today's call, we will be making forward-looking statements. Such forward-looking statements may include, without limitation, statements about the proposed acquisition of Perrigo by Mylan, which I will refer to as the Perrigo proposal, Mylan's acquisition, which I will refer to as the EPD transaction of Mylan Inc.

and Abbott Laboratories' non-U.S.

developed end markets specialty and branded generics business, which I will refer to as the business, the benefits and synergies of the Perrigo proposal, or EPD transaction, future opportunities for Mylan, Perrigo or the combined company and products and any other statements regarding Mylan, Perrigo, or the combined company's future operations, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competition, Mylan having sufficient supply of EpiPen Auto-Injector to meet anticipated demand due to Sanofi's voluntary recall and other expectations and targets for future periods.

Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, uncertainties related to the Perrigo proposal and the consummation thereof, the ability to meet expectations regarding the accounting and tax treatments of the EPD transaction and the Perrigo proposal, changes in relevant tax and other laws, the integration of Perrigo and EPD business being more difficult, time consuming or costly than expected, operating costs, customer loss and business disruption being greater than expected following the Perrigo proposal and the EPD transaction, the impact of competition situations where we manufacture, market and/or sell products, notwithstanding unresolved allegations of patent infringement, any regulatory, legal or other impediments to our ability to bring new products to market, any changes in our differences with our inventory of or ability to manufacture and distribute the EpiPen Auto-Injector and those set forth under the forward-looking statements in today's earnings release and the risk factors set forth in Mylan N.V.'s Quarterly Reports on Form 10-Q for the periods ended March 31, 2015 and June 30, 2015, as well as our other filings with the SEC.

These risks, as well as other risks associated with Mylan, Perrigo and the combined company, are also more fully discussed in the Registration Statement on Form S-4 which includes an offer to exchange/prospectus and was declared effective on September 10, 2015 in connection with the Perrigo proposal.

The offer to exchange/prospectus filed with Mylan with the SEC on Schedule TO on September 14, 2015 constitutes the offer document for purposes of the Irish Takeover Rules. Except as required by applicable law, we undertake no obligation to update any statements made today, whether as a result of new information, future events or otherwise.

Today's call should be listened to and considered in its entirety and understood to speak only as of today's date. In addition, we will be referring to actual and certain projected financial metrics of Mylan and Perrigo on an adjusted basis, which are non-GAAP financial measures.

These non-GAAP measures are presented in order to supplement your understanding and assessment of our financial performance.

Please refer to today's earnings release and the presentation used during today's call, both of which are available on our website, as they contain detailed reconciliations, where possible, of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

I would also like to point out that Mylan's offer for Perrigo is governed by the Irish Takeover Rules. Under the Irish Takeover Rules, Mylan management is prohibited from discussing any material, new information or significant new opinion which has not been publicly announced.

Any person interested in shares of Mylan or Perrigo is encouraged to consult his or her professional advisors.

Before I turn the call over to Robert, let me also remind you that the material in the call, with the exception of the participant questions, is the property of Mylan and cannot be recorded or rebroadcast without Mylan's expressed written permission. With that, I'll now turn the call over to Robert..

Thank you, Kris. Good morning, everyone, and thank you for joining us today. I would like to welcome our employees around the world to the call and thank them for their unwavering dedication, hard work and focus, which is what makes our consistently strong results possible.

I would also like to welcome any Perrigo and Omega employees listening in today. We certainly look forward to welcoming all of you to the Mylan family soon, as we have never been more confident in completing what we believe will be a very successful tender offer.

In addition, I would like to say a special hello to the Perrigo employees in Israel today. We are very excited to have now received approval to dual-list on the Tel Aviv Exchange and to finally have the opportunity to acquaint ourselves more closely with Israel, Israeli investors and Perrigo Israeli employees.

Before I turn the call over to Heather, Rajiv and John, who have a lot to cover today, I would like to make a couple of points regarding our offer for Perrigo and to clear out some of the possible misinformation. First, the notion conveyed by Perrigo that the Mylan offer is a bad deal for Perrigo shareholders is simply preposterous and disingenuous.

We will show once again today with math using Perrigo's own updated numbers that this is a substantial and compelling offer to Perrigo's shareholders.

Let me also simply highlight that Perrigo themselves have left their own shareholders no other options except to rely on non-strategic measures, such as cost cuts as well as the hope that they will trade at a very high PE multiple at a time when multiples have been completely reset throughout the industry, in order to generate their stand-alone long-term shareholder value.

This strategy is flawed and simply will not produce sustainable growth over the longer term and in sharp contrast to Mylan's well-established long-term strategy and exceptional operational performance that you will hear more about today.

With that said, as you will see later, it really doesn't matter which unrealistic multiple Perrigo wants to apply to itself because the immediate and significant earnings accretion to be realized by the Perrigo shareholders, which is potentially in excess of 80%, speaks for itself.

If Perrigo is correct, and the math doesn't lie, then you will see that the math will speak loudly in favor Mylan's offer. Here is just one clear example of how the math alone will demonstrate the compelling value of the Mylan offer.

Perrigo has recently projected its maximum stand-alone earnings capability for 2016 to be at $9.45, including the completion of a $500 million share buyback by year end.

What they haven't told you and what we will demonstrate using Perrigo's own math is that Perrigo's shareholders have the opportunity to earn $16.48 in 2016 if they simply accept Mylan's offer and reinvest the $75 in cash back into Mylan stock at the current share price.

Even if you accept the premise that Perrigo can achieve a forward 16 times PE multiple without our offer, their stock will still only be trading in the $150 range.

In comparison, what we will show today is that our combined earnings after reinvesting the $75 in cash would be worth approximately $200 per share using only a 12 times multiple, which I believe will only increase over time.

This substantial value is also in sharp contrast when you also consider the potential downside in Perrigo's stock should Mylan not receive the greater of 50% of acceptances by 8 a.m. Eastern Standard Time on November 13.

With this immediate and substantial accretion offer by our proposal to the Perrigo shareholders, this is anything but a bad deal for Perrigo. Therefore, in order to realize this immediate and significant value, you should tender your shares by the close of November 12 or risk losing this offer.

Lastly, with the October 23 deadline, which has now passed, for Perrigo to make material announcements, I did reach out to Joe Papa this past weekend and again offered to sit down with them so that we can plan with our management teams, as responsible leaders should, and bring in our two great companies together.

We filed this communication this morning with the SEC. I also made it clear that I will be open to discussing corporate governance as part of this conversation with the aim of coming to a negotiated transaction. Unfortunately, Joe once again rebuffed my offer and missed the opportunity to discuss his thoughts on this matter.

As I have said in my meetings with shareholders, I am very open to a conversation about corporate governance with the Mylan Perrigo combination and will continue to maintain an active dialogue with shareholders on this matter. With that, let me turn the call over to Heather..

Thank you, Rob, and good morning, everyone. To say the least, the last few months and days have been eventful. We have had a great quarter, we have a great outlook for the remainder of the year and have tremendous growth trajectory supported by many opportunities in front of us.

In addition to reviewing our quarter, we will again discuss our compelling offer for Perrigo and give an update on our integration planning for once the transaction is complete. Now let's turn to the third quarter, where we've broken a number of records.

On the top line, adjusted sales totaled $2.7 billion, a constant currency increase of 36% compared to the same period last year, with our Mylan legacy business delivering 14% growth on a constant currency basis, reflecting our diversification and scale. On the bottom line, adjusted EPS came in at $1.43, up 23% compared to third quarter of 2014.

This performance was fueled by strong revenue growth across our generic segment, with each of our regions experiencing year-over-year constant currency increases in adjusted sales. Turning to our Specialty segment.

We continue to believe, now more than ever, in the underlying strength of the EpiPen franchise as well as the growth potential for the market overall going forward.

We have continued to be proactive and competitive in maintaining our 85% market share, so while we saw a slight softening in the overall epinephrine market in Q3, total script volume remains positive for EpiPen on a year-over-year basis.

Against this backdrop we note Teva's statement that it will not be in a position to potentially launch a BX-rated or AB-rated alternative to EpiPen any earlier than the second half of 2016. Additionally, Sanofi has instituted a nationwide recall of Auvi-Q, affecting hospitals, retailers and consumers.

We have confirmed that we have sufficient supply of product to meet any anticipated demand. We're confident that the widespread familiarity with EpiPen established over more than 25 years coupled with our robust training resources will provide access and support for those impacted by the recall.

We take our leadership position on the epinephrine Auto-Injector market very seriously and would like to point out that there are approximately 28 million at-risk individuals in the United States. Of the approximately 14 million people who have been diagnosed, about 10% are carrying an Auto-Injector, leaving room for substantial upside.

Additionally, anaphylactic events can occur in people with no known allergies. This was demonstrated by a recent survey of schools participating in our EpiPen4Schools program. The study indicated that more than 20% of the students or others on school grounds who had an anaphylactic episode and were treated had no idea they had any allergy.

Obviously, this underscores the continued opportunity to build education and awareness about the need for access to our product, including public entities, as well as the run rate that still exists for our EpiPen franchise. As a result of these developments, we see additional opportunities this year.

We therefore expect adjusted EPS to be at the upper end of our range for 2015. This represents once again greater than 20% EPS growth.

Moreover, given the long-term landscape change for the EpiPen market, we see EpiPen contributing an additional range of approximately $0.25 to $0.30 to adjusted EPS next year, which will only enhance the already-stated significant growth rates projected for Mylan Perrigo on a combined basis.

Before leaving EpiPen, I'd like to add that the recent developments in the news in the epinephrine market as a whole are particularly significant, given the number of organic catalysts we see for Mylan in 2017 and beyond, which Rajiv will be discussing. That said, we have never had a strategy to build a business based on one product or one-off event.

Instead, we remain committed to building a differentiated platform that will deliver long-term sustainable growth for shareholders while at the same time benefiting our patients and other stakeholders.

Our results so far this year are a testament to our strategy, ability to execute it and exceed expectations, and our skill in leveraging the assets that we brought together, whether it's returning the EPD business to growth, lowering our tax rate or continuing to invest in R&D.

Given current market dynamics, especially in the pharmaceutical sector, trading on fundamentals has never been more important, which is why a Mylan Perrigo combination is so compelling. On last week's call, we got another glimpse at Perrigo's operating performance, which is struggling.

On sales, they reduced their guidance by $150 million to $250 million. On EPS, while they announced adjusted diluted EPS guidance for 2016 that was above consensus, taking a closer look, the change is driven by employee reduction and other cost cuts as well as financial measures.

Stripping all of that away, adjusted diluted EPS guidance on the core business was actually reduced by $0.24 below consensus. This ultimate reduction in guidance is not a result of one-time item, but of continued degradation across their Consumer Healthcare business. Furthermore, API has declined by 16% year-to-date.

Looking at Tysabri, the longer-term hope has evaporated. Patients usage is down approximately 4% annually since 2010. But the recent failure in the Phase III study of SPMS, there is potential for further decline as SPMS patients who use Tysabri off-label (17:14) turn to other alternatives.

Tysabri, as we know, contributes almost one-third of Perrigo's adjusted diluted EPS. The complementary Mylan Perrigo combination will not only derisk Perrigo's shareholders on a stand-alone basis, it will provide enhanced growth, scale and capability.

As such, we strongly believe that Perrigo's shareholders will see past the company's latest round of one-off initiatives, they will appreciate that Perrigo's stand-alone strategy is simply not a viable alternative to Mylan's offer, they will grasp the compelling value of our offer, which provides immediate accretion in excess of 80% as well as greater growth potential for the long term, and respond by tendering their shares.

Before turning the call over to Rajiv, I'd like to thank all of our employees around the world for their continued dedication to our cause and for remaining focused on executing and delivering the outstanding performance our shareholders expect and deserve. With that, I'll turn the call over to Rajiv..

Thank you, Heather. And good morning, everyone. I am very excited to review the performance of business, update you on our progress on some of our key growth drivers and provide some insight into our integration planning for Perrigo, including a high-level overview of our plans for our first 60 days of running this business.

As Heather mentioned, all of our regions contributed to the outstanding performance we delivered during the third quarter with each delivering very impressive double-digit revenue growth. Our global Generics segment generated third-party net sales of more than $2.3 billion, a year-over-year increase of 48% on a constant-currency basis.

In North America, sales were approximately $1.1 billion, up 29% year-over-year on a constant-currency basis. Our legacy business grew by 24% as a result of continued strong performance of sales from new products and higher volumes on existing products offset by lower net pricing.

We continued to see an improved flow of approvals coming out of FDA, and we launched 14 new products in the U.S. this quarter, including several generics to market and complex products such as Lidocaine, Transdermal, Paliperidone and (19:45).

In Europe, adjusted sales were approximately $630 million, a 95% constant currency increase as compared to the third quarter of 2014. This increase was largely attributed to the contribution of our acquired EPD business.

Our legacy business grew 6% year-over-year on a constant currency basis as a result of sales of new products and high volumes on existing ones, primarily in Italy and France. These increases were offset by government-enforced pricing reductions and complicated market conditions.

In our Rest of World business, sales totaled just under $550 million, a year-over-year increase of 47% on constant currency basis.

Sales from our legacy business grew 21% on constant currency basis, driven by new product launches in Australia and Japan and high volumes from our India operations, especially our ARV franchise, and our promising business in Brazil.

We continue to be very pleased with the integration process of our Abbott EPD business across the various regions, taking a country-by-country approach to maximizing the potential opportunities from this combination.

We have put in place new operating structures in several countries and are beginning to realize the benefits of cross-selling and an enhanced focus on key products.

We are extremely pleased to see a continuation of low-single digit growth in revenues across our EPD geographies in the third quarter, which reverses historically declines in that business, and we see this continuing through the end of the year.

As we noted last quarter, the improvement in this business has been quicker than expected and we are currently tracking ahead on our execution plan. We also continued to make progress executing against a number of our key growth drivers and positioning Mylan for continued organic growth well into the future. Let me start with our respiratory platform.

Sirdupla continues to be a nice product for us in Europe. We are very pleased with how we (22:10) on the launch of this product and now have more than 500 out of 1,160 clinics dispensing the product in the UK.

As we continue to build on our respiratory platform, our once-a-day LAMA, revefenacin, nebulized product for COPD partnered with Theravance, entered into Phase 3 clinical program in September. This program currently remains on track for an NDA submission in the later part of 2017.

We are also making good progress on our generic Flovent program for U.S., which we have partnered with Prosonix. Generic Flixotide, which is the same product in Europe, is on track to be approved in Q1 2016. We are excited to update you on our significant progress in our generic ADVAIR program.

As you are aware, the FDA Draft Guidance requires several key elements to achieve an AB-rated generic product. We are very pleased to report to you today that we have successfully achieved the following milestones for this product and are on track to submit our ANDA this December.

Formulation design has been developed to be qualitatively and quantitatively the same as the reference product. We have completed our clinical end-point study and have shown our product to meet all Draft Guideline criteria.

Our device robustness and Human Factors Studies have now been completed and demonstrate that our device can be used successfully with new patients as well as those trained on ADVAIR DISKUS. These studies met all three defined protocol criteria in vitro insulin studies against the reference products have met all acceptance criteria.

We have also completed PK bioequivalence studies for the two of the three stance (24:11) meet all draft guidance partner's criteria. The third and the final PK study is ongoing and will be available following the December submission.

In addition, we have had excellent engagement with FDA throughout our development program and have recently completed a productive and collaborative pre-ANDA meeting with the agency. Moving on to our biologics and insulin analogs program with our partner, Biocon.

We are very excited about the progress these programs have made during the last year, with five programs successfully completing Phase I clinical trials and four programs in active Phase III testing. To this end, we plan on submitting in 2016 three biosimilar applications and one glargine application in the U.S. and Europe.

As an update to our trastuzumab development program, we have now completed enrollment of our Phase III study, with the first study results expected to be available in the second half of 2016. We expect to submit our application in the first half of 2016. For pegfilgrastim, we have now completed the enrollment in our Phase III trials.

We plan on filing this product application in the first half of 2016. The Phase III clinical program for our adalimumab is advancing well and is expected to complete for a second half of 2016 submission.

Finally, we have now completed recruitment for both type 1 and type 2 diabetes studies for our glargine program and we expect to have these studies completed by mid-2016. We continue to pursue our discussions with FDA regarding interchangeability.

We also are very pleased with the completion and qualification of the state-of-the-art facility in Malaysia and activities to transfer that product into that facility. We plan to submit a European filing and our U.S. application in the second half of 2016.

While we continue to execute on the current portfolio, we also continue to actively explore opportunities to further enhance Mylan's biologic portfolio around the globe. Regarding our Copaxone program, as we indicated last quarter, we have responded to all FDA requests to-date.

We remain confident that we are positioned to receive approval for our product. The U.S. Patent and Trademark Office has instituted an inter partes review proceeding on all claims against a third Copaxone 40-milligrams patent and a hearing has been scheduled for May 2016. We generally believe that the IP surrounding the 40-milligram franchise is weak.

Looking ahead to the rest of the year, we are looking forward to close our acquisition of certain women's healthcare businesses from Famy Care by the end of the year, although the close has been delayed a bit as we await final approval from FIPB in India, which we expect very soon. Turning now to Perrigo.

Let me start out by being very clear; we are capable, confident and ready to run the Perrigo business as soon as we close and have been putting in place a comprehensive readiness plan to allow us to do so.

Of course, the first step will be ensuring business continuity of their existing businesses and maintaining the operational and commercial excellence that Perrigo and Mylan are known for. As we discussed during the last call, I don't think anyone should doubt our ability to manage Perrigo's Generics or API businesses.

These capabilities are at Mylan's core and our strong capabilities in these areas will only enhance the Perrigo effort.

Also we are very confident that we can do more with Omega within our combined commercial platform in Europe than what Perrigo has done or could do with this effort on a stand-alone basis, especially given our strong track record in the region, with the Merck and Abbott EPD integration. Now let me talk about the private label manufacturing.

One of the key factors which has been called out for success in this area is supply chain excellence. Mylan's supply chain, manufacturing and packaging capabilities are well recognized as being second to none. Our global supply chain operations are based in Dublin, and this hub has been operational since 2009.

Our complex platform manages more than 1,400 products and 15,000 SKUs from around 40 internal manufacturing sites and more than 1,400 third-party suppliers and contract manufacturing organizations.

With this platform, we serve approximately 145 markets around the world, have more than 35,000 customers and we serve these customers and markets in 40 different languages with varying packaging and artwork. All of this makes adding Perrigo's supply chain to our existing business very straightforward.

I also want to address the comments made by Perrigo about the lack of synergistic opportunities in the API business. First, I would like to note that API synergies are a relatively small part of our estimates.

That said, the opportunity we see here is about having a broad and diverse platform and deploying that platform, including its capacity, capabilities and portfolio, in an opportunistic way.

For example, after the Merck Generics acquisition, we successfully integrated 50% of the pipeline and portfolio despite not having the relevant capabilities prior to the acquisition. Turning to the next slide.

We manage a complex and diverse network of more than 30 finished dosage internal sites that are physically located across the network and maintain a close proximity to key markets.

Our ability to manage its complexity is a result of our continuous focus on operational excellence, including quality and delivery of a broad range of portfolio to customers at the right time and in the right quantities. We can bring Perrigo into our network and even more effectively deploy their efforts to the benefit of our business and customers.

As you know, we have successfully executed a number of global and transformational integrations and we have established a permanent Integration Office.

As part of this process, we have identified interim leaders for key Perrigo functional areas to lead the integration, in addition to Ranjan Chaudhuri, who we announced today to be the global commercial leader of our OTC business.

These leaders are prepared and fully capable of managing these functions in the event the Perrigo leaders in those areas choose to depart upon closing. We have also retained third-party consultants to support us in this process with significant experience in the OTC space. This will only further ensure that we are well prepared to manage the business.

A critical strategy for us will be to get to know the key talent at Perrigo and implement retention programs.

We believe that, as we communicate with leaders and their employees, they will see the significant opportunities for their future growth that this combination presents and they will be excited to engage with us on achieving a shared vision for the combined business.

We very much hope to make this a collaborative effort and we'll seek to retain as many of Perrigo leaders as possible. Within the first 60 days, we will have developed a clear roadmap for integration of our businesses, a plan for synergy realization as well as a defined operating model.

With regards to synergy realization, I would like to restate our confidence in our estimate that the combined company will achieve at least $800 million in annual pre-tax operational synergies by the end of year following the consummation of the offer.

Perrigo's cost-saving actions announced last week further relegate that synergy potential from a much larger combined Mylan Perrigo platform.

For instance, Mylan's global supply chain operations are already located at our Center of Excellence in Ireland, where Perrigo is looking to consolidate their supply chain operation, providing strategic and synergistic opportunities.

And we have already advanced in the implementation of Mylan's Global Shared Services structure, another area Perrigo identified for efficiencies, which could be implemented more effectively as part of Mylan. Working with the Perrigo team, we expect to identify additional opportunities from the combined assets.

We are confident in achieving these synergies both in a controlled subsidiary or 100% ownership position, although we have stated we believe some different steps may be taken to achieve that synergy realization depending on the ownership level achieved.

Finally, I would like to remind everyone again that Mylan has successfully integrated several large and highly complex transactions dealing with multiple geographies, new business areas and convoluted structures, including operating metrics as a majority-owned controlled public entity for several years.

While this combination with Perrigo has its own unique dynamic and complicating factors, we are realistic about the challenges, confident in our planning and experience and optimistic that once we get to day one, our combined teams will put the (35:24) of the last few months aside and get to work together to ensure our mutual success.

In closing, I would like to also give my sincere thanks to Mylan's employees who have demonstrated unwavering focus on our business and our mission every day and are now energized about the Perrigo opportunity and looking forward to welcoming their new colleagues to Mylan. With that, I'll turn the call over to John..

Thanks, Rajiv. As Heather and Rajiv both mentioned, we are extremely pleased with our financial results for the third quarter of 2015, highlighted by the strong revenue growth in our generic segment and the exceptional free cash flow that we generated during the quarter.

Our adjusted total revenues for the third quarter of 2015 were $2.7 billion, an increase of 36% on a constant currency basis from the prior-year period.

Adjusted revenues were unfavorably impacted by foreign currency translation of approximately $122 million in the current quarter when compared to the prior-year period, primarily reflecting the strength of the U.S. dollar as compared to the euro, yen, rupee and Australian dollar.

When compared to exchange rates at the beginning of the quarter, our adjusted revenues were unfavorably impacted by foreign currency translation of approximately $23 million.

Additionally, third-party net sales were positively impacted by the contribution from the acquired EPD business of approximately $462 million, of which approximately $314 million was in Europe, $105 million was in our Rest of World region, and the remainder coming from EPD Canada.

As stated during our second quarter conference call, foreign currency translation has been significantly impacted our reported revenues as a result of the strong U.S. dollar. As such, we expect that our actual reported full-year 2015 adjusted revenues will be at the low end of our 2015 guidance range.

On a constant currency basis, however, we expect to be near the midpoint of our guidance range for 2015 adjusted revenues. Adjusted gross margin for the third quarter of 2015 was a very strong 58%, up approximately 400 basis points over the prior year.

Our strong margins are primarily the result of the positive contribution from the EPD business combined with new product introductions and increased margins on existing products within North America. We continue to expect our full-year adjusted gross margin to be at the upper end of our 2015 guidance range.

On an adjusted basis, R&D expense was $174 million or approximately 6% of total revenues for the quarter. Adjusted R&D expense has actually increased over the prior-year quarter as a result of the impact of the EPD business.

As we continue to invest in our key growth drivers during 2015, we expect adjusted R&D spending as a percentage of adjusted total revenues to be near the midpoint of our guidance range for the full year. At the same time and also on an adjusted basis, SG&A was $492 million or approximately 18% of total revenues for the quarter.

The acquisition of the EPD business accounted for the majority of the increase in adjusted SG&A for the quarter. For the full year, we continue to expect adjusted SG&A as a percentage of total revenues to be close to the midpoint of our 2015 guidance range.

We continue to realize significant tax benefits from our inversion transaction and, as result of our ongoing effort to optimize our tax structure, during the third quarter we adjusted our full-year 2015 estimated annual effective tax rate to 18% from our previous assumption of 19%.

This resulted in an adjusted tax rate for the third quarter of approximately 17%. As we move towards the end of 2015, we continue to look at additional tax planning strategies for opportunities to further reduce our tax rate.

Our third quarter adjusted net earnings were $734 million or $1.43 per share, a 23% increase from our Q3 2014 adjusted diluted EPS of $1.16 per share. Excluding the gain that we recognized in the prior-year period for the settlement of contingent consideration related to the Agila acquisition, adjusted diluted EPS increased an impressive 42%.

The EPS growth in 2015 was achieved in spite of foreign currency headwinds, thanks to the strength of our global operating platform, including the recently acquired EPD business combined with revenue growth across our legacy Generic business. Turning to our cash flow and liquidity metrics.

Adjusted cash provided by operating activities was a record $1.1 billion for the current quarter, representing an increase of approximately $655 million from the prior-year period, which is the result of the growth in adjusted earnings combined with our ongoing working capital initiatives.

Through diligent cash flow management, our free cash flow increased 158% to $1 billion. Over the first nine months of 2015, free cash flow has risen 72% to $1.4 billion as compared to $818 million in the prior-year period.

Year-to-date capital spending was down slightly as compared to the prior year at $207 million as we continue to invest in our business and growth drivers. As a result of our strong operating cash flow, at the end of the quarter, our gross debt to adjusted EBITDA ratio was approximately 2:1.

We have no amounts outstanding on our $400 million receivables facility or $1.65 billion revolving credit facility. In addition, during the third quarter, we further optimized our capital structure through the redemption of our $1 billion 2020 senior notes and repayment of our cash convertible notes which matured in September.

We funded these transactions through a $1.6 billion term loan which we entered into at the beginning of the quarter. We remain fully committed to our investment-grade credit rating, including after a successful completion of the offer to acquire Perrigo, and we continue to have ample borrowing capacity and financial flexibility.

As a reminder, we have a fully committed financing facility to fund the acquisition of the Perrigo shares pursuant to our tender offer. For the full year, as Heather stated earlier, we expect to be at the high end of our 2015 guidance range at $4.35 per adjusted diluted share.

I would note that we are not assuming the launch of generic Copaxone or EpiPen competition in 2015. Now turning back to our tender offer for Perrigo. I'd like to quickly revisit the HUSP.

As we showed a few weeks ago using Perrigo's own updated numbers and even using their proxy peer group, we believe that Perrigo would trade at $153 per share or a 15 times EBITDA multiple, which is discount to where they're trading today and is a significant discount to the value of our offer. Turning to slide 21.

On a stand-alone basis, Perrigo has told you that their plan would deliver $9.45 of EPS in 2016 based on their recently announced financial initiatives, or $9.83 if you give them credit for the run rate cost savings they hope to achieve within three years.

Applying an illustrative 14 times to 16 times multiple to that EPS estimate, Perrigo would be worth between $132 per share and $151 per share next year assuming phased-in cost savings or up to $157 per share if you give them credit for run rate cost savings on a stand-alone basis.

In comparison, Mylan's offer for Perrigo using Perrigo's own numbers would deliver $9.55 of earnings attributable to each Perrigo share assuming phased-in synergies or $10.83 per Perrigo share assuming run rate synergies. This represents accretion of 3% to 16% to Perrigo shareholders.

Even if you only apply an illustrative 12 times to 14 times multiple to this EPS and add $75 in cash, it implies a total value of $190 per share to $226 per share.

It is important to note that these per share amounts are based upon Mylan's analyst consensus estimate and do not include the $0.25 to $0.30 of the EpiPen Auto-Injector 2016 upside opportunity Heather referred to earlier.

And if shareholders choose to reinvest their $75 of cash consideration in the combined company, they would receive $16.48 of EPS assuming phased-in synergies and $18.70 assuming run rate synergies. This represents 77% to 101% earnings accretion attributable to Perrigo shareholders due to the premium embedded in our offer.

Again, even if you only apply an illustrative 12 times to 14 times multiple to this EPS, it implies a total value of $198 per share to $262 per share, a substantial premium to what Perrigo could deliver on a stand-alone basis.

So, if shareholders choose Perrigo's stand-alone strategy, even if you assume a higher range of multiples of 14 times to 16 times, your shares would be at best be worth $151 per share. However, if you vote in favor of the transaction, your shares will be worth more, no matter what you choose to believe in terms of multiples.

Again, let's return to the math.

Assuming only an illustrative 12 times multiple and phased-in synergies, based on Perrigo's numbers your shares would be worth $190 with no reinvestment and $198 with reinvestment, a substantial premium to the best-case scenario of Perrigo stand-alone or a $37 to $45 premium to Perrigo's current hypothetical unaffected stock price.

Giving credit for run rate synergies at a blended multiple 14 times, the earnings attributed to the Perrigo shareholder would represent a value of $209 per share without reinvestment and $231 with reinvestment, a $56 to $78 premium to today's current hypothetical unaffected stock price.

Remember, in order to reap this substantial value and for the transaction to be completed, greater than 50% of Perrigo ordinary shares will need to be tendered into the offer. We would therefore encourage Perrigo shareholders to tender their shares before the close on November 1th2. There is no risk to you of tendering early.

If you tender before the 12th and the tender fails, you will receive your Perrigo shares back. If you do not tender, however, you risk losing the significant value we are offering. Wait and see is not the right choice if you want to benefit from the premium we are offering.

Bottom line, the M-A-T-H is a clear and compelling value proposition relative to Perrigo's stand-alone plan. That concludes my remarks. And I'll turn the call back over to Stephanie for questions..

Thank you. Our first question comes from Marc Goodman with UBS. Your line is open..

Morning.

Heather, on EpiPen, can you talk about the pricing commentary in the press release and put in context what it means relative to the troubles we learned about yesterday with Auvi-Q and with the Teva delays? And can you also comment on have there been any changes in channel inventory levels maybe in anticipation of the Teva generic coming? And then third question is, it seems with the recent changes here with EpiPen that you should be able to do over $5 a share of earnings next year and I was curious if you would make a comment on that.

Thank you..

Sure. Thank you, Marc. I'll start with your last point. I can't disagree with your math. As far as EpiPen, I guess a couple of things.

As far as inventories are concerned, we have not – and I think I had mentioned actually on last quarter as well, we have not seen any irregular things happening or our customers selling beyond because they were anticipating a Teva launch.

I think that there had not been any commentary about Teva coming into the market and, obviously, they've now clarified yesterday that it won't be at least till the second half of 2016. So our inventory levels were running due course. There were no issues there, as I mentioned.

There was a little softness in the overall epinephrine market in the third quarter. But as you know, we continue to see double-digit growth year-over-year and so the comparable had been very high. With that being said, we've still seen EpiPen grow in volume year-to-date.

And as far as all of the recent events, I would say that our dynamic with the payers will stay just that, I think very dynamic. As I've noted throughout this year, we have been very proactive and competitive to maintain our market share.

Obviously, in light of some of the recent developments, I think that we'll continue to have opportunities to improve that situation because it's not as competitive as it was.

So as happens in this space, the competition landscapes can change very rapidly and I think our ability to first and most importantly be there for the patient and the safety issue. And we have been very closely monitoring and assisting to make sure patients can get the scripts of EpiPen so they're not going without product.

So I would say all-in-all, as I mentioned in my commentary, the runway looks very bright and I think the future of the EpiPen franchise is just going to be one that's got a lot of brand equity and a lot of sustainability, too..

The only thing I would like to add to Heather's comments and because you asked a question, Marc, and obviously under Irish Takeover Rules we're not allowed to give forward-looking projections, but since you did the math on your own, not only do I support Heather's answer to you about your own math, but this opportunity with EpiPen really could not have come at a more opportune time because it only fuels the trajectory of our growth that we've been delivering for our shareholders over the last several years.

Especially when you think about what Rajiv said about our generic Advair application being filed by the end of this year, we have the real possibility to get on the fast track.

If that occurs, then if you take a look at what we see ahead of us in 2016 and then jump right over to 2017 with the potential launch of significant catalyst, you can see that the whole EpiPen situation could have not come in a more opportune time.

Next question?.

Our next question comes from Gregg Gilbert with Deutsche Bank. Your line is open..

Yes, hi. Good morning. I have three questions. First, John, can you talk a little more about gross margin and whether it's sustainable at these levels and some of the pushes and pulls? My second question is for Heather. When you describe Perrigo, I can't help but think it sounds like you're pitching a stock to short.

Can you talk about your philosophy of why you're talking about your target in a way that suggests that you can do a far better job with it? You're about to part with a lot of precious capital of your shareholders, yet you seem to be focused on the negatives of the business more than the positives, yet you haven't lowered your price.

And lastly for Robert, what are these corporate governance changes you're committed to making? I think it's appropriate to be more specific in this case so that your shareholders believe it's more than just lip service to get a deal done. Thanks..

Yes, so, first, Gregg, let me before I turn it over to Heather for her commentary. The Mylan shareholders have already spoken in terms of the Perrigo transaction and the opportunity.

We've spent an exorbitant amount of time with the Mylan shareholder describing to them why this asset in our hands is the right next opportunity to bolt-on to our existing platform with our existing assets.

And we convinced them when they supported us in the August 28 vote, we convinced them because we pointed to other assets that we've acquired that we said very consistently on a stand-alone basis if you look at what we paid for the other assets, this is almost déjà vu.

There are many assets that we've bolted on to our platform that we do not really like on a stand-alone basis. But then bolted on to our platform, as you can see through the demonstration of our continued, very strong execution and performance, we were able to deliver continual double-digit growth to our shareholders.

So I think that Perrigo is going to be no different and I'm going to have her explain that in more detail. In terms of the corporate governance, I've been very, very open, very, very direct and very transparent about, one, saying that the entire whole corporate governance discussion over this transaction has been nothing but a red herring.

With that said, I do listen to shareholders, and Perrigo shareholders, in particularly. That's why I extended my offer to Joe Papa and their Board of Directors to sit down and have a dialogue.

If this is really something that's all that's left out there, then let's sit down and talk about for the combination of the Mylan Perrigo combination, for that new structure, that new company profile, the new size and scale that the combined company will be absolutely warrants an open discussion about, not just what's on my mind, but I'd like them to participate.

I'd like them to have a say-so. I've offered them Board of Director seats to help oversee, not just participate, but actually help oversee on a going-forward basis. You can't get any more transparent than I have been about opening up or wanting to open up a dialogue and leave everything on the table because I think it's the appropriate thing to do.

Heather?.

Yes, so, I don't have much to add.

I would just say that we've tried to outline that our ability to really leverage, and I think given when you look at the United States market, the dynamic that we would have with the same customers and being able to take and have these complementary businesses going to those same customers and being able to we believe really not only change the paradigm but be able to evolve as rapidly as we're seeing as just the most recent announcement of the Walgreens Rite Aid.

Our customers are becoming larger and global. And to be able to have the scale and the ability to rapidly adapt to that, we think happens on this combined basis better than them on a stand-alone. And as we've said many times to the Europe platform, Omega, they didn't have any existing infrastructure there.

So, if you look at our critical mass now around the Rx channel and the Gx channel and our successful integration of EPD and how we've turned that business around, it really just shows and highlights that now adding Ox to that channel, again, our ability to really leverage this business and create, make one plus one equal more than three, is how we've always approached transactions and that's why we've approached the Perrigo, trying to layout the realities of Perrigo on a stand-alone basis versus combined with Mylan.

John, you want to hit gross margin?.

Yeah. Thanks, Gregg. With respect to gross margin, I guess I would start by pointing out that since 2010 our gross margins have increased from 45% up to the high end of the guidance range that we indicated we would be at this year of 55%. So the gross margins have been sustained. They have steadily increased over the last five, six years.

We've done that with, most importantly from my perspective, a best-in-class operating platform which has been driving annual cost reductions in our product portfolio, the vertical integration that we have in that operating platform, the very strong integration of API, our own API, into our products.

It also has been driven by the positive pricing environment that we've seen, especially over the last couple of years in North America. And, yeah, I would agree that EPD has been a portion of the increase that we've seen this year in 2015.

But to your question of sustainability on a going-forward basis, I would say that what we've demonstrated over the last five years, I see that continued to be sustainable, especially as we continue to add complex new products like generic Advair and our biologics products..

Our next question comes from Sumant Kulkarni with Bank of America. Your line is open..

Good morning. Thanks for taking my questions. I have three.

First, outside of over-the-counter, what are some of the specific business development priorities for Mylan, given that competition on the generic side may start to appear more formidable with the Teva Allergan transaction? Second, if the Perrigo stand-alone business appears so challenged in some fashion, what can Mylan specifically do to kick-start that business and how long would it take to turn it around, excluding any revenue synergies? And third, sorry if I missed it, but could you give us an update on the Antitrust review of this transaction in the U.S.?.

So, regarding Antitrust, we should be hearing really any day, quite frankly.

Heather?.

Yeah, Sumant. As I was explaining about Perrigo, their challenge is sustainable growth on a stand-alone basis. So we've continued to say they have a good solid business.

It's just when put with the Mylan and brought together with the Mylan entity, our ability of how we approach customers, of how we leverage the platform in Europe, how we can then broaden and go to other geographies with the assets we've put together is what we continue to show, not to mention the at least $800 million of synergies that we think we'll be able to get out of the combined platform.

So it's really just bringing the scale together and being able to leverage these complementary platforms that 1 plus 1 equals more than 3 or 4. And that's what, as we've said, our history and our track record has shown that we've continued to be able to do that with those transactions.

I'd say as far as business development opportunities, yes, we've said we'll focus on the OTC channel in continuing to go about and enhance that platform. Obviously, Perrigo accelerates that.

But we're interested in building and we believe there's great product opportunities in other assets out there that would let us continue to build the OTC, both in the U.S. as well as Rest of World. And as we've said before, we continue to believe there's dosage forms, therapeutic categories that we still don't have critical mass in.

As we added the injectable platform as an important bolus and opportunity for us to gain critical mass in that area, we believe that we've got other areas, such as ophthalmics, that we can continue to bolt-on and really leverage our global commercial platform..

And then the only other thing I would add is a sustainable cash flow business versus a business that is struggling to grow, I do believe that what we bring to Perrigo is an immediate protection of the downside that we can forecast that we see in their stand-alone business.

You cannot ask shareholders to rely on delusional high P/E multiples in order to deliver growth. You must rely on your own capability of producing earnings growth and leave it up to the Street to decide ultimately what P/E multiple and, in particular, platform or profile it deserves..

Our next question comes from Andrew Finkelstein with Susquehanna. Your line is open..

Thanks very much for taking the question. I was hoping you could comment more on a couple things. Number one, you mentioned better margins on some of your existing products in North America. And could you comment how much of that is related to pricing? Number two, Perrigo announced plans to spin off its BMS business.

How do you think about a business like that in terms of where you can compete successfully in OTC? And then finally, you mentioned ophthalmics, if you could comment anymore on the capabilities you do have there, including with products like generic RESTASIS. Thanks very much..

I'll start on the North American Perrigo question. Look, I would say as far as price increases, we've had a very consistent approach. We have absolutely had opportunities around generic pricing, but I would tell you is, as we noted I believe in our commentary, that we've seen our volumes up more than our increases.

So when you look our broad portfolio and hundreds of products, it's not dependent on any one product or any massive price increases across the board.

So I would say what we continue to see is because of the shortages and some of the issues with the FDA, that our ability to have that reliable supply has really been a differentiator for Mylan and has allowed us to continue to do more and optimize the assets we have.

As far as the Perrigo businesses and commentary on their price cuts or businesses they're selling, look, I think it would be premature for us to comment on those assets or their assessment.

I think that's why, as Rajiv talked about, our first 60 days it's really getting in there and assessing both the people and the businesses and before making any kind of quick rush decisions about what may or may not make sense going forward.

Rajiv?.

And regarding our product mix, in our global portfolio, we have a bunch of ophthalmics products, including a pending ANDA with RESTASIS, which we are waiting to hear from the FDA. We have filed this ANDA a couple of years back and are waiting to hear from the FDA..

And I would just close by saying that similar to the last question regarding margin, that the North America increase in margin is the combination of both, as I said, a positive pricing environment, but just as importantly, the cost reductions that our global operating platform has been able to achieve..

Our next question comes from Ronny Gal with Bernstein. Your line is open..

Good morning and thank you for taking my questions. I have three. First, Rajiv, about the insulin product, there are two formulations (66:35) out there. There's a vial formulation and a prefilled syringe formulation. And I know you're working on the prefilled syringe formulations. Others have been struggling with the vial formulation.

Can you just confirm to us that you were able to get the vial formulation right? Is this one of the formulations that will be submitted in 2016? Second, on R&D. You seem to have a lot of trials going into Phase III, both on the branded side and biosimilars.

Should we expect an increase in R&D in 2016 above the current percentage of revenue, even with the nice EpiPen number? Can you just give us an idea about what is the step function in R&D to cover those? And last, to come back to you guys on this issue of governance, I understand that you want to talk to the board of Perrigo in this issue.

But for your own shareholders I think the question is, are you willing to undo the stichting requirements to keep Mylan independent? Are you willing to change the board election to allow shareholders to propose new members, for your own shareholders, looking long term? Is this in the plans? Would you commit to that? Or is this something that you think is like bedrock the way Mylan should operate long term?.

Thanks for the question, Ronny. Rajiv, let me take that first and then you can take the other two. Look, Ronny, I don't want to be discussing corporate governance in a vacuum. I think it's appropriate when you look at this new combined entity, its profile, its size and scale, what this new profile will be on a going-forward basis.

I think it's very important rather than do this in a vacuum or on our own, I think it's very important that two boards come together and discuss this matter openly. I think it should be discussed with shareholders. Certainly, I would speak to Mylan shareholders.

Let me remind you that this corporate governance has been voted in by the Mylan shareholders. And I will always be open. With that said, this is really about the Perrigo transaction right now, but I will always be open with both the Mylan and Perrigo shareholders on an ongoing basis.

And all the type of governance changes that you've outlined, I will absolutely be open to all of those things with a good discussion. I believe, first, we need to deal with the Perrigo and the Perrigo potential transaction because I think, again, Ronny, a lot of this is a big red herring.

I truly believe it's much more of an excuse that's being used right now than the realities. We are a public company. A company that's a public company is for sale every single day. That's what a public company is. We, as a board, we've made our position abundantly clear that we would not hold this company back.

There has been several types of transactions I have mentioned that we would be open for, both in value and in structure, and especially transactions that would accelerate the mission and strategy of the company while delivering value for shareholders.

So I want you to understand because I know this is something that you've heard about, something that you've, I'm certain we're going to have a lot more discussions about, but I can't be any more transparent. Let's not use this as an (70:15).

So in a way to take it off the table, why I mentioned this morning, why I reached out to Joe after I saw that he left the shareholders no other alternative than to rely on some high P/E multiple. I'm giving him and the Board of Directors an opportunity to have dialogue.

I will invite their board members to participate in any questions or considerations on a going-forward basis and I will also invite their board members to come on the board and represent the Perrigo side, the Perrigo shareholders.

So let's not use corporate governance in the place of the real value proposition that 80%-plus accretion that we're given to the Perrigo's shareholder. So let me leave it at that. And, Rajiv, you can address both the .....

Yeah, so, Ronny, for glargine, our 2015 submission targets include both vial and cartridge. As far as the R&D spend is concerned, I think it's about the phasing-in of these clinical programs and also on an increased revenue base, the total absolute number of R&D dollars.

And we will be maintaining it, our R&D spend, between 6.5% to 7.5% range as we have been – we believe these dollars are good enough for us to manage this programs..

Our next question comes from Umer Raffat with Evercore ISI. Your line is open..

Hi. Thanks for taking my question. I have a few, if I may. First, Robert, when you say corporate governance changes, are you referring specifically to stichting or are there other considerations you're evaluating as well? Just wanted to understand that better.

And then, Heather, the slides mentioned that for Abbott Established Products business, the year-over-year constant currency growth is 5%.

Can you give us what it is without FX adjustment for Abbott Established Products? And finally, John, so what exactly does the purchase accounting amortization entail? I just want to understand like specifically what exactly does it include in that? And what's the $41 million financing-related cost that was non-GAAPed out? Thank you..

In terms of the corporate governance, again, I don't think there should be any limitations when you have an open dialogue with your shareholders, or, in this case, with Perrigo and Perrigo's board. I don't think there should be any limitations if you really are open to have a discussion about corporate governance as a whole..

Yeah, so on the question of the EPD revenues without being on a constant currency basis, you certainly know that the euro has weakened substantially against the U.S. dollar over the last year. And you also know we didn't own the EPD business last year, so that it wasn't included in our revenue.

So I would just say that the EPD business revenues on an actual value as expressed in U.S. dollars are down year-over-year. But, again, it wasn't in our numbers, so it's not necessarily a relevant point. I guess I'll just also hit, Heather, the purchase accounting amortization. When we make an acquisition, U.S.

GAAP requires the allocation of the purchase price to the value of the tangible and intangible assets acquired and the intangible assets are then amortized. That's a non-cash amortization charge which had been a consistent adjustment that we've made associated with our adjustments from GAAP to adjusted earnings.

And lastly, the financing charges, those represent the costs associated with the refinancing of our capital, our balance sheet, including the committed bridge loan that we have in place associated with our Perrigo tender offer..

And I guess just as a practical note I would add on the EPD business, as we stated when we acquired that business, Abbott themselves had forecasted it to be a declining business. And we had believed that, in our hands, we would be able to focus on investment to make that flat to slightly growing.

And I think what we've seen and reported today is just that we continued to exceed those expectations. That business has done very well integrated into the Mylan legacy European platform.

So we're proud to say that we're ahead of schedule and continue to see a lot of, not only great cash flows associated with the business, but they're really complementary in nature to the retail pharmacy channel that we already had our legacy business in..

Our final question comes from Jason Gerberry with Leerink Partners. Your line is open..

Hi. Good morning. This is Derek on for Jason. I just had one question. I was wondering if you could talk about the $17 million one-time customer incentive in the EU and whether that was related at all to Perrigo's distributors not taking any Omega products during the quarter? Thanks..

No, I can confirm to you that it was not. It had nothing to do with that. It relates to the integration of our EPD business in Europe and was, as I indicated, a one-time payment associated with the bringing of the EPD business into Mylan. So, with that, I'd just like to close the call by saying thank you to all the participants.

I think that the slides that we reviewed with you today will be available on the Mylan website. We think they produce a clear and compelling case for the value proposition that we're making to the Perrigo shareholders. And we would be pleased to continue to engage with you on the subject. Thanks very much, operator. And you can close the call..

Thank you. Ladies and gentlemen, that does conclude today's conference. You may all disconnect and everyone have a great day..