AbbVie 2012 Annual Report Download - page 78

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Long-Term Liabilities
as of December 31 (in millions) 2012 2011
Deferred income taxes $ 360 $ 646
Pension and other post-employment benefits 979 397
Other 900 617
Long-term liabilities $2,239 $1,660
Accumulated Other Comprehensive Income (Loss)
The net-of-tax components of AOCI, a component of parent company equity, were as follows.
as of December 31 (in millions) (brackets denote loss) 2012 2011
Cumulative foreign currency translation gain adjustments $ 181 $ 8
Pension and other post-employment benefits (511) (65)
Cumulative unrealized gains on marketable equity securities 1 26
Cumulative losses/gains on derivative instruments designated as cash flow hedges (21) 6
Accumulated other comprehensive loss $(350) $(25)
Note 4 Acquisitions, Collaborations and Other Arrangements
In 2012, 2011 and 2010, cash outflows related to acquisitions, collaborations and other arrangements
totaled $688 million, $273 million and $2.6 billion, respectively. AbbVie recorded IPR&D charges of
$288 million, $673 million and $313 million in 2012, 2011 and 2010, respectively. The following are the
more significant acquisitions and investments, including licensing and collaboration agreements, some of
which require contingent milestone payments.
Acquisitions
Solvay SA Pharmaceuticals
In February 2010, AbbVie acquired Solvay and certain other product rights for approximately
$1.9 billion, in cash, plus contingent payments of up to EUR 100 million per year if certain sales
milestones are met in 2011, 2012 and 2013. The total consideration was valued at $2.2 billion, which
includes the $1.9 billion cash payment plus the estimated fair value of the milestone-based contingent
payments of approximately $290 million. The estimated fair value of the contingent consideration was
based on the estimated probability of achieving the specified sales milestones discounted based on the
expected timing of payment. Subsequent changes to the fair value of contingent payments are
recognized in earnings.
This transaction provides AbbVie with a complementary pharmaceutical product portfolio including the
U.S. rights to AndroGel and Creon, worldwide rights to Duodopa, and various research and
development projects. AbbVie acquired control of this business on February 15, 2010, and the financial
results of the acquired operations are included in these financial statements beginning on that date. Net
sales of the acquired operations were approximately $1.1 billion in 2010. Had the Solvay acquisition
taken place on January 1, 2010, combined net sales and net earnings would not have been significantly
different from reported amounts. The acquisition was funded with cash and short-term investments.
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