Notes to Consolidated Financial Statements
Note 2 — Supplemental Financial Information
(dollars in millions) |
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Long-term Investments: |
2011 |
2010 |
2009 |
Equity securities |
$317 |
$240 |
$153 |
Note receivable from Boston Scientific, 4% interest |
— |
— |
880 |
Other |
61 |
62 |
100 |
Total |
$378 |
$302 |
$1,133 |
The judgment entered by the U.S. District Court for the Eastern District of Texas against Abbott in its litigation with New York University and Centocor, Inc. required Abbott to secure the judgment in the event that its appeal to the Federal Circuit court was unsuccessful in overturning the district court’s decision. In the first quarter of 2010, Abbott deposited $1.87 billion with an escrow agent and considered these assets to be restricted. On February 23, 2011, the Federal Circuit reversed the district court’s final judgment and found Centocor’s patent invalid. On April 25, 2011 Centocor petitioned the Federal Circuit to rehear and reconsider the decision. In June 2011 the Federal Circuit denied Centocor’s petition and the restrictions on the funds were lifted.
As discussed in Note 1, Other (income) expense, net, for 2011 includes a charge of $137 million to recognize the cumulative immaterial impacts to 2009 and 2010 relating to the change in year end for foreign subsidiaries. In addition, Other (income) expense, net, for 2011 includes $56 million of fair value adjustments and accretion in the contingent consideration related to the acquisition of Solvay’s pharmaceutical business. Other (income) expense, net, for 2009 includes the derecognition of a contingent liability of $797 million associated with the conclusion of the TAP Pharmaceutical Products Inc. joint venture. The contingent liability was established at the conclusion of the joint venture as Abbott agreed to remit cash to Takeda if certain research and development events were not achieved on the development assets retained by Takeda. In 2009, the research and development events were achieved and the contingent liability was derecognized. In addition, Other (income) expense, net for 2009 includes a $287 million gain from the settlement reached between Abbott and Medtronic, Inc. resolving all outstanding intellectual property litigation between the two parties and income from the recording of certain investments at fair value in connection with business acquisitions. Other (income) expense, net, for 2011, 2010 and 2009 also includes ongoing contractual payments from Takeda associated with the conclusion of the TAP joint venture.
(dollars in millions) |
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Other Accrued Liabilities: |
2011 |
2010 |
2009 |
Accrued rebates payable to government agencies |
$1,049 |
$900 |
$641 |
Accrued other rebates (a) |
1,238 |
862 |
668 |
All other (b) |
5,568 |
4,253 |
3,090 |
Total |
$7,855 |
$6,015 |
$4,399 |
|
(a) Accrued wholesaler chargeback rebates of $202, $216 and $217 at December 31, 2011, 2010 and 2009, respectively, are netted in trade receivables because Abbott’s customers are invoiced at a higher catalog price but only remit to Abbott their contract price for the products.
(b) 2011 includes $1,509 related to a previously disclosed government investigation and $400 for acquired in-process research and development. 2011 and 2010 includes acquisition consideration payable of $400 related to the acquisition of Piramal Healthcare Limited’s Healthcare Solutions business.
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(dollars in millions) |
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Post-employment Obligations and Other Long-term Liabilities: |
2011 |
2010 |
2009 |
Defined benefit pension plans and post-employment medical and dental plans for significant plans |
$3,301 |
$2,425 |
$2,394 |
Deferred income taxes |
703 |
1,112 |
165 |
All other (c) |
4,227 |
4,486 |
2,519 |
Total |
$8,231 |
$8,023 |
$5,078 |
|
(c) 2011 and 2010 includes acquisition consideration payable of $770 and $1,150, respectively, related to the acquisition of Piramal Healthcare Limited’s Healthcare Solutions business.
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