Abbott Laboratories 2015 Annual Report Download - page 44

ABBOTT 2015 ANNUAL REPORT
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet as of December 31, 2014. The held for disposition
balances as of December 31, 2015, relate to AbbVie assets and liabil-
ities. Prior period balance sheets are not adjusted when a business
is designated as being held for sale. The cash flows associated with
the developed markets branded generics pharmaceuticals and
animal health businesses up to the date of disposition are included
in Abbott’s Consolidated Statement of Cash Flows. The following is
a summary of the assets and liabilities held for disposition:
(inmillions)
December31 2015 2014
Cash and Trade receivables, net $÷54 $÷«501
Total inventories 43 254
Prepaid expenses and other receivables 8 137
Current assets held for disposition 105 892
Net property and equipment 1 125
Intangible assets, net of amortization — 804
Goodwill — 950
Deferred income taxes and other assets 1 55
Non-current assets held for disposition 2 1,934
Total assets held for disposition 107 2,826
Trade accounts payable 359 423
Salaries, wages, commissions and other accrued
liabilities 14 257
Current liabilities held for disposition 373 680
Post-employment obligations, deferred income
taxes and other long-term liabilities — 108
Total liabilities held for disposition $373 $÷«788
NOTE4—SUPPLEMENTAL FINANCIAL INFORMATION
Other (income) expense, net, for 2015 primarily relates to a
$207million gain on the sale of a portion of Abbott’s position in
Mylan N.V. stock and $79million of income resulting from a
decrease in the fair value of contingent consideration related to a
business acquisition. Abbott sold 40.25million of the 110million
ordinary shares of Mylan N.V. received in the sale of the developed
markets branded generics pharmaceuticals business to Mylan.
Abbott received $2.29billion in net proceeds from the sale of these
shares. As a result of this sale, Abbott’s ownership interest in Mylan
N.V. decreased from approximately 22% to approximately 14%.
Other (income) expense, net, for 2014 primarily relates to impair-
ment charges related to non-publically traded equity securities
partially oset by gains from the sales of equity securities. The loss
on the extinguishment of debt of $18million in 2014 relates to the
early redemption of approximately $500million of long-term notes.
The detail of various balance sheet components is as follows:
(inmillions) 2015 2014
Long-term Investments:
Equity securities $4,014 $212
Other 27 17
Total $4,041 $229
As a result of the disposition of the above businesses, the current
and prior years’ operating results of these businesses up to the
date of sale are reported as part of discontinued operations on
theEarnings from Discontinued Operations, net of taxes line in
the Consolidated Statement of Earnings. Discontinued operations
include an allocation of interest expense assuming a uniform ratio
of consolidated debt to equity for all of Abbott’s historical
operations.
The operating results of Abbott’s developed markets branded
generics pharmaceuticals and animal health businesses as well
asthe income tax benefit related to the businesses transferred to
AbbVie, which are being reported as discontinued operations
areas follows:
(inmillions)
Year Ended December31 2015 2014 2013
Net Sales
Developed markets generics
pharmaceuticals and animal
health businesses $256 $2,076 $2,191
AbbVie ———
Total $256 $2,076 $2,191
Earnings Before Tax
Developed markets generics
pharmaceuticals and animal
health businesses $÷13 $÷«505 $÷«480
AbbVie ———
Total $÷13 $÷«505 $÷«480
Net Earnings
Developed markets generics
pharmaceuticals and animal
health businesses $÷62 $÷«397 $÷«395
AbbVie 3166 193
Total $÷65 $÷«563 $÷«588
The net earnings of discontinued operations include income tax
benefits of $52million in 2015, $58million in 2014 and $108mil-
lion in 2013. 2015 includes $48million of tax benefits related to
theresolution of various tax positions related to prior years. 2014
and 2013 include $166million and $193million, respectively, of
taxbenefits as a result of the resolution of various tax positions
related to AbbVie’s operations for years prior to the separation.
The sale of the developed markets branded generics pharmaceuti-
cals and animal health business in 2015 resulted in the recognition
of a pretax gain of $2.840billion, tax expense of $1.088billion and
an after tax gain of $1.752billion. The tax provision includes
$667million of tax expense on certain current year funds earned
outside the U.S. related to the developed markets branded generics
pharmaceuticals businesses that were not designated as perma-
nently reinvested overseas.
The assets of the operations held for disposition and the liabilities
to be assumed in the disposition related to the businesses noted
above, as well as the AbbVie assets and liabilities discussed in
Note2 are classified as held for disposition in the Consolidated