AbbVie 2014 Annual Report Download - page 76
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13NOV201221352027
Note 3 Supplemental Financial Information
.....................................................................................................................................................................................................................................................................................................................................................
Interest Expense, Net
years ended December 31 (in millions) 2014 2013 2012
Interest expense $429 $299 $104
Interest and dividend income (38) (21) (20)
Interest expense, net $391 $278 $ 84
Interest expense, net in 2014 included $141 million of financing related fees incurred in connection
with the terminated proposed combination with Shire.
Other Income, Net
Other income, net, includes income from the resolution of certain contractual agreements, fair value
adjustments to contingent consideration, and impairments of equity securities. Other income, net in 2014
primarily consisted of income of $34 million from the resolution of a contractual agreement.
Accounts Payable and Accrued Liabilities
as of December 31 (in millions) 2014 2013
Sales rebates $1,384 $1,401
Accounts payable 881 933
Due to Abbott Laboratories 536 876
Dividends payable 791 643
Salaries, wages and commissions 623 621
Royalty license arrangements 821 443
Other 1,918 1,531
Accounts payable and accrued liabilities $6,954 $6,448
Long-Term Liabilities
as of December 31 (in millions) 2014 2013
Deferred income taxes $ 630 $ 570
Pension and other post-employment benefits 2,220 1,628
Other 990 1,337
Long-term liabilities $3,840 $3,535
Note 4 Termination of Proposed Combination with Shire
.....................................................................................................................................................................................................................................................................................................................................................
On October 15, 2014, AbbVie’s board of directors withdrew its previous recommendation to AbbVie
stockholders in favor of a proposed combination with Shire plc, a company incorporated in Jersey (Shire),
and recommended stockholders vote against the proposed combination. On October 20, 2014, AbbVie and
Shire mutually agreed to terminate the proposed combination. During the year-ended December 31, 2014,
the company incurred transaction and financing-related costs totaling $1.8 billion, of which $1.7 billion was
recorded in SG&A expense and $141 million was recorded in interest expense. Included in SG&A expense
was a break fee of $1.6 billion, which is tax deductible, paid by AbbVie to Shire in October 2014 as a result
of the termination of the proposed combination. In addition, the company recorded $666 million of net
foreign exchange losses primarily due to undesignated forward contracts that were entered into to hedge
70 2014 Form 10-K