Eli Lilly 2012 Annual Report Download - page 71

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59
Summary of Collaboration-Related Commission and Profit-Share Payments
The aggregate amount of commission and profit-share payments included in marketing, selling, and
administrative expense pursuant to the collaborations described above was $261.5 million, $219.2 million,
and $174.5 million for the years ended December 31, 2012, 2011, and 2010, respectively.
Note 5: Asset Impairments, Restructuring, and Other Special Charges
The components of the charges included in asset impairments, restructuring, and other special charges in
our consolidated statements of operations are described below.
2012 2011 2010
Severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 74.5 $ 251.8 $ 142.0
Asset impairments and other special charges . . . . . . . . . . . . . . . . . 206.6 149.6 50.0
Asset impairments, restructuring, and other special charges. . . . . $ 281.1 $ 401.4 $ 192.0
Severance costs for all years relate to initiatives to reduce our cost structure and global workforce.
For the year ended December 31, 2012, we incurred $206.6 million of asset impairments and other special
charges consisting of $122.6 million related to an intangible asset impairment for liprotamase (see Note 7)
net of the reduction of the related contingent consideration liability (see Note 6), $64.0 million related to the
recognition of an asset impairment associated with the decision to stop development of a delivery device
platform, and $20.0 million resulting from a change in our estimates of returned product related to the
withdrawal of Xigris from the market during the fourth quarter of 2011.
For the year ended December 31, 2011, we incurred $149.6 million of asset impairments and other special
charges primarily consisting of $85.0 million for returned product and contractual commitments related to
the withdrawal of Xigris from the market and $56.1 million related to our decision to vacate certain leased
premises, a decision that was as a result of our initiative to reorganize global operations, streamline various
functions of the business, and reduce the total number of employees.
For the year ended December 31, 2010, we incurred $50.0 million of asset impairments and other special
charges primarily consisting of lease termination costs and asset impairments outside the United States.
Note 6: Financial Instruments
Financial instruments that potentially subject us to credit risk consist principally of trade receivables and
interest-bearing investments. Wholesale distributors of life-sciences products account for a substantial
portion of trade receivables; collateral is generally not required. The risk associated with this concentration is
mitigated by our ongoing credit-review procedures and insurance. A large portion of our cash is held by a few
major financial institutions. We monitor our exposures with these institutions and do not expect any of these
institutions to fail to meet their obligations. Major financial institutions represent the largest component of
our investments in corporate debt securities. In accordance with documented corporate policies, we monitor
the amount of credit exposure to any one financial institution or corporate issuer. We are exposed to credit-
related losses in the event of nonperformance by counterparties to risk-management instruments but do not
expect any counterparties to fail to meet their obligations given their high credit ratings.
At December 31, 2012, we had outstanding foreign currency forward commitments to purchase 273.8 million
U.S. dollars and sell 210.0 million euro, and commitments to purchase 212.0 million euro and sell
277.4 million U.S. dollars, which will all settle within 45 days.
At December 31, 2012, approximately 100 percent of our total debt is at a fixed rate. We have converted
approximately 60 percent of our fixed-rate debt to floating rates through the use of interest rate swaps.