FINANCIAL REPORT.

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(1)HALF-YEAR REPORT 2016. This is an interactive pdf, press the button to begin. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. FINANCIAL REPORT..

(2) CONTENTS. ACTELION’S MISSION: TREAT MORE PATIENTS WITH GROUNDBREAKING MEDICINES. 03 Financial Review Actelion Ltd. is a leading biopharmaceutical company focused on the discovery, development and commercialization of innovative drugs for diseases with significant unmet medical needs. Actelion is a leader in the field of pulmonary arterial hypertension (PAH). Our portfolio of PAH treatments covers the spectrum of disease, from WHO Functional Class (FC) II through to FC IV, with oral, inhaled and intravenous medications. Although not available in all countries, Actelion also has treatments approved by health authorities for a number of specialist diseases including Type 1 Gaucher disease, Niemann-Pick type C disease, Digital Ulcers in patients suffering from systemic sclerosis, and mycosis fungoides type cutaneous T-cell lymphoma.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 2. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. 19 Interim Consolidated Financial Statements.

(3) HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 3. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. FINANCIAL REVIEW.

(4) 1. PROFIT AND LOSS. (in CHF millions, except % variance and EPS). 2016. Half Year 2015. variance CHF. Second Quarter 2016 2015. Sales Product sales Opsumit® Tracleer® Uptravi® Other. 1,179 378 546 90 165. 1,008 208 645 155. 17% 82% -15% nm 6%. 13% 76% -18% nm 3%. 590 200 256 56 78. 493 113 301 79. 20% 77% -15% nm -0%. 15% 71% -19% nm -4%. Core results Operating income Net income Diluted EPS. 499 440 4.05. 423 357 3.11. 18% 23% 30%. 11% 16% 23%. 250 224 2.07. 205 172 1.51. 22% 30% 38%. 14% 22% 29%. US GAAP results Operating income Net income Diluted EPS. 412 361 3.32. 344 287 2.50. 20% 25% 33%. 12% 17% 23%. 204 182 1.68. 154 128 1.12. 33% 42% 50%. 22% 31% 38%. CER. variance CHF. CER. CASH FLOW. (in CHF millions). 2016. Half Year 2015. 2016. Second Quarter 2015. Cash flow Operating cash flow Capital expenditure Cash returned to shareholders Free cash flow. 420 (31) (294) 14. 278 (11) (596) (540). 247 (26) (225) (53). 183 (5) (596) (483). CASH POSITION AND SHARES June 30, 2016. Cash position Net cash. 418. 472. 405. 114.1 8.9 4.7. 114.1 9.5 5.6. 114.1 9.1 5.9. Share count (million shares) Issued common shares Treasury shares held Outstanding equity instruments. March 31, December 31, 2016 2015. Disclaimer and notes to this financial report: Actelion continues to measure, report and issue guidance on its core operating performance, which management believes more accurately reflects the underlying business performance. The Group believes that these non-GAAP financial measurements provide useful supplementary information to investors. These non-GAAP measures are reported in addition to, not as a substitute for, US GAAP financial performance. Constant Exchange Rates (CER) percentage changes are calculated by reconsolidating both the H1 2015 and H1 2016 results at constant currencies (the average monthly exchange rates for H1 2015). Rounding differences may occur nm = not meaningful Europe = EU28 and Switzerland. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 4 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. (in CHF millions).

(5) 2 During the first six months of 2016, Actelion continued to deliver double digit sales and core operating income growth through excellent execution across the commercial organization and disciplined management of the business. Due to this continued strong performance and increased clarity on a number of factors, Actelion is upgrading its full-year 2016 financial guidance: the company is now confident that, barring unforeseen events, core operating income growth will be in the low-teen percentage range at CER. Product sales rose 13% at CER to 1,179 million Swiss francs driven by the continued growth of our PAH product portfolio led by the strong uptake of Opsumit and the very successful Uptravi launch in the United States where the product was introduced on January 4, 2016. With this strong performance along with the continued growth of Veletri, the transformation of Actelion’s PAH portfolio is well underway with almost half of the second quarter 2016 sales stemming from its new outcome-based therapies. Core operating income increased by 11% at CER to 499 million Swiss francs. The strong sales performance was supported by increased investment, as the commercial organization launched Uptravi in the United States, prepared to launch Uptravi in Europe and beyond, and continued Opsumit and Veletri roll-outs in markets around the globe. Core R&D expenses increased to 21% of sales as the company is advancing its late-stage pipeline. The company also made significant progress by entering into Phase II clinical development with its new dual orexin receptor antagonist and Phase III with macitentan (Opsumit) in children with PAH. G&A expenses increased by 5% at CER. US GAAP operating income amounted to 412 million Swiss francs compared to 344 million Swiss francs in the first half of 2015, an increase of 12% at CER. Core net income amounted to 440 million Swiss francs resulting in core diluted earnings per share (EPS) of 4.05 Swiss francs, an increase of 16% and 23% at CER respectively compared to the first half of 2015. US GAAP net income amounted to 361 million Swiss francs resulting in diluted earnings per share (EPS) of 3.32 Swiss francs, an increase of 17% and 23% at CER respectively compared to the first half of 2015.. In the absence of any meaningful acquisition, operating cash flow of 420 million Swiss francs for the first six months of 2016 was almost fully dedicated to return cash to shareholders and manage dilution arising from stock-based compensation, as committed by the Board of Directors: Actelion paid an increased dividend of 1.50 Swiss franc per share (159 million Swiss francs), purchased 0.9 million second-line shares (135 million Swiss francs) and 0.8 million first-line shares (113 million Swiss francs).. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 5 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Actelion’s net cash position of 418 million Swiss francs at the end of June 2016 is almost unchanged since the start of the year as the company believes the current cash levels are appropriate to retain full financial flexibility in order to seize any external opportunities that would fit the company’s strategy while meeting its strict financial criteria to ensure value creation for its shareholders..

(6) 3. SALES Sales by product (in CHF millions, except % variance). Product sales Opsumit® Tracleer® Uptravi® Veletri® Ventavis® Valchlor® Zavesca® Others Total product sales. 2016. Half Year 2015. 378 546 90 48 43 18 52 4 1,179. 208 645 38 57 12 44 3 1,008. variance CHF 82% -15% nm 24% -24% 49% 17% 17% 17%. CER 76% -18% nm 19% -27% 43% 15% 22% 13%. Second Quarter 2016 2015 200 256 56 24 17 9 27 2 590. 113 301 19 26 7 25 2 493. variance CHF. CER. 77% -15% nm 24% -35% 24% 8% 13% 20%. 71% -19% nm 18% -37% 20% 6% 15% 15%. Actelion delivered an outstanding first half 2016, driven by a very strong Uptravi launch in the US and the continued successful uptake of Opsumit. The excellent performance of the company’s outcome-based PAH portfolio is the result of consistently strong referrals of new PAH patients across markets, as well as an increase in the number of patients benefitting from double and triple combination PAH therapy. In the US, sales increased by 25% at CER, driven by the strong Uptravi launch, continued Opsumit momentum and ERA market share gains. European sales were 1% lower at CER, despite increased Opsumit uptake and Tracleer use in the digital ulcer indication, due to continued pricing pressure and market erosion from generics particularly in Spain. Sales in Japan increased by 20% at CER, mostly driven by very strong sales of Opsumit (launched in June 2015), Veletri and Zavesca (Japanese trade name Brazaves). Comparing average exchange rates for the first six months of 2016 to the first six months of 2015, the Swiss franc weakened against the US dollar, euro and Japanese yen, but strengthened - on average - against all other currencies, which resulted in a positive currency variance of 39 million Swiss francs.. (in CHF millions, except % variance). Product sales by region United States Europe Japan Rest of the world Total product sales. HALF-YEAR FINANCIAL REPORT.. 2016. Half Year 2015. 639 322 116 102 1,179. 495 318 86 109 1,008. CONTENTS. variance CHF. CER. 29% 1% 34% -6% 17%. 25% -1% 20% -3% 13%. FINANCIAL REVIEW. Second Quarter 2016 2015 313 158 66 54 590. 243 155 45 50 493. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. variance CHF. CER. 29% 1% 48% 8% 20%. 25% -3% 29% 10% 15%. 6 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Sales by region.

(7) 4. PAH FRANCHISE Opsumit® (in CHF millions, except % variance). Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 246 82 22 28 378. 149 46 1 12 208. variance CHF. CER. 66% 79% nm nm 82%. 60% 74% nm nm 76%. Second Quarter 2016 2015 126 44 14 16 200. 80 25 1 7 113. variance CHF. CER. 58% 74% nm nm 77%. 53% 68% nm nm 71%. Sales of Opsumit (macitentan) amounted to 378 million Swiss francs for the first six months of 2016, an increase of 76% at CER compared to the first six months of 2015. This increase continues to be driven by the uptake trajectory with commercial availability in over 30 countries. The strong increase in patients benefitting from Opsumit was driven by referral of treatment-naïve patients together with increased early combination with PDE-5 inhibitors, and some switching from Tracleer, notably in Japan. Tracleer® (in CHF millions, except % variance). Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 207 203 80 57 546. 249 241 74 81 645. variance CHF -17% -16% 8% -31% -15%. CER -19% -18% -3% -28% -18%. Second Quarter 2016 2015 89 95 45 28 256. 115 114 38 34 301. variance CHF. CER. -23% -17% 18% -18% -15%. -25% -20% 3% -16% -19%. Sales of Tracleer (bosentan) amounted to 546 million Swiss francs for the first six months of 2016, a decrease of 18% at CER compared to the first six months of 2015. This decrease was mostly a consequence of lower volumes in countries where Opsumit is available, due to lower referrals of new patients as well as switches to Opsumit. Underlying volumes decreased globally by 16%. Tracleer sales were further impacted by increased generic bosentan competition, notably in Spain, continued pricing pressure in Europe and buying pattern variations in the US.. Following the Pediatric Investigation Plan (PIP) compliance statement from the European Committee for Medicinal Products for Human Use (CHMP), applications for extension of the Supplementary Protection Certificate (SPC) were filed in 19 EU countries and have been granted in 15 of those, with 4 still pending.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 7 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Positively, Tracleer sales were supported by the digital ulcer indication in Europe and Japan and continued solid demand in markets where Opsumit is not yet available..

(8) 5 Uptravi® (in CHF millions, except % variance). Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 90 0 0 90. -. variance CHF. CER. nm nm. nm nm. nm nm. nm nm. Second Quarter 2016 2015 55 0 0 56. -. variance CHF. CER. nm nm. nm nm. nm nm. nm nm. Sales of Uptravi (selexipag) amounted to 90 million Swiss francs for the first six months of 2016. Approximately 60 million Swiss francs can be attributed to patient demand and 30 million Swiss francs to the build-up of the US inventory as 10 different presentations of the drug across the various doses were made available. Uptravi has been launched in the US since January 4, 2016 and in Germany since June 15, 2016. During the second quarter 2016, Uptravi also became available in France under a temporary cohort authorization of use (“ATU”) and in Canada for the private market segment. At the end of June, around 1,150 patients were using this outcomebased, oral selective IP receptor agonist. Veletri® (in CHF millions, except % variance). Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 20 11 13 3 48. 20 6 10 3 38. variance CHF. CER. 3% nm 22% 17% 24%. -0% nm 10% 19% 19%. Second Quarter 2016 2015 10 6 6 2 24. 9 3 5 1 19. variance CHF. CER. 7% 80% 20% 23% 24%. 4% 74% 4% 25% 18%. Sales of Veletri (epoprostenol for injection) amounted to 48 million Swiss francs for the first six months of 2016, an increase of 19% at CER compared to the first six months of 2015. This increase was mostly driven by increased market penetration, successful launches in additional markets and continued growth in Japan (where it is marketed as Epoprostenol “ACT”). In March 2016, Actelion Japan was notified of an average 12% price cut for Veletri, effective March 1, 2016. At the end of June 2016, Veletri was available in 15 countries globally. Ventavis®. Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 43 43. 57 57. variance CHF. CER. -24%. -27%. -24%. -27%. Second Quarter 2016 2015 17 17. 26 26. variance CHF. CER. -35%. -37%. -35%. -37%. Sales of Ventavis (iloprost) amounted to 43 million Swiss francs for the first six months of 2016, a decrease of 27% at CER compared to the first six months of 2015 due to competitive environment, including the availability of Uptravi. Underlying units decreased by 34%.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 8 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. (in CHF millions, except % variance).

(9) 6. SPECIALTY PRODUCTS Valchlor® (in CHF millions, except % variance). Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 17 1 0 18. 11 1 12. variance CHF 56% -14% nm nm 49%. CER 50% -17% nm nm 43%. Second Quarter 2016 2015 9 1 0 9. 7 1 7. variance CHF. CER. 27% -19% nm nm 24%. 24% -23% nm nm 20%. Sales of Valchlor (mechlorethamine) amounted to 18 million Swiss francs for the first six months of 2016, an increase of 43% at CER compared to the first six months of 2015. In the US, the company is continuing its efforts to establish Valchlor as an option in the treatment algorithm for early-stage mycosis fungoides, a type of Cutaneous T-Cell Lymphoma (MF-CTCL). In France, patients benefited from the drug under a temporary nominative authorization for use (“ATU”) program initiated during the second half of 2014. The regulatory dossier is currently under review with the European Medicines Agency (under the trade name Ledaga®). Zavesca® (in CHF millions, except % variance). Sales by region United States Europe Japan Rest of the world Total. 2016. Half Year 2015. 16 24 2 10 52. 10 24 1 9 44. variance CHF. CER. 54% 0% 33% 16% 17%. 49% -2% 19% 22% 15%. Second Quarter 2016 2015 7 12 1 6 27. 6 12 1 6 25. variance CHF. CER. 17% 4% 43% 4% 8%. 14% -0% 25% 7% 6%. In Europe, sales decreased by 2% mainly due to the launch of generic miglustat (approved for the type 1 Gaucher disease indication only), which has become commercially available in Spain, Sweden and the Czech Republic. Sales in Japan were 19% higher driven by increased patient demand in the Niemann-Pick type C indication.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 9 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Sales of Zavesca (miglustat) amounted to 52 million Swiss francs for the first six months of 2016, an increase of 15% at CER compared to the first six months of 2015. Sales in the US were strong due to a relatively low prior year base as a consequence of last year’s inventory adjustment. The global number of patients receiving therapy grew by 5% compared to the first half of 2015, driven by a 14% increase in Niemann-Pick type C demand ex-US..

(10) 7. OPERATING EXPENSES Operating expenses break down as follows: (in CHF millions, except % variance). Operating expenses Core cost of sales Core research and development Core SG&A Core operating expenses Depreciation of assets Amort. of acquired intangible assets Stock-based compensation Milestone payment Doubtful debt movements Accretion expenses (benefits) Other expenses Non-core operating expenses US GAAP operating expenses. 2016. Half Year 2015. 92 250 338 681 16 28 32 2 0 9 (0) 87 767. 94 191 300 585 18 27 27 11 5 (7) 0 82 667. 2016. Half Year 2015. 56 36 92 9 101. 63 31 94 (7) 88. variance CHF -2% 31% 13% 16% -12% 3% 18% nm nm nm nm 6% 15%. CER -4% 30% 11% 15% -12% 2% 18% nm nm nm nm 6% 14%. Second Quarter 2016 2015 46 124 169 340 8 14 16 2 0 6 (0) 46 386. 43 94 151 288 9 12 15 11 5 1 (0) 53 341. variance CHF 7% 32% 13% 18% -10% 16% 8% nm nm nm nm -14% 13%. CER 5% 31% 10% 16% -11% 15% 8% nm nm nm nm -14% 12%. Cost of sales (in CHF millions, except % variance). Cost of sales Royalty expenses Cost of goods sold Core cost of sales Non-core cost of sales US GAAP cost of sales. variance CHF -11% 16% -2% nm 15%. CER -14% 16% -4% nm 13%. Second Quarter 2016 2015 31 16 46 6 52. 28 15 43 1 45. variance CHF. CER. 11% 1% 7% nm 17%. 7% 2% 5% nm 15%. Core cost of sales for the first six months of 2016 decreased by 4% at CER to 92 million Swiss francs, despite an increase in sales of 13% at CER.. Non-core cost of sales relate to the accretion expense for the contingent consideration for Valchlor in H1 2016 compared to a positive impact in H1 2015 due to adjusted sales projections.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 10 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Royalties in the first half of 2016 were lower, mainly due to ceased royalty obligations, following the patent expiry of Tracleer in the US (late November 2015) and Ventavis (mid-March 2015). Royalties were also lower due to a favorable product mix with a low single-digit royalty rate paid on Opsumit sales compared to a high single-digit rate paid on Tracleer sales in markets where Tracleer is still under patent protection and despite a mid-teen royalty rate on Uptravi..

(11) 8 Research and development (“R&D”) expenses (in CHF millions, except % variance). Core R&D expenses Depreciation Stock-based compensation Milestone payment US GAAP R&D expenses1 Amort. of acquired intangible assets US GAAP R&D expenses. 2016. Half Year 2015. 250 11 14 2 277 3 280. 191 13 12 11 227 1 228. variance CHF 31% -11% 19% nm 22% nm 23%. CER 30% -12% 19% nm 22% nm 22%. Second Quarter 2016 2015 124 6 6 2 138 2 139. 94 6 6 11 117 1 118. variance CHF. CER. 32% -9% 7% nm 18% nm 18%. 31% -9% 7% nm 17% nm 18%. As reported in the consolidated income statements, excluding amortization of acquired intangible assets.. 1. Core R&D expenses amounted to 250 million Swiss francs, an increase of 30% at CER. This increase was driven by higher clinical trial expenses, mainly driven by the strong recruitment in the Phase III OPTIMUM study (ponesimod in multiple sclerosis announced in April 2015) and the Phase III IMPACT study (Cadazolid in Clostridium difficile associated diarrhea), in order to complete enrollment before year-end. Core R&D expenditure represented 21% of product sales. Actelion will continue to focus on carefully balancing investments so as to ensure future growth and delivery of appropriate shareholder returns. US GAAP R&D expenses included depreciation of 11 million Swiss francs (relating to the research building and laboratory equipment) and stock-based compensation expenses of 14 million Swiss francs. Selling, general and administrative (“SG&A”) expenses (in CHF millions, except % variance). SG&A expenses Marketing, selling and distribution General and administrative Core SG&A expenses Depreciation Stock-based compensation Doubtful debt movements Other US GAAP SG&A expenses1 Amort. of acquired intangible assets US GAAP SG&A expenses. Half Year 2015. 243 95 338 5 18 0 0 362 25 386. 210 89 300 6 15 5 326 26 351. variance CHF 16% 6% 13% -12% 17% nm nm 11% -4% 10%. CER 13% 5% 11% -13% 17% nm nm 9% -4% 8%. Second Quarter 2016 2015 122 48 169 3 9 0 182 12 194. 106 44 151 3 9 5 167 11 179. variance CHF 15% 8% 13% -13% 8% nm nm 9% 8% 9%. CER 11% 6% 10% -14% 8% nm nm 6% 7% 6%. As reported in the consolidated income statements, excluding amortization of acquired intangible assets.. Core marketing, selling and distribution expenses amounted to 338 million Swiss francs, an increase of 11% at CER. This increase was driven mostly by costs relating to launch activities of Uptravi in the United States, Canada, Germany and other anticipated European launches. Additionally, the company is continuing the roll-out of Opsumit and Veletri in various markets around the globe. G&A expenses increased by 5%. US GAAP SG&A expenses included depreciation of 5 million Swiss francs and stock-based compensation expenses of 18 million Swiss francs.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 11 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. 1. 2016.

(12) 9. OPERATING RESULTS. (in CHF millions, except % variance). 2016. Half Year 2015. Operating results Product sales Core operating expenses Core operating income Contract revenue Non core operating expenses US GAAP operating income. 1,179 (681) 499 0 (87) 412. 1,008 (585) 423 3 (82) 344. variance CHF. CER. Second Quarter 2016 2015. 17% 16% 18% nm 6% 20%. 13% 15% 11% nm 6% 12%. 590 (340) 250 0 (46) 204. 493 (288) 205 2 (53) 154. variance CHF 20% 18% 22% nm -14% 33%. CER 15% 16% 14% nm -14% 22%. Core operating income amounted to 499 million Swiss francs, an increase of 11% or 47 million Swiss francs at CER. The weakening of the Swiss franc against the major currencies affecting Actelion’s performance had a positive impact of 29 million Swiss francs on core operating income. Non core operating expenses were stable excluding accretion effects and milestone payments. US GAAP operating income amounted to 412 million Swiss francs, an increase of 12% at CER.. NET RESULTS. (in CHF millions, except % variance). Net results Core operating income Core financial results Core income tax Core net results. 2016. Half Year 2015. 499 3 (62) 440. 423 (17) (48) 357. variance CHF. CER. 18% nm nm 23%. 11% nm nm 16%. Second Quarter 2016 2015 250 4 (30) 224. 205 (10) (23) 172. variance CHF. CER. 22% nm nm 30%. 14% nm nm 22%. Core net income amounted to 440 million Swiss francs, an increase of 16% at CER.. Core tax expense amounted to 62 million Swiss francs, which translates into an effective core tax rate of 12.3%. This core tax rate is slightly higher than in 2015 due to higher profits outside of Switzerland and is expected to remain around this level for the remainder of the year. (in CHF millions, except % variance). Net results Operating results Financial results Income tax Net results Net loss attr. to the nonctrl. interests US GAAP net results. 2016. Half Year 2015. 412 3 (55) 360 1 361. 344 (17) (42) 284 3 287. variance CHF. CER. 20% nm nm 26% nm 25%. 12% nm nm 18% nm 17%. Second Quarter 2016 2015 204 4 (26) 182 1 182. 154 (10) (18) 125 3 128. variance CHF. CER. 33% nm nm 45% nm 42%. 22% nm nm 34% nm 31%. Below the operating line, US GAAP results do not materially differ from core results.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 12 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Core financial result amounted to 3 million Swiss francs related to foreign exchange gains. Actelion aims to minimize the volatility of the company’s financial results and uses forward contracts to hedge transaction exposures arising from foreign currency cash flows and cash positions held in foreign currencies. Actelion no longer incurs interest expense as the company is debt-free..

(13) 10. EARNINGS PER SHARE (EPS) 2016. Half Year 2015. 440 361. Basic earnings per share Weighted avg no. of shares (in mm) Core basic EPS (in CHF) US GAAP basic EPS (in CHF) Diluted earnings per share Weighted avg no. of shares (in mm) Core diluted EPS (in CHF) US GAAP diluted EPS (in CHF). (in CHF millions, unless otherwise indicated). Net results Core net results US GAAP net results. variance CHF. CER. Second Quarter 2016 2015. variance CHF. CER. 357 287. 23% 25%. 16% 17%. 224 182. 172 128. 30% 42%. 22% 31%. 105.1 4.18 3.43. 110.5 3.23 2.60. nm 29% 32%. nm 22% 23%. 105.3 2.13 1.73. 110.0 1.56 1.16. nm 36% 49%. nm 27% 37%. 108.6 4.05 3.32. 114.7 3.11 2.50. nm 30% 33%. nm 23% 23%. 108.2 2.07 1.68. 114.1 1.51 1.12. nm 38% 50%. nm 29% 38%. The increase in core and US GAAP EPS was driven by higher net income and the decrease in number of common shares. The average share count for basic EPS decreased by 5.4 million shares due to the second-line share repurchase program. The average share count for diluted EPS decreased by 6.1 million shares as the average number of dilutive instruments decreased by 0.7 million shares despite an increase in the average share price (145 Swiss francs per share in H1 2016 compared to 119 Swiss francs in H1 2015).. IMPACT OF FOREIGN EXCHANGE RATES ON SALES AND OPERATING RESULTS Actelion’s exposure to foreign currency movements affecting its sales and operating results as expressed in Swiss francs is summarized in the table below. (in CHF millions, except % variance). 2016. Half Year 2015. Core operating results Product sales Operating expenses Operating income Net income. 1,179 681 499 440. 1,008 585 423 357. 171 95 76 82. 17% 16% 18% 23%. 132 85 47 57. 13% 15% 11% 16%. US GAAP results Revenues Operating expenses Operating income Net income. 1,180 767 412 361. 1,011 667 344 287. 169 100 69 73. 17% 15% 20% 25%. 130 92 40 48. 13% 14% 12% 17%. CHF %. variance CER. CER %. As a result of the weakening of the Swiss franc against the main currencies that the company operates, foreign exchange rates had for the first half year 2016 a positive net impact of 39 million Swiss francs on sales (US dollar 22 million, euro 9 million and Japanese yen 12 million Swiss francs) and 29 million Swiss francs on core operating income (US dollar 16 million, euro 7 million and Japanese yen 7 million Swiss francs).. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 13 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. variance CHF.

(14) 11. CASH FLOW AND CASH POSITION Operating cash flow 2016. Half Year 2015. 2016. Second Quarter 2015. Operating cash flow Net results Depreciation and amortization Stock-based compensation Other non cash items Funds from operations. 360 44 32 6 442. 284 45 27 (41) 316. 182 22 16 15 235. 125 21 15 (15) 146. Net change in trade and other receivables Net change in trade and other payables Net change in other operating assets and liabilities Decrease (increase) in net working capital Decrease (increase) in deferred taxes. (11) (6) (34) (51) 28. (58) (10) (2) (71) 32. 16 3 (16) 2 10. 2 (6) 25 21 16. Operating cash flow. 420. 278. 247. 183. (in CHF millions). Operating cash flow amounted to 420 million Swiss francs for the first six months of 2016. The strong underlying business performance resulted in funds from operations of 442 million Swiss francs. Working capital increased by 51 million Swiss francs, driven by an increase of 11 million Swiss francs in trade and other receivables due to strong sales. Cash collection remained solid with days of sales outstanding (DSO) at 53 days. Deferred tax net positions decreased by 28 million Swiss francs mainly driven by the utilization of net operating losses in the US and Switzerland.. (in CHF millions). Free cash flow Operating cash flow Acquisition of tangible, intangible and other assets Acquisition of businesses Operating free cash flow Second-line share repurchase Dividend First-line share purchase Proceeds from exercise of stock options Other items Free cash flow. 2016. Half Year 2015. 2016. Second Quarter 2015. 420 (31) (2) 387. 278 (11) (1) 266. 247 (26) (1) 221. 183 (5) (1) 178. (135) (159) (113) 19 14. (454) (142) (261) 61 (10). (66) (159) (76) 13 14. (454) (142) (100) 38 (3). 14. (540). (53). (483). Free cash flow reconciles the net cash position between the opening and closing period. In the absence of any meaningful acquisition, operating cash flow was fully dedicated to return cash to shareholders and to manage dilution arising from stock-based compensation, as the company believes that cash levels around 400 million Swiss francs are appropriate to retain full financial flexibility. The company paid a dividend of 159 million Swiss francs, purchased 0.9 million second-line shares for a consideration of 135 million Swiss francs (including withholding tax) and also acquired 0.8 million first-line shares for a consideration of 113 million Swiss francs.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 14 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Free cash flow.

(15) 12 Net cash position The net cash position amounted to 418 million Swiss francs on June 30, 2016 and breaks down by currency as follows: June 30, 2016. in %. Closing rate against CHF. 97 115 115 32 58 418. 23% 27% 28% 8% 14% 100%. 1 USD = 0.98 1 EUR = 1.09 100 JPY = 0.95 -. June 30, 2016. March 31, 2016. December 31, 2015. 418 447 185 340 408 134 52 1,985. 472 452 166 343 401 134 52 2,021. 405 427 131 348 414 134 56 1,915. 467 175 642. 427 171 598. 421 179 600. 2,522 (1,175) 1,347. 2,632 (1,206) 1,426. 2,455 (1,137) 1,318. Noncontrolling interests Equity attributable to noncontrolling interests Total equity. (4) 1,343. (3) 1,423. (3) 1,315. Total liabilities and equity. 1,985. 2,021. 1,915. (CHF millions unless otherwise indicated). Cash position by currency Swiss franc US dollar Euro Japanese yen Other foreign currencies Total net cash position. BALANCE SHEET (in CHF millions). Assets Cash position1 Trade and other receivables, net Other current assets Tangible assets Intangible assets Goodwill Other non-current assets Total assets Liabilities and shareholders' equity Other current liabilities Other non-current liabilities Total liabilities Share capital and accumulated reserves Treasury shares Total Actelion's shareholders' equity. Cash position includes cash, cash equivalents and short-term deposits.. There are no significant changes in the balance sheet which continues to be strong with a net cash position of 418 million Swiss francs ensuring full financial flexibility.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 15 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. 1.

(16) 13. ACTELION SHARES The movement of Actelion treasury shares is shown in the table below:. (numbers in thousands, except where indicated). Treasury shares - total December 31, 2015 Acquisition of treasury shares Q1 Outgoing shares Q1 March 31, 2015 Acquisition of treasury shares Q2 Outgoing shares Q2 June 30, 2016. First-line treasury shares. Second-line treasury shares. Total treasury shares. Average price (in CHF). Treasury shares (in CHF million). 2,988 264 (253) 2,998 498 (1,499) 1,998. 6,072 445 6,517 428 6,945. 9,060 709 (253) 9,515 926 (1,499) 8,943. 125.55 136.69 125.06 126.70 153.64 115.34 131.39. 1,137 97 (29) 1,206 142 (173) 1,175. ESOP. RSU. PSU. Total. Issued shares. Equity Overhang. 2,884 (422) (1) 2,462. 1,523 350 (660) (22) 1,191. 1,454 309 (666) (16) 1,080. 5,862 659 (1,748) (39) 4,733. 114.1. 5.1%. 114.1. 4.1%. (numbers in thousands, except %). Dilutive instruments and equity overhang Outstanding dilutive instruments Dec. 31, 2015 Grants Exercised / Vesting Forfeited Outstanding dilutive instruments Jun. 30, 2016. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 16 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The movement in outstanding dilutive instruments is shown in the table below:.

(17) 14. RECONCILIATION US GAAP TO CORE RESULTS FOR THE FIRST HALF 2016. (in CHF millions, except per share amounts and EPS). Depreciation, US GAAP amortization, Stock-based Doubtful debt Milestones or results impairment compensation movements contract. Accretion expense. Core results. Net revenue Product sales Contract revenue Total net revenue. 1,179 0 1,180. -. -. -. (0) (0). -. 1,179 1,179. Operating (expenses) Cost of sales Research and development Selling, general and administration Amortization of acquired intangible assets Total operating (expenses) Operating results. (101) (277) (362) (28) (767) 412. 11 5 28 44 44. 14 18 32 32. 0 0 0. 2 2 2. 9 9 9. (92) (250) (338) (681) 499. 3. -. -. -. -. -. 3. Income before income tax benefit (expense). 415. 44. 32. 0. 2. 9. 501. Income tax benefit (expense) Noncontrolling interest Net results. (55) 1 361. (4) 40. (2) 30. (0) 0. (0) (1) 1. (1) 8. (62) 440. 3.32 108.578. 0.37. 0.27. 0.00. 0.01. 0.07. 4.05 108.578. Depreciation, US GAAP amortization, Stock-based Doubtful debt Milestones or results impairment compensation movements contract. Accretion expense. Core results. Total financial results. Diluted net income (loss) per share Weighted-average number of common shares. (in CHF millions, except per share amounts and EPS). Net revenue Product sales Contract revenue Total net revenue. 590 0 590. -. -. -. (0) (0). -. 590 590. (52) (138) (182) (14) (386) 204. 6 3 14 22 22. 6 9 16 16. 0 0 0. 2 2 2. 6 6 6. (46) (124) (169) (340) 250. 4. -. -. -. -. -. 4. Income before income tax benefit (expense). 208. 22. 16. 0. 2. 6. 254. Income tax benefit (expense) Noncontrolling interest Net results. (26) 1 182. (2) 20. (1) 15. (0) 0. (0) (1) 1. (0) 6. (30) 224. 1.68 108.243. 0.19. 0.14. 0.00. 0.01. 0.05. 2.07 108.243. Operating (expenses) Cost of sales Research and development Selling, general and administration Amortization of acquired intangible assets Total operating (expenses) Operating results Total financial results. Diluted net income (loss) per share Weighted-average number of common shares. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 17 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. RECONCILIATION US GAAP TO CORE RESULTS FOR THE SECOND QUARTER 2016.

(18) 15. Q3 2015 three months. Q4 2015 three months. Q1 2016 three months. Q2 2016 three months. US GAAP Operating results Net revenue Operating expenses Operating income Financial results Income tax results Noncontrolling interest Net results. 515 (325) 189 (2) (23) 0 165. 520 (397) 122 (1) (22) 1 100. 590 (381) 208 (1) (29) 0 178. 590 (386) 204 4 (26) 1 182. Core operating results Product sales Operating expenses Operating income Financial results Income tax results Net results. 514 (286) 228 (2) (24) 203. 519 (357) 163 (1) (28) 133. 589 (341) 249 (1) (32) 215. 590 (340) 250 4 (30) 224. (in CHF millions). HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 18 ACTELION FINANCIAL REPORT 2014. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. QUARTERLY RESULTS.

(19) HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 19. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. INTERIM CONSOLIDATED FINANCIAL STATEMENTS.

(20) 20. INTERIM CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS Notes. (in CHF thousands, except per share amounts). Six months ended June 30, 2016 2015 (unaudited). (unaudited). 1,179,294 261 1,179,555. 1,007,883 2,723 1,010,606. (100,560) (277,389) (361,633) (27,512) (767,094) 412,461. (87,725) (226,503) (325,699) (26,827) (666,754) 343,852. 458 2,124 2,582. (5,545) (11,838) (17,383). Income before income tax benefit (expense). 415,043. 326,469. Income tax benefit (expense) Net income. (55,248) 359,795. (41,977) 284,492. Less: Net loss attributable to the noncontrolling interests Net income attributable to Actelion's shareholders. 915 360,710. 2,933 287,425. Net revenue Product sales Contract revenue Total net revenue. 15 15. Operating (expenses)1 Cost of sales2 Research and development Selling, general and administration Amortization of acquired intangible assets Total operating (expenses) Operating income Interest income (expense), net Other financial income (expense), net Total financial income (expense). 7. Basic net income per share attributable to Actelion's shareholders Weighted-average number of common shares (in thousands). 5. 3.43 105,124. 2.60 110,480. Diluted net income per share attributable to Actelion's shareholders Weighted-average number of common shares (in thousands). 5. 3.32 108,578. 2.50 114,741. Includes stock-based compensation as follows:. Research and development. (13,843). (11,587). Selling, general and administration Total stock-based compensation. (18,080). (15,390). (31,923). (26,977). 2. Excludes amortization of intangible assets as presented separately.. The accompanying notes form an integral part of these consolidated financial statements.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 20. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. 1.

(21) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Six months ended June 30, 2016 2015. (in CHF thousands). (unaudited). (unaudited). Net income Other comprehensive income (loss), net of tax: Foreign currency translation adjustments Change of unrecognized components of net periodic benefit costs Amortization of components of net periodic benefit costs Other comprehensive income (loss), net of tax. 359,795. 284,492. 6,739 796 7,535. (28,633) (5,482) 947 (33,168). Comprehensive income. 367,330. 251,324. Less: Comprehensive loss attributable to noncontrolling interests Comprehensive income attributable to Actelion's shareholders. 915 368,245. 2,933 254,257. ACTELION INTERIM FINANCIAL REPORT 2016. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 21. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The accompanying notes form an integral part of these consolidated financial statements..

(22) CONSOLIDATED BALANCE SHEETS Notes. June 30, 2016. December 31, 2015. (unaudited). (audited). 418,406 447,117 121,026 64,054 1,050,603. 404,892 427,223 62,107 68,828 963,050. 339,976 408,190 134,096 25,374 26,734 934,370. 348,277 413,542 134,494 39,159 16,415 951,887. 1,984,973. 1,914,937. 71,021 352,297 43,808 467,126. 83,878 302,729 34,375 420,982. 62,353 87,164 25,266 174,783 641,909. 67,204 83,759 27,979 178,942 599,924. 57,064 2,695,935 (1,174,972) (231,260) 1,346,767. 57,064 2,636,931 (1,137,399) (238,795) 1,317,801. Equity attributable to noncontrolling interests Total equity. (3,703) 1,343,064. (2,788) 1,315,013. TOTAL LIABILITIES AND EQUITY. 1,984,973. 1,914,937. (in CHF thousands, except number of shares). ASSETS Current assets Cash and cash equivalents Trade and other receivables, net Inventories Other current assets Total current assets. 6 8/9 7. Noncurrent assets Property, plant and equipment, net Intangible assets, net Goodwill Deferred tax assets Other noncurrent assets Total noncurrent assets. 2. TOTAL ASSETS LIABILITIES Current liabilities Trade and other payables Accrued expenses Other current liabilities Total current liabilities. 9 7. Noncurrent liabilities Pension liability Contingent considerations Other noncurrent liabilities Total noncurrent liabilities Total liabilities. 2. EQUITY Actelion's shareholders' equity Common shares (par value CHF 0.50 per share, authorized 154,120,077 and 154,120,627; issued 114,128,427 shares in 2016 and 2015, respectively) Accumulated profit Treasury shares, at cost Accumulated other comprehensive income (loss) Total Actelion's shareholders equity. 13. The accompanying notes form an integral part of these consolidated financial statements.. ACTELION INTERIM FINANCIAL REPORT 2016. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 22. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. 12.

(23) CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended June 30, 2016 2015. (in CHF thousands). Cash flow from operating activities Net income Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization Stock-based compensation, incl. treasury shares to members of Board of Directors Excess tax benefits from share-based payment arrangements Deferred taxes Deferred revenue (Gains) Losses on derivative instruments Interest expense on bonds Accretion expense (benefit) on contingent considerations Changes in operating assets and liabilities: Trade and other receivables Inventories Trade and other payables Accrued expenses Changes in other operating cash flow items Net cash flow provided by (used in) operating activities Cash flow from investing activities Purchase of property, plant and equipment Purchase of intangible assets Acquisition of a business, incl. contingent consideration payments Net cash flow provided by (used in) investing activities Cash flow from financing activities Dividend payment Payments on capital leases Proceeds from exercise of stock options, net of expense Purchase of treasury shares Excess tax benefits from share-based payment arrangements Contributions from noncontrolling interests' owners Net cash flow provided by (used in) financing activities Net effect of exchange rates on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period. (unaudited). (unaudited). 359,795. 284,492. 43,705 32,401 (11,533) 28,354 (282) (2,299) 8,517. 45,177 27,441 (10,538) 31,661 (778) (39,229) 5,987 (6,658). (11,063) (58,930) (5,546) 53,975 (17,510) 419,584. (58,376) 5,953 (9,696) (16,834) 18,990 277,592. (8,124) (22,705) (2,036) (32,865). (8,303) (2,222) (1,095) (11,620). (158,510) 19,303 (248,019) 11,533 (375,693). (142,429) (3) 60,776 (714,339) 10,538 1,136 (784,321). 2,488 13,514. (21,847) (540,196). 404,892 418,406. 1,204,958 664,762. ACTELION INTERIM FINANCIAL REPORT 2016. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 23. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The accompanying notes form an integral part of these consolidated financial statements..

(24) CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY. (in CHF thousands, except number of shares). At January 1, 2015 Comprehensive income (loss)1: Net income Other comprehensive income (loss) Comprehensive income (loss)1 Excess tax benefits from share-based payments Transactions in treasury shares Stock-based compensation expense Dividend payment Contributions from owners At June 30, 2015 (unaudited) Comprehensive income (loss)1: Net income Other comprehensive income (loss) Comprehensive income (loss)1 Excess tax benefits from share-based payments Transactions in treasury shares Stock-based compensation expense Dividend payment At December 31, 2015 (audited) Comprehensive income (loss)1: Net income Other comprehensive income (loss) Comprehensive income (loss)1 Excess tax benefits from share-based payments Transactions in treasury shares Stock-based compensation expense Dividend payment At June 30, 2016 (unaudited) 1. Noncontrolling Actelion's shareholders interests Common shares Additional Accum. other Equity attrib. to paid-in Accum. Treasury comprehensive noncontrolling Shares Amount capital profit shares income (loss) interests 111,128,427. 57,064. -. 2,359,573. (287,701). (208,513). -. -. -. 287,425 287,425. -. (33,168) (33,168). (4,116,146) 107,012,281. 57,064. 10,538 105,095 26,796 (142,429) -. (268,749) 2,378,249. (573,540) (861,241). (241,681). -. -. -. 264,434 264,434. -. 2,886 2,886. (1,943,364) 105,068,917. 57,064. (473) (29,106) 29,540 39 -. (5,752) 2,636,931. (276,158) (1,137,399). (238,795). -. -. -. 360,710 360,710. -. 7,535 7,535. 116,880 105,185,797. 57,064. 7,182 119,816 31,512 (158,510) -. (301,706) 2,695,935. (37,573) (1,174,972). (231,260). Total equity. - 1,920,423. (2,933) (2,933). 284,492 (33,168) 251,324. 10,538 - (737,194) 26,796 - (142,429) 1,136 1,136 (1,797) 1,330,594. (991) (991). 263,443 2,886 266,329. (473) - (311,016) 29,540 39 (2,788) 1,315,013. (915) (915). 359,795 7,535 367,330. 7,182 - (219,463) 31,512 - (158,510) (3,703) 1,343,064. Comprehensive income (loss) is presented net of tax.. ACTELION INTERIM FINANCIAL REPORT 2016. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 24. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The accompanying notes form an integral part of these consolidated financial statements..

(25) 25. NOTES TO THE UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS (CHF thousands, except share and per share amounts). NOTE 1. BASIS OF PRESENTATION The unaudited interim consolidated financial statements for Actelion Ltd (“Actelion” or the “Group”) have been prepared under Generally Accepted Accounting Principles in the United States (“US GAAP”) for interim financial information. Accordingly, such financial statements do not include all the information and footnotes required by US GAAP for annual financial statements. These interim financial statements should be read in conjunction with the audited consolidated financial statements of the Group for the year ended December 31, 2015. All US GAAP references relate to the Accounting Standards Codification (“ASC” or “Codification”) established by the Financial Accounting Standards Board (“FASB”) as the single authoritative source of US GAAP to be applied by non-governmental entities. All amounts are presented in Swiss francs (“CHF”), unless otherwise indicated. In addition, certain prior period amounts within the consolidated financial statements and related notes have been reclassified to conform to the current presentation.. NOTE 2. ACQUISITIONS AND GOODWILL Ceptaris Therapeutics, Inc. In 2013, the Group acquired 100 percent of privately-held Ceptaris Therapeutics, Inc. (“Ceptaris”), a specialty pharmaceutical company based in Malvern, Pennsylvania, US. The transaction was recorded as a business combination in compliance with the requirements of ASC 805. In conjunction with the acquisition, the Group assumed contingent considerations related to achievement of future performance and commercialization milestones as well as a contingent consideration related to future royalty stream payments. The maximum undiscounted amount of the performance and commercialization milestones is US dollars (“USD”) 445 million as of June 30, 2016. Since arising from the acquisition, the contingent considerations are re-measured at fair value at each reporting date using Level 3 inputs. The resulting fair value adjustments of the acquisition contingencies are included in cost of sales. Since denominated in USD, the contingent considerations are revalued at each reporting date.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 25. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make judgments, assumptions and estimates that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. On an on-going basis, management evaluates its estimates, including those related to revenue recognition for contract revenue, allowance for doubtful accounts, stock-based compensation, inventory and costs of goods sold, intangible assets, clinical trial and rebate accruals, impairment of indefinite lived intangibles including goodwill, provisions, contingent considerations arising from acquisitions, loss contingencies and income taxes. The Group bases its estimates on historical experience and on various market-specific and other relevant assumptions that are believed to be reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ significantly from these estimates..

(26) 26. As of June 30, 2016, the fair value of the contingent considerations amounts to CHF 91.4 million (USD 93.4 million). Thereof, CHF 4.2 million (USD 4.4 million) are included in other current liabilities and CHF 87.2 million (USD 89 million) are disclosed as contingent considerations in the consolidated balance sheet. The table below states the changes in the contingent considerations for the six months ended June 30, 2016: Contingent consideration expense USD CHF 7,480 7,309. December 31, 2015 USD CHF 88,006 87,586. Settlements USD CHF (2,082) (2,036). Foreign currency translation CHF (1,431). USD 93,404. June 30, 2016 CHF 91,427. In determining the fair value of the contingent considerations the Group evaluates probabilities and timing of milestone events’ occurrence. Further, management develops cash flow projections on expected net revenues and royalty payments, which are then deferred, probability-weighted and adjusted for the time value of money in order to derive their reporting date fair value. As of June 30, 2016, the Group applied a discount rate of 8% for the contingent consideration arising from the royalty streams. This rate corresponds to the weighted-average costs of capital (“WACC”) and is calculated by weighting the required returns for interest-bearing debt and common equity capital in proportion to their estimated percentages in an expected capital structure. Management believes that the WACC appropriately captures a market participant’s view of the risk associated with the expected contingent consideration payments because such payments are impacted by broader, non-diversifiable industry and business risks which are not completely captured in developing the probability weightedpayment estimates. Further, the Group used a discount rate of 5.3% for determination of the fair value of the contingent consideration related to the commercialization milestones. This discount rate corresponds to the global market participants’ required return on debt capital considered in the WACC calculation, which management believes is equivalent to the market participant’s costs of borrowing. The following table provides the significant unobservable inputs applied on the fair value measurement of the contingent considerations for the periods presented:. Contingent considerations arising from acquisitions. Assumptions Valuation technique. Unobservable input Probability of performance milestones' payments Probability of commercialization milestones Probability of royalty payments Discounted cash flows Expected period of payments Discount rate commercialization milestones Discount rate. June 30, 2016 December 31, 2015 0% 0% 0%-90% 0%-90% 100% 100% 2016-2028 2016-2028 5.3% 5.9% 8% 9%. If the actual results deviate significantly from the developed projections, the net income of the Group may be adversely affected in future periods. In addition, an increase in the probability of performance milestone payments or a significant decrease in the discount rate could lead to a significantly higher fair value measurement of the contingent considerations in the period of revaluation. None of the changes in the unobservable inputs would lead to a change of the current maximum undiscounted amount of the performance milestones’ contingencies of USD 445 million. If the performance-based milestone for 2016 is not achieved, the maximum undiscounted amount of the performance milestones’ contingencies will be decreased to USD 395 million as of December 31, 2016. Goodwill Except for the effect of foreign currency translation, the net carrying amount of goodwill has not been adjusted in the current reporting period: Balance at January 1 134,494. Translation effects (398). Balance at June 30 134,096. .. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 26. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Level 3 fair value measurement.

(27) 27. NOTE 3. NONCONTROLLING INTERESTS AND VARIABLE INTEREST ENTITIES Vaxxilon Ltd (“Vaxxilon”) In 2015, the Group established a new majority owned company, Vaxxilon Ltd., which aims to discover, develop, and commercialize synthetic carbohydrate vaccines. Vaxxilon was incorporated under the laws of Switzerland together with the Max Planck Society (“MPS”), a publicly funded non-profit organization in Munich, Germany, and Seeberger Science GmbH, a private company in Kleinmachnow, Germany. The Group is the principal investor and majority shareholder holding 73.9% of the voting interests of the company. Vaxxilon has licensed exclusive rights to multiple preclinical vaccine candidates and additional technologies from Max-Planck Innovation GmbH (“MPI”), Munich, Germany, the technology transfer office of MPS. As of June 30, 2016, CHF 3.7 million net assets and CHF 0.4 million research and development (“R&D”) expenses allocated to minority shareholders have been disclosed as noncontrolling interests. Other In addition, there are other noncontrolling interests, which are variable interest entities (“VIE”), where the Group is the primary beneficiary and which are not material to the Group. Note 4. Licensing and collaborative agreements provides further information on the Group’s involvement with VIEs. The following table reflects the effect of noncontrolling interests on the Group’s equity:. At January 1, 2015. Equity attributable to Actelion's shareholders 1,920,423. Equity attributable to noncontrolling interests -. 561,037 (9,178) 551,859. (3,924) 1,136 (2,788). 561,037 (13,102) 1,136 549,071. (1,154,481). -. (1,154,481). 1,317,801. (2,788). 1,315,013. 362,239 (1,529) 360,710. (915) (915). 362,239 (2,444) 359,795. (331,744). -. (331,744). 1,346,767. (3,703). 1,343,064. Net income of the Group Net (loss) from noncontrolling interests Contributions from owners Change from net income (loss) and contributions from owners Other changes in equity1 At December 31, 2015 Net income of the Group Net (loss) from noncontrolling interests Change from net income (loss) and contributions from owners Other changes in equity1 At June 30, 2016. 1,920,423. Details on other changes in equity are provided in the consolidated statements of changes in equity.. NOTE 4. LICENSING AND COLLABORATIVE AGREEMENTS Endo International plc (“Endo”) In February 2012, the Group entered into a long-term collaborative agreement with Auxilium Pharmaceuticals, Inc. (“Auxilium”) to develop, supply and commercialize Xiaflex® for the potential treatment of Dupuytren’s contracture and Peyronie’s disease in Canada, Australia, Brazil and Mexico upon receipt of the respective regulatory approvals. During 2013 and 2014, the Group notified Auxilium that it would no longer pursue approval and commercialization in Mexico and Brazil. In January 2015, Endo acquired Auxilium and consequently assumed Auxilium’s rights and obligations in conjunction with the collaboration with Actelion. In July 2016, the parties mutually agreed to terminate the collaboration for Canada and agreed upon certain transition services to be provided by Actelion until approval of the transfer of the drug identification. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 27. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. 1. Total equity.

(28) 28. number by the regulatory authority in Canada to Endo. For Australia the collaboration agreement remains in effect until a new agreement is reached. In consideration for the rights returned by the Group to Endo, Actelion received a cash payment of USD 5.5 million (CHF 5.4 million) in July 2016. Nippon Shinyaku Co., Ltd. (“Shinyaku”) In April 2008, the Group entered into a worldwide (excluding Japan) exclusive license agreement with Shinyaku on selexipag, a novel orally available selective IP receptor agonist originally discovered and synthesized by Shinyaku for the treatment of PAH. Upfront and milestone payments made during the development phase were expensed as R&D costs. Milestone payments made upon approval of the respective regulatory authority are capitalized and amortized over the respective patent period. Following approval of Uptravi® (selexipag) by the European Commission in May 2016, the Group made a milestone payment of USD 20 million (CHF 19.5 million) to Shinyaku, which has been capitalized and will be amortized over the expected patent period. The Group will make further milestone payments for the second indication totaling up to USD 40 million depending on achievement of certain development and regulatory approval milestones. Furthermore, Shinyaku will be entitled to receive additional payments of up to USD 50 million upon achievement of predetermined sales targets by the Group. The Group also pays a mid-teen royalty to Shinyaku on net sales of products, with selexipag as the active ingredient.. ReveraGen Biopharma Inc. (“Reveragen”) In April 2016, the Group signed a collaborative agreement with ReveraGen Biopharma Inc., a corporation organized under the laws of Delaware, US, to research and co-develop vamorolone, a non-hormonal steroid modulator for the treatment of Duchene Muscular Dystrophy (“DMD”). The agreement will only enter into full force upon certain conditions being met. Upon signature of the agreement, the Group provided a refundable advance payment of USD 2 million (CHF 1.9 million) to Reveragen which has been expensed as R&D costs. The Group will pay a further USD 8 million upon satisfaction of the outstanding conditions. Under the terms of the agreement the Group will also support R&D activities up to a maximum amount of USD 1 million p.a. for the next three years. In addition, the Group acquired an option to obtain the exclusive worldwide license rights on vamorolone at any time but not later than upon receipt of the Phase IIb study results. If the option is exercised, Reveragen will be entitled to receive up to USD 165 million in development and regulatory milestones for the DMD indication and up to USD 190 million for three further indications depending on achievement of certain development, regulatory approval and commercialization milestones. Furthermore, the Group will pay increasing tiered double-digit royalties on the net sales of vamorolone. The Group evaluated the contract with Reveragen under the requirements of the VIE model (See Note 1. Description of business and summary of significant accounting policies in the audited consolidated financial statements for the twelve months ended December 31, 2015) and determined that Reveragen is a variable interest entity but Actelion is not the primary beneficiary. Therefore, the Group would not have any additional financial exposure due to its involvement with Reveragen as long as the contingent conditions have not been met.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 28. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. In conjunction with the semi-exclusive co-promotion and co-development agreement for macitentan in Japan (See Note 5. Collaborative agreements in the audited consolidated financial statements for the twelve months ended December 31, 2015), the Group recognized a royalty expense of Japanese yen (“JPY”) 428.5 million (CHF 5.2 million), which has been included in cost of sales for the six months ended June 30, 2016. Further amounts exchanged between the collaborators were not material to the Group for the six months ended June 30, 2016 and 2015..

(29) 29. NOTE 5. EARNINGS PER SHARE The following table sets forth the basic and diluted earnings per share calculations at: June 30, 2016 Basic. Numerator Net income attributable to Actelion's shareholders Net income available for earnings per share calculation Denominator Weighted-average number of common shares Incremental shares for assumed conversion of stock-based awards Total weighted-average equivalent shares Earnings per share attributable to Actelion's shareholders. Diluted. June 30, 2015 Basic. Diluted. 360,710 360,710. 360,710 360,710. 287,425 287,425. 287,425 287,425. 105,123,997 105,123,997. 105,123,997 3,454,364 108,578,361. 110,480,138 110,480,138. 110,480,138 4,261,181 114,741,319. 3.43. 3.32. 2.60. 2.50. For the six months ended June 30, 2016, 52 shares that would have had an anti-dilutive effect were excluded from the EPS calculation (June 30, 2015: 110,942). The following table reconciles the number of outstanding to the number of weighted-average common shares used in the earnings per share calculation: June 30, 2016. June 30, 2015. Weighted-average number of common shares Number of common shares issued Number of treasury shares held Number of outstanding common shares. 114,128,427 (8,942,630) 105,185,797. 114,128,427 (7,116,146) 107,012,281. Weighted-average treasury shares' equivalents Weighted-average number of common shares. (61,800) 105,123,997. 3,467,857 110,480,138. NOTE 6. CASH AND CASH EQUIVALENTS. June 30, 2016 404,464 13,942 418,406. Cash� Short-term bank deposits Total¹ 1. December 31, 2015 249,182 155,710 404,892. Includes restricted cash and cash equivalents of CHF 1.1 million as of June 30, 2016, and CHF 1 million as of December 31, 2015.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 29. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Cash and cash equivalents consisted of the following at:.

(30) 30. NOTE 7. FINANCIAL ASSETS AND LIABILITIES The following table shows the Group’s financial assets and liabilities carried at fair value:. Financial assets carried at fair value1 Cash and cash equivalents Derivative financial instruments2 Total Financial liabilities carried at fair value1 Derivative financial instruments3 Contingent considerations Total. Total. June 30, 2016 Level 1. Level 2. 418,406 582 418,988. 418,406 418,406. 582 582. 404,892 883 405,775. 404,892 404,892. 883 883. 5,630 5,630 See Note 2. Acquisitions for Level 3 disclosures 5,630 5,630. 8,230. -. 8,230. 8,230. -. 8,230. 1. For the six months ended June 30, 2016 and 2015, no transfers to or from Level 1 and Level 2 took place.. 2. Included in other current assets.. 3. Included in other current liabilities.. December 31, 2015 Total Level 1. Level 2. Derivative financial instruments A significant portion of the Group’s operations is denominated in foreign currencies, principally in USD, Euros (“EUR”) and JPY. Exposures to fluctuations in foreign currencies may adversely impact the Group’s net income and net assets. The Group uses derivatives to partially offset these risks. The Group’s derivative instruments, while providing economic hedges under the Group’s policies, do not qualify for hedge accounting as defined by the Derivatives and Hedging Topic of FASB ASC (“ASC 815”). Note 14. Concentrations provides further information on the foreign currencies exposure of the Group. Derivative financial instruments are deployed to manage foreign currency and interest rate exposures and are not used for speculative purposes.. The Group does not regularly enter into agreements containing embedded derivatives. However, when such agreements are executed, an assessment is made based on the criteria set out in ASC 815 to determine if the derivative is required to be bifurcated and accounted for as a standalone derivative instrument. If the derivative is bifurcated, changes in fair value of the instrument are reported in other financial income (expense), net in the consolidated income statements. The following tables reflect the contract or underlying principal amounts and fair values of derivative financial instruments, analyzed by type of contract as of June 30, 2016 and 2015. The underlying principal amount indicates the volume of outstanding positions at the balance sheet date and does not represent an amount at risk.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 30. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The Group records all derivatives on the balance sheet at fair value. Changes in fair value as well as gains and losses realized on derivative financial instruments are reported in other financial income (expense), net in the consolidated income statements. The Group determines the fair value of these derivative contracts using an income-based industry standard valuation model which utilizes counterparty information and other observable inputs derived from Reuters or Bloomberg, which include foreign currency spot rates, forwards points and stated maturities. Fair value amounts recognized for the right to reclaim and the obligation to return cash collateral, arising from derivative instruments recognized at fair value and executed with the same counterparty under a master netting arrangement, are not offset. Recognized financial instruments subject to an enforceable master netting arrangement are presented gross in the consolidated balance sheets..

(31) 31. Location of gain or (loss) recognized in income on derivatives. Income Statement Forward rate contracts Amount of gain recognized in income on derivatives Amount of (loss) recognized in income on derivatives Total. Derivative financial instruments not designated as hedging instruments June 30, 2016. June 30, 2015. Other financial income (expense), net Other financial income (expense), net. 6,180 (13,739) (7,559). 44,503 (13,207) 31,296. Balance Sheet Location. June 30, 2016. December 31, 2015. Other current assets Other current liabilities. 582 (5,630) (5,048). 883 (8,230) (7,347). June 30, 2016. June 30, 2015. 255,914. 272,721. Balance Sheet Forward rate contracts Forward rate contracts Total Underlying principal amount Forward rate contracts. As at June 30, 2016, the majority of the foreign currency forwards consists of privately negotiated OTC contracts with maturities of eight months or less and entered into with counterparties with a Standard & Poor’s (“S&P”) credit rating ranging from BBB+ to AA. As at December 31, 2015, all foreign currency forwards were privately negotiated OTC contracts with maturities of twelve months or less and entered into with counterparties with a Standard & Poor’s (“S&P”) credit rating ranging from A to AA. For the six months ended June 30, 2016, the total net loss recognized on derivative financial instruments amounts to CHF 7.6 million (June 30, 2015: net gain of CHF 31.3 million) and includes CHF 2.3 million gross unrealized gains on the forward rate contracts (June 30, 2015: gross unrealized gains of CHF 39.2 million). In addition to the net loss recognized on derivatives of CHF 7.6 million, other financial income (expense), net contains foreign exchange net transaction gains of CHF 9.7 million for the six months ended June 30, 2016 (June 30, 2015: net transaction losses CHF 43.1 million). For each of the six months ended June 30, 2016, and the twelve months ended December 31, 2015, the Group did not have any derivatives which were offset in accordance with ASC 210-20-45 or ASC 815-10-45. The following table shows the derivatives subject to an enforceable master netting arrangement:. December 31, 2015 Forward rate contracts Total. Gross amount disclosed. Asset derivatives Netting adjustment. Liability derivatives Gross amount Netting disclosed adjustment. Net amount. 118 118. (118) (118). -. 2,382 2,382. (118) (118). 2,264 2,264. -. -. -. 1,645 1,645. -. 1,645 1,645. Net amount. The right to offset these asset and liability derivatives is provided to both the Group and the financial institution only in case of predefined default events and upon a consequential early contract termination. None of these events occurred as of June 30, 2016, and December 31, 2015. Credit facilities At June 30, 2016, the Group had unused credit lines of: a) CHF 5.7 million as margin cover for over-the-counter trades; b) CHF 3.5 million deployable for issuance of letters of credit; c) JPY 500 million (CHF 4.8 million) established as an overdraft facility and d) CHF 21.8 million as senior mortgage certificates.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 31. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. Derivative financial instruments subject to a master netting arrangement June 30, 2016 Forward rate contracts Total.

(32) 32. NOTE 8. INVENTORIES Inventories consisted of the following at: June 30, 2016 31,142 89,884 121,026. Semi-finished products Finished products Total. December 31, 2015 30,510 31,597 62,107. Semi-finished products primarily include active pharmaceutical ingredients used in production of finished goods. The increase in inventory is mainly related to the launch of Uptravi® (selexipag) in 2016. In accordance with the terms of the license agreement with Shinyaku (See Note 4. Licensing and collaborative agreements), the Group revalued the existing stock of the compound to reflect the estimated supply price, which is based on a percentage of annual net sales. Consequently, the final supply price can be only retroactively determined and is currently based on estimates.. NOTE 9. ACCRUED EXPENSES Accrued expenses consisted of the following at: June 30, 2016 88,923 21,052 79,963 38,964 27,074 1,536 62,669 11,348 20,768 352,297. Personnel and compensation costs Accrued taxes Rebates and allowances Research and development Marketing and royalties Fixed assets Inventory Professional services Other accrued expenses Total. December 31, 2015 101,980 19,163 89,992 22,568 23,356 2,536 7,718 17,991 17,425 302,729. NOTE 10. COMMITMENTS, CONTINGENCIES AND GUARANTEES Commitments The Group has entered into capital commitments related to maintenance of the Group’s own facilities, which are expected to be paid within the next twelve months and which are not material to the Group. In the ordinary course of business the Group has entered into purchase commitments related to long-term manufacturing and supply agreements in the total amount of CHF 11.1 million for 2016, CHF 9.4 million for 2017, CHF 13.8 million for 2018, CHF 11.5 million for 2019 and CHF 11.5 million for 2020. A significant portion of the purchase commitments relates to. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016 INTERIM CONSOLIDATED FINANCIAL STATEMENTS 32. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The increase in accrued expenses was mainly related to the purchase price adjustments and obligations towards Shinyaku for the active ingredient of Uptravi® (selexipag). Note 4. Licensing and collaborative agreements provides further information on the collaboration with Shinyaku..

(33) 33. purchase obligations to Shinyaku for the active ingredient of Uptravi® (selexipag). Note 4. Licensing and collaborative agreements provides further details on the collaboration with Shinyaku. Contingencies The Group records accruals for loss contingencies, asserted or unasserted, to the extent that their occurrence is deemed to be probable and the related damages are estimable. If a range of liability is probable and estimable and some amount within the range appears to be a better estimate than any other amount within the range, the Group accrues that amount. If a range of liability is probable and estimable and no amount within the range appears to be a better estimate than any other amount within the range, the Group accrues the minimum of such probable range. Litigation claims that the Group might be involved in entail highly complex issues which are subject to substantial uncertainties and, therefore, the probability of loss and an estimation of damages are difficult to ascertain. Consequently, the Group cannot reasonably estimate the maximum potential exposure or the range of possible loss in excess of amounts accrued for loss contingencies. These assessments can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions (See Note 1. Basis of presentation). The Group’s assessments are based on estimates and assumptions that have been deemed reasonable by management. Litigation is inherently unpredictable, and excessive verdicts do occur. Although the Group believes to have substantial defenses in these matters, the Group could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.. US department of Justice Investigation A Group subsidiary, Actelion Pharmaceuticals US, Inc. ("Actelion US") received a subpoena on May 6, 2016, and a follow up subpoena on June 3 from the US Attorney’s Office for the District of Massachusetts. The subpoena requests documents related to Actelion US’ support to independent charitable organizations that provide financial assistance to Medicare patients, and documents related to pricing, marketing and sales strategies related to such financial assistance in the United States. The Group is aware of multiple other pharmaceutical companies receiving similar requests. The Group is cooperating fully with the US Authorities and is providing the documents requested pursuant to the subpoena. As of June 30, 2016, the investigation is ongoing, and the Group cannot reasonably estimate the timing of resolution and the final outcome.. Other contingencies. Guarantees In order to secure its obligations from derivative trading, cash pooling, overdraft facilities and forward transactions in foreign currencies, the Group has issued guarantees and a letter of indemnity to various financial institutions in the total amount of CHF 79.1 million. In the ordinary course of business the Group has entered into certain guarantee contracts and letters of credit amounting to CHF 8.8 million. The guarantees primarily relate to operating leases and credit lines for subsidiaries in foreign jurisdictions. Due to the nature of these arrangements, the Group has never been required to make payments under these contracts and does not expect any potential required future payments to be material.. HALF-YEAR FINANCIAL REPORT.. CONTENTS. FINANCIAL REVIEW. ACTELION INTERIM FINANCIAL REPORT 2016. INTERIM CONSOLIDATED FINANCIAL STATEMENTS. 33. WorldReginfo - e51d7904-b990-406b-866b-8e72feef6cd3. The Group is involved in commercial disputes and administrative actions in certain jurisdictions. The possible losses which might arise as a result of these disputes range from CHF 0 million to CHF 3.5 million. As of July 19, 2016, the date these consolidated financial statements were available to be issued, the Group cannot reasonably estimate the final outcome and the timing of resolution of these disputes..