Abbott Laboratories 2015 Annual Report Download - page 45

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ABBOTT 2015 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
exchange bolivars into U.S. dollars. These mechanisms included
the CENCOEX, SICAD, and SIMADI rates, which stood at 6.3, 13.5,
and approximately 200, respectively, at December31, 2015. In 2015,
Abbott continued to use the CENCOEX rate of 6.3Venezuelan
bolivars to the U.S. dollar to report the results, financial position,
and cash flows related to its operations in Venezuela since Abbott
continued to qualify for this exchange rate to pay for the import
ofvarious products into Venezuela.
Revenue from operations in Venezuela represented approximately
2% of Abbott’s total net sales and pre-tax income totaled approxi-
mately $200 million in 2015 and $175 million in 2014. Abbott’s sales
in Venezuela primarily relate to the Nutritional and Established
Pharmaceuticals segments. Abbott had net monetary assets that are
subject to revaluation in Venezuela of approximately $440million
at December 31, 2015. Such assets are comprised primarily of cash.
On February 17, 2016, the Venezuelan government announced that
the three-tier exchange rate system will be reduced to two rates and
the ocial rate for food and medicine imports will be adjusted from
6.3 to 10 bolivars per U.S. dollar. As a result of the new 10bolivars
per U.S. dollar exchange rate, Abbott’s net monetary assets in
Venezuela will be subject to revaluation during the quarter ending
March 31, 2016, which will result in recognition of a foreign cur-
rency exchange loss in that period. Based on Abbott’s net monetary
assets subject to revaluation at December 31, 2015, remeasuring
these assets at a rate of 10 bolivars per U.S. dollar would result in a
foreign currency loss of approximately $165million. Abbott cannot
be certain that the Venezuelan government will not make further
revisions to the ocial exchange rate in the future which could
result in additional foreign currency losses.
The long-term investments in equity securities as of December 31,
2015 include 69.7million of ordinary shares of Mylan N.V. with a
market value of $3.771billion.
(inmillions) 2015 2014
Other Accrued Liabilities:
Accrued rebates payable to government agencies $÷«140 $÷÷«88
Accrued other rebates (a) 301 239
All other 2,602 2,551
Total $3,043 $2,878
(a) Accrued wholesaler chargeback rebates of $170million and $158million at December31,
2015 and 2014, 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.
(inmillions) 2015 2014
Post-employment Obligations and Other Long-term
Liabilities:
Defined benefit pension plans and post-employment
medical and dental plans for
significant plans $2,241 $2,875
Deferred income taxes 808 872
All other (b) 1,815 1,853
Total $4,864 $5,600
(b) 2015 and 2014 include approximately $600 million of net unrecognized tax benefits, as
well as approximately $148 million and $220 million, respectively, of acquisition
consideration payable.
Since January 2010, Venezuela has been designated as a highly
inflationary economy under U.S. GAAP. In 2014 and 2015, the
government of Venezuela operated multiple mechanisms to
NOTE5—ACCUMULATED OTHER COMPREHENSIVE INCOME
The components of the changes in accumulated other comprehensive income from continuing operations, net of income taxes, are as follows:
(inmillions)
Cumulative
Foreign Currency
Translation
Adjustments
Net Actuarial
Losses and Prior
Service Costs and
Credits
Cumulative
Unrealized Gains
on Marketable
Equity Securities
Cumulative Gains
on Derivative
Instruments
Designated as
Cash Flow Hedges Total
Balance at December 31, 2013 $÷÷(718) $(1,312) $÷«13 $÷÷«5 $(2,012)
Other comprehensive income (loss) before
reclassifications (2,206) (970) 4 106 (3,066)
(Income) loss amounts reclassified from accumulated
other comprehensive income (a) — 53 (16) (12) 25
Net current period comprehensive income (loss) (2,206) (917) (12) 94 (3,041)
Balance at December 31, 2014 (2,924) (2,229) 1 99 (5,053)
Impact of business dispositions 108 19 — — 127
Other comprehensive income (loss) before
reclassifications (2,013) 145 202 89 (1,577)
(Income) loss amounts reclassified from accumulated
other comprehensive income (a) — 107 (138) (124) (155)
Net current period comprehensive income (loss) (2,013) 252 64 (35) (1,732)
Balance at December 31, 2015 $(4,829) $(1,958) $÷«65 $÷«64 $(6,658)
(a) Reclassified amounts for foreign currency translation are recorded in the Consolidated Statement of Earnings as Net Foreign exchange loss (gain); gains (losses) on marketable equity securi-
ties are recorded as Other (income) expense and gains/losses related to cash flow hedges are recorded as Cost of product sold. Net actuarial losses and prior service cost is included as a
component of net periodic benefit plan cost—see Note 13 for additional information.