MIME-Version: 1.0 X-Document-Type: Workbook Content-Type: multipart/related; boundary="----=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2" This document is a Single File Web Page, also known as a Web Archive file. If you are seeing this message, your browser or editor doesn't support Web Archive files. Please download a browser that supports Web Archive, such as Microsoft Internet Explorer. ------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Workbook.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"

This page should be opened with Microsoft Excel XP or newer.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet01.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Document And Entity Information (USD $)
12 Months Ended
Dec. 31, 2011
Feb. 10, 2012
Jun. 30, 2011
Document And Entity Information [Abstract]
Document Type 10-K
Amendment Flag false
Document Period End Date Dec 31, 2011
Document Fiscal Year Focus 2011
Document Fiscal Period Focus FY
Trading Symbol gild
Entity Registrant Name GILEAD SCIENCES INC
Entity Central Index Key 0000882095
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 757,315,361
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Public Float $ 29,933,970,092
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet02.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Assets
Cash and cash equivalents $ 9,883,777 $ 907,879
Short-term marketable securities 16,491 1,190,789
Accounts receivable, net of allowances of $205,990 at December 31, 2011 and $150,942 at December 31, 2010 1,951,167 1,621,966
Inventories 1,389,983 1,203,809
Deferred tax assets 208,155 279,339
Prepaid taxes 246,444 320,424
Prepaid expenses 95,922 67,632
Other current assets 126,846 116,244
Total current assets 13,918,785 5,708,082
Property, plant and equipment, net 774,406 701,235
Noncurrent portion of prepaid royalties 174,584 203,790
Noncurrent deferred tax assets 144,015 153,379
Long-term marketable securities 63,704 3,219,403
Intangible assets 2,066,966 1,425,592
Other noncurrent assets 160,674 181,149
Total assets 17,303,134 11,592,630
Liabilities and Stockholders' Equity
Accounts payable 1,206,052 803,025
Accrued government rebates 516,045 325,018
Accrued compensation and employee benefits 173,316 147,632
Income taxes payable 40,583 1,862
Other accrued liabilities 502,557 437,893
Deferred revenues 74,665 103,175
Current portion of convertible senior notes, net and other long-term obligations 1,572 646,345
Total current liabilities 2,514,790 2,464,950
Long-term deferred revenues 31,870 32,844
Long-term debt, net 7,605,734 2,838,573
Long-term income taxes payable 135,655 107,025
Other long-term obligations 147,736 27,401
Commitments and contingencies (Note 12)      
Stockholders' equity:
Preferred stock, par value $0.001 per share; 5,000 shares authorized; none outstanding 0 0
Common stock, par value $0.001 per share; 2,800,000 shares authorized; 753,106 and 801,998 shares issued and outstanding at December 31, 2011 and 2010, respectively 753 802
Additional paid-in capital 4,903,143 4,648,286
Accumulated other comprehensive income 58,200 30,911
Retained earnings 1,776,760 1,183,730
Total Gilead stockholders' equity 6,738,856 5,863,729
Noncontrolling interest 128,493 258,108
Total stockholders' equity 6,867,349 6,121,837
Total liabilities and stockholders' equity $ 17,303,134 $ 11,592,630
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet03.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Per Share data, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowances $ 205,990 $ 150,942
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 5,000 5,000
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 2,800,000 2,800,000
Common stock, shares issued 753,106 801,998
Common stock, shares outstanding 753,106 801,998
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet04.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Consolidated Statements Of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Revenues:
Product sales $ 8,102,359 $ 7,389,921 $ 6,469,311
Royalty revenues 268,827 545,970 491,818
Contract and other revenues 14,199 13,529 50,254
Total revenues 8,385,385 7,949,420 7,011,383
Costs and expenses:
Cost of goods sold 2,124,410 1,869,876 1,595,558
Research and development 1,229,151 1,072,930 939,918
Selling, general and administrative 1,241,983 1,044,392 946,686
Total costs and expenses 4,595,544 3,987,198 3,482,162
Income from operations 3,789,841 3,962,222 3,529,221
Interest and other income, net 66,581 60,287 42,397
Interest expense (205,418) (108,961) (69,662)
Income before provision for income taxes 3,651,004 3,913,548 3,501,956
Provision for income taxes 861,945 1,023,799 876,364
Net income 2,789,059 2,889,749 2,625,592
Net loss attributable to noncontrolling interest 14,578 11,508 10,163
Net income attributable to Gilead $ 2,803,637 $ 2,901,257 $ 2,635,755
Net income per share attributable to Gilead common stockholders - basic $ 3.62 $ 3.39 $ 2.91
Shares used in per share calculation - basic 774,903 856,060 904,604
Net income per share attributable to Gilead common stockholders - diluted $ 3.55 $ 3.32 $ 2.82
Shares used in per share calculation - diluted 790,118 873,396 934,109
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet05.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Consolidated Statements Of Stockholders' Equity (USD $)
In Thousands, except Share data
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Retained Earnings [Member]
Noncontrolling Interest [Member]
Total
Balance, value at Dec. 31, 2008 $ 910 $ 3,930,109 $ 41,240 $ 300,314 $ 193,010 $ 4,465,583
Balance, shares at Dec. 31, 2008 909,819,000
Contributions from (distributions to) noncontrolling interest 0 0 0 0 (44,754) (44,754)
Net income (loss) 0 0 0 2,635,755 (10,163) 2,625,592
Unrealized gain (loss) on available-for-sale securities, net of tax 0 0 15,868 0 0 15,868
Foreign currency translation adjustment 0 0 8,459 0 0 8,459
Unrealized gain (loss) on cash flow hedges, net of tax 0 0 (71,325) 0 0 (71,325)
Comprehensive income 0 0 0 0 0 2,578,594
Issuances under employee stock purchase plan, shares 932,000
Issuances under employee stock purchase plan, value 1 34,872 0 0 0 34,873
Stock option exercises, net, shares 12,067,000 12,071,000
Stock option exercises, net, value 12 187,843 0 0 0 187,855
Tax benefits from employee stock plans 0 88,368 0 0 0 88,368
Stock-based compensation, shares 227,000
Stock-based compensation, value 0 181,530 0 0 0 181,530
Assumption of stock options in connection with acquisition 0 15,655 0 0 0 15,655
Sale of warrants 0
Repurchases of common stock, shares (23,292,000)
Repurchases of common stock, value (23) (61,726) 0 (940,797) 0 (1,002,546)
Balance, value at Dec. 31, 2009 900 4,376,651 (5,758) 1,995,272 138,093 6,505,158
Balance, shares at Dec. 31, 2009 899,753,000
Contributions from (distributions to) noncontrolling interest 0 0 0 0 131,523 131,523
Net income (loss) 0 0 0 2,901,257 (11,508) 2,889,749
Unrealized gain (loss) on available-for-sale securities, net of tax 0 0 7,020 0 0 7,020
Foreign currency translation adjustment 0 0 (8,416) 0 0 (8,416)
Unrealized gain (loss) on cash flow hedges, net of tax 0 0 38,065 0 0 38,065
Comprehensive income 0 0 0 0 0 2,926,418
Issuances under employee stock purchase plan, shares 1,110,000
Issuances under employee stock purchase plan, value 1 32,306 0 0 0 32,307
Stock option exercises, net, shares 10,671,000 10,671,000
Stock option exercises, net, value 11 188,906 0 0 0 188,917
Tax benefits from employee stock plans 0 82,086 0 0 0 82,086
Stock-based compensation, shares 461,000
Stock-based compensation, value 0 200,595 0 0 0 200,595
Purchases of convertible note hedges 0 (362,622) 0 0 0 (362,622)
Sale of warrants 0 155,425 0 0 0 155,425
Deferred tax assets on convertible note hedges 0 39,093 0 0 0 39,093
Equity portion of convertible notes, net of issuance costs of $4,018 0 255,517 0 0 0 255,517
Repurchases of common stock, shares (109,997,000)
Repurchases of common stock, value (110) (319,671) 0 (3,712,799) 0 (4,032,580)
Balance, value at Dec. 31, 2010 802 4,648,286 30,911 1,183,730 258,108 6,121,837
Balance, shares at Dec. 31, 2010 801,998,000 801,998,000
Contributions from (distributions to) noncontrolling interest 0 0 0 0 (115,037) (115,037)
Net income (loss) 0 0 0 2,803,637 (14,578) 2,789,059
Unrealized gain (loss) on available-for-sale securities, net of tax 0 0 (43,276) 0 0 (43,276)
Foreign currency translation adjustment 0 0 (5,264) 0 0 (5,264)
Unrealized gain (loss) on cash flow hedges, net of tax 0 0 75,829 0 0 75,829
Comprehensive income 0 0 0 0 0 2,816,348
Issuances under employee stock purchase plan, shares 1,200,000
Issuances under employee stock purchase plan, value 1 35,012 0 0 0 35,013
Stock option exercises, net, shares 9,175,000 9,175,000
Stock option exercises, net, value 9 176,699 0 0 0 176,708
Tax benefits from employee stock plans 0 37,231 0 0 0 37,231
Stock-based compensation, shares   
Stock-based compensation, value 0 192,030 0 0 0 192,030
Sale of warrants 0
Repurchases of common stock, shares (59,267,000)
Repurchases of common stock, value (59) (186,115) 0 (2,210,607) 0 (2,396,781)
Balance, value at Dec. 31, 2011 $ 753 $ 4,903,143 $ 58,200 $ 1,776,760 $ 128,493 $ 6,867,349
Balance, shares at Dec. 31, 2011 753,106,000 753,106,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet06.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Consolidated Statements Of Stockholders' Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2010
Consolidated Statements Of Stockholders' Equity [Abstract]
Equity portion of convertible notes, issuance costs $ 4,018
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet07.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Consolidated Statements Of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Operating activities:
Net income $ 2,789,059 $ 2,889,749 $ 2,625,592
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense 72,187 67,240 64,560
Amortization expense 230,045 198,237 148,384
Stock-based compensation expenses 192,378 200,041 180,684
In-process research and development impairment 26,630 136,000 0
Excess tax benefits from stock-based compensation (40,848) (81,620) (80,186)
Tax benefits from employee stock plans 37,231 82,086 88,368
Deferred income taxes 64,061 12,152 (42,013)
Other non-cash transactions 47,931 10,408 64,456
Changes in operating assets and liabilities:
Accounts receivable, net (375,736) (348,875) (356,462)
Inventories (200,793) (161,190) (75,266)
Prepaid expenses and other assets (13,959) (70,466) (65,667)
Accounts payable 428,944 (4,453) 203,641
Income taxes payable 110,771 (185,733) 166,334
Accrued liabilities 300,593 120,065 109,026
Deferred revenues (29,484) (29,728) 48,603
Net cash provided by operating activities 3,639,010 2,833,913 3,080,054
Investing activities:
Purchases of marketable securities (5,127,790) (5,502,687) (2,614,046)
Proceeds from sales of marketable securities 8,649,752 3,033,893 1,440,509
Proceeds from maturities of marketable securities 788,395 683,927 435,510
Acquisitions, net of cash acquired (588,608) (91,000) (1,247,816)
Capital expenditures and other (131,904) (61,884) (230,057)
Net cash provided by (used in) investing activities 3,589,845 (1,937,751) (2,215,900)
Financing activities:
Proceeds from issuances of senior notes, net of issuance costs 4,660,702 0 0
Proceeds from issuances of convertible notes, net of issuance costs 0 2,462,500 0
Proceeds from sale of warrants 0 155,425 0
Purchases of convertible note hedges 0 362,622 0
Proceeds from credit facility 0 500,000 400,000
Repayments of credit facility 0 (500,000) (400,000)
Proceeds from issuances of common stock 211,737 221,223 222,728
Repurchases of common stock (2,383,132) (4,022,593) (998,495)
Extinguishment of long-term debt (649,987) 0 (305,455)
Repayments of long-term obligations (1,562) (5,786) (5,648)
Excess tax benefits from stock-based compensation 40,848 81,620 80,186
Contributions from (distributions to) noncontrolling interest (115,037) 131,523 (44,754)
Net cash provided by (used in) financing activities 1,763,569 (1,338,710) (1,051,438)
Effect of exchange rate changes on cash (16,526) 77,469 940
Net change in cash and cash equivalents 8,975,898 (365,079) (186,344)
Cash and cash equivalents at beginning of period 907,879 1,272,958 1,459,302
Cash and cash equivalents at end of period 9,883,777 907,879 1,272,958
Supplemental disclosure of cash flow information:
Interest paid 62,180 15,748 8,990
Income taxes paid $ 621,025 $ 1,129,577 $ 746,224
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet08.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Organization And Summary Of Significant Accounting Policies
12 Months Ended
Dec. 31, 2011
Organization And Summary Of Significant Accounting Policies [Abstract]
Organization And Summary Of Significant Accounting Policies
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Overview

Gilead Sciences, Inc. (Gilead, we or us), incorporated in Delaware on June 22, 1987, is a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines in areas of unmet medical need. With each new discovery and experimental drug candidate, we seek to improve the care of patients suffering from life-threatening diseases around the world. Gilead's primary areas of focus include human immunodeficiency virus (HIV)/AIDS, liver diseases such as hepatitis B virus (HBV) and hepatitis C virus (HCV) and serious cardiovascular/metabolic and respiratory conditions. Headquartered in Foster City, California, we have operations in North America, Europe and Asia Pacific. We continue to seek to add to our existing portfolio of products through our internal discovery and clinical development programs and through a product acquisition and in-licensing strategy.

Our product portfolio is comprised of Atripla®, Truvada®, Viread®, Emtriva®, Complera®/Eviplera®, Hepsera®, AmBisome®, Letairis®, Ranexa®, Cayston® and Vistide®. In addition, we also sell and distribute certain products through our corporate partners under royalty-paying collaborative agreements. For example, F. Hoffmann-La Roche Ltd (together with Hoffmann-La Roche Inc., Roche) markets Tamiflu®; GlaxoSmithKline Inc. (GSK) markets Hepsera and Viread in certain territories outside of the United States; GSK also markets Volibris® outside of the United States; Astellas Pharma US, Inc. markets AmBisome in the United States and Canada; Astellas US LLC markets Lexiscan® injection in the United States; Rapidscan Pharma Solutions, Inc. markets Rapiscan in certain territories outside of the United States; Menarini International Operations Luxembourg SA markets Ranexa in certain territories outside of the United States; and Japan Tobacco Inc. (Japan Tobacco) markets Truvada, Viread and Emtriva in Japan.

 

Shipping and Handling Costs

Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of goods sold in our Consolidated Statements of Income.

Research and Development Expenses

Major components of research and development (R&D) expenses consist of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by contract research organizations (CROs), materials and supplies, licenses and fees, milestone payments under collaboration arrangements and overhead allocations consisting of various support and facilities related costs.

We charge R&D costs, including clinical study costs, to expense when incurred. Clinical study costs are a significant component of R&D expenses. Most of our clinical studies are performed by third-party CROs. We monitor levels of performance under each significant contract including the extent of patient enrollment and other activities through communications with our CROs. We accrue costs for clinical studies performed by CROs over the service periods specified in the contracts and adjust our estimates, if required, based upon our ongoing review of the level of effort and costs actually incurred by the CROs. We validate our accruals quarterly with our vendors and perform detailed reviews of the activities related to our significant contracts. Based upon the results of these validation processes, we assess the appropriateness of our accruals and make any adjustments we deem necessary to ensure that our expenses reflect the actual effort incurred by the CROs.

All of our material CRO contracts are terminable by us upon written notice and we are generally only liable for actual effort expended by the CRO and certain non-cancelable expenses incurred at any point of termination. Amounts paid in advance related to uncompleted services will be refunded to us if a contract is terminated. Some contracts may include additional termination payments that become due and payable if we terminate the contract. Such additional termination payments are only recorded if it becomes probable that a contract will be terminated.

Advertising Expenses

We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $116.6 million in 2011, $116.5 million in 2010 and $108.1 million in 2009.

   

Net Income Per Share Attributable to Gilead Common Stockholders

Basic net income per share attributable to Gilead common stockholders is calculated based on the weighted-average number of shares of our common stock outstanding during the period. Diluted net income per share attributable to Gilead common stockholders is calculated based on the weighted-average number of shares of our common stock outstanding and other dilutive securities outstanding during the period. The potential dilutive shares of our common stock resulting from the assumed exercise of outstanding stock options, restricted stock units and performance shares and the assumed exercise of warrants relating to the convertible senior notes due in May 2011 (May 2011 Notes), May 2013 (May 2013 Notes), May 2014 (May 2014 Notes) and May 2016 (May 2016 Notes) (collectively, the Convertible Notes) are determined under the treasury stock method.

Because the principal amount of the Convertible Notes will be settled in cash, only the conversion spread relating to the Convertible Notes is included in our calculation of diluted net income per share attributable to Gilead common stockholders. Our common stock resulting from the assumed settlement of the conversion spread of the Convertible Notes has a dilutive effect when the average market price of our common stock during the period exceeds the conversion prices of $38.75, $38.10, $45.08 and $45.41 for the May 2011 Notes, May 2013 Notes, May 2014 Notes and May 2016 Notes, respectively.

In May 2011, our May 2011 Notes matured and as a result, we have only considered their impact for the period they were outstanding on our net income per share calculations. In August 2011, the warrants related to our May 2011 Notes expired and as a result, we have only considered their impact for the period they were outstanding on our net income per share calculations.

For 2011, 2010 and 2009, the average market prices of our common stock exceeded the conversion prices of the May 2011 and May 2013 Notes and the dilutive effects are included in the accompanying table. For 2011, 2010 and 2009, the average market prices of our common stock did not exceed the conversion prices of the May 2014 Notes and May 2016 Notes and therefore, these notes did not have a dilutive effect on our net income per share for those periods.

Warrants relating to the May 2011 Notes, May 2013 Notes, May 2014 Notes and May 2016 Notes have a dilutive effect when the average market price of our common stock during the period exceeds the warrants' exercise prices of $50.80, $53.90, $56.76 and $60.10, respectively. The average market prices of our common stock during 2011, 2010 and 2009 did not exceed the warrants' exercise prices relating to any of the Convertible Notes; therefore, these warrants did not have a dilutive effect on our net income per share for those periods.

Stock options to purchase approximately 21.1 million, 22.5 million and 17.4 million weighted-average shares of our common stock were outstanding during 2011, 2010 and 2009, respectively, but were not included in the computation of diluted net income per share attributable to Gilead common stockholders because their effect was antidilutive.

The following table is a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share attributable to Gilead common stockholders (in thousands):

 

                         
    Year Ended December 31,  
    2011     2010     2009  

Numerator:

                       

Net income attributable to Gilead

  $ 2,803,637      $ 2,901,257      $ 2,635,755   
   

 

 

   

 

 

   

 

 

 

Denominator:

                       

Weighted-average shares of common stock outstanding used in the calculation of basic net income per share attributable to Gilead common stockholders

    774,903        856,060        904,604   

Effect of dilutive securities:

                       

Stock options and equivalents

    14,248        16,606        23,850   

Conversion spread related to the May 2011 Notes

    187        222        2,684   

Conversion spread related to the May 2013 Notes

    780        508        2,971   
   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding used in the calculation of diluted net income per share attributable to Gilead common stockholders

    790,118        873,396        934,109   
   

 

 

   

 

 

   

 

 

 

 

Stock-Based Compensation

Share-based payments to employees and directors are recognized in the Consolidated Statements of Income based on their fair values and the benefit of tax deductions in excess of recognized compensation cost are reported in the Consolidated Statements of Cash Flows as a financing activity. The calculated pool of excess tax benefits is recorded as part of additional paid-in capital (APIC).

 

Cash and Cash Equivalents

We consider highly liquid investments with insignificant interest rate risk and an original maturity of three months or less on the purchase date to be cash equivalents. We may enter into overnight repurchase agreements (repos) under which we purchase securities with an obligation to resell them the following day. Securities purchased under agreements to resell are recorded at face value and reported as cash and cash equivalents. Under our investment policy, we may enter into repos with major banks and authorized dealers provided that such repos are collateralized by U.S. government securities with a fair value of at least 102% of the fair value of securities sold to us. Other eligible instruments under our investment policy that are included in cash equivalents include commercial paper, money market funds and other bank obligations.

 

Marketable and Nonmarketable Securities

We determine the appropriate classification of our marketable securities, which consist primarily of debt securities and which include auction rate securities and variable rate demand obligations, at the time of purchase and reevaluate such designation at each balance sheet date. All of our marketable securities are considered as available-for-sale and carried at estimated fair values and reported in either cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity. Interest and other income, net, includes interest, dividends, amortization of purchase premiums and discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. We regularly review all of our investments for other-than-temporary declines in fair value. Our review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost basis. When we determine that the decline in fair value of an investment is below our accounting basis and this decline is other-than-temporary, we reduce the carrying value of the security we hold and record a loss for the amount of such decline.

As a result of entering into collaborations, from time to time, we may hold investments in non-public companies. We record these nonmarketable securities at cost in other noncurrent assets, less any amounts for other-than-temporary impairment. We regularly review our securities for indicators of impairment. Investments in nonmarketable securities are not material for the periods presented.

 

Concentrations of Risk

We are subject to credit risk from our portfolio of cash equivalents and marketable securities. Under our investment policy, we limit amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. We are not exposed to any significant concentrations of credit risk from these financial instruments. The goals of our investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash flow requirements; and a competitive after-tax rate of return.

 

We are also subject to credit risk from our accounts receivable related to our product sales. The majority of our trade accounts receivable arises from product sales in the United States and Europe. As of December 31, 2011, our accounts receivable in Southern Europe, specifically Greece, Italy, Portugal and Spain totaled approximately $1.10 billion, of which $612.4 million were greater than 120 days past due and $250.7 million were greater than 365 days past due. To date, we have not experienced significant losses with respect to the collection of our accounts receivable. We believe that our allowance for doubtful accounts was adequate at December 31, 2011.

Certain of the raw materials and components that we utilize in our operations are obtained through single suppliers. Certain of the raw materials that we utilize in our operations are made at only one facility. Since the suppliers of key components and raw materials must be named in a new drug application (NDA) filed with the U.S. Food and Drug Administration (FDA) for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from our suppliers were interrupted for any reason, we may be unable to ship our commercial products or to supply any of our product candidates for clinical trials.

Accounts Receivable

Trade accounts receivable are recorded net of allowances for wholesaler chargebacks related to government rebate programs, cash discounts for prompt payment, doubtful accounts and sales returns. Estimates for wholesaler chargebacks for government rebates, cash discounts and sales returns are based on contractual terms, historical trends and our expectations regarding the utilization rates for these programs. Estimates for our allowance for doubtful accounts is determined based on existing contractual payment terms, historical payment patterns of our customers and individual customer circumstances, an analysis of days sales outstanding by geographic region and a review of the local economic environment and its potential impact on government funding and reimbursement practices. Historically, the amounts of uncollectible accounts receivable that have been written off have been insignificant and consistent with management's expectations.

 

Prepaid Royalties

Prepaid royalties are capitalized at cost, which initially is equivalent to the present value of the future royalty obligation that we would expect to pay to the licensor on expected future levels of product sales incorporating the related technology. We review periodically the expected future sales levels of our products and any indicators that might require a write-down in the net recoverable value of our asset or a change in the estimated life of the prepaid royalty. We amortize our prepaid royalties to cost of goods sold over the remaining life of the underlying patent based on an effective royalty rate derived from forecasted future product sales incorporating the related technology. We review our effective royalty rate at least annually and prospectively adjust the effective rate based on significant new facts or circumstances that may arise from our review.

Our prepaid royalties are primarily comprised of emtricitabine royalties we paid to Emory University (Emory) for the HIV indication when we and Royalty Pharma purchased the royalty interest owned by Emory in 2005. Under the terms of the transaction, we and Royalty Pharma paid 65% and 35%, respectively, of the total purchase price of $525.0 million to Emory in exchange for the elimination of the emtricitabine royalties due to Emory on worldwide net sales of products containing emtricitabine. As a result of this transaction, we capitalized as prepaid royalties our 65% share of the $525.0 million purchase price, or $341.3 million. As of December 31, 2011 and 2010, we had an unamortized prepaid royalty asset of $190.2 million and $219.5 million, respectively. In 2011, 2010 and 2009, $29.3 million, $25.5 million and $29.9 million were amortized to cost of goods sold, respectively.

 

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method. Repairs and maintenance costs are expensed as incurred. Estimated useful lives in years are as follows:

 

     

Description

   Estimated Useful Life

Buildings and improvements

   20-35

Laboratory and manufacturing equipment

   4-10

Office and computer equipment

   3-7

Leasehold improvements

   Shorter of useful life

or lease term

Office and computer equipment includes capitalized software. We had unamortized capitalized software costs of $96.0 million and $22.5 million on our Consolidated Balance Sheets as of December 31, 2011 and 2010, respectively. Leasehold improvements and capitalized leased equipment are amortized over the shorter of the lease term or the asset's useful life. Amortization of capitalized leased equipment is included in depreciation expense. Capitalized interest on construction in-progress is included in property, plant and equipment. Interest capitalized in 2011, 2010 and 2009 was not significant.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Other intangible assets with indefinite useful lives are related to purchased in-process research and development (IPR&D) projects and are measured at their respective fair values as of the acquisition date. We do not amortize goodwill and other intangible assets with indefinite useful lives. We test goodwill and other indefinite-lived intangible assets for impairment on an annual basis and in between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the assets below their carrying amounts.

Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment on an annual basis as well as between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time.

Intangible assets with finite useful lives are primarily related to purchased marketed products from our acquisition of CV Therapeutics, Inc. (CV Therapeutics) and are amortized over their estimated useful lives. Intangible assets with finite useful lives are reviewed for impairment when facts or circumstances suggest that the carrying value of these assets may not be recoverable. We amortize the intangible asset related to Ranexa, which we acquired from CV Therapeutics, over its estimated useful life to cost of goods sold using an amortization rate derived from our forecasted future product sales for Ranexa. Our product sales forecasts are prepared annually and determined using our best estimates of future activity and consider such factors as historical and expected future patient usage or uptake of our products, the introduction of complimentary or combination therapies or products and future product launch plans. If a previously unanticipated and significant change occurs to our sales forecasts, we will prospectively update the rate used to amortize our intangible asset related to Ranexa which may increase future cost of goods sold, as that is where we record the amortization expense. We amortize the intangible asset related to Lexiscan, which we also acquired from CV Therapeutics, over its estimated useful life to cost of goods sold on a straight-line basis. Given that current Lexiscan revenues consist of royalties received from a collaboration partner and our lack of ongoing access and visibility into that partner's future sales forecasts, we cannot make a reasonable estimate of the amortization rate using a forecasted product sales approach.

Impairment of Long-Lived Assets

The carrying value of long-lived assets is reviewed on a regular basis for the existence of facts or circumstances both internally and externally that may suggest impairment. Specific potential indicators of impairment include a significant decrease in the fair value of an asset, a significant change in the extent or manner in which an asset is used or a significant physical change in an asset, a significant adverse change in legal factors or in the business climate that affects the value of an asset, an adverse action or assessment by the FDA or another regulator, an accumulation of costs significantly in excess of the amount originally expected to acquire or construct an asset and operating or cash flow losses combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with an income producing asset.

Should there be an indication of impairment, we will test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value will be recognized as an impairment loss.

Foreign Currency Translation, Transactions and Contracts

Adjustments resulting from translating the financial statements of our foreign subsidiaries into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income (loss) as a separate component of stockholders' equity. Net foreign currency exchange transaction gains or losses are included in interest and other income, net, on our Consolidated Statements of Income. Net transaction losses totaled $21.3 million, $3.7 million and $16.4 million in 2011, 2010 and 2009, respectively.

We hedge a portion of our foreign currency exposures related to outstanding monetary assets and liabilities as well as forecasted product sales using foreign currency exchange forward and option contracts. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. The credit risk associated with these contracts is driven by changes in interest and currency exchange rates and, as a result, varies over time. By working only with major banks and closely monitoring current market conditions, we limit the risk that counterparties to these contracts may be unable to perform. We also limit our risk of loss by entering into contracts that permit net settlement at maturity. Therefore, our overall risk of loss in the event of a counterparty default is limited to the amount of any unrecognized gains on outstanding contracts (i.e., those contracts that have a positive fair value) at the date of default. We do not enter into derivative contracts for trading purposes, nor do we hedge our net investment in any of our foreign subsidiaries.

 

 

Fair Value of Financial Instruments

Our financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable, foreign currency exchange forward and option contracts, accounts payable, and short-term and long-term debt. Cash and cash equivalents, marketable securities and foreign currency exchange contracts that hedge accounts receivable and forecasted sales are reported at their respective fair values on our Consolidated Balance Sheets. The carrying value and fair value of the Convertible Notes were $2.92 billion and $3.53 billion, respectively, as of December 31, 2011. The carrying value and fair value of the Convertible Notes were $3.48 billion and $3.97 billion, respectively as of December 31, 2010.

In March 2011, we issued senior unsecured notes due in April 2021 (April 2021 Notes) in a registered offering for an aggregate principal amount of $1.00 billion. The carrying value and fair value of the April 2021 Notes were $992.1 million and $1.06 billion, respectively, as of December 31, 2011. In December 2011, we issued senior unsecured notes due in December 2014 (December 2014 Notes), December 2016 (December 2016 Notes), December 2021 (December 2021 Notes) and December 2041 (December 2041 Notes) for an aggregate principal amount of $3.70 billion. The carrying value and fair value of these notes were $3.69 billion and $3.93 billion, respectively, as of December 31, 2011. The fair values of the Convertible Notes and senior unsecured notes were based on their quoted market values.

The remaining financial instruments are reported on our Consolidated Balance Sheets at amounts that approximate current fair values.

Income Taxes

Our income tax provision is computed under the liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations. Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, our portion of the non-tax deductible pharmaceutical excise tax that we are required to pay as a result of the enactment of U.S. healthcare reform legislation, the accounting for stock options and other share-based payments, mergers and acquisitions, future levels of R&D spending, changes in accounting standards, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and resolution of federal, state and foreign income tax audits. The impact on our income tax provision resulting from the above mentioned factors may be significant and could have a negative impact on our consolidated net income.

We record liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We do not believe any such uncertain tax positions currently pending will have a material adverse effect on our Consolidated Financial Statements, although an adverse resolution of one or more of these uncertain tax positions in any period could have a material impact on the results of operations for that period.

 

 

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued amendments to its existing standard for fair value measurement to achieve common guidance between U.S. generally accepted accounting principles and International Financial Reporting Standards. In addition, the amended standard revises certain requirements for measuring fair value and for disclosure around fair value measurement. It does not require additional fair value measurements and was not intended to establish valuation standards or affect valuation practices outside of financial reporting. The updated standard is effective for us beginning in the first quarter of 2012. The adoption of these amendments will not have a material impact on our Consolidated Financial Statements.

In June 2011, the FASB issued an update to an existing standard for comprehensive income to make the presentation of items within other comprehensive income (OCI) more prominent. The updated standard prohibits the current presentation of OCI in the statement of stockholders' equity and instead, provides public companies the option of presenting OCI in a continuous statement of comprehensive income or as two separate consecutive statements. Additionally, the update requires that reclassification adjustments be displayed on the face of the financial statements where OCI is reported. In December 2011, the FASB issued another update that indefinitely deferred the specific requirement of presenting reclassification adjustments out of OCI in both net income and OCI on the face of the financial statements. During the deferral period, the existing requirements for the presentation of reclassification adjustments must continue to be followed. The updated standard is effective for us beginning in the first quarter of 2012. Upon adoption, the updated standard will impact the presentation of our Consolidated Financial Statements; however, it will have no impact on our financial position or results of operations.

In September 2011, the FASB issued new accounting guidance intended to simplify goodwill impairment testing. Entities will be allowed to perform a qualitative assessment on goodwill impairment to determine whether a quantitative assessment is necessary. This guidance is effective for goodwill impairment tests performed in interim and annual periods for fiscal years beginning after December 15, 2011. The standard is effective for us beginning in the first quarter of 2012. The adoption of this guidance will not have a material impact on our Consolidated Financial Statements.

In December 2011, the FASB issued a new standard to address the disclosure requirements around offsetting financial and derivative instruments and their related arrangements to enable users of financial statements to understand the effect of those arrangements on a company's financial position. The update requires companies to disclose both the net and gross amounts of the relevant assets and liabilities that are offset in the notes to the financial statements. The updated standard is effective for us beginning in the first quarter of 2013 and will be applied retrospectively for all comparative periods presented. We believe that the adoption of this standard will not have a material impact on our Consolidated Financial Statements.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet09.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair Value Measurements
12 Months Ended
Dec. 31, 2011
Fair Value Measurements [Abstract]
Fair Value Measurements
2. FAIR VALUE MEASUREMENTS

We determine the fair value of financial and non-financial assets and liabilities using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value, as follows:

 

   

Level 1 inputs which include quoted prices in active markets for identical assets or liabilities;

 

   

Level 2 inputs which include observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. We review trading activity and pricing for these investments as of the measurement date. When sufficient quoted pricing for identical securities is not available, we use market pricing and other observable market inputs for similar securities obtained from various third-party data providers. These inputs either represent quoted prices for similar assets in active markets or have been derived from observable market data; and

 

   

Level 3 inputs which include unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, as well as significant management judgment or estimation.

The following table summarizes, for assets or liabilities recorded at fair value, the respective fair value and the classification by level of input within the fair value hierarchy defined above (in thousands):

 

    December 31, 2011     December 31, 2010  
    Level 1     Level 2     Level 3     Total     Level 1     Level 2     Level 3     Total  

Assets:

               

Debt securities:

               

U.S. treasury securities

  $ —        $ —        $ —        $ —        $ 1,355,437      $ —        $ —        $ 1,355,437   

Money market funds

    7,455,982        —          —          7,455,982        520,063        —          —          520,063   

Certificates of deposit

    —          1,139,982        —          1,139,982        —          127,619        —          127,619   

U.S. government agencies and FDIC guaranteed securities

    —          —          —          —          —          1,296,110        —          1,296,110   

Municipal debt securities

    —          —          —          —          —          17,625        —          17,625   

Non-U.S. government securities

    —          —          24,741        24,741        —          278,610        9,594        288,204   

Corporate debt securities

    —          404,989        —          404,989        —          991,635        —          991,635   

Residential mortgage and asset-backed securities

    —          —          —          —          —          277,043        —          277,043   

Student loan-backed securities

    —          —          46,952        46,952        —          —          70,771        70,771   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total debt securities

    7,455,982        1,544,971        71,693        9,072,646        1,875,500        2,988,642        80,365        4,944,507   

Equity securities

    8,503        —          —          8,503        4,631        —          —          4,631   

Derivatives

    —          100,475        —          100,475        —          64,461        —          64,461   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ 7,464,485      $ 1,645,446      $ 71,693      $ 9,181,624      $ 1,880,131      $ 3,053,103      $ 80,365      $ 5,013,599   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

               

Contingent consideration

    —          —          135,591        135,591        —          —          11,100        11,100   

Derivatives

    —          5,710        —          5,710        —          38,553        —          38,553   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ —        $ 5,710      $ 135,591      $ 141,301      $ —        $ 38,553      $ 11,100      $ 49,653   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The following table provides a rollforward of assets measured using Level 3 inputs (in thousands):

 

     Year Ended December 31,  
     2011     2010  

Balance, beginning of period

   $ 80,365      $ 105,662   

Total realized and unrealized gains (losses) included in:

    

Interest and other income, net

     6,251        115   

Other comprehensive income (loss), net

     (30,376     5,026   

Sales of marketable securities

     (38,430     (40,032

Transfers into Level 3

     53,883        9,594   
  

 

 

   

 

 

 

Balance, end of period

   $ 71,693      $ 80,365   
  

 

 

   

 

 

 

 

Our policy is to recognize transfers into or out of Level 3 classification as of the actual date of the event or change in circumstances that caused the transfer.

Assets measured at fair value using Level 3 inputs are comprised of auction rate securities and Greek government-issued bonds within our available-for-sale investment portfolio.

The underlying assets of our auction rate securities consist of student loans. Although auction rate securities would typically be measured using Level 2 inputs, the failure of auctions and the lack of market activity and liquidity experienced since the beginning of 2008 required that these securities be measured using Level 3 inputs. The fair value of our auction rate securities was determined using a discounted cash flow model that considered projected cash flows for the issuing trusts, underlying collateral and expected yields. Projected cash flows were estimated based on the underlying loan principal, bonds outstanding and payout formulas. The weighted-average life over which the cash flows were projected considered the collateral composition of the securities and related historical and projected prepayments. The underlying student loans have a weighted-average expected life of two to seven years. The discount rates used in our discounted cash flow model were based on market conditions for comparable or similar term asset-backed and other fixed income securities, adjusted for an illiquidity discount. This resulted in an annual discount rate of 2.76%. Our auction rate securities reset every seven to 14 days with maturity dates ranging from 2025 through 2040 and have annual interest rates ranging from 0.18% to 0.80%. As of December 31, 2011, our auction rate securities continued to earn interest. Although there continued to be failed auctions as well as lack of market activity and liquidity in 2011, we believe we had no other-than-temporary impairments on these securities as of December 31, 2011. We do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before the recovery of their amortized cost basis.

In 2010, the Greek government agreed to settle the majority of its aged outstanding accounts receivable with zero-coupon bonds, which were expected to trade at a discount to face value. Through December 31, 2011, we had received a total of $63.5 million in bonds, of which $53.9 million were received during the year ended December 31, 2011 and were included in transfers into Level 3. We have estimated the fair value of the Greek zero-coupon bonds using Level 3 inputs due to the current lack of market activity and liquidity. The discount rates used in our fair value model for these bonds were based on credit default swap rates. We have the ability and intent to hold these bonds until maturity. Therefore, we believe we had no other-than-temporary impairments on these investments as of December 31, 2011.

As of December 31, 2011 and 2010, our auction rate securities were recorded in long-term marketable securities on our Consolidated Balance Sheet. As of December 31, 2011 and 2010, our Greek government-issued bonds were recorded in short-term and long-term marketable securities on our Consolidated Balance Sheet.

Contingent consideration liabilities measured at fair value using Level 3 inputs increased from $11.1 million at December 31, 2010 to $135.6 million at December 31, 2011 as a result of our acquisitions of Arresto Biosciences, Inc. (Arresto) in January 2011 and Calistoga Pharmaceuticals, Inc. (Calistoga) in April 2011. The estimated fair value of the contingent consideration liabilities for our acquisitions was based on the present value of the total earnout amount giving consideration to the probability of technical and regulatory success to achieve each of the milestone events at the expected dates. We evaluate changes in the fair values of our contingent consideration liabilities at the end of each period. See Note 5 for a description of our acquisitions.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet10.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities
12 Months Ended
Dec. 31, 2011
Available-For-Sale Securities [Abstract]
Available-For-Sale Securities
3. AVAILABLE-FOR-SALE SECURITIES

The following table is a summary of available-for-sale debt and equity securities recorded in cash and cash equivalents or marketable securities in our Consolidated Balance Sheets. Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services (in thousands):

 

     Amortized
Cost
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
    Estimated
Fair Value
 

December 31, 2011

          

Debt securities:

          

U.S. treasury securities

   $ —         $ —         $ —        $ —     

Money market funds

     7,455,982         —           —          7,455,982   

Certificates of deposit

     1,140,000         —           (18     1,139,982   

U.S. government agencies and FDIC guaranteed securities

     —           —           —          —     

Municipal debt securities

     —           —           —          —     

Non-U.S. government securities

     55,246         —           (30,505     24,741   

Corporate debt securities

     404,994         —           (5     404,989   

Residential mortgage and asset-backed securities

     —           —           —          —     

Student loan-backed securities

     51,500         —           (4,548     46,952   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total debt securities

     9,107,722         —           (35,076     9,072,646   

Equity securities

     1,451         7,052         —          8,503   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 9,109,173       $ 7,052       $ (35,076   $ 9,081,149   
  

 

 

    

 

 

    

 

 

   

 

 

 

December 31, 2010

          

Debt securities:

          

U.S. treasury securities

   $ 1,349,348       $ 7,109       $ (1,020   $ 1,355,437   

Money market funds

     520,063         —           —          520,063   

Certificates of deposit

     127,594         41         (16     127,619   

U.S. government agencies and FDIC guaranteed securities

     1,284,654         11,919         (463     1,296,110   

Municipal debt securities

     17,543         103         (21     17,625   

Non-U.S. government securities

     286,410         1,880         (86     288,204   

Corporate debt securities

     985,382         7,999         (1,746     991,635   

Residential mortgage and asset-backed securities

     277,359         923         (1,239     277,043   

Student loan-backed securities

     75,900         —           (5,129     70,771   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total debt securities

     4,924,253         29,974         (9,720     4,944,507   

Equity securities

     1,451         3,180         —          4,631   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 4,925,704       $ 33,154       $ (9,720   $ 4,949,138   
  

 

 

    

 

 

    

 

 

   

 

 

 

The following table summarizes the classification of the available-for-sale debt and equity securities on our Consolidated Balance Sheets (in thousands):

 

     December 31, 2011      December 31, 2010  

Cash and cash equivalents

   $ 9,000,954       $ 538,946   

Short-term marketable securities

     16,491         1,190,789   

Long-term marketable securities

     63,704         3,219,403   
  

 

 

    

 

 

 

Total

   $ 9,081,149       $ 4,949,138   
  

 

 

    

 

 

 

 

The following table summarizes our portfolio of available-for-sale debt securities by contractual maturity (in thousands):

 

     December 31, 2011      December 31, 2010  
     Amortized Cost      Fair Value      Amortized Cost      Fair Value  

Less than one year

   $ 1,574,140       $ 1,561,462       $ 1,726,095       $ 1,729,735   

Greater than one year but less than five years

     26,100         8,249         3,022,744         3,044,114   

Greater than five years but less than ten years

     —           —           33,076         33,580   

Greater than ten years

     7,507,482         7,502,935         142,338         137,078   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 9,107,722       $ 9,072,646       $ 4,924,253       $ 4,944,507   
  

 

 

    

 

 

    

 

 

    

 

 

 

The following table summarizes the gross realized gains and losses related to sales of marketable securities (in thousands):

 

     Year Ended December 31,  
     2011     2010     2009  

Gross realized gains on sales

   $ 42,849      $ 13,254      $ 10,373   

Gross realized losses on sales

   $ (12,526   $ (3,657   $ (1,405

The cost of securities sold was determined based on the specific identification method.

The following table summarizes our available-for-sale debt securities that were in a continuous unrealized loss position, but were not deemed to be other-than-temporarily impaired (in thousands):

 

     Less Than 12 Months      12 Months or Greater      Total  
     Gross
Unrealized
Losses
    Estimated
Fair Value
     Gross
Unrealized
Losses
    Estimated
Fair Value
     Gross
Unrealized
Losses
    Estimated
Fair Value
 

December 31, 2011

              

Debt securities:

              

U.S. treasury securities

   $ —        $ —         $ —        $ —         $ —        $ —     

U.S. government agencies and FDIC guaranteed securities

     —          —           —          —           —          —     

Municipal debt securities

     —          —           —          —           —          —     

Non-U.S. government securities

     (30,505     24,741         —          —           (30,505     24,741   

Corporate debt securities

     (5     224,989         —          —           (5     224,989   

Certificates of deposit

     (18     1,019,982         —          —           (18     1,019,982   

Residential mortgage and asset-backed securities

     —          —           —          —           —          —     

Student loan-backed securities

     —          —           (4,548     46,952         (4,548     46,952   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

   $ (30,528   $ 1,269,712       $ (4,548   $ 46,952       $ (35,076   $ 1,316,664   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

December 31, 2010

              

Debt securities:

              

U.S. treasury securities

   $ (1,020   $ 531,184       $ —        $ —         $ (1,020   $ 531,184   

Certificates of deposit

     (13     39,987         —          —           (13     39,987   

U.S. government agencies and FDIC guaranteed securities

     (463     226,176         —          —           (463     226,176   

Municipal debt securities

     (21     4,688         —          —           (21     4,688   

Non-U.S. government securities

     (86     44,317         —          —           (86     44,317   

Corporate debt securities

     (1,749     419,425         —          —           (1,749     419,425   

Residential mortgage and asset-backed securities

     (1,239     197,330         —          —           (1,239     197,330   

Student loan-backed securities

     —          —           (5,129     70,771         (5,129     70,771   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

   $ (4,591   $ 1,463,107       $ (5,129   $ 70,771       $ (9,720   $ 1,533,878   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

As of December 31, 2011 and 2010, approximately 36% and 34%, respectively, of the total number of securities were in an unrealized loss position. The gross unrealized losses for Greek government-issued bonds reflect a higher discount rate used in the valuation of these securities as compared to the implied interest rates of these securities resulting primarily from lack of market activity and liquidity of the underlying securities. The gross unrealized losses for auction rate securities also reflect a higher discount rate used in the valuation of these securities. Based on our review of these securities, we believe we had no other-than-temporary impairments on these securities as of December 31, 2011 and 2010 because we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before the recovery of their amortized cost basis.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet11.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments
12 Months Ended
Dec. 31, 2011
Derivative Financial Instruments [Abstract]
Derivative Financial Instruments
4. DERIVATIVE FINANCIAL INSTRUMENTS

We operate in foreign countries, which exposes us to market risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies, the most significant of which is the Euro. In order to manage this risk, we hedge a portion of our foreign currency exposures related to outstanding monetary assets and liabilities as well as forecasted product sales using foreign currency exchange forward and option contracts. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. The credit risk associated with these contracts is driven by changes in interest and currency exchange rates and, as a result, varies over time. By working only with major banks and closely monitoring current market conditions, we limit the risk that counterparties to these contracts may be unable to perform. We also limit our risk of loss by entering into contracts that permit net settlement at maturity. Therefore, our overall risk of loss in the event of a counterparty default is limited to the amount of any unrecognized gains on outstanding contracts (i.e., those contracts that have a positive fair value) at the date of default. We do not enter into derivative contracts for trading purposes, nor do we hedge our net investment in any of our foreign subsidiaries.

We hedge our exposure to foreign currency exchange rate fluctuations for certain monetary assets and liabilities of our foreign subsidiaries that are denominated in a non-functional currency. The derivative instruments we use to hedge this exposure are not designated as hedges, and as a result, changes in their fair value are recorded in interest and other income, net on our Consolidated Statements of Income.

We hedge our exposure to foreign currency exchange rate fluctuations for forecasted product sales that are denominated in a non-functional currency. The derivative instruments we use to hedge this exposure are designated as cash flow hedges and have maturity dates of 18 months or less. Upon executing a hedging contract and quarterly thereafter, we assess prospective hedge effectiveness using a regression analysis which calculates the change in cash flow as a result of the hedge instrument. On a monthly basis, we assess retrospective hedge effectiveness using a dollar offset approach. We exclude time value from our effectiveness testing and recognize changes in the time value of the hedge in interest and other income, net. The effective component of our hedge is recorded as an unrealized gain or loss on the hedging instrument in accumulated OCI within stockholders' equity. When the hedged forecasted transaction occurs, the hedge is de-designated and the unrealized gains or losses are reclassified into product sales. The majority of gains and losses related to the hedged forecasted transactions reported in accumulated OCI at December 31, 2011 will be reclassified to product sales within 12 months.

We had notional amounts on foreign currency exchange contracts outstanding of $4.03 billion and $3.55 billion at December 31, 2011 and 2010, respectively.

 

The following table summarizes information about the fair values of derivative instruments on our Consolidated Balance Sheets (in thousands):

 

   

As of December 31, 2011

 
   

Asset Derivatives

   

Liability Derivatives

 
   

Classification

  Fair Value    

Classification

  Fair Value  

Derivatives designated as hedges:

       

Foreign currency exchange contracts

  Other current assets   $ 77,066      Other accrued liabilities   $ 5,052   

Foreign currency exchange contracts

  Other noncurrent assets     23,169      Other long-term obligations     620   
   

 

 

     

 

 

 

Total derivatives designated as hedges

      100,235          5,672   
   

 

 

     

 

 

 

Derivatives not designated as hedges:

       

Foreign currency exchange contracts

  Other current assets     240      Other accrued liabilities     38   
   

 

 

     

 

 

 

Total derivatives not designated as hedges

      240          38   
   

 

 

     

 

 

 

Total derivatives

    $ 100,475        $ 5,710   
   

 

 

     

 

 

 

 

   

As of December 31, 2010

 
   

Asset Derivatives

   

Liability Derivatives

 
   

Classification

  Fair Value    

Classification

  Fair Value  

Derivatives designated as hedges:

       

Foreign currency exchange contracts

  Other current assets   $ 59,276      Other accrued liabilities   $ 36,493   

Foreign currency exchange contracts

  Other noncurrent assets     5,089      Other long-term obligations     2,022   
   

 

 

     

 

 

 

Total derivatives designated as hedges

      64,365          38,515   
   

 

 

     

 

 

 

Derivatives not designated as hedges:

       

Foreign currency exchange contracts

  Other current assets     96      Other accrued liabilities     38   
   

 

 

     

 

 

 

Total derivatives not designated as hedges

      96          38   
   

 

 

     

 

 

 

Total derivatives

    $ 64,461        $ 38,553   
   

 

 

     

 

 

 

 

The following table summarizes the effect of our foreign currency exchange contracts on our Consolidated Statements of Income (in thousands):

 

    Year Ended December 31,  
            2011                     2010          

Derivatives designated as hedges:

   

Net gains recognized in OCI (effective portion)

  $ 1,664      $ 115,073   

Net gains (losses) reclassified from accumulated OCI into product sales (effective portion)

  $ (78,647   $ 73,720   

Net gains (losses) recognized in interest and other income, net (ineffective portion and amounts excluded from effectiveness testing)

  $ (17,237   $ 887   

Derivatives not designated as hedges:

   

Net gains recognized in interest and other income, net

  $ 22,084      $ 66,639   

There were no material amounts recorded in interest and other income, net, for the years ended December 31, 2011 and 2010 as a result of the discontinuance of cash flow hedges.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet12.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Acquisitions
12 Months Ended
Dec. 31, 2011
Acquisitions [Abstract]
Acquisitions
5. ACQUISITIONS

Calistoga Pharmaceuticals, Inc.

In February 2011, we entered into an agreement to acquire Calistoga for $375.0 million plus potential payments of up to $225.0 million based on the achievement of certain milestones. This transaction closed on April 1, 2011, at which time Calistoga became a wholly-owned subsidiary. Calistoga was a privately-held, biotechnology company based in Seattle, Washington, focused on the development of medicines to treat cancer and inflammatory diseases. This acquisition has provided us with a portfolio of proprietary compounds that selectively target isoforms of phosphoinositide-3 kinase (PI3K). The lead product candidate, GS-1101, was a first-in-class specific inhibitor of the PI3K delta isoform. PI3K delta is preferentially expressed in leukocytes involved in a variety of inflammatory and autoimmune diseases and hematological cancers.

The acquisition was accounted for as a business combination. Calistoga's results of operations since April 1, 2011 have been included in our Consolidated Statement of Income and were not significant.

The acquisition-date fair value of the total consideration transferred to acquire Calistoga was $484.3 million, and consisted of cash paid at or prior to closing of $373.7 million and contingent consideration of $110.6 million.

The following table summarizes the fair values of the assets acquired and liabilities assumed at April 1, 2011 (in thousands):

 

IPR&D

   $  149,200   

Goodwill

     336,951   

Other net liabilities assumed

     (1,853
  

 

 

 

Total consideration transferred

   $ 484,298   
  

 

 

 

 

IPR&D

Intangible assets associated with IPR&D projects relate to the GS-1101 product candidate. Management determined that the estimated acquisition-date fair value of intangible assets related to IPR&D was $149.2 million. The estimated fair value was determined using the income approach, which discounts expected future cash flows to present value. We estimated the fair value using a present value discount rate of 11%, which considers both the estimated weighted-average cost of capital for companies with profiles substantially similar to that of Calistoga, as well as the acquirer's estimated weighted-average cost of capital. We believe this is appropriate given the unique characteristics of this acquisition which included a competitive bidding process. This rate is comparable to the estimated internal rate of return for the acquisition and represents the rate that market participants would use to value the intangible assets. The projected cash flows from the IPR&D projects were based on key assumptions such as: estimates of revenues and operating profits related to each project considering its stage of development; the time and resources needed to complete the development and approval of the product candidate; the life of the potential commercialized product and associated risks, including the inherent difficulties and uncertainties in developing a product candidate such as obtaining marketing approval from the FDA and other regulatory agencies; and risks related to the viability of and potential alternative treatments in any future target markets. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts.

Goodwill

The excess of the consideration transferred over the fair values assigned to the assets acquired and liabilities assumed is $337.0 million, which represents the goodwill amount resulting from the Calistoga acquisition. Management believes that the goodwill mainly represents the synergies expected from combining our research and development operations as well as acquiring Calistoga's assembled workforce and other intangible assets that do not qualify for separate recognition.

We do not consider the Calistoga acquisition to be a material business combination and therefore have not disclosed the pro forma results of operations as required for material business combinations.

Arresto Biosciences, Inc.

In December 2010, we entered into an agreement to acquire Arresto for $225.0 million plus potential future payments based on the achievement of certain sales targets. This transaction closed on January 14, 2011, at which time Arresto became a wholly-owned subsidiary. Arresto was a privately-held, development-stage biotechnology company based in Palo Alto, California, focused on developing antibodies for the potential treatment of fibrotic diseases and cancer. The lead product from the acquisition of Arresto was GS-6224, a humanized monoclonal antibody (mAb) targeting the human lysyl oxidase-like-2 (LOXL2) protein. In addition to an ongoing Phase 1 study of GS-6224 in patients with advanced solid tumors at the time of the acquisition, a Phase 1 study had also been initiated to evaluate GS-6224 in patients with idiopathic pulmonary fibrosis.

The acquisition was accounted for as a business combination. Arresto's results of operations since January 14, 2011 have been included in our Consolidated Statement of Income and were not significant.

The acquisition-date fair value of the total consideration transferred to acquire Arresto was $227.1 million, and consisted of cash paid at or prior to closing of $221.7 million and contingent consideration of $5.4 million.

 

The following table summarizes the fair values of the assets acquired and liabilities assumed at January 14, 2011 (in thousands):

 

IPR&D

   $  117,000   

Goodwill

     134,482   

Deferred tax assets

     17,417   

Deferred tax liabilities

     (41,705

Other net liabilities assumed

     (125
  

 

 

 

Total consideration transferred

   $ 227,069   
  

 

 

 

IPR&D

Intangible assets associated with IPR&D projects relate to the GS-6224 product candidate. Management determined that the estimated acquisition-date fair value of intangible assets related to IPR&D was $117.0 million. The estimated fair value was determined using the income approach, which discounts expected future cash flows to present value. We estimated the fair value using a present value discount rate of 16%, which is based on the estimated weighted-average cost of capital for companies with profiles substantially similar to that of Arresto. This is comparable to the estimated internal rate of return for the acquisition and represents the rate that market participants would use to value the intangible assets. The projected cash flows from the IPR&D projects were based on key assumptions such as: estimates of revenues and operating profits related to each project considering its stage of development; the time and resources needed to complete the development and approval of the product candidate; the life of the potential commercialized product and associated risks, including the inherent difficulties and uncertainties in developing a product candidate such as obtaining marketing approval from the FDA and other regulatory agencies; and risks related to the viability of and potential alternative treatments in any future target markets. Intangible assets related to IPR&D projects will be considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts.

Goodwill

The excess of the consideration transferred over the fair values assigned to the assets acquired and liabilities assumed is $134.5 million, which represents the goodwill amount resulting from the Arresto acquisition. Management believes that the goodwill mainly represents the synergies expected from combining our research and development operations as well as acquiring Arresto's assembled workforce and other intangible assets that do not qualify for separate recognition.

We do not consider the Arresto acquisition to be a material business combination and therefore have not disclosed the pro forma results of operations as required for material business combinations.

CGI Pharmaceuticals, Inc.

In June 2010, we entered into an agreement to acquire CGI Pharmaceuticals, Inc. (CGI) for up to $120.0 million in cash, consisting of $91.0 million as an upfront payment and up to $29.0 million of contingent consideration payable based on the achievement of clinical development milestones. This transaction closed on July 8, 2010, at which time CGI became a wholly-owned subsidiary. CGI was a privately-held development stage pharmaceutical company based in Branford, Connecticut, primarily focused on small molecule chemistry and protein kinase biology. The lead preclinical compound from CGI's library of proprietary small molecule kinase inhibitors targets spleen tyrosine kinase (Syk) and could have unique applications for the treatment of serious inflammatory diseases, including rheumatoid arthritis.

 

The CGI acquisition was accounted for as a business combination. The results of operations of CGI since July 8, 2010 have been included in our Consolidated Statements of Income and were not significant.

The acquisition-date fair value of the total consideration transferred to acquire CGI was $102.1 million, and consisted of cash paid at or prior to closing of $91.0 million and contingent consideration of $11.1 million.

The following table summarizes the fair values of the assets acquired and liabilities assumed at July 8, 2010 (in thousands):

 

IPR&D

   $ 26,630   

Goodwill

     70,111   

Deferred tax assets

     12,656   

Deferred tax liabilities

     (6,313

Other net liabilities assumed

     (984
  

 

 

 

Total consideration transferred

   $ 102,100   
  

 

 

 

IPR&D

Intangible assets associated with IPR&D projects relate to the preclinical Syk product candidate. Management estimated the acquisition-date fair value of intangible assets related to IPR&D to be $26.6 million. The estimated fair value was determined using the income approach, which discounts expected future cash flows to present value. We estimated the fair value using a present value discount rate of 18%, which is based on the estimated weighted-average cost of capital for companies with profiles substantially similar to that of CGI. This is comparable to the estimated internal rate of return for CGI's operations and represents the rate that market participants would use to value the intangible assets. The projected cash flows from the IPR&D project was based on key assumptions such as: estimates of revenues and operating profits related to the project considering its stage of development; the time and resources needed to complete the development and approval of the product candidate; the life of the potential commercialized product and associated risks, including the inherent difficulties and uncertainties in developing a drug compound such as obtaining marketing approval from the FDA and other regulatory agencies; and risks related to the viability of and potential alternative treatments in any future target markets. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts.

During the fourth quarter of 2011, we recorded $26.6 million of impairment charges in R&D expense related to the Syk IPR&D asset acquired from CGI. These impairment charges were a result of changes in the anticipated market share related to the Syk compound.

Goodwill

The excess of the consideration transferred over the fair values assigned to the assets acquired and liabilities assumed is $70.1 million, which represents the goodwill amount resulting from the CGI acquisition. Management believes that the goodwill mainly represents the synergies expected from combining our research and development operations as well as acquiring CGI's assembled workforce and other intangible assets that do not qualify for separate recognition.

CV Therapeutics, Inc.

On April 15, 2009, we acquired CV Therapeutics through a cash tender offer under the terms of an agreement and plan of merger entered into in March 2009. CV Therapeutics was a publicly-held biopharmaceutical company based in Palo Alto, California, primarily focused on the discovery, development and commercialization of small molecule drugs for the treatment of cardiovascular, metabolic and pulmonary diseases. CV Therapeutics had two marketed products, Ranexa for the treatment of chronic angina and Lexiscan injection for use as a pharmacologic stress agent in radionuclide MPI in patients unable to undergo adequate exercise stress. CV Therapeutics also had several product candidates in clinical development for the treatment of cardiovascular, metabolic and pulmonary diseases.

The CV Therapeutics acquisition was accounted for as a business combination. The results of operations of CV Therapeutics since April 15, 2009 have been included in our Consolidated Statements of Income. The acquisition date was determined to be April 15, 2009 as that is the date on which we acquired approximately 89% of the outstanding shares of common stock of CV Therapeutics and obtained effective control of the company. The acquisition was completed two days later on April 17, 2009, at which time CV Therapeutics became a wholly-owned subsidiary.

The aggregate consideration transferred to acquire CV Therapeutics was $1.39 billion, and consisted of cash paid for common stock and other equity instruments at or prior to closing of $1.38 billion and the fair value of vested stock options assumed of $15.7 million.

In accordance with the merger agreement, the number of Gilead stock options and restricted stock units into which assumed CV Therapeutics' stock options and restricted stock units were converted was determined based on an option conversion ratio. This conversion ratio was calculated by taking the per share acquisition price of $20.00 and dividing it by the average closing price of our common stock for the five consecutive trading days immediately preceding (but not including) the closing date of April 17, 2009, which was $46.24 per share. The fair value of stock options assumed was calculated using a Black-Scholes valuation model with the following assumptions: market price of $44.54 per share, which was the closing price of our common stock on the acquisition date; expected term ranging from 0.1 to 5.2 years; risk-free interest rate ranging from 0.1% to 1.7%; expected volatility ranging from 37.4% to 43.2%; and no dividend yield. The fair value of restricted stock units assumed was calculated using the acquisition-date closing price of $44.54 per share for our common stock.

We included the fair value of vested stock options assumed by us of $15.7 million in the consideration transferred for the acquisition. We did not assume any vested restricted stock units. The estimated fair value of unvested stock options and restricted stock units assumed by us of $11.2 million was not included in the consideration transferred and is being recognized as stock-based compensation expenses over the remaining future vesting period of the awards.

 

The following table summarizes the assets acquired and liabilities assumed at April 15, 2009 (in thousands):

 

Intangible assets—marketed products

   $ 951,200   

Intangible assets—IPR&D

     138,900   

Goodwill

     341,910   

Deferred tax assets

     413,816   

Deferred tax liabilities

     (426,861

Other assets/liabilities

  

Cash and cash equivalents

     129,087   

Marketable securities

     116,363   

Accounts receivable

     9,136   

Inventories

     50,455   

Prepaids and other current assets

     60,671   

Property, plant and equipment

     11,672   

Other assets

     20,162   

Accounts payable

     (5,089

Accrued and other current liabilities

     (87,898

Convertible senior notes

     (303,060

Other liabilities

     (27,906
  

 

 

 

Total other net liabilities

     (26,407
  

 

 

 

Total consideration transferred

   $ 1,392,558   
  

 

 

 

Intangible Assets

A substantial portion of the assets acquired consisted of intangible assets related to CV Therapeutics' two marketed products, Ranexa and Lexiscan, and CV Therapeutics' IPR&D projects. Management determined that the estimated acquisition-date fair values of the intangible assets related to the marketed products and IPR&D projects were $951.2 million and $138.9 million, respectively.

Of the $951.2 million of intangible assets related to the marketed products, $688.4 million related to Ranexa and $262.8 million related to Lexiscan. We have determined that these intangible assets have finite useful lives and will be amortized over their respective useful lives, which we estimated to be the periods over which the associated product patents will expire as those are the periods over which the intangible assets are expected to contribute to the future cash flows of the related products.

We are amortizing the intangible asset related to Ranexa over its estimated useful life using an amortization rate derived from our forecasted future product sales for Ranexa. We are amortizing the intangible asset related to Lexiscan over its estimated useful life on a straight-line basis. Given that current Lexiscan revenues consist of royalties received from a collaboration partner and our lack of ongoing access and visibility into that partner's future sales forecasts, we cannot make a reasonable estimate of the amortization rate using a forecasted product sales approach. The weighted-average amortization period for these intangible assets is approximately ten years.

Of the $138.9 million of intangible assets related to the IPR&D projects, $93.4 million related to GS-9667, a product candidate that was in Phase 1 clinical studies for the treatment of diabetes and hypertriglyceridemia. The remaining balance of the intangible assets related to IPR&D projects represented various other in-process projects with no single project comprising a significant portion of the total value. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. During the fourth quarter of 2010, we recorded $136.0 million of impairment charges related to certain IPR&D assets acquired from CV Therapeutics which we had no future plans to develop and which were deemed to have no future use to us or other market participants. These charges related to the GS-9667, Adentri and tecadenoson programs and were recorded in R&D expense. The majority of the impairment charge related to our GS-9667 program, which was terminated in the fourth quarter of 2010 due to unfavorable results from pharmacokinetics and pharmacodynamics tests that demonstrated limited effectiveness of the compound in patients. Given these results, we do not believe it has alternative future uses for us or other market participants. In the first quarter of 2011, $2.9 million of purchased IPR&D project from CV Therapeutics was completed and reclassified as a finite-lived intangible asset, and is currently being amortized over its estimated useful life. As of December 31, 2010, we had $2.9 million of IPR&D assets acquired from CV Therapeutics remaining on our Consolidated Balance Sheet.

Deferred Tax Assets and Deferred Tax Liabilities

The $413.8 million of deferred tax assets resulting from the acquisition was primarily related to federal and state net operating loss and tax credit carryforwards. The $426.9 million of deferred tax liabilities resulting from the acquisition was primarily related to the difference between the book basis and tax basis of the intangible assets related to the marketed products and IPR&D projects. We have concluded that it is more likely than not that we will not realize the benefit from deferred tax assets related to certain state net operating loss carryforwards. As a result, a valuation allowance of $15.1 million was recorded related to those deferred tax assets. For presentation purposes, the $426.9 million of deferred tax liabilities, all of which is of a noncurrent nature, has been netted against noncurrent deferred tax assets on our Consolidated Balance Sheet. As a result of the impairment charges recorded in the fourth quarter of 2010, we reduced the deferred tax liabilities related to IPR&D projects by $49.7 million.

Convertible Senior Notes

As a result of the acquisition, we assumed convertible notes from CV Therapeutics consisting of 2.75% senior subordinated convertible notes due 2012, 3.25% senior subordinated convertible notes due 2013 and 2.0% senior subordinated convertible debentures due 2023. All of these convertible notes were recognized at their fair values at the acquisition date. In May 2009, we offered to repurchase these convertible notes in consideration for their par value plus accrued interest, as required under the terms of the respective convertible note agreements following the occurrence of a change in control or fundamental change as defined in the agreements. As of December 31, 2010, all of these convertible notes had been extinguished.

Goodwill

The excess of the consideration transferred over the fair values assigned to the assets acquired and liabilities assumed was $341.9 million, which represents the goodwill amount resulting from the acquisition. Management believes that the goodwill mainly represents the synergies and economies of scale expected from combining our operations with CV Therapeutics. None of the goodwill is expected to be deductible for income tax purposes. We recorded the goodwill as an intangible asset in our Consolidated Balance Sheet as of the acquisition date. Goodwill is tested for impairment on an annual basis and between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the goodwill below its carrying amount.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet13.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Restructuring
12 Months Ended
Dec. 31, 2011
Restructuring [Abstract]
Restructuring
6. RESTRUCTURING

During the second quarter of 2010, we implemented a plan to close our research operations in Durham, North Carolina and consolidate our liver disease research activities in Foster City, California. The restructuring plan includes consolidation of the liver disease R&D organization and our exit from certain facilities. During 2010, we recorded a total of $14.6 million and $10.4 million in SG&A expenses and R&D expenses, respectively, related to employee severance and facilities-related expenses under this plan. In December 2010, we closed our operations in Durham. We have not incurred and do not expect to incur any additional significant costs in connection with this plan.

During the second quarter of 2009, we approved a plan to realize certain synergies as a result of the CV Therapeutics acquisition by re-aligning our cardiovascular operations and eliminating redundancies. The restructuring plan included consolidation and re-alignment of the cardiovascular R&D organization, our exit from certain facilities and the termination of certain contractual obligations. During 2011, we recorded other facilities-related expenses of $6.7 million in SG&A expense. Comparatively, in 2010, we recorded $10.6 million and $3.4 million of restructuring expenses in SG&A and R&D expenses, respectively, and in 2009, we recorded $26.2 million and $25.7 million in SG&A and R&D expenses, respectively. In 2010 and 2009, the expenses primarily related to employee severance, relocation, lease termination costs and other facilities-related expenses. Total costs incurred under this plan were $43.5 million and $29.1 million in SG&A and R&D expenses, respectively. We have not incurred and do not expect to incur any additional costs in connection with this plan.

The following table summarizes the restructuring liabilities accrued for and changes in those amounts during the period for the restructuring plan related to our cardiovascular operations (in thousands):

 

     Employee
Severance and
Termination
Benefits
    Facilities-
Related Costs
 

Balance at December 31, 2008

   $ —        $ —     

Costs incurred during the period

     33,797        9,880   

Costs paid or settled during the period

     (24,108     (545
  

 

 

   

 

 

 

Balance at December 31, 2009

   $ 9,689      $ 9,335   

Costs incurred during the period

     2,190        9,727   

Costs paid or settled during the period

     (11,445     (4,529
  

 

 

   

 

 

 

Balance at December 31, 2010

   $ 434      $ 14,533   

Costs incurred during the period

     —          6,683   

Costs paid or settled during the period

     (434     (9,969
  

 

 

   

 

 

 

Balance at December 31, 2011

   $ —        $ 11,247   
  

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet14.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories
12 Months Ended
Dec. 31, 2011
Inventories [Abstract]
Inventories
7. INVENTORIES

Inventories are summarized as follows (in thousands):

 

     December 31,  
     2011      2010  

Raw materials

   $ 697,621       $ 408,015   

Work in process

     466,499         454,652   

Finished goods

     225,863         341,142   
  

 

 

    

 

 

 

Total

   $ 1,389,983       $ 1,203,809   
  

 

 

    

 

 

 

 

As of December 31, 2011 and 2010, the joint ventures formed by Gilead and BMS (See Note 10), which are included in our Consolidated Financial Statements, held $995.7 million and $811.9 million in inventory, respectively, of efavirenz active pharmaceutical ingredient purchased from BMS at BMS's estimated net selling price of efavirenz.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet15.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Property, Plant And Equipment
12 Months Ended
Dec. 31, 2011
Property, Plant And Equipment [Abstract]
Property, Plant And Equipment
8. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are summarized as follows (in thousands):

 

     December 31,  
     2011     2010  

Property, plant and equipment, net:

    

Buildings and improvements (including leasehold improvements)

   $ 500,040      $ 501,401   

Laboratory and manufacturing equipment

     199,693        168,711   

Office and computer equipment

     211,936        116,479   

Capitalized leased equipment

     10,878        10,865   

Construction in progress

     60,746        82,334   
  

 

 

   

 

 

 

Subtotal

     983,293        879,790   

Less accumulated depreciation and amortization (including $10,546 and $10,451 relating to capitalized leased equipment for 2011 and 2010, respectively)

     (358,263     (316,367
  

 

 

   

 

 

 

Subtotal

     625,030        563,423   

Land

     149,376        137,812   
  

 

 

   

 

 

 

Total

   $ 774,406      $ 701,235   
  

 

 

   

 

 

 

In September 2011, we completed the purchase of a clinical biologics manufacturing facility and certain process development assets located in Oceanside, California. We paid a total purchase price of $28.3 million in cash including transaction costs. We accounted for this transaction as an asset acquisition. The purchase price was allocated based on the fair value of the acquired tangible assets, which consisted primarily of property, plant and equipment.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet16.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets
12 Months Ended
Dec. 31, 2011
Intangible Assets [Abstract]
Intangible Assets
9. INTANGIBLE ASSETS

The following table summarizes the carrying amount of our intangible assets (in thousands):

 

     December 31,  
     2011      2010  

Goodwill

   $ 1,004,102       $ 532,669   

Finite-lived intangible assets

     796,664         863,393   

Indefinite-lived intangible assets

     266,200         29,530   
  

 

 

    

 

 

 

Total

   $ 2,066,966       $ 1,425,592   
  

 

 

    

 

 

 

 

Goodwill

The following table summarizes the changes in the carrying amount of goodwill (in thousands):

 

Balance at December 31, 2010

   $ 532,669   

Goodwill resulting from the acquisition of Arresto

     134,482   

Goodwill resulting from the acquisition of Calistoga

     336,951   
  

 

 

 

Balance at December 31, 2011

   $ 1,004,102   
  

 

 

 

Finite-Lived Intangible Assets

The following table summarizes our finite-lived intangible assets (in thousands):

 

     December 31, 2011      December 31, 2010  
     Gross Carrying
Amount
     Accumulated
Amortization
     Gross Carrying
Amount
     Accumulated
Amortization
 

Intangible asset - Ranexa

   $ 688,400       $ 97,099       $ 688,400       $ 54,795   

Intangible asset - Lexiscan

     262,800         69,723         262,800         43,979   

Other

     24,995         12,709         22,095         11,128   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 976,195       $ 179,531       $ 973,295       $ 109,902   
  

 

 

    

 

 

    

 

 

    

 

 

 

Amortization expense related to intangible assets was $69.6 million and $59.9 million for the years ended December 31, 2011 and 2010, respectively, and was recorded in cost of goods sold in our Consolidated Statement of Income. Amortization expense related to intangible assets was $43.4 million for the year ended December 31, 2009 and was recorded primarily in cost of goods sold in our Consolidated Statement of Income. The weighted-average amortization period for these intangible assets is approximately ten years.

As of December 31, 2011, the estimated future amortization expense associated with our intangible assets for each of the five succeeding fiscal years is as follows (in thousands):

 

Fiscal Year

   Amount  

2012

   $ 63,345   

2013

     64,283   

2014

     66,735   

2015

     73,261   

2016

     100,048   
  

 

 

 

Total

   $ 367,672   
  

 

 

 

Indefinite-Lived Intangible Assets

As of December 31, 2011, we had indefinite-lived intangible assets of $266.2 million which consisted of $117.0 million and $149.2 million of purchased IPR&D from our acquisitions of Arresto and Calistoga, respectively. During the fourth quarter of 2011, we recorded $26.6 million of impairment charges related to certain IPR&D assets acquired from CGI. These impairment charges were a result of changes in the anticipated market share related to the Syk compound. The $2.9 million purchased IPR&D project from CV Therapeutics was completed and reclassified as a finite-lived intangible asset in 2011, and is currently being amortized over its estimated useful life.

As of December 31, 2010, we had indefinite-lived intangible assets of $29.5 million, which consisted of $26.6 million and $2.9 million of purchased IPR&D from our acquisitions of CGI and CV Therapeutics, respectively. In the fourth quarter of 2010, we recorded $136.0 million of impairment charges in R&D expense related to certain IPR&D assets acquired from CV Therapeutics which we had no future plans to develop and which were deemed to have no future use to us or other market participants. The majority of the impairment charge related to our GS-9667 program, a product candidate that was in Phase 1 clinical studies for the treatment of diabetes and hypertriglyceridemia, which was terminated due to unfavorable results from pharmacokinetics and pharmacodynamics tests that demonstrated limited effectiveness of the compound in patients. Given these results, we do not believe it has alternative future uses for us or other market participants.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet17.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Collaborative Arrangements
12 Months Ended
Dec. 31, 2011
Collaborative Arrangements [Abstract]
Collaborative Arrangements
10. COLLABORATIVE ARRANGEMENTS

From time to time, as a result of entering into strategic collaborations, we may hold investments in non-public companies. We review our interests in investee companies for consolidation and/or appropriate disclosure based on applicable guidance. Contractual terms which provide us control over an entity may require us to consolidate the entity. Entities consolidated because they are controlled by means other than a majority voting interest are referred to as variable interest entities (VIEs). We assess whether we are the primary beneficiary of a VIE based on our power to direct the activities of the VIE that most significantly impact the VIE's economic performance and our obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. As of December 31, 2011, we determined that certain of our investee companies are VIEs; however, other than with respect to our joint ventures with BMS, we are not the primary beneficiary and therefore do not consolidate these investees.

Bristol-Myers Squibb Company

North America

In 2004, we entered into a collaboration arrangement with BMS in the United States to develop and commercialize a single-tablet regimen containing our Truvada and BMS's Sustiva (efavirenz), which we sell as Atripla. The collaboration is structured as a joint venture and operates as a limited liability company named Bristol-Myers Squibb & Gilead Sciences, LLC, which we consolidate. The ownership interests of the joint venture and thus the sharing of product revenue and costs reflect the respective economic interests of BMS and Gilead and are based on the proportions of the net selling price of Atripla attributable to efavirenz and Truvada. Since the net selling price for Truvada may change over time relative to the net selling price of efavirenz, both BMS's and our respective economic interests in the joint venture may vary annually.

We and BMS share marketing and sales efforts, with both parties providing equivalent sales force efforts at levels agreed to annually by BMS and Gilead. Since the second quarter of 2011, except for a limited number of activities that will be jointly managed, the parties no longer coordinate detailing and promotional activities in the United States and the parties have begun to reduce their joint promotional efforts in Canada as we launch Complera and in anticipation of the launch of Quad. The parties will continue to collaborate on activities such as manufacturing, regulatory, compliance and pharmacovigilance. We are responsible for accounting, financial reporting, tax reporting, manufacturing and product distribution for the joint venture. Both parties provide their respective bulk active pharmaceutical ingredients to the joint venture at their approximate market values. In 2006, the joint venture received approval from the FDA to sell Atripla in the United States. Also in 2006, we and BMS amended the joint venture's collaboration agreement to allow the joint venture to sell Atripla into Canada and in 2007, the joint venture received approval from Health Canada to sell Atripla in Canada. As of December 31, 2011 and 2010, the joint venture held efavirenz active pharmaceutical ingredient which it purchased from BMS at BMS's estimated net selling price of efavirenz in the U.S. market. These amounts are included in inventories on our Consolidated Balance Sheets. As of December 31, 2011 and 2010, total assets held by the joint venture were $1.62 billion and $1.45 billion, respectively, and consisted primarily of cash and cash equivalents, accounts receivable (including intercompany receivables with Gilead) and inventories. As of December 31, 2011 and 2010, total liabilities held by the joint venture were $1.27 billion and $759.5 million, respectively, and consisted primarily of accounts payable (including intercompany payables with Gilead) and other accrued expenses. These asset and liability amounts do not reflect the impact of intercompany eliminations that are included in our Consolidated Balance Sheets. Although we are the primary beneficiary of the joint venture, the legal structure of the joint venture limits the recourse that its creditors will have over our general credit or assets.

Europe

In 2007, Gilead Sciences Limited, a wholly-owned subsidiary in Ireland, and BMS entered into a collaboration arrangement to commercialize and distribute Atripla in the European Union, Iceland, Liechtenstein, Norway and Switzerland (collectively, the European Territory). The parties formed a limited liability company which we consolidate, to manufacture Atripla for distribution in the European Territory using efavirenz that it purchases from BMS at BMS's estimated net selling price of efavirenz in the European Territory. We are responsible for product distribution, inventory management and warehousing. Through our local subsidiaries, we have primary responsibility for order fulfillment, collection of receivables, customer relations and handling of sales returns in all the territories where we co-promote Atripla with BMS.

Starting in 2012, except for a limited number of activities that will be jointly managed, the parties will no longer coordinate detailing and promotional activities in the region. We are also responsible for accounting, financial reporting and tax reporting for the collaboration. In 2007, the European Commission approved Atripla for sale in the European Union. As of December 31, 2011 and 2010, efavirenz purchased from BMS at BMS's estimated net selling price of efavirenz in the European Territory is included in inventories on our Consolidated Balance Sheets.

The parties also formed a limited liability company to hold the marketing authorization for Atripla in Europe. We have primary responsibility for regulatory activities and we share marketing and sales efforts with BMS. In the major market countries, both parties have agreed to provide equivalent sales force efforts. Revenue and cost sharing is based on the relative ratio of the respective net selling prices of Truvada and efavirenz.

PARI GmbH

As a result of our acquisition of Corus Pharma, Inc. (Corus) in 2006, we assumed all rights to the February 2002 development agreement between Corus and PARI GmbH (PARI) for the development of Cayston and development of an inhalation delivery device for this product. Under the terms of the agreement, we are obligated to pay PARI for services rendered, and subject to the achievement of specific milestones, we are obligated to pay certain milestone payments to PARI. In addition, we will make royalty payments based on net sales of Cayston. The agreement also provided us the right to reduce the royalty rate payable to PARI. In 2007, we paid PARI $13.5 million to reduce the royalty rate under the agreement. As Cayston had not yet been approved for commercialization at the time of the payment, we recorded this payment in R&D expenses in our Consolidated Statement of Income. In 2008, we entered into a commercialization agreement with PARI which provides for the supply and manufacture of an inhalation delivery device and accessories for use with Cayston. Under the terms of this agreement, we are obligated to pay royalties on future net sales of these products pursuant to the development agreement.

 

In 2010, we received marketing approval from the FDA for Cayston as a treatment to improve respiratory symptoms in cystic fibrosis patients with P. aeruginosa. Cayston was conditionally approved in Europe and Canada in 2009 and received full approvals in 2011.

Roche

In 1996, we entered into a development and license agreement (the 1996 Agreement) with Roche to develop and commercialize therapies to treat and prevent viral influenza. Tamiflu, an antiviral oral formulation for the treatment and prevention of influenza, was co-developed by us and Roche. Under the 1996 Agreement, Roche has the exclusive right to manufacture and sell Tamiflu worldwide, subject to its obligation to pay us a percentage of the net revenues that Roche generates from Tamiflu sales, which, in turn, has been subject to reduction for certain defined manufacturing costs.

In 2005, we entered into a first amendment and supplement to the 1996 Agreement with Roche. The amended agreement provided for the formation of a joint manufacturing committee to review Roche's manufacturing capacity for Tamiflu and its global plans for manufacturing Tamiflu, a U.S. commercial committee to evaluate commercial plans and strategies for Tamiflu in the United States and a joint supervisory committee to evaluate Roche's overall commercial plans for Tamiflu on a global basis in each case, consisting of representatives of Roche and us. Under the amended agreement, we also have the option to provide a specialized sales force to supplement Roche's marketing efforts in the United States for Tamiflu.

The royalties payable to us on net sales of Tamiflu sold by Roche remain the same under the amended agreement, which are as follows: (a) 14% of the first $200.0 million in worldwide net sales in a given calendar year; (b) 18% of the next $200.0 million in worldwide net sales during the same calendar year; and (c) 22% of worldwide net sales in excess of $400.0 million during the same calendar year. The amended agreement revised the provision in the 1996 Agreement relating to the calculation of royalty payments such that in any given calendar quarter Roche will pay royalties based on the actual royalty rates applicable to such quarter. In addition, under the amended agreement, royalties payable by Roche to us will no longer be subject to a cost of goods sold adjustment that was provided in the 1996 Agreement. We recorded a total of $75.5 million, $386.5 million and $392.7 million of Tamiflu royalties in 2011, 2010 and 2009, respectively.

As a result of our acquisition of CV Therapeutics in 2009, we assumed all rights to the agreement between CV Therapeutics and Roche under which we have an exclusive worldwide license to Ranexa. Under the license agreement, we paid an initial license fee and are obligated to make certain payments to Roche upon receipt of the first and second product approvals for Ranexa in any of the following major market countries: France, Germany, Italy, the United States and the United Kingdom. In 2006, we received FDA approval for Ranexa for the treatment of chronic angina and paid $11.0 million to Roche in accordance with the agreement. In 2008, we received marketing authorization from the European Medicines Agency (EMA) for Ranexa for the treatment of chronic angina in all 27 European Union member states and paid $9.0 million to Roche related to this approval. This amount was capitalized as a noncurrent asset on our Consolidated Balance Sheet and is being amortized over its useful patent life, which is approximately 11 years, expiring in 2019.

In 2006, we entered into an amendment to the agreement with Roche related to Ranexa. This amendment provided us with exclusive worldwide commercial rights to Ranexa for all potential indications in humans. Under the terms of the amendment, we made an upfront payment to Roche and are obligated to make royalty payments to Roche on worldwide net product sales of any licensed products. In addition, we are obligated to make additional milestone payments upon the achievement of certain regulatory approvals.

 

Japan Tobacco Inc.

In 2005, Japan Tobacco granted us exclusive rights to develop and commercialize elvitegravir, a novel HIV integrase inhibitor, in all countries of the world, excluding Japan, where Japan Tobacco retained such rights. Under the agreement, we are responsible for seeking regulatory approval in our territories and are required to use diligent efforts to commercialize a product for the treatment of HIV infection. We will bear all costs and expenses associated with such commercialization efforts. Under the terms of the agreement, we incurred an up-front license fee of $15.0 million which was included in R&D expenses in 2005 as there was no future alternative use for this technology. In 2006, we recorded $5.0 million in R&D expenses related to a milestone we incurred as a result of dosing the first patient in a Phase 2 clinical study and in 2008, we recorded $7.0 million in R&D expenses related to a milestone we paid related to the dosing of the first patient in a Phase 3 clinical study.

In October 2011, we submitted an NDA to the FDA for marketing approval of the once-daily, single-tablet "Quad" regimen of elvitegravir, cobicistat, tenofovir disoproxil fumarate and emtricitabine. In December 2011, the FDA accepted the NDA for review. The FDA has set a target review date for Quad of August 27, 2012 under the Prescription Drug User Fee Act. Also in December 2011, we announced that we had submitted a marketing authorization application to the EMA for marketing approval of this single-tablet regimen. We recorded $16.0 million in R&D expenses in December 2011 related to milestones we incurred in connection with these filings. We are obligated to make additional payments upon the achievement of other milestones as well as pay royalties on any future product sales arising from this collaboration.

GlaxoSmithKline Inc.

In 2002, we granted GSK the right to commercialize Hepsera, our oral antiviral for the treatment of chronic HBV, in Asia, Latin America and certain other territories. Under the agreement, we retained rights to Hepsera in the United States, Canada, Europe, Australia, New Zealand and Turkey. GSK received exclusive rights to develop Hepsera solely for the treatment of chronic HBV in all of its territories, the most significant of which include China, Japan, South Korea and Taiwan. GSK has full responsibility for the development and commercialization of Hepsera in its territories. Under the terms of the agreement, we received an up-front license payment of $10.0 million and from 2002 to 2004, we received an aggregate of $17.0 million in milestone payments related to the commercial approvals of Hepsera in various countries. In 2006, we received an aggregate of $10.0 million in milestone payments from GSK for the achievement by GSK of four consecutive quarters of Hepsera gross sales exceeding $75.0 million and the achievement of a certain drug status in China. The up-front license fee and milestone payments had been recorded as deferred revenue with a total of $3.4 million and $3.6 million being amortized into contract revenue in 2008 and 2007, respectively. In 2009, we terminated our supply agreement with GSK to allow GSK to assume all manufacturing and supply obligations for Hepsera for use in the GSK territories. As a result of the termination of this supply agreement, we recognized the remaining $24.5 million balance of deferred revenue as contract revenue during 2009. Under the terms of the agreement, GSK is also required to pay us royalties on net sales that GSK generates from sales of Hepsera and Epivir-HBV/Zeffix (GSK's hepatitis product) in the GSK territories. We recorded $39.7 million, $48.0 million and $32.4 million of royalty revenues in 2011, 2010 and 2009, respectively.

In 2009, we entered into an agreement with GSK to commercialize Viread for the treatment of chronic HBV in five countries in Asia. Under the agreement, we will retain exclusive rights for commercialization of Viread for chronic HBV in Hong Kong, Singapore, South Korea and Taiwan. In China, GSK will have exclusive commercialization rights for Viread for chronic HBV. Each company will pay royalties to the other on sales of Viread for chronic HBV in their respective Asian territories.

 

In 2010, we granted GSK the exclusive right to commercialize tenofovir disoproxil fumarate for chronic HBV in Japan. GSK will be required to pay us royalties on sales of tenofovir disoproxil fumarate for chronic HBV in this territory.

As a result of our acquisition of Myogen, Inc. (Myogen) in 2006, we assumed all rights to the March 2006 license and distribution and supply agreements between Myogen and GSK. Under the terms of the license agreement, GSK has exclusive rights to market ambrisentan (the active pharmaceutical ingredient in Letairis) under the name Volibris for pulmonary arterial hypertension in territories outside the United States. We received an up-front payment of $20.0 million and, subject to the achievement of specific milestones, we are eligible to receive total additional milestone payments of $80.0 million. In addition, we will receive royalties based on net sales of Volibris in the GSK territories. GSK has an option to negotiate from us an exclusive sublicense for additional therapeutic uses for Volibris in the GSK territories during the term of the license agreement. We will continue to conduct and bear the expense of all clinical development activities that we believe are required to obtain and maintain regulatory approvals for Letairis and Volibris in the United States, Canada and the European Economic Area, and each party may conduct additional development activities in its territories at its own expense. The parties may agree to jointly develop ambrisentan for new indications in the licensed field and each party will pay its share of external costs associated with such joint development. Significant milestone payments we have received to date include a milestone payment of $11.0 million from GSK for validation by the EMA of the marketing authorization application for Volibris in 2007, and a $20.0 million milestone payment related to the European Commission marketing authorization approval for Volibris in 2008. In 2011, we received a $10.0 million milestone payment for the achievement by GSK of four consecutive quarters of Volibris net sales exceeding $100.0 million. The milestone and up-front license payments have been recorded as deferred revenue and are being recognized as contract revenue over the remaining period for which we have performance obligations under the agreement, which is approximately six years. We recognized $9.8 million, $8.7 million and $8.3 million as contract revenue in 2011, 2010 and 2009, respectively.

Astellas US LLC and Astellas Pharma US, Inc. (Astellas), as applicable

As a result of our acquisition of CV Therapeutics in 2009, we assumed all rights to the July 2000 collaboration agreement between CV Therapeutics and Astellas US LLC to develop and market second generation pharmacologic MPI stress agents. Under this agreement, Astellas received exclusive North American rights to Lexiscan and to a backup compound. In 2008, we received FDA approval of Lexiscan for use as a pharmacologic stress agent in MPI studies in patients unable to undergo adequate exercise stress. Under the terms of the agreement, the product is marketed by Astellas and was launched in 2008 in the United States. We recognized $51.3 million, $43.2 million and $19.7 million of royalty revenues in 2011, 2010 and 2009, respectively, from Astellas related to sales of Lexiscan.

Since 1991, we have had an agreement with Astellas Pharma US, Inc. related to rights to market AmBisome. Under the terms of the agreement, Astellas is responsible for promotion of AmBisome in the United States and Canada. We have exclusive marketing rights to AmBisome in the rest of the world, subject to our obligation to pay royalties to Astellas in connection with sales in significant markets in Asia. We receive royalties from Astellas' sales of AmBisome in the Unites States and Canada. In connection with this agreement, we recorded royalty revenues of $9.9 million, $10.2 million and $9.4 million in 2011, 2010 and 2009, respectively.

Tibotec Pharmaceuticals

In 2009, we entered into a license and collaboration agreement with Tibotec Pharmaceuticals (Tibotec), a wholly-owned subsidiary of Johnson & Johnson, to develop and commercialize a fixed-dose combination of our Truvada and Tibotec's non-nucleoside reverse transcriptase inhibitor rilpivirine. This combination was approved in the United States and European Union in 2011 and is sold under the trade name Complera in the United States and Eviplera in the European Union. Under our license and collaboration agreement with Tibotec, we were granted an exclusive license to Complera/Eviplera for administration to adults in a once-daily, oral dosage form, worldwide excluding certain middle income and developing world countries and Japan. Neither party is restricted from combining its drug products with any other drugs.

In accordance with the terms of the agreement, we will reimburse up to €71.5 million (approximately $100.0 million) of development costs incurred by Tibotec for rilpivirine through December 2011. For 2011, 2010 and 2009, we recorded €17.9 million (approximately $24.7 million), €17.9 million (approximately $22.1 million) and €35.7 million (approximately $52.4 million), respectively, in reimbursable R&D expenses incurred by Tibotec in the development of rilpivirine. We are responsible for manufacturing Complera/Eviplera and have the lead role in registration, distribution and commercialization of the combination product in the licensed countries. Tibotec has exercised a right to co-detail the combination product in the countries where Gilead is the selling party. The price of the combination product is expected to be the sum of the prices of the Truvada and rilpivirine components. The cost of rilpivirine to be purchased by us from Tibotec for the combination product will approximate the market price of rilpivirine, less a specified percentage of up to thirty percent.

In 2011, we amended the agreement to include distribution of Complera/Eviplera to the rest of the world. We will distribute the product in North America, Europe, Latin America, Australia and New Zealand, while Tibotec will distribute the product in the other regions, including Japan and Russia.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet18.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Long-Term Obligations
12 Months Ended
Dec. 31, 2011
Long-Term Obligations [Abstract]
Long-Term Obligations
11. LONG-TERM OBLIGATIONS

Financing Arrangements

The following table summarizes the carrying amount of our borrowings under various financing arrangements (in thousands):

 

     December 31,  
     2011      2010  

May 2011 convertible senior notes

   $ —         $ 638,991   

May 2013 convertible senior notes

     607,036         576,884   

May 2014 convertible senior notes

     1,181,525         1,153,805   

May 2016 convertible senior notes

     1,132,293         1,107,884   

December 2014 senior unsecured notes

     749,078         —     

December 2016 senior unsecured notes

     698,864         —     

April 2021 senior unsecured notes

     992,066         —     

December 2021 senior unsecured notes

     1,247,138         —     

December 2041 senior unsecured notes

     997,734         —     
  

 

 

    

 

 

 

Total debt, net

   $ 7,605,734       $ 3,477,564   

Less current portion (May 2011 convertible senior notes)

     —           638,991   
  

 

 

    

 

 

 

Total long-term debt, net

   $ 7,605,734       $ 2,838,573   
  

 

 

    

 

 

 

May 2011 and 2013 Convertible Senior Notes

In April 2006, we issued $650.0 million of the May 2011 Notes and $650.0 million of the May 2013 Notes in a private placement pursuant to Rule 144A of the Securities Act of 1933, as amended. In May 2011, the May 2011 Notes matured and we repaid the aggregate principal balance of $650.0 million. We also paid $36.1 million in cash related to the conversion spread of the May 2011 Notes, which represents the conversion value in excess of the principal amount, and received $36.1 million in cash from our convertible note hedges related to the May 2011 Notes. Warrants related to the May 2011 Notes expired in August 2011.

The May 2011 Notes and May 2013 Notes were issued at par and bear interest rates of 0.50% and 0.625%, respectively. Debt issuance costs of $23.8 million were recorded in other noncurrent assets and are being amortized to interest expense over the contractual terms of the May 2011 Notes and the May 2013 Notes. The initial conversion rate for the May 2011 Notes is 25.8048 shares per $1,000 principal amount of the May 2011 Notes (which represents an initial conversion price of approximately $38.75 per share), and the initial conversion rate for the May 2013 Notes is 26.2460 shares per $1,000 principal amount of the May 2013 Notes (which represents an initial conversion price of approximately $38.10 per share). The conversion rates are subject to customary anti-dilution adjustments.

The May 2011 Notes and May 2013 Notes may be converted, subject to adjustment, only under the following circumstances: 1) during any calendar quarter beginning after September 30, 2006 if the closing price of our common stock for at least 20 trading days during the last 30 consecutive trading day period of the previous quarter is more than 130% of the applicable conversion price per share, 2) if we make specified distributions to holders of our common stock or if specified corporate transactions occur, or 3) during the last month prior to maturity of the applicable notes. Upon conversion, a holder would receive an amount in cash equal to the lesser of (i) the principal amount of the note or (ii) the conversion value for such note. If the conversion value exceeds the principal amount, we may also deliver, at our option, cash or common stock or a combination of cash and common stock for the conversion value in excess of the principal amount. If the May 2011 Notes and the May 2013 Notes are converted in connection with a change in control, we may be required to provide a make whole premium in the form of an increase in the conversion rate, subject to a stated maximum amount. In addition, in the event of a change in control, the holders may require us to purchase all or a portion of their notes at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any. As of December 31, 2011, the if-converted value of the May 2013 Notes would exceed the principal amount of the notes by $48.3 million.

Concurrent with the issuance of the May 2011 Notes and the May 2013 Notes, we purchased convertible note hedges in private transactions at a cost of $379.1 million, which is tax deductible over the life of the notes. We also sold warrants in private transactions and received net proceeds of $235.5 million from the sale of the warrants. The convertible note hedges and warrants are intended to reduce the potential economic dilution upon future conversions of the notes by effectively increasing our conversion price to $50.80 per share for the May 2011 Notes and $53.90 per share for the May 2013 Notes. The net cost of $143.7 million of the convertible note hedge and warrant transactions was recorded in stockholders' equity on our Consolidated Balance Sheets.

The convertible note hedges cover, subject to customary anti-dilution adjustments, 33.8 million shares of our common stock at strike prices that initially correspond to the initial conversion prices of the May 2011 Notes and the May 2013 Notes and are subject to adjustments similar to those applicable to the conversion price of the related notes. If the market value per share of our common stock at the time of conversion of the May 2011 Notes and the May 2013 Notes is above the strike price of the applicable convertible note hedges, we will be entitled to receive from the counterparties in the transactions shares of our common stock or, to the extent we have made a corresponding election with respect to the related convertible notes, cash or a combination of cash and shares of our common stock, at our option, for the excess of the market value of the common stock over the strike price of the convertible note hedges. The convertible note hedges will terminate upon the maturity of the May 2011 Notes and the May 2013 Notes or when none of the May 2011 Notes and the May 2013 Notes remain outstanding due to conversion or otherwise. There are 33.8 million shares of our common stock underlying the warrants, subject to customary anti-dilution adjustments. The warrants have strike prices of $50.80 per share (for the warrants expiring in 2011) and $53.90 per share (for the warrants expiring in 2013) and are exercisable only on their respective expiration dates. If the market value of our common stock at the time of the exercise of the applicable warrants exceeds their respective strike prices, we will be required to net settle in cash or shares of our common stock, at our option, with the respective counterparties for the value of the warrants in excess of the warrant strike prices.

Contemporaneously with the closing of the sale of the May 2011 Notes and May 2013 Notes, a portion of the net proceeds from the notes issuance and the proceeds of the warrant transactions were used to repurchase 16.7 million shares of our common stock for $544.9 million.

 

Under current accounting guidance, we bifurcated the conversion option of the May 2011 Notes and the May 2013 Notes from the debt instrument, classified the conversion option in equity and are accreting the resulting debt discount as interest expense over the contractual terms of the May 2011 Notes and the May 2013 Notes. The following table summarizes information about the equity and liability components of the May 2011 Notes and the May 2013 Notes (in thousands):

 

    Carrying Value of
Equity Component
    Net Carrying Amount of
Liability Component
    Unamortized Discount  of
Liability Component
 
    December 31,     December 31,     December 31,  
        2011             2010             2011             2010                 2011                     2010          

May 2011 convertible senior notes

  $ —        $ 147,481      $ —        $ 638,991      $ —        $ (10,996

May 2013 convertible senior notes

    193,231        193,231        607,036        576,884        (42,831     (72,983
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total May 2011 and 2013 convertible senior notes

  $ 193,231      $ 340,712      $ 607,036      $ 1,215,875      $ (42,831   $ (83,979
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

For the years ended December 31, 2011, 2010 and 2009, we recognized $46.3 million, $67.9 million and $64.6 million, respectively, in interest expense related to the contractual coupon rates and amortization of the debt discount for the May 2011 Notes and May 2013 Notes. The effective interest rates on the liability components of the May 2011 Notes and May 2013 Notes were 5.7% and 5.8%, respectively.

May 2014 and 2016 Convertible Senior Notes

In July 2010, we issued $1.25 billion of the May 2014 Notes and $1.25 billion of the May 2016 Notes in a private placement pursuant to Rule 144A of the Securities Act of 1933, as amended. The May 2014 Notes and May 2016 Notes were issued at par and bear interest rates of 1.00% and 1.625%, respectively. Debt issuance costs are primarily comprised of $37.5 million in bankers' fees, the majority of which were recorded in other noncurrent assets and are being amortized to interest expense over the contractual terms of the May 2014 Notes and the May 2016 Notes. The aggregate principal amount of the May 2014 Notes and the May 2016 Notes sold reflects the full exercise by the initial purchasers of their option to purchase additional notes to cover over-allotments. The initial conversion rate for the May 2014 Notes is 22.1845 shares per $1,000 principal amount (which represents an initial conversion price of approximately $45.08 per share), and the initial conversion rate for the May 2016 Notes is 22.0214 shares per $1,000 principal amount (which represents an initial conversion price of approximately $45.41 per share). The conversion rates are subject to customary anti-dilution adjustments.

The May 2014 Notes and May 2016 Notes may be converted prior to April 1, 2014 and April 1, 2016, respectively, only under the following circumstances: 1) during any calendar quarter commencing after September 30, 2010, if the closing price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than 130% of the applicable conversion price on each applicable trading day, or 2) during the five business day period after any measurement period of ten consecutive trading days in which, for each trading day of such period, the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on such trading day, or 3) upon the occurrence of specified corporate transactions, such as the distribution of certain stock rights, cash amounts, or other assets to all of our shareholders or the occurrence of a change in control. On and after April 1, 2014, in the case of the May 2014 Notes, and April 1, 2016, in the case of the May 2016 Notes, holders may convert their notes at any time, regardless of the foregoing circumstances. Generally, upon conversion, a holder would receive an amount in cash equal to the lesser of (i) the principal amount of the note or (ii) the conversion value for such note, as measured under the indenture governing the relevant notes. If the conversion value exceeds the principal amount, we may also deliver, at our option, cash or common stock or a combination of cash and common stock for the conversion value in excess of the principal amount. If the May 2014 Notes and the May 2016 Notes are converted in connection with a change in control, we may be required to provide a make whole premium in the form of an increase in the conversion rate, subject to a stated maximum amount. In addition, in the event of a change in control, the holders may require us to purchase all or a portion of their notes at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest, if any. As of December 31, 2011, the if-converted value of the May 2014 Notes and May 2016 Notes would not exceed the principal amounts of the notes.

Concurrent with the issuance of the May 2014 Notes and May 2016 Notes, we purchased convertible note hedges in private transactions at a cost of $362.6 million, which is tax deductible over the life of the notes. We also sold warrants in private transactions and received net proceeds of $155.4 million from the sale of the warrants. The convertible note hedges and warrants are intended to reduce the potential economic dilution upon future conversions of the May 2014 Notes and May 2016 Notes by effectively increasing our conversion price to $56.76 per share for the May 2014 Notes and $60.10 per share for the May 2016 Notes. The net cost of $207.2 million of the convertible note hedge and warrant transactions was recorded in stockholders' equity on our Consolidated Balance Sheets.

The convertible note hedges cover, subject to customary anti-dilution adjustments, 55.3 million shares of our common stock at strike prices that initially correspond to the initial conversion prices of the May 2014 Notes and the May 2016 Notes and are subject to adjustments similar to those applicable to the conversion price of the related notes. If the market value per share of our common stock at the time of conversion of the May 2014 Notes and the May 2016 Notes is above the strike price of the applicable convertible note hedges, we will be entitled to receive from the counterparties in the transactions shares of our common stock or, to the extent we have made a corresponding election with respect to the related convertible notes, cash or a combination of cash and shares of our common stock, at our option, for the excess of the market value of the common stock over the strike price of the convertible note hedges. The convertible note hedges will terminate upon the maturity of the May 2014 Notes and the May 2016 Notes or when none of the May 2014 Notes and the May 2016 Notes remain outstanding due to conversion or otherwise. There are 55.3 million shares of our common stock underlying the warrants, subject to customary anti-dilution adjustments. The warrants have strike prices of $56.76 per share (for the warrants expiring in 2014) and $60.10 per share (for the warrants expiring in 2016) and are exercisable only on their respective expiration dates. If the market value of our common stock at the time of the exercise of the applicable warrants exceeds their respective strike prices, we will be required to net settle in cash or shares of our common stock, at our option, with the respective counterparties for the value of the warrants in excess of the warrant strike prices.

We have used the net proceeds from the issuance of the convertible notes to repurchase shares of our common stock and repay existing indebtedness.

 

Under current accounting guidance, we bifurcated the conversion option of the May 2014 Notes and May 2016 Notes from the debt instrument, classified the conversion option in equity and are accreting the resulting debt discount as interest expense over the contractual terms of the May 2014 Notes and the May 2016 Notes. The following table summarizes information about the equity and liability components of the May 2014 Notes and May 2016 Notes (in thousands):

 

    Carrying Value of
Equity Component
    Net Carrying Amount of
Liability Component
    Unamortized Discount of
Liability Component
 
    December 31,     December 31,     December 31,  
    2011     2010     2011     2010     2011     2010  

May 2014 convertible senior notes

  $ 107,496      $ 107,496      $ 1,181,525      $ 1,153,805      $ (68,475   $ (96,195

May 2016 convertible senior notes

    152,039        152,039        1,132,293        1,107,884        (117,707     (142,116
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total May 2014 and 2016 convertible senior notes

  $ 259,535      $ 259,535      $ 2,313,818      $ 2,261,689      $ (186,182   $ (238,311
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

For the years ended December 31, 2011 and 2010, we recognized $84.9 million and $34.9 million, respectively, in interest expense related to the contractual coupon rates and amortization of the debt discount for the May 2014 Notes and May 2016 Notes. The effective interest rate on the liability components of the May 2014 Notes and May 2016 Notes were 3.5% and 4.0%, respectively.

April 2021 Senior Unsecured Notes

In March 2011, we issued the April 2021 Notes in a registered offering for an aggregate principal amount of $1.00 billion. The April 2021 Notes will mature on April 1, 2021 and pay interest at a fixed annual rate of 4.50%. Debt issuance costs incurred in connection with the issuance of this debt totaled approximately $5.8 million and are being amortized to interest expense over the contractual term of the April 2021 Notes.

The April 2021 Notes may be redeemed at our option at any time or from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum, as determined by an independent investment banker, of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate plus 20 basis points, plus, in each case, accrued and unpaid interest on the notes to be redeemed to the date of redemption. At any time on or after January 1, 2021, we may redeem the notes, in whole or in part, at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to the date of redemption. In addition, in the event of the occurrence of both a change in control and a downgrade in the rating of the April 2021 Notes below an investment grade rating by Standard & Poor's Ratings Services and Moody's Investors Service, Inc., the holders may require us to purchase all or a portion of their notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest.

We used the net proceeds for general corporate purposes, which include the repayment of existing indebtedness and repurchases of our common stock.

December 2014, 2016, 2021 and 2041 Senior Unsecured Notes

In December 2011, we issued the December 2014 Notes, December 2016 Notes, December 2021 Notes and December 2041 Notes in a registered offering for $750.0 million, $700.0 million, $1.25 billion and $1.00 billion, respectively for an aggregate principal amount of $3.70 billion. The notes will mature in December 2014, 2016, 2021 and 2041 and pay interest at fixed annual rates of 2.40%, 3.05%, 4.40% and 5.65%, respectively. Debt issuance costs incurred in connection with the issuance of this debt totaled approximately $20.0 million and are being amortized to interest expense over the contractual term of each of the respective notes.

These notes may be redeemed at our option at any time or from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum, as determined by an independent investment banker, of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semiannual basis at the Treasury Rate plus 35 basis points in the case of the December 2014 Notes and December 2016 Notes and 40 basis points in the case of the December 2021 Notes and December 2041 Notes plus, in each case, accrued and unpaid interest on the notes to be redeemed to the date of redemption.

At any time on or after the date that is three months prior to the maturity date of the December 2021 Notes, we may redeem the notes, in whole or in part, at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to the date of redemption. At any time on or after the date that is six months prior to the maturity date of the December 2041 Notes, we may redeem the notes, in whole or in part, at 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to the date of redemption.

In the event of the occurrence of a change in control and a downgrade in the rating of a series of notes below an investment grade rating by Standard & Poor's Ratings Services and Moody's Investors Service, Inc., the holders of such series of notes may require us to purchase all or a portion of their notes of such series at a price equal to 101% of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest.

We plan to use the net proceeds to fund the acquisition of Pharmasset, Inc. (Pharmasset) announced in November 2011 and completed in January 2012 (See Note 19).

Credit Facilities

Under our amended and restated credit agreement, we, along with our wholly-owned subsidiary, Gilead Biopharmaceutics Ireland Corporation, may borrow up to an aggregate of $1.25 billion in revolving credit loans. The credit agreement also includes a sub-facility for swing-line loans and letters of credit. Loans under the credit agreement bear interest at an interest rate of either LIBOR plus a margin ranging from 20 basis points to 32 basis points or the base rate, as described in the credit agreement. We may reduce the commitments and may prepay loans under the credit agreement in whole or in part at any time without penalty, subject to certain conditions. The credit agreement will terminate in December 2012 and all unpaid borrowings thereunder shall be due and payable at that time. In April 2009, in connection with the acquisition of CV Therapeutics, we borrowed $400.0 million under the credit agreement to partially fund the acquisition. As of December 31, 2009, we had repaid the $400.0 million under this credit agreement. In May 2010, we borrowed $500.0 million under the credit agreement to fund our stock repurchases. In August 2010, we repaid the $500.0 million borrowed under this credit agreement using proceeds from our convertible senior notes issued in July 2010. As of December 31, 2011, we had $4.0 million in letters of credit outstanding under the $1.25 billion credit agreement. We are required to comply with certain covenants under the credit agreement and as of December 31, 2011, we were in compliance with all such covenants. Subsequently, in January 2012, we fully repaid the outstanding obligations and terminated this credit agreement.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet19.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Commitments And Contingencies
12 Months Ended
Dec. 31, 2011
Commitments And Contingencies [Abstract]
Commitments And Contingencies
12. COMMITMENTS AND CONTINGENCIES

Lease Arrangements

We have entered into various long-term non-cancelable operating leases for equipment and facilities. We lease facilities in Foster City, Fremont, Palo Alto and San Dimas, California; Branford, Connecticut; Princeton, New Jersey; Seattle, Washington; the Dublin and Cork areas of Ireland and the London area of the United Kingdom. We also have operating leases for sales, marketing and administrative facilities in Europe, Canada and Asia Pacific. Our leases expire on various dates between 2012 and 2030, with many of our leases containing options to renew. Certain facility leases also contain rent escalation clauses. Our most significant lease, related to a facility in Seattle, Washington, expires in 2020 and has a 10-year term. The lease provides us with three consecutive rights to extend the term of the lease through 2035 and contains an annual three percent rent escalation clause. The lease also requires us to pay additional amounts for operating expenses and maintenance. We also have leases for three corporate aircraft, with varying terms, with renewal options upon expiration of the lease terms.

Lease expense under our operating leases was approximately $48.1 million, $41.7 million and $37.3 million during the years ended December 31, 2011, 2010 and 2009, respectively. Aggregate non-cancelable future minimum rental payments under operating leases are as follows (in thousands):

 

2012

   $ 43,635   

2013

     36,302   

2014

     30,027   

2015

     23,961   

2016

     17,814   

Thereafter

     53,215   
  

 

 

 
   $ 204,954   
  

 

 

 

Legal Proceedings

In June 2011, we received a subpoena from the United States Attorney's Office for the Northern District of California requesting documents related to the manufacture, and related quality and distribution practices, of Atripla, Emtriva, Hepsera, Letairis, Truvada, Viread and Complera. We have been cooperating and will continue to cooperate with this governmental inquiry. An estimate of a possible loss or range of losses cannot be determined given we are at the early stage of the inquiry.

We are a party to various legal actions that arose in the ordinary course of our business. We do not believe that any of these legal actions will have a material adverse impact on our consolidated business, financial position or results of operations.

Other Commitments

In the normal course of business, we enter into various firm purchase commitments primarily related to active pharmaceutical ingredients and certain inventory related items. As of December 31, 2011, these commitments for the next five years were approximately $990.2 million in 2012, $119.9 million in 2013, $82.6 million in 2014, $64.6 million in 2015 and $60.7 million in 2016. The amounts related to active pharmaceutical ingredients represent minimum purchase requirements. Actual payments for the purchases related to these active pharmaceutical ingredients were $1.53 billion, $835.7 million and $1.03 billion during the years ended December 31, 2011, 2010 and 2009, respectively.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet20.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' Equity
12 Months Ended
Dec. 31, 2011
Stockholders' Equity [Abstract]
Stockholders' Equity
13. STOCKHOLDERS' EQUITY

Stock Repurchase Programs

During 2009, we repurchased and retired 21.8 million shares of our common stock at an average purchase price of $45.69 per share, for an aggregate purchase price of $998.1 million through open market transactions under the $3.00 billion stock repurchase program approved by our Board in October 2007. In 2009, we also received 1.4 million shares of our common stock under the accelerated share repurchase agreement that we completed in March 2009. As of December 31, 2009, we completed stock repurchases under the October 2007 stock repurchase program.

In January 2010, our Board authorized a program for the repurchase of our common stock in an amount of up to $1.00 billion through open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated purchases or other means. We completed this plan in May 2010, at which time our Board authorized a three-year, $5.00 billion stock repurchase program. As of December 31, 2010, we had repurchased $3.02 billion of our common stock under our May 2010 program, and the remaining authorized amount of stock repurchases that may be made under the program was $1.98 billion. In 2010, we spent a total of $4.02 billion to repurchase and retire 109.9 million shares of our common stock, at an average purchase price of $36.57 per share.

In January 2011, our Board authorized a three-year, $5.00 billion stock repurchase program. We initiated purchases under this program in September 2011 upon completion of our May 2010 stock repurchase program. As of December 31, 2011, we had repurchased $403.1 million of our common stock under our January 2011 stock repurchase program and the remaining authorized amount of stock repurchases that may be made under this plan was $4.60 billion. In 2011, we spent a total of $2.38 billion to repurchase and retire 59.9 million shares of our common stock at an average purchase price of $39.80 per share.

We use the par value method of accounting for our stock repurchases. Under the par value method, common stock is first charged with the par value of the shares involved. The excess of the cost of shares acquired over the par value is allocated to APIC based on an estimated average sales price per issued share with the excess amounts charged to retained earnings. As a result of our stock repurchases in 2009, we reduced common stock and APIC by an aggregate of $61.7 million and charged $940.8 million to retained earnings. As a result of our stock repurchases in 2010, we reduced common stock and APIC by an aggregate of $319.8 million and charged $3.71 billion to retained earnings. As a result of our stock repurchases in 2011, we reduced common stock and APIC by an aggregate of $186.2 million and charged $2.21 billion to retained earnings.

Preferred Stock

We have 5,000,000 shares of authorized preferred stock issuable in series. Our Board is authorized to determine the designation, powers, preferences and rights of any such series. We have designated 800,000 shares of Series A Junior Participating Preferred Stock for potential issuance under our November 1994 rights agreement with Computershare Limited, as amended (the Rights Plan). There was no preferred stock outstanding as of December 31, 2011 and 2010.

Rights Plan

The Rights Plan provides for the distribution of a preferred stock purchase right as a dividend for each share of our common stock. The purchase rights are not currently exercisable. Under certain conditions involving an acquisition or proposed acquisition by any person or group of 15% or more of our common stock, the purchase rights permit the holders (other than the 15% holder) to purchase our common stock at a 50% discount from the market price at that time, upon payment of a specified exercise price per purchase right. In addition, in the event of certain business combinations, the purchase rights permit the purchase of the common stock of an acquirer at a 50% discount from the market price at that time. Under certain conditions, the purchase rights may be redeemed by our Board in whole, but not in part, at a price of $0.0025 per purchase right. The purchase rights have no voting privileges and are attached to and automatically trade with our common stock.

In October 1999, October 2003 and May 2006, our Board approved amendments to the Rights Plan. The first amendment provided, among other things, for an increase in the exercise price of a right under the plan from $15 to $100 and an extension of the term of the plan from November 2004 to October 2009. The second amendment provides, among other things, for an increase in the exercise price of a right under the plan from $100 to $400 and an extension of the term of the Rights Plan to October 2013. The third amendment was a clarifying amendment entered into in connection with an increase in the designated number of shares of Series A Junior Participating Preferred Stock for potential issuance under the Rights Plan in May 2006.

2004 Equity Incentive Plan

In May 2004, our stockholders approved and we adopted the Gilead Sciences, Inc. 2004 Equity Incentive Plan (the 2004 Plan), which replaced all of our existing equity plans (Prior Plans). The remaining shares that were available for future grants under the Prior Plans were transferred to the 2004 Plan and additionally, if awards granted under the Prior Plans expire or otherwise terminate without being exercised, the shares of our common stock reserved for such awards are added back to the pool of available shares of common stock under the 2004 Plan. The 2004 Plan is a broad based incentive plan that provides for the grant of equity-based awards, including stock options, restricted stock units, restricted stock awards and performance awards, to employees, directors and consultants. Under the 2004 Plan, we are authorized to issue a maximum of 25,000,000 shares of full-value awards, such as restricted stock, restricted stock units, performance shares, performance units (to the extend settled in common stock) and phantom shares over the term of the Plan. The 2004 Plan authorizes the issuance of a total of 121,594,183 shares of common stock. As of December 31, 2011, 47,406,212 shares remain available for future grant under the 2004 Plan.

Stock Options

The 2004 Plan provides for option grants designated as either non-qualified or incentive stock options. Prior to January 1, 2006, we granted both non-qualified and incentive stock options, but all stock options granted after January 1, 2006 have been non-qualified stock options. Under the 2004 Plan, employee stock options granted prior to 2011 generally vest over five years and stock options granted starting in 2011 generally vest over four years. All options are exercisable over a period not to exceed the contractual term of ten years from the date the stock options are issued and are granted at prices not less than the fair market value of our common stock on the grant date. Stock option exercises are settled with common stock from the 2004 Plan's previously authorized and available pool of shares.

In connection with the acquisition of CV Therapeutics, we assumed CV Therapeutics' 1994 Equity Incentive Plan, as amended and restated, Non-Employee Directors' Stock Option Plan, as amended and restated, 2000 Equity Incentive Plan, as amended and restated, 2000 Nonstatutory Incentive Plan, as amended and restated, and 2004 Employee Commencement Incentive Plan, as amended and restated (collectively, the CV Therapeutics Plans). The majority of options that were issued and outstanding under the CV Therapeutics Plans as of April 15, 2009 were converted into options to purchase approximately 1.8 million shares of our common stock and remain subject to their original terms and conditions. There are no shares available for future grant under the CV Therapeutics Plans.

 

In connection with the acquisition of Arresto, we assumed the Arresto 2007 Equity Incentive Plan (the Arresto Plan). The options that were issued and outstanding under the Arresto Plan have been converted into options to purchase our common stock effective January 14, 2011. The number of converted options to purchase our common stock is not significant. There are no shares available for future grant under the Arresto Plan.

The following table summarizes activity under our stock option plans. All option grants presented in the table had exercise prices not less than the fair value of the underlying common stock on the grant date (shares in thousands):

 

    Year Ended December 31,  
  2011     2010     2009  
  Shares     Weighted-
Average
Exercise Price
    Shares     Weighted-
Average
Exercise Price
    Shares     Weighted-
Average
Exercise Price
 

Outstanding, beginning of year

    60,251      $ 30.32        69,193      $ 28.09        76,811      $ 24.70   

Granted and assumed

    2,445      $ 38.35        4,836      $ 44.27        7,286      $ 48.87   

Forfeited

    (1,523   $ 43.33        (2,348   $ 43.16        (2,393   $ 39.33   

Expired

    (1,117   $ 47.83        (759   $ 53.27        (440   $ 64.08   

Exercised

    (9,175   $ 19.26        (10,671   $ 17.68        (12,071   $ 15.56   
 

 

 

     

 

 

     

 

 

   

Outstanding, end of year

    50,881      $ 31.91        60,251      $ 30.32        69,193      $ 28.09   
 

 

 

     

 

 

     

 

 

   

Exercisable, end of year

    41,418      $ 29.22        45,018      $ 25.92        47,090      $ 22.36   
 

 

 

     

 

 

     

 

 

   

Weighted-average grant date fair value of options granted during the year

    $ 12.33        $ 14.24        $ 17.00   

The total intrinsic value of options exercised during the years ended December 31, 2011, 2010 and 2009 was $194.5 million, $262.3 million and $379.8 million, respectively. The total fair value of stock options that vested during the years ended December 31, 2011, 2010 and 2009 was $96.4 million, $124.6 million and $162.9 million, respectively.

As of December 31, 2011, the number of options outstanding that are expected to vest, net of estimated future option forfeitures was 8,734,108 with a weighted-average exercise price of $43.79 per share, an aggregate intrinsic value of $10.3 million and a weighted-average remaining contractual life of 7.6 years. The aggregate intrinsic value of stock options outstanding and stock options exercisable as of December 31, 2011 were $557.2 million and $545.8 million, respectively. As of December 31, 2011, the weighted-average remaining contractual life for options outstanding and options exercisable were 4.8 and 4.1 years, respectively.

As of December 31, 2011, there was $163.0 million of unrecognized compensation cost related to stock options, which is expected to be recognized over an estimated weighted-average period of 2.4 years.

Performance Awards

Under the 2004 Plan, we grant performance-based restricted stock units which vest upon the achievement of specified market and performance goals relative to a pre-determined peer group. The actual number of common shares ultimately issued is calculated by multiplying the number of performance units by a payout percentage ranging from 0% to 200%. Performance awards vest only when a committee (or subcommittee) of our Board has determined that we have achieved our specified market and performance goals. In January 2011, 2010 and 2009 we granted 603,400412,505 and 426,305 performance-based unit awards (the 2011 performance shares, the 2010 performance shares and the 2009 performance shares, respectively). These awards will vest over a single three-year performance measurement and vesting period for each of the performance share awards.

The fair value of each performance share grant is estimated at the grant date using a Monte Carlo valuation methodology. The weighted-average grant date fair values of the 2011, 2010 and 2009 performance shares were $38.44, $54.25 and $61.89 per share, respectively.

We recognized $24.6 million, $21.3 million and $14.9 million of stock-based compensation expenses in 2011, 2010 and 2009, respectively, related to these performance shares. As of December 31, 2011, there was $26.9 million of unrecognized compensation costs related to performance shares, which is expected to be recognized over an estimated weighted-average period of 1.3 years.

We have also granted performance-based restricted stock units to certain of our employees under the 2004 Plan. The vesting of these awards is subject to the achievement of specified performance goals. The number of these awards issued to date has not been significant.

Restricted Stock Units

We grant restricted stock units (RSUs) to certain employees as part of our annual employee equity compensation review program as well as to new hire employees and to non-employee members of our Board. RSUs are share awards that entitle the holder to receive freely tradable shares of our common stock upon vesting. Generally, RSUs vest ratably on an annual basis over five years from the date of grant for awards granted prior to 2011. Starting January 1, 2011, RSUs vest over four years from the date of grant.

The fair value of an RSU is equal to the closing price of our common stock on the grant date. The following table summarizes our RSU activities and related information (in thousands, except per share amounts):

 

     Year Ended December 31,  
     2011      2010      2009  
     Shares     Weighted-
Average
Grant-Date
Fair Value
Per Share
     Shares     Weighted-
Average
Grant-Date
Fair Value
Per Share
     Shares     Weighted-
Average
Grant-Date
Fair Value
Per Share
 

Outstanding, beginning of year

     2,649      $ 42.99         1,251      $ 48.25         —        $ —     

Granted and assumed

     4,215      $ 38.79         1,974      $ 40.90         1,368      $ 48.24   

Vested

     (587   $ 43.23         (274   $ 47.79         (37   $ 44.54   

Forfeited

     (454   $ 41.09         (302   $ 46.82         (80   $ 49.84   
  

 

 

      

 

 

      

 

 

   

Outstanding, end of year

     5,823      $ 40.07         2,649      $ 42.99         1,251      $ 48.25   
  

 

 

      

 

 

      

 

 

   

The total fair value of RSUs that vested during the years ended December 31, 2011, 2010 and 2009 was $25.4 million, $13.1 million and $1.7 million, respectively. As of December 31, 2011, there was $218.9 million of unrecognized compensation cost related to nonvested RSUs which is expected to be recognized over a weighted-average period of 3.3 years.

Employee Stock Purchase Plan

Under our Employee Stock Purchase Plan, as amended (ESPP), employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits. The purchase price per share is equal to the lower of 85% of the fair market value of our common stock on the offering date or the purchase date. The ESPP offers a two-year look-back feature as well as an automatic reset feature that provides for an offering period to be reset to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period. ESPP purchases are settled with common stock from the ESPP's previously authorized and available pool of shares. During 2011, 1,199,739 shares were issued under the ESPP for $35.0 million. A total of 33,280,000 shares of common stock have been reserved for issuance under the ESPP, and there were 5,367,672 shares available for issuance under the ESPP as of December 31, 2011.

As of December 31, 2011, there was $7.3 million of unrecognized compensation cost related to the ESPP, which is expected to be recognized over an estimated weighted-average period of 1.4 years.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet21.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stock-Based Compensation
12 Months Ended
Dec. 31, 2011
Stock-Based Compensation [Abstract]
Stock-Based Compensation
14. STOCK-BASED COMPENSATION

The following table summarizes the stock-based compensation expenses included in our Consolidated Statements of Income (in thousands):

 

     Year Ended December 31,  
     2011     2010     2009  

Cost of goods sold

   $ 8,433      $ 10,180      $ 10,859   

Research and development expenses

     73,490        84,048        82,893   

Selling, general and administrative expenses

     110,455        105,813        92,006   
  

 

 

   

 

 

   

 

 

 

Stock-based compensation expense included in total costs and expenses

     192,378        200,041        185,758   

Income tax effect

     (47,325     (52,331     (46,486
  

 

 

   

 

 

   

 

 

 

Stock-based compensation expense, net of tax

   $ 145,053      $ 147,710      $ 139,272   
  

 

 

   

 

 

   

 

 

 

During the years ended December 31, 2011, 2010 and 2009, we capitalized $8.6 million, $10.9 million and $11.4 million of stock-based compensation costs to inventory, respectively, of which $2.0 million, $1.8 million and $1.1 million remained in inventory at December 31, 2011, 2010 and 2009, respectively.

Stock-based compensation is recognized as expense over the requisite service periods in our Consolidated Statements of Income using a graded vesting expense attribution approach for unvested stock options granted prior to January 1, 2006, and using the straight-line expense attribution approach for stock options granted after our adoption of new guidance for share-based payments to employees and directors on January 1, 2006. As stock-based compensation expenses related to stock options recognized on adoption of the new guidance is based on awards ultimately expected to vest, gross expense has been reduced for estimated forfeitures. The guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We estimated forfeitures based on our historical experience. Prior to the adoption of this guidance, pro forma information that was required to be disclosed included forfeitures as they occurred. As a result of the guidance adopted on January 1, 2006, we only recognize a tax benefit from stock-based compensation in APIC if an incremental tax benefit is realized after all other tax attributes currently available to us have been utilized. In addition, we have elected to account for the indirect benefits of stock-based compensation on the research tax credit and the extraterritorial income deduction through the Consolidated Statements of Income rather than through APIC.

Valuation Assumptions

Fair values of options granted under our 2004 Plan and purchases under our ESPP were estimated at grant or purchase dates using a Black-Scholes option valuation model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including expected stock price volatility and expected award life. We used the following assumptions to calculate the estimated fair value of the awards:

 

     Year Ended December 31,  
     2011     2010     2009  

Expected volatility:

      

Stock options

     29     31     35

ESPP

     30     35     37

Expected term in years:

      

Stock options

     5.6        5.4        5.3   

ESPP

     1.4        1.3        1.3   

Risk-free interest rate:

      

Stock options

     2.2     2.3     2.1

ESPP

     0.8     0.4     0.7

Expected dividend yield

     0     0     0

The fair value of stock options granted was calculated using the single option approach. We use a blend of historical volatility along with implied volatility for traded options on our common stock to determine our expected volatility. The expected term of stock-based awards represents the weighted-average period the awards are expected to remain outstanding. We estimate the weighted-average expected term based on historical cancellation and historical exercise data related to our stock options as well as the contractual term and vesting terms of the awards. The risk-free interest rate is based upon observed interest rates appropriate for the term of the stock-based awards. The dividend yield is based on our history and expectation of dividend payouts.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet22.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Comprehensive Income (Loss)
12 Months Ended
Dec. 31, 2011
Comprehensive Income (Loss) [Abstract]
Comprehensive Income (Loss)
15. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) comprises net income and certain changes in stockholders' equity that are excluded from net income, such as changes in the fair value of our outstanding effective cash flow hedges, changes in unrealized gains and losses on our available-for-sale securities and changes in our cumulative foreign currency translation account. Comprehensive income (loss) for the years ended December 31, 2011, 2010 and 2009 is included in our Consolidated Statements of Stockholders' Equity. The components of comprehensive income (loss) are shown net of related taxes where the underlying assets or liabilities are held in jurisdictions that are expected to generate a future tax benefit or liability.

The following reclassifications were recorded in connection with net realized gains (losses) on sales of securities and cash flow hedges that were previously included in comprehensive income (loss) (in thousands):

 

     Year Ended December 31,  
     2011     2010      2009  

Net unrealized gain (loss) related to available-for-sale securities, net of tax impact of $(3,305), $(6,624) and $(11,724) for 2011, 2010 and 2009, respectively

   $ (24,067   $ 13,450       $ 21,689   

Net unrealized gain (loss) related to cash flow hedges, net of tax impact of $(93), $(9,149) and $10,682 for 2011, 2010 and 2009, respectively

     1,571        105,924         (19,016

Less reclassification adjustments, net of tax impact of $(6,725), $(9,028) and $(32,532)for 2011, 2010 and 2009, respectively

     (55,049     74,289         58,130   
  

 

 

   

 

 

    

 

 

 

Other comprehensive income (loss)

   $ 32,553      $ 45,085       $ (55,457
  

 

 

   

 

 

    

 

 

 

 

The balance of accumulated other comprehensive income (loss), net of taxes, as reported on our Consolidated Balance Sheets consists of the following components (in thousands):

 

     As of December 31,  
     2011     2010  

Net unrealized gain (loss) on available-for-sale securities

   $ (26,748   $ 16,528   

Net unrealized gain on cash flow hedges

     97,444        21,615   

Cumulative foreign currency translation adjustment

     (12,496     (7,232
  

 

 

   

 

 

 

Accumulated other comprehensive income

   $ 58,200      $ 30,911   
  

 

 

   

 

 

 

 

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet23.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Segment Information
12 Months Ended
Dec. 31, 2011
Segment Information [Abstract]
Segment Information
16. SEGMENT INFORMATION

Product Sales

We operate in one business segment, which primarily focuses on the development and commercialization of human therapeutics for life threatening diseases. All products are included in one segment, because the majority of our products have similar economic and other characteristics, including the nature of the products and production processes, type of customers, distribution methods and regulatory environment.

Product sales consist of the following (in thousands):

 

     Year Ended December 31,  
     2011      2010      2009  

Antiviral products:

        

Atripla

   $ 3,224,518       $ 2,926,579       $ 2,382,113   

Truvada

     2,875,141         2,649,908         2,489,682   

Viread

     737,867         732,240         667,510   

Hepsera

     144,679         200,592         271,595   

Complera/Eviplera

     38,747         —           —     

Emtriva

     28,764         27,679         27,974   
  

 

 

    

 

 

    

 

 

 

Total antiviral products

     7,049,716         6,536,998         5,838,874   

AmBisome

     330,156         305,856         298,597   

Letairis

     293,426         240,279         183,949   

Ranexa

     320,004         239,832         131,062   

Other products

     109,057         66,956         16,829   
  

 

 

    

 

 

    

 

 

 

Total product sales

   $ 8,102,359       $ 7,389,921       $ 6,469,311   
  

 

 

    

 

 

    

 

 

 

 

The following table summarizes total revenues from external customers and collaboration partners by geographic region (in thousands). Product sales and product-related contract revenue are attributed to countries based on ship-to location. Royalty and non-product related contract revenue are attributed to countries based on the location of the collaboration partner.

 

     Year Ended December 31,  
     2011      2010      2009  

United States

   $ 4,608,343       $ 4,224,035       $ 3,599,313   

Outside of the United States:

        

France

     587,292         519,700         468,314   

United Kingdom

     518,377         450,368         393,036   

Spain

     498,201         456,647         451,115   

Italy

     392,052         345,189         323,709   

Germany

     370,403         274,991         293,111   

Switzerland

     179,582         458,606         448,203   

Other European countries

     578,792         665,237         603,068   

Other countries

     652,343         554,647         431,514   
  

 

 

    

 

 

    

 

 

 

Total revenues outside of the United States

     3,777,042         3,725,385         3,412,070   
  

 

 

    

 

 

    

 

 

 

Total revenues

   $ 8,385,385       $ 7,949,420       $ 7,011,383   
  

 

 

    

 

 

    

 

 

 

The following table summarizes revenues from each of our customers who individually accounted for 10% or more of our total revenues (as a percentage of total revenues):

 

     Year Ended December 31,  
     2011     2010     2009  

Cardinal Health, Inc.

     17     17     18

McKesson Corp.

     14     14     13

AmerisourceBergen Corp.

     12     12     11

Property, Plant and Equipment

At December 31, 2011, the net book value of our property, plant and equipment in the United States, Ireland and Canada was $597.9 million, $109.0 million and $51.7 million, respectively, which comprised approximately 98% of the total net book value of our property, plant and equipment. At December 31, 2010, the net book value of our property, plant and equipment in the United States, Ireland and Canada was $519.4 million, $112.2 million and $53.9 million, respectively, which comprised approximately 98% of the total net book value of our property, plant and equipment.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet24.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes
12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]
Income Taxes
17. INCOME TAXES

The provision for income taxes consists of the following (in thousands):

 

     Year Ended December 31,  
     2011     2010     2009  

Federal:

      

Current

   $ 704,412      $ 852,822      $ 719,777   

Deferred

     68,391        (29,854     (47,608
  

 

 

   

 

 

   

 

 

 
     772,803        822,968        672,169   
  

 

 

   

 

 

   

 

 

 

State:

      

Current

     62,631        139,819        153,376   

Deferred

     (17,450     17,464        9,150   
  

 

 

   

 

 

   

 

 

 
     45,181        157,283        162,526   
  

 

 

   

 

 

   

 

 

 

Foreign:

      

Current

     39,921        43,094        42,860   

Deferred

     4,040        454        (1,191
  

 

 

   

 

 

   

 

 

 
     43,961        43,548        41,669   
  

 

 

   

 

 

   

 

 

 

Provision for income taxes

   $ 861,945      $ 1,023,799      $ 876,364   
  

 

 

   

 

 

   

 

 

 

Foreign pre-tax income was $1.48 billion, $1.37 billion and $1.33 billion in 2011, 2010 and 2009, respectively. The cumulative unremitted foreign earnings that are considered to be permanently invested outside the United States and for which no U.S. taxes have been provided, were approximately $5.84 billion and $4.48 billion as of December 31, 2011 and 2010, respectively. The residual U.S. tax liability, if such amounts were remitted, would be approximately $2.05 billion and $1.60 billion as of December 31, 2011 and 2010, respectively.

The difference between the provision for income taxes and the amount computed by applying the U.S. federal statutory income tax rate to income before provision for income taxes is as follows (in thousands):

 

     Year Ended December 31,  
     2011     2010     2009  

Income before provision for income taxes

   $ 3,651,004      $ 3,913,548      $ 3,501,956   
  

 

 

   

 

 

   

 

 

 

Tax at federal statutory rate

   $ 1,277,852      $ 1,369,742      $ 1,225,685   

State taxes, net of federal benefit

     27,894        106,250        111,095   

Foreign earnings at different rates

     (443,879     (435,767     (399,993

Research and other credits

     (32,403     (33,072     (43,045

Net unbenefitted stock compensation

     14,860        13,188        4,269   

Other

     17,621        3,458        (21,647
  

 

 

   

 

 

   

 

 

 

Provision for income taxes

   $ 861,945      $ 1,023,799      $ 876,364   
  

 

 

   

 

 

   

 

 

 

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows (in thousands):

 

     December 31,  
     2011     2010  

Deferred tax assets:

    

Net operating loss carryforwards

   $ 260,907      $ 308,854   

Stock-based compensation

     156,715        142,242   

Reserves and accruals not currently deductible

     116,564        109,806   

Deferred revenue

     37,314        49,194   

Depreciation related

     45,223        58,875   

Research and other credit carryforwards

     30,350        25,151   

Capitalized intangibles

     5,227        5,839   

Other, net

     58,172        88,669   
  

 

 

   

 

 

 

Total deferred tax assets before valuation allowance

     710,472        788,630   

Valuation allowance

     (9,209     (13,040
  

 

 

   

 

 

 

Total deferred tax assets

     701,263        775,590   
  

 

 

   

 

 

 

Deferred tax liabilities:

    

Intangibles

     (330,184     (322,168

Unremitted foreign earnings

     (15,928     (15,928

Other

     (14,562     (20,774
  

 

 

   

 

 

 

Total deferred tax liabilities

     (360,674     (358,870
  

 

 

   

 

 

 

Net deferred tax assets

   $ 340,589      $ 416,720   
  

 

 

   

 

 

 

The valuation allowance decreased by $3.8 million for the year ended December 31, 2011 and increased by $11.9 million and $1.1 million for the years ended December 31, 2010 and 2009, respectively. We have concluded, based on the standard set forth in the FASB Accounting Standards Codification related to Income Taxes, that it is more likely than not that we will not realize any benefit from the deferred tax assets related to certain state net operating loss and credit carryforwards.

At December 31, 2011, we had U.S. federal net operating loss carryforwards of approximately $594.4 million. The federal net operating loss carryforwards will start to expire in 2016, if not utilized. We also had federal tax credit carryforwards of approximately $21.3 million which will start to expire in 2016, if not utilized. In addition, we had state net operating loss and tax credit carryforwards of approximately $1.45 billion and $27.5 million, respectively. The state net operating loss and tax credit carryforwards will start to expire in 2012 if not utilized.

Utilization of net operating losses and tax credits may be subject to an annual limitation due to ownership change limitations provided in the Internal Revenue Code of 1986, as amended, and similar state provisions. This annual limitation may result in the expiration of the net operating losses and credits before utilization.

We file federal, state and foreign income tax returns in many jurisdictions in the United States and abroad. For federal income tax purposes, the statute of limitations is open for 2003 and onwards. For certain acquired entities, the statute of limitations is open for all years from inception due to our utilization of their net operating losses and credits carried over from prior years. For California income tax purposes, the statute of limitations is open for 2002 and onwards.

 

Our income tax returns are audited by federal, state and foreign tax authorities. We are currently under examination by the Internal Revenue Service (IRS) for the 2008 and 2009 tax years and by various state and foreign jurisdictions. There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We periodically evaluate our exposures associated with our tax filing positions.

At December 31, 2011 and 2010, we have total federal, state and foreign unrecognized tax benefits of $146.9 million and $126.5 million, respectively. Of the total unrecognized tax benefits, $120.6 million and $106.5 million at December 31, 2011 and 2010, respectively, if recognized, would reduce our effective tax rate in the period of recognition. We have continued to classify interest and penalties related to unrecognized tax benefits as part of our income tax provision in our Consolidated Statements of Income. As of December 31, 2011 and 2010, we had accrued interest and penalties related to unrecognized tax benefits of $17.7 million and $12.3 million, respectively.

As of December 31, 2011, we believe that it is reasonably possible that our unrecognized tax benefits will not significantly change in the next 12 months as we do not expect to have clarification from the IRS and other tax authorities around any of our uncertain tax positions.

The following is a rollforward of our total gross unrecognized tax benefit liabilities for the years ended December 31, 2011, 2010 and 2009 (in thousands):

 

     December 31,  
     2011     2010     2009  

Balance, beginning of period

   $ 126,516      $ 106,506      $ 121,424   

Tax positions related to current year:

      

Additions

     21,113        24,320        25,036   

Reductions

     —          (3,303     (8,380

Tax positions related to prior years:

      

Additions

     11,171        25,581        37,014   

Reductions

     (4,896     (23,474     (36,277

Settlements

     (3,067     (2,160     (31,517

Lapse of statute of limitations

     (3,929     (954     (794
  

 

 

   

 

 

   

 

 

 

Balance, end of period

   $ 146,908      $ 126,516      $ 106,506   
  

 

 

   

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet25.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Deferred Compensation Plans
12 Months Ended
Dec. 31, 2011
Deferred Compensation Plans [Abstract]
Deferred Compensation Plans
18. DEFERRED COMPENSATION PLANS

We maintain a retirement savings plan under which eligible employees may defer compensation for income tax purposes under Section 401(k) of the Internal Revenue Code (Gilead Plan). Under the Gilead Plan, employees may contribute up to 60% of their eligible annual compensation, subject to IRS plan limits. We make matching contributions under the Gilead Plan. In 2011, 2010 and 2009, we contributed up to 50% of an employee's contributions up to an annual maximum match of $5,000.Our total matching contribution expense under the Gilead Plan for the years ended December 31, 2011, 2010 and 2009 was $18.8 million, $11.2 million, and $10.2 million, respectively.

We maintain a deferred compensation plan under which our directors and key employees may defer compensation for income tax purposes. The deferred compensation plan is a non-qualified deferred compensation plan which is not subject to the qualification requirements under Section 401(a) of the Internal Revenue Code. Compensation deferred after December 31, 2004 is subject to the requirements of Section 409A of the Internal Revenue Code. Under the plan, officers and other senior grade level employees may contribute up to 70% of their annual salaries and up to 100% of their annual bonus while directors may contribute up to 100% of their annual retainer fee. Effective 2011, directors may also defer up to 100% of their RSU awards. Amounts deferred by participants are deposited in a rabbi trust and are recorded in other noncurrent assets in our Consolidated Balance Sheets. Beginning in 2004, directors may also elect to receive all or a portion of their annual cash retainer in phantom shares, which gives the participant the right to receive an amount equal to the value of a specified number of shares over a specified period of time and which will be payable in shares of our common stock (with fractional shares paid out in cash) as established by the plan administrator. As of December 31, 2011, we had 35,376 phantom shares outstanding. Participants can elect one of several distribution dates available under the plan at which they will receive their deferred compensation payment.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet26.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Subsequent Events
12 Months Ended
Dec. 31, 2011
Subsequent Events [Abstract]
Subsequent Events
19. SUBSEQUENT EVENTS

Acquisition of Pharmasset, Inc.

In November 2011, we entered into a definitive agreement to acquire Pharmasset for $11.1 billion through a cash tender offer and subsequent merger. This transaction closed on January 17, 2012, at which time Pharmasset became a wholly-owned subsidiary. We financed the transaction with approximately $5.2 billion in cash on hand, $2.2 billion in bank debt and $3.7 billion in senior unsecured notes issued in December 2011.

Pharmasset was a clinical-stage pharmaceutical company located in Princeton, New Jersey, committed to discovering, developing and commercializing novel drugs to treat viral infections. Pharmasset's primary focus was the development of oral therapeutics for the treatment of HCV infection. Pharmasset's research and development efforts were focused on nucleoside/tide analogs, a class of compounds which act as alternative substrates for the viral polymerase, thus inhibiting viral replication. We believe the acquisition will provide us with an opportunity to complement our existing HCV portfolio and help advance our effort to develop all-oral regimens for the treatment of HCV.

Pharmasset's lead compound was a nucleotide analog in HCV-infected individuals across genotypes now known as GS-7977. GS-7977 is being evaluated in Phase 2 and 3 clinical studies. During 2012, we expect to receive a significant amount of data from clinical trials evaluating GS-7977. On February 17, 2012, we announced that data indicates that GS-7977 with ribavirin for the treatment of genotype 1 patients with a prior "null" response to an interferon-containing regimen for 12 weeks will not be sufficient to cure their disease. We are currently conducting additional Phase 2 studies in HCV infected genotype 1 patients, including treatment-naïve patients, the results of which we expect at the end of the first quarter, in the second quarter and early in the third quarter of 2012.

We are currently in the process of valuing the assets acquired and liabilities assumed in the business combination. Upon the completion of the valuation analysis, we expect to provide the amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed.

Bank Debt

On January 12, 2012, in conjunction with our acquisition of Pharmasset, we entered into a five-year $1.25 billion revolving credit facility credit agreement (the Five-Year Revolving Credit Agreement), a $750.0 million short-term revolving credit facility credit agreement (the Short-Term Revolving Credit Agreement) and a $1.00 billion Term Loan Facility (the Term Loan Credit Agreement). We borrowed $750.0 million under the Five-Year Revolving Credit Agreement, $400.0 million under the Short-Term Revolving Credit Agreement and $1.00 billion under the Term Loan Credit Agreement, upon the close of the acquisition.

 

Loans under the Five-Year Revolving Credit Agreement, Short-Term Revolving Credit Agreement and Term Loan Credit Agreement will bear interest at either (i) the Eurodollar Rate plus the Applicable Margin or (ii) the Base Rate plus the Applicable Margin, each as defined in the applicable credit agreement. We may reduce the commitments and may prepay loans under any of these agreements in whole or in part at any time without premium or penalty.

The Five-Year Revolving Credit Agreement was inclusive of a $30.0 million swing line loan sub-facility and a $25.0 million letter of credit sub-facility. The Five-Year Revolving Credit Agreement will terminate and all amounts owing thereunder shall be due and payable on January 12, 2017. The Short-Term Revolving Credit Agreement will terminate and all amounts owing thereunder shall be due and payable on January 10, 2013; however, we may request that the maturity date be extended until January 9, 2014. All principal repayment installments under the Term Loan Credit Agreement will be due and payable as specified in the Term Loan Credit Agreement, with the final principal installment payment due and payable on January 12, 2015.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet27.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Quarterly Results Of Operations
12 Months Ended
Dec. 31, 2011
Quarterly Results Of Operations [Abstract]
Quarterly Results Of Operations
20. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following amounts are in thousands, except per share amounts:

 

     1st Quarter      2nd Quarter      3rd Quarter      4th Quarter  

2011 (1)

        

Total revenues

   $ 1,926,094       $ 2,137,253       $ 2,121,660       $ 2,200,378   

Gross profit on product sales

   $ 1,389,467       $ 1,505,725       $ 1,533,870       $ 1,548,887   

Net income

   $ 647,303       $ 742,459       $ 737,538       $ 661,759   

Net income attributable to Gilead

   $ 651,141       $ 746,227       $ 741,124       $ 665,145   

Net income per share attributable to Gilead common stockholders—basic

   $ 0.82       $ 0.95       $ 0.97       $ 0.88   

Net income per share attributable to Gilead common stockholders—diluted

   $ 0.80       $ 0.93       $ 0.95       $ 0.87   

2010 (2)

        

Total revenues

   $ 2,085,853       $ 1,927,224       $ 1,937,656       $ 1,998,687   

Gross profit on product sales

   $ 1,347,633       $ 1,350,536       $ 1,387,975       $ 1,433,901   

Net income

   $ 852,094       $ 709,127       $ 702,163       $ 626,365   

Net income attributable to Gilead

   $ 854,901       $ 712,061       $ 704,876       $ 629,419   

Net income per share attributable to Gilead common stockholders—basic

   $ 0.95       $ 0.81       $ 0.85       $ 0.78   

Net income per share attributable to Gilead common stockholders—diluted

   $ 0.92       $ 0.79       $ 0.83       $ 0.76   

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet28.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Schedule II: Valuation And Qualifying Accounts
12 Months Ended
Dec. 31, 2011
Schedule II: Valuation And Qualifying Accounts [Abstract]
Schedule II: Valuation And Qualifying Accounts

GILEAD SCIENCES, INC.

Schedule II: Valuation and Qualifying Accounts

(in thousands)

 

     Balance at
Beginning of
Period
     Additions/
Charged to
Expense
     Deductions      Balance at
End of
Period
 

Year ended December 31, 2011:

           

Accounts receivable allowances (1)

   $ 150,942       $ 1,228,006       $ 1,172,958       $ 205,990   

Valuation allowances for deferred tax assets (2)

   $ 13,040       $ 436       $ 4,267       $ 9,209   

Year ended December 31, 2010:

           

Accounts receivable allowances (1)

   $ 132,810       $ 818,132       $ 800,000       $ 150,942   

Valuation allowances for deferred tax assets (2)

   $ 1,078       $ 12,127       $ 165       $ 13,040   

Year ended December 31, 2009:

           

Accounts receivable allowances (1)

   $ 90,694       $ 606,504       $ 564,388       $ 132,810   

Valuation allowances for deferred tax assets (2)

   $ —         $ 15,103       $ 14,025       $ 1,078   

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet29.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Organization And Summary Of Significant Accounting Policies (Policy)
12 Months Ended
Dec. 31, 2011
Organization And Summary Of Significant Accounting Policies [Abstract]
Basis Of Presentation And Significant Accounting Policies, Estimates And Judgments
Revenue Recognition
Revenue Recognition, Product Sales
Revenue Recognition, Government Rebates
Revenue Recognition, Cash Discounts
Revenue Recognition, Distributor Fees
Revenue Recognition, Product Returns
Revenue Recognition, Royalty Revenues
Revenue Recognition, Contract And Other Revenues
Shipping And Handling Costs

Shipping and Handling Costs

Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of goods sold in our Consolidated Statements of Income.

Research And Development Expenses

Research and Development Expenses

Major components of research and development (R&D) expenses consist of personnel costs, including salaries, benefits and stock-based compensation, clinical studies performed by contract research organizations (CROs), materials and supplies, licenses and fees, milestone payments under collaboration arrangements and overhead allocations consisting of various support and facilities related costs.

We charge R&D costs, including clinical study costs, to expense when incurred. Clinical study costs are a significant component of R&D expenses. Most of our clinical studies are performed by third-party CROs. We monitor levels of performance under each significant contract including the extent of patient enrollment and other activities through communications with our CROs. We accrue costs for clinical studies performed by CROs over the service periods specified in the contracts and adjust our estimates, if required, based upon our ongoing review of the level of effort and costs actually incurred by the CROs. We validate our accruals quarterly with our vendors and perform detailed reviews of the activities related to our significant contracts. Based upon the results of these validation processes, we assess the appropriateness of our accruals and make any adjustments we deem necessary to ensure that our expenses reflect the actual effort incurred by the CROs.

All of our material CRO contracts are terminable by us upon written notice and we are generally only liable for actual effort expended by the CRO and certain non-cancelable expenses incurred at any point of termination. Amounts paid in advance related to uncompleted services will be refunded to us if a contract is terminated. Some contracts may include additional termination payments that become due and payable if we terminate the contract. Such additional termination payments are only recorded if it becomes probable that a contract will be terminated.

Advertising Expenses

Advertising Expenses

We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $116.6 million in 2011, $116.5 million in 2010 and $108.1 million in 2009.

Net Income Per Share Attributable To Gilead Common Stockholders

Net Income Per Share Attributable to Gilead Common Stockholders

Basic net income per share attributable to Gilead common stockholders is calculated based on the weighted-average number of shares of our common stock outstanding during the period. Diluted net income per share attributable to Gilead common stockholders is calculated based on the weighted-average number of shares of our common stock outstanding and other dilutive securities outstanding during the period. The potential dilutive shares of our common stock resulting from the assumed exercise of outstanding stock options, restricted stock units and performance shares and the assumed exercise of warrants relating to the convertible senior notes due in May 2011 (May 2011 Notes), May 2013 (May 2013 Notes), May 2014 (May 2014 Notes) and May 2016 (May 2016 Notes) (collectively, the Convertible Notes) are determined under the treasury stock method.

Because the principal amount of the Convertible Notes will be settled in cash, only the conversion spread relating to the Convertible Notes is included in our calculation of diluted net income per share attributable to Gilead common stockholders. Our common stock resulting from the assumed settlement of the conversion spread of the Convertible Notes has a dilutive effect when the average market price of our common stock during the period exceeds the conversion prices of $38.75, $38.10, $45.08 and $45.41 for the May 2011 Notes, May 2013 Notes, May 2014 Notes and May 2016 Notes, respectively.

In May 2011, our May 2011 Notes matured and as a result, we have only considered their impact for the period they were outstanding on our net income per share calculations. In August 2011, the warrants related to our May 2011 Notes expired and as a result, we have only considered their impact for the period they were outstanding on our net income per share calculations.

For 2011, 2010 and 2009, the average market prices of our common stock exceeded the conversion prices of the May 2011 and May 2013 Notes and the dilutive effects are included in the accompanying table. For 2011, 2010 and 2009, the average market prices of our common stock did not exceed the conversion prices of the May 2014 Notes and May 2016 Notes and therefore, these notes did not have a dilutive effect on our net income per share for those periods.

Warrants relating to the May 2011 Notes, May 2013 Notes, May 2014 Notes and May 2016 Notes have a dilutive effect when the average market price of our common stock during the period exceeds the warrants' exercise prices of $50.80, $53.90, $56.76 and $60.10, respectively. The average market prices of our common stock during 2011, 2010 and 2009 did not exceed the warrants' exercise prices relating to any of the Convertible Notes; therefore, these warrants did not have a dilutive effect on our net income per share for those periods.

Stock options to purchase approximately 21.1 million, 22.5 million and 17.4 million weighted-average shares of our common stock were outstanding during 2011, 2010 and 2009, respectively, but were not included in the computation of diluted net income per share attributable to Gilead common stockholders because their effect was antidilutive.

The following table is a reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share attributable to Gilead common stockholders (in thousands):

 

                         
    Year Ended December 31,  
    2011     2010     2009  

Numerator:

                       

Net income attributable to Gilead

  $ 2,803,637      $ 2,901,257      $ 2,635,755   
   

 

 

   

 

 

   

 

 

 

Denominator:

                       

Weighted-average shares of common stock outstanding used in the calculation of basic net income per share attributable to Gilead common stockholders

    774,903        856,060        904,604   

Effect of dilutive securities:

                       

Stock options and equivalents

    14,248        16,606        23,850   

Conversion spread related to the May 2011 Notes

    187        222        2,684   

Conversion spread related to the May 2013 Notes

    780        508        2,971   
   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding used in the calculation of diluted net income per share attributable to Gilead common stockholders

    790,118        873,396        934,109   
   

 

 

   

 

 

   

 

 

 
Stock-Based Compensation

Stock-Based Compensation

Share-based payments to employees and directors are recognized in the Consolidated Statements of Income based on their fair values and the benefit of tax deductions in excess of recognized compensation cost are reported in the Consolidated Statements of Cash Flows as a financing activity. The calculated pool of excess tax benefits is recorded as part of additional paid-in capital (APIC).

Cash And Cash Equivalents

Cash and Cash Equivalents

We consider highly liquid investments with insignificant interest rate risk and an original maturity of three months or less on the purchase date to be cash equivalents. We may enter into overnight repurchase agreements (repos) under which we purchase securities with an obligation to resell them the following day. Securities purchased under agreements to resell are recorded at face value and reported as cash and cash equivalents. Under our investment policy, we may enter into repos with major banks and authorized dealers provided that such repos are collateralized by U.S. government securities with a fair value of at least 102% of the fair value of securities sold to us. Other eligible instruments under our investment policy that are included in cash equivalents include commercial paper, money market funds and other bank obligations.

Marketable And Nonmarketable Securities

Marketable and Nonmarketable Securities

We determine the appropriate classification of our marketable securities, which consist primarily of debt securities and which include auction rate securities and variable rate demand obligations, at the time of purchase and reevaluate such designation at each balance sheet date. All of our marketable securities are considered as available-for-sale and carried at estimated fair values and reported in either cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net income and reported in accumulated other comprehensive income (loss) as a separate component of stockholders' equity. Interest and other income, net, includes interest, dividends, amortization of purchase premiums and discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. We regularly review all of our investments for other-than-temporary declines in fair value. Our review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost basis. When we determine that the decline in fair value of an investment is below our accounting basis and this decline is other-than-temporary, we reduce the carrying value of the security we hold and record a loss for the amount of such decline.

As a result of entering into collaborations, from time to time, we may hold investments in non-public companies. We record these nonmarketable securities at cost in other noncurrent assets, less any amounts for other-than-temporary impairment. We regularly review our securities for indicators of impairment. Investments in nonmarketable securities are not material for the periods presented.

Concentrations Of Risk

 

Concentrations of Risk

We are subject to credit risk from our portfolio of cash equivalents and marketable securities. Under our investment policy, we limit amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. We are not exposed to any significant concentrations of credit risk from these financial instruments. The goals of our investment policy, in order of priority, are as follows: safety and preservation of principal and diversification of risk; liquidity of investments sufficient to meet cash flow requirements; and a competitive after-tax rate of return.

 

We are also subject to credit risk from our accounts receivable related to our product sales. The majority of our trade accounts receivable arises from product sales in the United States and Europe. As of December 31, 2011, our accounts receivable in Southern Europe, specifically Greece, Italy, Portugal and Spain totaled approximately $1.10 billion, of which $612.4 million were greater than 120 days past due and $250.7 million were greater than 365 days past due. To date, we have not experienced significant losses with respect to the collection of our accounts receivable. We believe that our allowance for doubtful accounts was adequate at December 31, 2011.

Certain of the raw materials and components that we utilize in our operations are obtained through single suppliers. Certain of the raw materials that we utilize in our operations are made at only one facility. Since the suppliers of key components and raw materials must be named in a new drug application (NDA) filed with the U.S. Food and Drug Administration (FDA) for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from our suppliers were interrupted for any reason, we may be unable to ship our commercial products or to supply any of our product candidates for clinical trials.

Accounts Receivable

Accounts Receivable

Trade accounts receivable are recorded net of allowances for wholesaler chargebacks related to government rebate programs, cash discounts for prompt payment, doubtful accounts and sales returns. Estimates for wholesaler chargebacks for government rebates, cash discounts and sales returns are based on contractual terms, historical trends and our expectations regarding the utilization rates for these programs. Estimates for our allowance for doubtful accounts is determined based on existing contractual payment terms, historical payment patterns of our customers and individual customer circumstances, an analysis of days sales outstanding by geographic region and a review of the local economic environment and its potential impact on government funding and reimbursement practices. Historically, the amounts of uncollectible accounts receivable that have been written off have been insignificant and consistent with management's expectations.

Inventories
Prepaid Royalties

Prepaid Royalties

Prepaid royalties are capitalized at cost, which initially is equivalent to the present value of the future royalty obligation that we would expect to pay to the licensor on expected future levels of product sales incorporating the related technology. We review periodically the expected future sales levels of our products and any indicators that might require a write-down in the net recoverable value of our asset or a change in the estimated life of the prepaid royalty. We amortize our prepaid royalties to cost of goods sold over the remaining life of the underlying patent based on an effective royalty rate derived from forecasted future product sales incorporating the related technology. We review our effective royalty rate at least annually and prospectively adjust the effective rate based on significant new facts or circumstances that may arise from our review.

Our prepaid royalties are primarily comprised of emtricitabine royalties we paid to Emory University (Emory) for the HIV indication when we and Royalty Pharma purchased the royalty interest owned by Emory in 2005. Under the terms of the transaction, we and Royalty Pharma paid 65% and 35%, respectively, of the total purchase price of $525.0 million to Emory in exchange for the elimination of the emtricitabine royalties due to Emory on worldwide net sales of products containing emtricitabine. As a result of this transaction, we capitalized as prepaid royalties our 65% share of the $525.0 million purchase price, or $341.3 million. As of December 31, 2011 and 2010, we had an unamortized prepaid royalty asset of $190.2 million and $219.5 million, respectively. In 2011, 2010 and 2009, $29.3 million, $25.5 million and $29.9 million were amortized to cost of goods sold, respectively.

Property, Plant And Equipment

 

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are recognized using the straight-line method. Repairs and maintenance costs are expensed as incurred. Estimated useful lives in years are as follows:

 

     

Description

   Estimated Useful Life

Buildings and improvements

   20-35

Laboratory and manufacturing equipment

   4-10

Office and computer equipment

   3-7

Leasehold improvements

   Shorter of useful life

or lease term

Office and computer equipment includes capitalized software. We had unamortized capitalized software costs of $96.0 million and $22.5 million on our Consolidated Balance Sheets as of December 31, 2011 and 2010, respectively. Leasehold improvements and capitalized leased equipment are amortized over the shorter of the lease term or the asset's useful life. Amortization of capitalized leased equipment is included in depreciation expense. Capitalized interest on construction in-progress is included in property, plant and equipment. Interest capitalized in 2011, 2010 and 2009 was not significant.

Goodwill And Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Other intangible assets with indefinite useful lives are related to purchased in-process research and development (IPR&D) projects and are measured at their respective fair values as of the acquisition date. We do not amortize goodwill and other intangible assets with indefinite useful lives. We test goodwill and other indefinite-lived intangible assets for impairment on an annual basis and in between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the assets below their carrying amounts.

Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment on an annual basis as well as between annual tests if we become aware of any events occurring or changes in circumstances that would indicate a reduction in the fair value of the IPR&D projects below their respective carrying amounts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized based on their respective estimated useful lives at that point in time.

Intangible assets with finite useful lives are primarily related to purchased marketed products from our acquisition of CV Therapeutics, Inc. (CV Therapeutics) and are amortized over their estimated useful lives. Intangible assets with finite useful lives are reviewed for impairment when facts or circumstances suggest that the carrying value of these assets may not be recoverable. We amortize the intangible asset related to Ranexa, which we acquired from CV Therapeutics, over its estimated useful life to cost of goods sold using an amortization rate derived from our forecasted future product sales for Ranexa. Our product sales forecasts are prepared annually and determined using our best estimates of future activity and consider such factors as historical and expected future patient usage or uptake of our products, the introduction of complimentary or combination therapies or products and future product launch plans. If a previously unanticipated and significant change occurs to our sales forecasts, we will prospectively update the rate used to amortize our intangible asset related to Ranexa which may increase future cost of goods sold, as that is where we record the amortization expense. We amortize the intangible asset related to Lexiscan, which we also acquired from CV Therapeutics, over its estimated useful life to cost of goods sold on a straight-line basis. Given that current Lexiscan revenues consist of royalties received from a collaboration partner and our lack of ongoing access and visibility into that partner's future sales forecasts, we cannot make a reasonable estimate of the amortization rate using a forecasted product sales approach.

Impairment Of Long-Lived Assets

Impairment of Long-Lived Assets

The carrying value of long-lived assets is reviewed on a regular basis for the existence of facts or circumstances both internally and externally that may suggest impairment. Specific potential indicators of impairment include a significant decrease in the fair value of an asset, a significant change in the extent or manner in which an asset is used or a significant physical change in an asset, a significant adverse change in legal factors or in the business climate that affects the value of an asset, an adverse action or assessment by the FDA or another regulator, an accumulation of costs significantly in excess of the amount originally expected to acquire or construct an asset and operating or cash flow losses combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with an income producing asset.

Should there be an indication of impairment, we will test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value will be recognized as an impairment loss.

Foreign Currency Translation, Transactions And Contracts

Foreign Currency Translation, Transactions and Contracts

Adjustments resulting from translating the financial statements of our foreign subsidiaries into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income (loss) as a separate component of stockholders' equity. Net foreign currency exchange transaction gains or losses are included in interest and other income, net, on our Consolidated Statements of Income. Net transaction losses totaled $21.3 million, $3.7 million and $16.4 million in 2011, 2010 and 2009, respectively.

We hedge a portion of our foreign currency exposures related to outstanding monetary assets and liabilities as well as forecasted product sales using foreign currency exchange forward and option contracts. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. The credit risk associated with these contracts is driven by changes in interest and currency exchange rates and, as a result, varies over time. By working only with major banks and closely monitoring current market conditions, we limit the risk that counterparties to these contracts may be unable to perform. We also limit our risk of loss by entering into contracts that permit net settlement at maturity. Therefore, our overall risk of loss in the event of a counterparty default is limited to the amount of any unrecognized gains on outstanding contracts (i.e., those contracts that have a positive fair value) at the date of default. We do not enter into derivative contracts for trading purposes, nor do we hedge our net investment in any of our foreign subsidiaries.

Fair Value Of Financial Instruments

Fair Value of Financial Instruments

Our financial instruments consist principally of cash and cash equivalents, marketable securities, accounts receivable, foreign currency exchange forward and option contracts, accounts payable, and short-term and long-term debt. Cash and cash equivalents, marketable securities and foreign currency exchange contracts that hedge accounts receivable and forecasted sales are reported at their respective fair values on our Consolidated Balance Sheets. The carrying value and fair value of the Convertible Notes were $2.92 billion and $3.53 billion, respectively, as of December 31, 2011. The carrying value and fair value of the Convertible Notes were $3.48 billion and $3.97 billion, respectively as of December 31, 2010.

In March 2011, we issued senior unsecured notes due in April 2021 (April 2021 Notes) in a registered offering for an aggregate principal amount of $1.00 billion. The carrying value and fair value of the April 2021 Notes were $992.1 million and $1.06 billion, respectively, as of December 31, 2011. In December 2011, we issued senior unsecured notes due in December 2014 (December 2014 Notes), December 2016 (December 2016 Notes), December 2021 (December 2021 Notes) and December 2041 (December 2041 Notes) for an aggregate principal amount of $3.70 billion. The carrying value and fair value of these notes were $3.69 billion and $3.93 billion, respectively, as of December 31, 2011. The fair values of the Convertible Notes and senior unsecured notes were based on their quoted market values.

The remaining financial instruments are reported on our Consolidated Balance Sheets at amounts that approximate current fair values.

Income Taxes

Income Taxes

Our income tax provision is computed under the liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations. Various factors may have favorable or unfavorable effects on our income tax rate. These factors include, but are not limited to, interpretations of existing tax laws, changes in tax laws and rates, our portion of the non-tax deductible pharmaceutical excise tax that we are required to pay as a result of the enactment of U.S. healthcare reform legislation, the accounting for stock options and other share-based payments, mergers and acquisitions, future levels of R&D spending, changes in accounting standards, changes in the mix of earnings in the various tax jurisdictions in which we operate, changes in overall levels of pre-tax earnings and resolution of federal, state and foreign income tax audits. The impact on our income tax provision resulting from the above mentioned factors may be significant and could have a negative impact on our consolidated net income.

We record liabilities related to uncertain tax positions in accordance with the guidance that clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We do not believe any such uncertain tax positions currently pending will have a material adverse effect on our Consolidated Financial Statements, although an adverse resolution of one or more of these uncertain tax positions in any period could have a material impact on the results of operations for that period.

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet30.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Organization And Summary Of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2011
Organization And Summary Of Significant Accounting Policies [Abstract]
Reconciliation Of The Numerator And Denominator Used In The Calculation Of Basic And Diluted Net Income Per Share
                         
    Year Ended December 31,  
    2011     2010     2009  

Numerator:

                       

Net income attributable to Gilead

  $ 2,803,637      $ 2,901,257      $ 2,635,755   
   

 

 

   

 

 

   

 

 

 

Denominator:

                       

Weighted-average shares of common stock outstanding used in the calculation of basic net income per share attributable to Gilead common stockholders

    774,903        856,060        904,604   

Effect of dilutive securities:

                       

Stock options and equivalents

    14,248        16,606        23,850   

Conversion spread related to the May 2011 Notes

    187        222        2,684   

Conversion spread related to the May 2013 Notes

    780        508        2,971   
   

 

 

   

 

 

   

 

 

 

Weighted-average shares of common stock outstanding used in the calculation of diluted net income per share attributable to Gilead common stockholders

    790,118        873,396        934,109   
   

 

 

   

 

 

   

 

 

 
Schedule Of Estimated Useful Lives Of Property Plant And Equipment
     

Description

   Estimated Useful Life

Buildings and improvements

   20-35

Laboratory and manufacturing equipment

   4-10

Office and computer equipment

   3-7

Leasehold improvements

   Shorter of useful life

or lease term

------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet31.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair Value Measurements (Tables)
12 Months Ended
Dec. 31, 2011
Fair Value Measurements [Abstract]
Summary Of Assets And Liabilities Recorded At Fair Value
    December 31, 2011     December 31, 2010  
    Level 1     Level 2     Level 3     Total     Level 1     Level 2     Level 3     Total  

Assets:

               

Debt securities:

               

U.S. treasury securities

  $ —        $ —        $ —        $ —        $ 1,355,437      $ —        $ —        $ 1,355,437   

Money market funds

    7,455,982        —          —          7,455,982        520,063        —          —          520,063   

Certificates of deposit

    —          1,139,982        —          1,139,982        —          127,619        —          127,619   

U.S. government agencies and FDIC guaranteed securities

    —          —          —          —          —          1,296,110        —          1,296,110   

Municipal debt securities

    —          —          —          —          —          17,625        —          17,625   

Non-U.S. government securities

    —          —          24,741        24,741        —          278,610        9,594        288,204   

Corporate debt securities

    —          404,989        —          404,989        —          991,635        —          991,635   

Residential mortgage and asset-backed securities

    —          —          —          —          —          277,043        —          277,043   

Student loan-backed securities

    —          —          46,952        46,952        —          —          70,771        70,771   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total debt securities

    7,455,982        1,544,971        71,693        9,072,646        1,875,500        2,988,642        80,365        4,944,507   

Equity securities

    8,503        —          —          8,503        4,631        —          —          4,631   

Derivatives

    —          100,475        —          100,475        —          64,461        —          64,461   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ 7,464,485      $ 1,645,446      $ 71,693      $ 9,181,624      $ 1,880,131      $ 3,053,103      $ 80,365      $ 5,013,599   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities:

               

Contingent consideration

    —          —          135,591        135,591        —          —          11,100        11,100   

Derivatives

    —          5,710        —          5,710        —          38,553        —          38,553   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ —        $ 5,710      $ 135,591      $ 141,301      $ —        $ 38,553      $ 11,100      $ 49,653   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Rollforward Of Assets Measured Using Level 3 Inputs
     Year Ended December 31,  
     2011     2010  

Balance, beginning of period

   $ 80,365      $ 105,662   

Total realized and unrealized gains (losses) included in:

    

Interest and other income, net

     6,251        115   

Other comprehensive income (loss), net

     (30,376     5,026   

Sales of marketable securities

     (38,430     (40,032

Transfers into Level 3

     53,883        9,594   
  

 

 

   

 

 

 

Balance, end of period

   $ 71,693      $ 80,365   
  

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet32.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Tables)
12 Months Ended
Dec. 31, 2011
Available-For-Sale Securities [Abstract]
Summary Of Available-For-Sale Debt And Equity Securities At Estimated Fair Value
     Amortized
Cost
     Gross
Unrealized
Gains
     Gross
Unrealized
Losses
    Estimated
Fair Value
 

December 31, 2011

          

Debt securities:

          

U.S. treasury securities

   $ —         $ —         $ —        $ —     

Money market funds

     7,455,982         —           —          7,455,982   

Certificates of deposit

     1,140,000         —           (18     1,139,982   

U.S. government agencies and FDIC guaranteed securities

     —           —           —          —     

Municipal debt securities

     —           —           —          —     

Non-U.S. government securities

     55,246         —           (30,505     24,741   

Corporate debt securities

     404,994         —           (5     404,989   

Residential mortgage and asset-backed securities

     —           —           —          —     

Student loan-backed securities

     51,500         —           (4,548     46,952   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total debt securities

     9,107,722         —           (35,076     9,072,646   

Equity securities

     1,451         7,052         —          8,503   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 9,109,173       $ 7,052       $ (35,076   $ 9,081,149   
  

 

 

    

 

 

    

 

 

   

 

 

 

December 31, 2010

          

Debt securities:

          

U.S. treasury securities

   $ 1,349,348       $ 7,109       $ (1,020   $ 1,355,437   

Money market funds

     520,063         —           —          520,063   

Certificates of deposit

     127,594         41         (16     127,619   

U.S. government agencies and FDIC guaranteed securities

     1,284,654         11,919         (463     1,296,110   

Municipal debt securities

     17,543         103         (21     17,625   

Non-U.S. government securities

     286,410         1,880         (86     288,204   

Corporate debt securities

     985,382         7,999         (1,746     991,635   

Residential mortgage and asset-backed securities

     277,359         923         (1,239     277,043   

Student loan-backed securities

     75,900         —           (5,129     70,771   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total debt securities

     4,924,253         29,974         (9,720     4,944,507   

Equity securities

     1,451         3,180         —          4,631   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 4,925,704       $ 33,154       $ (9,720   $ 4,949,138   
  

 

 

    

 

 

    

 

 

   

 

 

 
Summary Of The Classification Of Available-For-Sale Debt And Equity Securities
     December 31, 2011      December 31, 2010  

Cash and cash equivalents

   $ 9,000,954       $ 538,946   

Short-term marketable securities

     16,491         1,190,789   

Long-term marketable securities

     63,704         3,219,403   
  

 

 

    

 

 

 

Total

   $ 9,081,149       $ 4,949,138   
  

 

 

    

 

 

 
Summary Of Available-For-Sale Debt Securities By Contractual Maturity
     December 31, 2011      December 31, 2010  
     Amortized Cost      Fair Value      Amortized Cost      Fair Value  

Less than one year

   $ 1,574,140       $ 1,561,462       $ 1,726,095       $ 1,729,735   

Greater than one year but less than five years

     26,100         8,249         3,022,744         3,044,114   

Greater than five years but less than ten years

     —           —           33,076         33,580   

Greater than ten years

     7,507,482         7,502,935         142,338         137,078   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 9,107,722       $ 9,072,646       $ 4,924,253       $ 4,944,507   
  

 

 

    

 

 

    

 

 

    

 

 

 
Summary Of Gross Realized Gains And Losses Related To Sales Of Marketable Securities
     Year Ended December 31,  
     2011     2010     2009  

Gross realized gains on sales

   $ 42,849      $ 13,254      $ 10,373   

Gross realized losses on sales

   $ (12,526   $ (3,657   $ (1,405
Summary Of Available-For-Sale Debt Securities In A Continuous Unrealized Loss Position Deemed Not To Be Other-Than-Temporarily Impaired
     Less Than 12 Months      12 Months or Greater      Total  
     Gross
Unrealized
Losses
    Estimated
Fair Value
     Gross
Unrealized
Losses
    Estimated
Fair Value
     Gross
Unrealized
Losses
    Estimated
Fair Value
 

December 31, 2011

              

Debt securities:

              

U.S. treasury securities

   $ —        $ —         $ —        $ —         $ —        $ —     

U.S. government agencies and FDIC guaranteed securities

     —          —           —          —           —          —     

Municipal debt securities

     —          —           —          —           —          —     

Non-U.S. government securities

     (30,505     24,741         —          —           (30,505     24,741   

Corporate debt securities

     (5     224,989         —          —           (5     224,989   

Certificates of deposit

     (18     1,019,982         —          —           (18     1,019,982   

Residential mortgage and asset-backed securities

     —          —           —          —           —          —     

Student loan-backed securities

     —          —           (4,548     46,952         (4,548     46,952   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

   $ (30,528   $ 1,269,712       $ (4,548   $ 46,952       $ (35,076   $ 1,316,664   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

December 31, 2010

              

Debt securities:

              

U.S. treasury securities

   $ (1,020   $ 531,184       $ —        $ —         $ (1,020   $ 531,184   

Certificates of deposit

     (13     39,987         —          —           (13     39,987   

U.S. government agencies and FDIC guaranteed securities

     (463     226,176         —          —           (463     226,176   

Municipal debt securities

     (21     4,688         —          —           (21     4,688   

Non-U.S. government securities

     (86     44,317         —          —           (86     44,317   

Corporate debt securities

     (1,749     419,425         —          —           (1,749     419,425   

Residential mortgage and asset-backed securities

     (1,239     197,330         —          —           (1,239     197,330   

Student loan-backed securities

     —          —           (5,129     70,771         (5,129     70,771   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

   $ (4,591   $ 1,463,107       $ (5,129   $ 70,771       $ (9,720   $ 1,533,878   
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet33.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2011
Derivative Financial Instruments [Abstract]
Fair Values Of Derivative Instruments On Condensed Consolidated Balance Sheets
   

As of December 31, 2011

 
   

Asset Derivatives

   

Liability Derivatives

 
   

Classification

  Fair Value    

Classification

  Fair Value  

Derivatives designated as hedges:

       

Foreign currency exchange contracts

  Other current assets   $ 77,066      Other accrued liabilities   $ 5,052   

Foreign currency exchange contracts

  Other noncurrent assets     23,169      Other long-term obligations     620   
   

 

 

     

 

 

 

Total derivatives designated as hedges

      100,235          5,672   
   

 

 

     

 

 

 

Derivatives not designated as hedges:

       

Foreign currency exchange contracts

  Other current assets     240      Other accrued liabilities     38   
   

 

 

     

 

 

 

Total derivatives not designated as hedges

      240          38   
   

 

 

     

 

 

 

Total derivatives

    $ 100,475        $ 5,710   
   

 

 

     

 

 

 

 

   

As of December 31, 2010

 
   

Asset Derivatives

   

Liability Derivatives

 
   

Classification

  Fair Value    

Classification

  Fair Value  

Derivatives designated as hedges:

       

Foreign currency exchange contracts

  Other current assets   $ 59,276      Other accrued liabilities   $ 36,493   

Foreign currency exchange contracts

  Other noncurrent assets     5,089      Other long-term obligations     2,022   
   

 

 

     

 

 

 

Total derivatives designated as hedges

      64,365          38,515   
   

 

 

     

 

 

 

Derivatives not designated as hedges:

       

Foreign currency exchange contracts

  Other current assets     96      Other accrued liabilities     38   
   

 

 

     

 

 

 

Total derivatives not designated as hedges

      96          38   
   

 

 

     

 

 

 

Total derivatives

    $ 64,461        $ 38,553   
   

 

 

     

 

 

 
Summary Of The Effect Of Foreign Currency Exchange Contracts On Consolidated Statements Of Income
    Year Ended December 31,  
            2011                     2010          

Derivatives designated as hedges:

   

Net gains recognized in OCI (effective portion)

  $ 1,664      $ 115,073   

Net gains (losses) reclassified from accumulated OCI into product sales (effective portion)

  $ (78,647   $ 73,720   

Net gains (losses) recognized in interest and other income, net (ineffective portion and amounts excluded from effectiveness testing)

  $ (17,237   $ 887   

Derivatives not designated as hedges:

   

Net gains recognized in interest and other income, net

  $ 22,084      $ 66,639   
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet34.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Acquisitions (Tables)
12 Months Ended
Dec. 31, 2011
Business Acquisition [Line Items]
Schedule Of Assets Acquired And Liabilities Assumed

Intangible assets—marketed products

   $ 951,200   

Intangible assets—IPR&D

     138,900   

Goodwill

     341,910   

Deferred tax assets

     413,816   

Deferred tax liabilities

     (426,861

Other assets/liabilities

  

Cash and cash equivalents

     129,087   

Marketable securities

     116,363   

Accounts receivable

     9,136   

Inventories

     50,455   

Prepaids and other current assets

     60,671   

Property, plant and equipment

     11,672   

Other assets

     20,162   

Accounts payable

     (5,089

Accrued and other current liabilities

     (87,898

Convertible senior notes

     (303,060

Other liabilities

     (27,906
  

 

 

 

Total other net liabilities

     (26,407
  

 

 

 

Total consideration transferred

   $ 1,392,558   
  

 

 

 
Calistoga Pharmaceuticals, Inc. [Member]
Business Acquisition [Line Items]
Fair Values Of The Assets Acquired And Liabilities Assumed

IPR&D

   $  149,200   

Goodwill

     336,951   

Other net liabilities assumed

     (1,853
  

 

 

 

Total consideration transferred

   $ 484,298   
  

 

 

 
Arresto Biosciences, Inc. [Member]
Business Acquisition [Line Items]
Fair Values Of The Assets Acquired And Liabilities Assumed

IPR&D

   $  117,000   

Goodwill

     134,482   

Deferred tax assets

     17,417   

Deferred tax liabilities

     (41,705

Other net liabilities assumed

     (125
  

 

 

 

Total consideration transferred

   $ 227,069   
  

 

 

 
CGI Pharmaceuticals, Inc. [Member]
Business Acquisition [Line Items]
Fair Values Of The Assets Acquired And Liabilities Assumed

IPR&D

   $ 26,630   

Goodwill

     70,111   

Deferred tax assets

     12,656   

Deferred tax liabilities

     (6,313

Other net liabilities assumed

     (984
  

 

 

 

Total consideration transferred

   $ 102,100   
  

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet35.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Restructuring (Tables)
12 Months Ended
Dec. 31, 2011
Restructuring [Abstract]
Schedule Of Restructuring Reserve By Type Of Cost
     Employee
Severance and
Termination
Benefits
    Facilities-
Related Costs
 

Balance at December 31, 2008

   $ —        $ —     

Costs incurred during the period

     33,797        9,880   

Costs paid or settled during the period

     (24,108     (545
  

 

 

   

 

 

 

Balance at December 31, 2009

   $ 9,689      $ 9,335   

Costs incurred during the period

     2,190        9,727   

Costs paid or settled during the period

     (11,445     (4,529
  

 

 

   

 

 

 

Balance at December 31, 2010

   $ 434      $ 14,533   

Costs incurred during the period

     —          6,683   

Costs paid or settled during the period

     (434     (9,969
  

 

 

   

 

 

 

Balance at December 31, 2011

   $ —        $ 11,247   
  

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet36.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories (Tables)
12 Months Ended
Dec. 31, 2011
Inventories [Abstract]
Schedule Of Inventories
     December 31,  
     2011      2010  

Raw materials

   $ 697,621       $ 408,015   

Work in process

     466,499         454,652   

Finished goods

     225,863         341,142   
  

 

 

    

 

 

 

Total

   $ 1,389,983       $ 1,203,809   
  

 

 

    

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet37.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Property, Plant And Equipment (Tables)
12 Months Ended
Dec. 31, 2011
Property, Plant And Equipment [Abstract]
Schedule Of Property, Plant And Equipment
     December 31,  
     2011     2010  

Property, plant and equipment, net:

    

Buildings and improvements (including leasehold improvements)

   $ 500,040      $ 501,401   

Laboratory and manufacturing equipment

     199,693        168,711   

Office and computer equipment

     211,936        116,479   

Capitalized leased equipment

     10,878        10,865   

Construction in progress

     60,746        82,334   
  

 

 

   

 

 

 

Subtotal

     983,293        879,790   

Less accumulated depreciation and amortization (including $10,546 and $10,451 relating to capitalized leased equipment for 2011 and 2010, respectively)

     (358,263     (316,367
  

 

 

   

 

 

 

Subtotal

     625,030        563,423   

Land

     149,376        137,812   
  

 

 

   

 

 

 

Total

   $ 774,406      $ 701,235   
  

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet38.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets (Tables)
12 Months Ended
Dec. 31, 2011
Intangible Assets [Abstract]
Schedule Of Carrying Amount Of Intangible Assets
     December 31,  
     2011      2010  

Goodwill

   $ 1,004,102       $ 532,669   

Finite-lived intangible assets

     796,664         863,393   

Indefinite-lived intangible assets

     266,200         29,530   
  

 

 

    

 

 

 

Total

   $ 2,066,966       $ 1,425,592   
  

 

 

    

 

 

 
Schedule Of Changes In The Carrying Amount Of Goodwill

Balance at December 31, 2010

   $ 532,669   

Goodwill resulting from the acquisition of Arresto

     134,482   

Goodwill resulting from the acquisition of Calistoga

     336,951   
  

 

 

 

Balance at December 31, 2011

   $ 1,004,102   
  

 

 

 
Schedule Of Finite-Lived Intangible Assets
     December 31, 2011      December 31, 2010  
     Gross Carrying
Amount
     Accumulated
Amortization
     Gross Carrying
Amount
     Accumulated
Amortization
 

Intangible asset - Ranexa

   $ 688,400       $ 97,099       $ 688,400       $ 54,795   

Intangible asset - Lexiscan

     262,800         69,723         262,800         43,979   

Other

     24,995         12,709         22,095         11,128   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 976,195       $ 179,531       $ 973,295       $ 109,902   
  

 

 

    

 

 

    

 

 

    

 

 

 
Estimated Future Amortization Expense

Fiscal Year

   Amount  

2012

   $ 63,345   

2013

     64,283   

2014

     66,735   

2015

     73,261   

2016

     100,048   
  

 

 

 

Total

   $ 367,672   
  

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet39.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Long-Term Obligations (Tables)
12 Months Ended
Dec. 31, 2011
Debt Instrument [Line Items]
Schedule of Carrying Amount of Long Term Obligations
     December 31,  
     2011      2010  

May 2011 convertible senior notes

   $ —         $ 638,991   

May 2013 convertible senior notes

     607,036         576,884   

May 2014 convertible senior notes

     1,181,525         1,153,805   

May 2016 convertible senior notes

     1,132,293         1,107,884   

December 2014 senior unsecured notes

     749,078         —     

December 2016 senior unsecured notes

     698,864         —     

April 2021 senior unsecured notes

     992,066         —     

December 2021 senior unsecured notes

     1,247,138         —     

December 2041 senior unsecured notes

     997,734         —     
  

 

 

    

 

 

 

Total debt, net

   $ 7,605,734       $ 3,477,564   

Less current portion (May 2011 convertible senior notes)

     —           638,991   
  

 

 

    

 

 

 

Total long-term debt, net

   $ 7,605,734       $ 2,838,573   
  

 

 

    

 

 

 
May 2014 and 2016 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Schedule of Carrying Amount of Long Term Obligations
    Carrying Value of
Equity Component
    Net Carrying Amount of
Liability Component
    Unamortized Discount of
Liability Component
 
    December 31,     December 31,     December 31,  
    2011     2010     2011     2010     2011     2010  

May 2014 convertible senior notes

  $ 107,496      $ 107,496      $ 1,181,525      $ 1,153,805      $ (68,475   $ (96,195

May 2016 convertible senior notes

    152,039        152,039        1,132,293        1,107,884        (117,707     (142,116
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total May 2014 and 2016 convertible senior notes

  $ 259,535      $ 259,535      $ 2,313,818      $ 2,261,689      $ (186,182   $ (238,311
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Total May 2011 And 2013 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Schedule of Carrying Amount of Long Term Obligations
    Carrying Value of
Equity Component
    Net Carrying Amount of
Liability Component
    Unamortized Discount  of
Liability Component
 
    December 31,     December 31,     December 31,  
        2011             2010             2011             2010                 2011                     2010          

May 2011 convertible senior notes

  $ —        $ 147,481      $ —        $ 638,991      $ —        $ (10,996

May 2013 convertible senior notes

    193,231        193,231        607,036        576,884        (42,831     (72,983
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total May 2011 and 2013 convertible senior notes

  $ 193,231      $ 340,712      $ 607,036      $ 1,215,875      $ (42,831   $ (83,979
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet40.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Commitments And Contingencies (Tables)
12 Months Ended
Dec. 31, 2011
Commitments And Contingencies [Abstract]
Schedule Of Aggregate Non-Cancelable Future Minimum Rental Payments Under Operating Leases

2012

   $ 43,635   

2013

     36,302   

2014

     30,027   

2015

     23,961   

2016

     17,814   

Thereafter

     53,215   
  

 

 

 
   $ 204,954   
  

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet41.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' Equity (Tables)
12 Months Ended
Dec. 31, 2011
Stockholders' Equity [Abstract]
Schedule Of Summary Of Activity Under Stock Option Plans
    Year Ended December 31,  
  2011     2010     2009  
  Shares     Weighted-
Average
Exercise Price
    Shares     Weighted-
Average
Exercise Price
    Shares     Weighted-
Average
Exercise Price
 

Outstanding, beginning of year

    60,251      $ 30.32        69,193      $ 28.09        76,811      $ 24.70   

Granted and assumed

    2,445      $ 38.35        4,836      $ 44.27        7,286      $ 48.87   

Forfeited

    (1,523   $ 43.33        (2,348   $ 43.16        (2,393   $ 39.33   

Expired

    (1,117   $ 47.83        (759   $ 53.27        (440   $ 64.08   

Exercised

    (9,175   $ 19.26        (10,671   $ 17.68        (12,071   $ 15.56   
 

 

 

     

 

 

     

 

 

   

Outstanding, end of year

    50,881      $ 31.91        60,251      $ 30.32        69,193      $ 28.09   
 

 

 

     

 

 

     

 

 

   

Exercisable, end of year

    41,418      $ 29.22        45,018      $ 25.92        47,090      $ 22.36   
 

 

 

     

 

 

     

 

 

   

Weighted-average grant date fair value of options granted during the year

    $ 12.33        $ 14.24        $ 17.00   
Schedule Of Restricted Stock Units Activity
     Year Ended December 31,  
     2011      2010      2009  
     Shares     Weighted-
Average
Grant-Date
Fair Value
Per Share
     Shares     Weighted-
Average
Grant-Date
Fair Value
Per Share
     Shares     Weighted-
Average
Grant-Date
Fair Value
Per Share
 

Outstanding, beginning of year

     2,649      $ 42.99         1,251      $ 48.25         —        $ —     

Granted and assumed

     4,215      $ 38.79         1,974      $ 40.90         1,368      $ 48.24   

Vested

     (587   $ 43.23         (274   $ 47.79         (37   $ 44.54   

Forfeited

     (454   $ 41.09         (302   $ 46.82         (80   $ 49.84   
  

 

 

      

 

 

      

 

 

   

Outstanding, end of year

     5,823      $ 40.07         2,649      $ 42.99         1,251      $ 48.25   
  

 

 

      

 

 

      

 

 

   
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet42.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stock-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2011
Stock-Based Compensation [Abstract]
Schedule Of Stock-Based Compensation Expenses Included In Consolidated Statement Of Income
     Year Ended December 31,  
     2011     2010     2009  

Cost of goods sold

   $ 8,433      $ 10,180      $ 10,859   

Research and development expenses

     73,490        84,048        82,893   

Selling, general and administrative expenses

     110,455        105,813        92,006   
  

 

 

   

 

 

   

 

 

 

Stock-based compensation expense included in total costs and expenses

     192,378        200,041        185,758   

Income tax effect

     (47,325     (52,331     (46,486
  

 

 

   

 

 

   

 

 

 

Stock-based compensation expense, net of tax

   $ 145,053      $ 147,710      $ 139,272   
  

 

 

   

 

 

   

 

 

 
Schedule Of Assumptions To Calculate The Estimated Fair Value Of The Awards
     Year Ended December 31,  
     2011     2010     2009  

Expected volatility:

      

Stock options

     29     31     35

ESPP

     30     35     37

Expected term in years:

      

Stock options

     5.6        5.4        5.3   

ESPP

     1.4        1.3        1.3   

Risk-free interest rate:

      

Stock options

     2.2     2.3     2.1

ESPP

     0.8     0.4     0.7

Expected dividend yield

     0     0     0
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet43.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Comprehensive Income (Loss) (Tables)
12 Months Ended
Dec. 31, 2011
Comprehensive Income (Loss) [Abstract]
Other Comprehensive Income (loss) related to Securities and Cash Flow Hedges
     Year Ended December 31,  
     2011     2010      2009  

Net unrealized gain (loss) related to available-for-sale securities, net of tax impact of $(3,305), $(6,624) and $(11,724) for 2011, 2010 and 2009, respectively

   $ (24,067   $ 13,450       $ 21,689   

Net unrealized gain (loss) related to cash flow hedges, net of tax impact of $(93), $(9,149) and $10,682 for 2011, 2010 and 2009, respectively

     1,571        105,924         (19,016

Less reclassification adjustments, net of tax impact of $(6,725), $(9,028) and $(32,532)for 2011, 2010 and 2009, respectively

     (55,049     74,289         58,130   
  

 

 

   

 

 

    

 

 

 

Other comprehensive income (loss)

   $ 32,553      $ 45,085       $ (55,457
  

 

 

   

 

 

    

 

 

 
Accumulated Other Comprehensive Income (Loss), Net Of Taxes
     As of December 31,  
     2011     2010  

Net unrealized gain (loss) on available-for-sale securities

   $ (26,748   $ 16,528   

Net unrealized gain on cash flow hedges

     97,444        21,615   

Cumulative foreign currency translation adjustment

     (12,496     (7,232
  

 

 

   

 

 

 

Accumulated other comprehensive income

   $ 58,200      $ 30,911   
  

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet44.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Segment Information (Tables)
12 Months Ended
Dec. 31, 2011
Segment Information [Abstract]
Schedule Of Product Sales
     Year Ended December 31,  
     2011      2010      2009  

Antiviral products:

        

Atripla

   $ 3,224,518       $ 2,926,579       $ 2,382,113   

Truvada

     2,875,141         2,649,908         2,489,682   

Viread

     737,867         732,240         667,510   

Hepsera

     144,679         200,592         271,595   

Complera/Eviplera

     38,747         —           —     

Emtriva

     28,764         27,679         27,974   
  

 

 

    

 

 

    

 

 

 

Total antiviral products

     7,049,716         6,536,998         5,838,874   

AmBisome

     330,156         305,856         298,597   

Letairis

     293,426         240,279         183,949   

Ranexa

     320,004         239,832         131,062   

Other products

     109,057         66,956         16,829   
  

 

 

    

 

 

    

 

 

 

Total product sales

   $ 8,102,359       $ 7,389,921       $ 6,469,311   
  

 

 

    

 

 

    

 

 

 
Schedule Of Total Revenues From External Customers And Collaboration Partners By Geographic Region
     Year Ended December 31,  
     2011      2010      2009  

United States

   $ 4,608,343       $ 4,224,035       $ 3,599,313   

Outside of the United States:

        

France

     587,292         519,700         468,314   

United Kingdom

     518,377         450,368         393,036   

Spain

     498,201         456,647         451,115   

Italy

     392,052         345,189         323,709   

Germany

     370,403         274,991         293,111   

Switzerland

     179,582         458,606         448,203   

Other European countries

     578,792         665,237         603,068   

Other countries

     652,343         554,647         431,514   
  

 

 

    

 

 

    

 

 

 

Total revenues outside of the United States

     3,777,042         3,725,385         3,412,070   
  

 

 

    

 

 

    

 

 

 

Total revenues

   $ 8,385,385       $ 7,949,420       $ 7,011,383   
  

 

 

    

 

 

    

 

 

 
Schedule Of Revenues From Each Customer Who Individually Accounted For 10% Or More Of Total Revenues
     Year Ended December 31,  
     2011     2010     2009  

Cardinal Health, Inc.

     17     17     18

McKesson Corp.

     14     14     13

AmerisourceBergen Corp.

     12     12     11
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet45.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]
Schedule Of Provision For Income Taxes
     Year Ended December 31,  
     2011     2010     2009  

Federal:

      

Current

   $ 704,412      $ 852,822      $ 719,777   

Deferred

     68,391        (29,854     (47,608
  

 

 

   

 

 

   

 

 

 
     772,803        822,968        672,169   
  

 

 

   

 

 

   

 

 

 

State:

      

Current

     62,631        139,819        153,376   

Deferred

     (17,450     17,464        9,150   
  

 

 

   

 

 

   

 

 

 
     45,181        157,283        162,526   
  

 

 

   

 

 

   

 

 

 

Foreign:

      

Current

     39,921        43,094        42,860   

Deferred

     4,040        454        (1,191
  

 

 

   

 

 

   

 

 

 
     43,961        43,548        41,669   
  

 

 

   

 

 

   

 

 

 

Provision for income taxes

   $ 861,945      $ 1,023,799      $ 876,364   
  

 

 

   

 

 

   

 

 

 
Schedule Of Difference Between Provision For Income Taxes And Federal Statutory Income Tax Rate To Income Before Provision For Income Taxes
     Year Ended December 31,  
     2011     2010     2009  

Income before provision for income taxes

   $ 3,651,004      $ 3,913,548      $ 3,501,956   
  

 

 

   

 

 

   

 

 

 

Tax at federal statutory rate

   $ 1,277,852      $ 1,369,742      $ 1,225,685   

State taxes, net of federal benefit

     27,894        106,250        111,095   

Foreign earnings at different rates

     (443,879     (435,767     (399,993

Research and other credits

     (32,403     (33,072     (43,045

Net unbenefitted stock compensation

     14,860        13,188        4,269   

Other

     17,621        3,458        (21,647
  

 

 

   

 

 

   

 

 

 

Provision for income taxes

   $ 861,945      $ 1,023,799      $ 876,364   
  

 

 

   

 

 

   

 

 

 
Components Of Deferred Tax Assets And Liabilities
     December 31,  
     2011     2010  

Deferred tax assets:

    

Net operating loss carryforwards

   $ 260,907      $ 308,854   

Stock-based compensation

     156,715        142,242   

Reserves and accruals not currently deductible

     116,564        109,806   

Deferred revenue

     37,314        49,194   

Depreciation related

     45,223        58,875   

Research and other credit carryforwards

     30,350        25,151   

Capitalized intangibles

     5,227        5,839   

Other, net

     58,172        88,669   
  

 

 

   

 

 

 

Total deferred tax assets before valuation allowance

     710,472        788,630   

Valuation allowance

     (9,209     (13,040
  

 

 

   

 

 

 

Total deferred tax assets

     701,263        775,590   
  

 

 

   

 

 

 

Deferred tax liabilities:

    

Intangibles

     (330,184     (322,168

Unremitted foreign earnings

     (15,928     (15,928

Other

     (14,562     (20,774
  

 

 

   

 

 

 

Total deferred tax liabilities

     (360,674     (358,870
  

 

 

   

 

 

 

Net deferred tax assets

   $ 340,589      $ 416,720   
  

 

 

   

 

 

 
Schedule Of Total Gross Unrecognized Tax Benefit Liabilities
     December 31,  
     2011     2010     2009  

Balance, beginning of period

   $ 126,516      $ 106,506      $ 121,424   

Tax positions related to current year:

      

Additions

     21,113        24,320        25,036   

Reductions

     —          (3,303     (8,380

Tax positions related to prior years:

      

Additions

     11,171        25,581        37,014   

Reductions

     (4,896     (23,474     (36,277

Settlements

     (3,067     (2,160     (31,517

Lapse of statute of limitations

     (3,929     (954     (794
  

 

 

   

 

 

   

 

 

 

Balance, end of period

   $ 146,908      $ 126,516      $ 106,506   
  

 

 

   

 

 

   

 

 

 
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet46.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Quarterly Results Of Operations (Tables)
12 Months Ended
Dec. 31, 2011
Quarterly Results Of Operations [Abstract]
Schedule Of Quarterly Results Of Operations
     1st Quarter      2nd Quarter      3rd Quarter      4th Quarter  

2011 (1)

        

Total revenues

   $ 1,926,094       $ 2,137,253       $ 2,121,660       $ 2,200,378   

Gross profit on product sales

   $ 1,389,467       $ 1,505,725       $ 1,533,870       $ 1,548,887   

Net income

   $ 647,303       $ 742,459       $ 737,538       $ 661,759   

Net income attributable to Gilead

   $ 651,141       $ 746,227       $ 741,124       $ 665,145   

Net income per share attributable to Gilead common stockholders—basic

   $ 0.82       $ 0.95       $ 0.97       $ 0.88   

Net income per share attributable to Gilead common stockholders—diluted

   $ 0.80       $ 0.93       $ 0.95       $ 0.87   

2010 (2)

        

Total revenues

   $ 2,085,853       $ 1,927,224       $ 1,937,656       $ 1,998,687   

Gross profit on product sales

   $ 1,347,633       $ 1,350,536       $ 1,387,975       $ 1,433,901   

Net income

   $ 852,094       $ 709,127       $ 702,163       $ 626,365   

Net income attributable to Gilead

   $ 854,901       $ 712,061       $ 704,876       $ 629,419   

Net income per share attributable to Gilead common stockholders—basic

   $ 0.95       $ 0.81       $ 0.85       $ 0.78   

Net income per share attributable to Gilead common stockholders—diluted

   $ 0.92       $ 0.79       $ 0.83       $ 0.76   
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet47.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Organization And Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
12 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2011
Warrants Expiring In 2011 [Member]
Dec. 31, 2011
Warrants Expiring In 2013 [Member]
Dec. 31, 2011
Warrants Expiring In 2014 [Member]
Dec. 31, 2011
Warrants Expiring In 2016 [Member]
Dec. 31, 2011
May 2011 Convertible Senior Notes [Member]
Apr. 30, 2006
May 2011 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2013 Convertible Senior Notes [Member]
Apr. 30, 2006
May 2013 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2014 Convertible Senior Notes [Member]
Jul. 31, 2010
May 2014 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2016 Convertible Senior Notes [Member]
Dec. 31, 2011
April 2021 Senior Unsecured Notes [Member]
Mar. 31, 2011
April 2021 Senior Unsecured Notes [Member]
Dec. 31, 2011
Convertible Senior Notes [Member]
Dec. 31, 2010
Convertible Senior Notes [Member]
Dec. 31, 2011
December 2014 Senior Unsecured Notes, December 2016 Senior Unsecured Notes, December 2021 Senior Unsecured Notes And December 2041 Senior Unsecured Notes [Member]
Dec. 31, 2011
Greater Than 120 Days Past Due [Member]
Dec. 31, 2011
Greater Than 365 Days Past Due [Member]
Dec. 31, 2011
Accounts Receivables [Member]
Organization And Summary Of Significant Accounting Policies [Line Items]
Advertising expenses $ 116,600,000 $ 116,500,000 $ 108,100,000
Conversion price of notes $ 38.75 $ 38.75 $ 38.1 $ 38.1 $ 45.08 $ 45.08 $ 45.41
Warrants exercise price 50.8 53.9 56.76 60.1
Weighted-average shares of common stock outstanding excluded from the computation of diluted net income per share because their effect was antidilutive 21.1 22.5 17.4
Percentage of fair value of securities sold and collateralized by U.S. government securities 102.00%
Accounts receivables, amount past due 612,400,000 250,700,000
Accounts receivable, days past due 120 365
Total Accounts Receivable due from Greece, Italy, Portugal and Spain 1,100,000,000
Purchase cost of royalties interest paid 525,000,000
Percentage share cost of royalty interest paid 65.00%
Percentage share cost of royalty interest by Royalty Pharma 35.00%
Prepaid royalties capitalized 341,300,000
Unamortized prepaid royalty asset 190,200,000 219,500,000
Amortized to cost of goods sold 29,300,000 25,500,000 29,900,000
Unamortized capitalized software costs 96,000,000 22,500,000
Net transaction losses 21,300,000 3,700,000 16,400,000
Carrying value of the convertible notes 2,920,000,000 3,480,000,000
Carrying value of the senior unsecured notes 7,605,734,000 2,838,573,000 992,100,000 3,690,000,000
Debt Instrument, Fair Value 1,060,000,000 3,530,000,000 3,970,000,000 3,930,000,000
Principal amount of senior notes $ 650,000,000 $ 650,000,000 $ 1,250,000,000 $ 1,000,000,000 $ 3,700,000,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet48.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Organization And Summary Of Significant Accounting Policies (Reconciliation Of The Numerator And Denominator Used In The Calculation Of Basic And Diluted Net Income Per Share) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Numerator And Denominator Used In The Calculation Of Basic And Diluted Net Income Per Share [Line Items]
Net income attributable to Gilead $ 665,145 [1] $ 741,124 [1] $ 746,227 [1] $ 651,141 [1] $ 629,419 [2] $ 704,876 [2] $ 712,061 [2] $ 854,901 [2] $ 2,803,637 $ 2,901,257 $ 2,635,755
Weighted-average shares of common stock outstanding used in the calculation of basic net income per share attributable to Gilead common stockholders 774,903 856,060 904,604
Effect of dilutive securities, stock options and equivalents 14,248 16,606 23,850
Weighted-average shares of common stock outstanding used in the calculation of diluted net income per share attributable to Gilead common stockholders 790,118 873,396 934,109
2011 Convertible Senior Notes [Member]
Numerator And Denominator Used In The Calculation Of Basic And Diluted Net Income Per Share [Line Items]
Effect of dilutive securities, conversion spread 187 222 2,684
2013 Convertible Senior Notes [Member]
Numerator And Denominator Used In The Calculation Of Basic And Diluted Net Income Per Share [Line Items]
Effect of dilutive securities, conversion spread 780 508 2,971
[1] During the fourth quarter of 2011, we recorded $26.6 million of impairment charges in R&D expense, related to certain IPR&D assets acquired from CGI. See Notes 5 and 9.
[2] During the fourth quarter of 2010, we recorded $136.0 million of impairment charges in R&D expense, related to certain IPR&D assets acquired from CV Therapeutics. See Notes 5 and 9.
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet49.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Organization And Summary Of Significant Accounting Policies (Schedule Of Estimated Useful Lives Of Property Plant And Equipment) (Details)
12 Months Ended
Dec. 31, 2011
Buildings And Improvements [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Estimated Useful Life, minimum, in years 20
Estimated Useful Life, maximum, in years 35
Laboratory And Manufacturing Equipment [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Estimated Useful Life, minimum, in years 4
Estimated Useful Life, maximum, in years 10
Leasehold Improvements [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Estimated Useful Life Shorter of useful life or lease term
Office And Computer Equipment [Member]
Property Plant And Equipment Estimated Useful Lives [Line Items]
Estimated Useful Life, minimum, in years 3
Estimated Useful Life, maximum, in years 7
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet50.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair Value Measurements (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2011
Contingent Consideration [Member]
Dec. 31, 2010
Contingent Consideration [Member]
Short-term Debt [Line Items]
Weighted-average expected life of underlying student loans minimum, years 2
Weighted-average expected life of underlying student loans maximum, years 7
Annual discount rate used in discounted cash flow model 2.76%
Auction rate reset, lower range, in days 7
Auction rate reset, upper range, in days 14
Auction rate securities year of maturity, lower range 2025
Auction rate securities year of maturity, higher range 2040
Auction rate securities annual interest rate, lower range 0.18%
Auction rate securities annual interest rate, higher range 0.80%
Bonds received from Greek government $ 63,500,000
Balance included in transfers into level 3 53,900,000
Contingent consideration $ 135,600,000 $ 11,100,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet51.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair Value Measurements (Summary Of Assets And Liabilities Recorded At Fair Value) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities $ 9,072,646 $ 4,944,507
Equity securities 8,503 4,631
Derivatives, assets 100,475 64,461
Fair value assets, total 9,181,624 5,013,599
U.S. Treasury Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 1,355,437
Money Market Funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 7,455,982 520,063
Certificates Of Deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 1,139,982 127,619
U.S. Government Agencies And FDIC Guaranteed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 1,296,110
Municipal Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 17,625
Non-U.S. Government Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 24,741 288,204
Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 404,989 991,635
Residential Mortgage And Asset-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 277,043
Student Loan-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 46,952 70,771
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 7,455,982 1,875,500
Equity securities 8,503 4,631
Derivatives, assets 0 0
Fair value assets, total 7,464,485 1,880,131
Level 1 [Member] | U.S. Treasury Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 1,355,437
Level 1 [Member] | Money Market Funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 7,455,982 520,063
Level 1 [Member] | Certificates Of Deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 1 [Member] | U.S. Government Agencies And FDIC Guaranteed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 1 [Member] | Municipal Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 1 [Member] | Non-U.S. Government Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 1 [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 1 [Member] | Residential Mortgage And Asset-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 1 [Member] | Student Loan-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 1,544,971 2,988,642
Equity securities 0 0
Derivatives, assets 100,475 64,461
Fair value assets, total 1,645,446 3,053,103
Level 2 [Member] | U.S. Treasury Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 2 [Member] | Money Market Funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 2 [Member] | Certificates Of Deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 1,139,982 127,619
Level 2 [Member] | U.S. Government Agencies And FDIC Guaranteed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 1,296,110
Level 2 [Member] | Municipal Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 17,625
Level 2 [Member] | Non-U.S. Government Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 278,610
Level 2 [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 404,989 991,635
Level 2 [Member] | Residential Mortgage And Asset-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 277,043
Level 2 [Member] | Student Loan-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 71,693 80,365
Equity securities 0 0
Derivatives, assets 0 0
Fair value assets, total 71,693 80,365
Level 3 [Member] | U.S. Treasury Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | Money Market Funds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | Certificates Of Deposit [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | U.S. Government Agencies And FDIC Guaranteed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | Municipal Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | Non-U.S. Government Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 24,741 9,594
Level 3 [Member] | Corporate Debt Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | Residential Mortgage And Asset-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 0 0
Level 3 [Member] | Student Loan-Backed Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt securities 46,952 70,771
Liabilities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration 135,591 11,100
Derivatives, liabilities 5,710 38,553
Fair value liabilities, total 141,301 49,653
Liabilities [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration 0 0
Derivatives, liabilities 0 0
Fair value liabilities, total 0 0
Liabilities [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration 0 0
Derivatives, liabilities 5,710 38,553
Fair value liabilities, total 5,710 38,553
Liabilities [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration 135,591 11,100
Derivatives, liabilities 0 0
Fair value liabilities, total $ 135,591 $ 11,100
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet52.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair Value Measurements (Rollforward Of Assets Measured Using Level 3 Inputs) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Fair Value Measurements [Abstract]
Balance, beginning of period $ 80,365 $ 105,662
Total realized and unrealized gains (losses) included in Interest and other income, net 6,251 115
Total realized and unrealized gains (losses) included in Other comprehensive income (loss), net (30,376) 5,026
Sales of marketable securities (38,430) (40,032)
Transfers into Level 3 53,883 9,594
Balance, end of period $ 71,693 $ 80,365
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet53.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Narrative) (Details)
Dec. 31, 2011
Dec. 31, 2010
Available-For-Sale Securities [Abstract]
Number of securities in an unrealized loss position, percentage of total 36.00% 34.00%
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet54.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Summary Of Available-For-Sale Debt And Equity Securities At Estimated Fair Value) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Total $ 9,109,173 $ 4,925,704
Gross Unrealized Gains 7,052 33,154
Gross Unrealized Losses (35,076) (9,720)
Estimated Fair Value, Debt securities 9,072,646 4,944,507
Estimated Fair Value, Equity securities 8,503 4,631
Estimated Fair Value, Total 9,081,149 4,949,138
Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Equity securities 1,451 1,451
Gross Unrealized Gains 7,052 3,180
Gross Unrealized Losses 0 0
Estimated Fair Value, Equity securities 8,503 4,631
Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 9,107,722 4,924,253
Gross Unrealized Gains 0 29,974
Gross Unrealized Losses (35,076) (9,720)
Estimated Fair Value, Debt securities 9,072,646 4,944,507
Debt Securities [Member] | U.S. Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 0 1,349,348
Gross Unrealized Gains 0 7,109
Gross Unrealized Losses 0 (1,020)
Estimated Fair Value, Debt securities 0 1,355,437
Debt Securities [Member] | Money Market Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 7,455,982 520,063
Gross Unrealized Gains 0 0
Gross Unrealized Losses 0 0
Estimated Fair Value, Debt securities 7,455,982 520,063
Debt Securities [Member] | Certificates Of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 1,140,000 127,594
Gross Unrealized Gains 0 41
Gross Unrealized Losses (18) (16)
Estimated Fair Value, Debt securities 1,139,982 127,619
Debt Securities [Member] | U.S. Government Agencies And FDIC Guaranteed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 0 1,284,654
Gross Unrealized Gains 0 11,919
Gross Unrealized Losses 0 (463)
Estimated Fair Value, Debt securities 0 1,296,110
Debt Securities [Member] | Municipal Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 0 17,543
Gross Unrealized Gains 0 103
Gross Unrealized Losses 0 (21)
Estimated Fair Value, Debt securities 0 17,625
Debt Securities [Member] | Non-U.S. Government Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 55,246 286,410
Gross Unrealized Gains 0 1,880
Gross Unrealized Losses (30,505) (86)
Estimated Fair Value, Debt securities 24,741 288,204
Debt Securities [Member] | Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 404,994 985,382
Gross Unrealized Gains 0 7,999
Gross Unrealized Losses (5) (1,746)
Estimated Fair Value, Debt securities 404,989 991,635
Debt Securities [Member] | Residential Mortgage And Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 0 277,359
Gross Unrealized Gains 0 923
Gross Unrealized Losses 0 (1,239)
Estimated Fair Value, Debt securities 0 277,043
Debt Securities [Member] | Student Loan-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost, Debt securities 51,500 75,900
Gross Unrealized Gains 0 0
Gross Unrealized Losses (4,548) (5,129)
Estimated Fair Value, Debt securities $ 46,952 $ 70,771
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet55.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Summary Of The Classification Of Available-For-Sale Debt And Equity Securities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Available-For-Sale Securities [Abstract]
Cash and cash equivalents $ 9,000,954 $ 538,946
Short-term marketable securities 16,491 1,190,789
Long-term marketable securities 63,704 3,219,403
Estimated Fair Value, Total $ 9,081,149 $ 4,949,138
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet56.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Summary Of Available-For-Sale Debt Securities By Contractual Maturity) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Available-For-Sale Securities [Abstract]
Less than one year, Amortized Cost $ 1,574,140 $ 1,726,095
Greater than one year but less than five years, Amortized Cost 26,100 3,022,744
Greater than five years but less than ten years, Amortized Cost 0 33,076
Greater than ten years, Amortized Cost 7,507,482 142,338
Total, Amortized Cost 9,107,722 4,924,253
Less than one year, Fair Value 1,561,462 1,729,735
Greater than one year but less than five years, Fair Value 8,249 3,044,114
Greater than five years but less than ten years, Fair Value 0 33,580
Greater than ten years, Fair Value 7,502,935 137,078
Total, Fair Value $ 9,072,646 $ 4,944,507
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet57.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Summary Of Gross Realized Gains And Losses Related To Sales Of Marketable Securities) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Available-For-Sale Securities [Abstract]
Gross realized gains on sales $ 42,849 $ 13,254 $ 10,373
Gross realized losses on sales $ (12,526) $ (3,657) $ (1,405)
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet58.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-For-Sale Securities (Summary Of Available-For-Sale Debt Securities In A Continuous Unrealized Loss Position Deemed Not To Be Other-Than-Temporarily Impaired) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses $ (30,528) $ (4,591)
Less Than 12 Months, Estimated Fair Value 1,269,712 1,463,107
12 Months or Greater, Gross Unrealized Losses (4,548) (5,129)
12 Months or Greater, Estimated Fair Value 46,952 70,771
Total, Gross Unrealized Losses (35,076) (9,720)
Total, Estimated Fair Value 1,316,664 1,533,878
U.S. Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses 0 (1,020)
Less Than 12 Months, Estimated Fair Value 0 531,184
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses 0 (1,020)
Total, Estimated Fair Value 0 531,184
U.S. Government Agencies And FDIC Guaranteed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses 0 (463)
Less Than 12 Months, Estimated Fair Value 0 226,176
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses 0 (463)
Total, Estimated Fair Value 0 226,176
Municipal Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses 0 (21)
Less Than 12 Months, Estimated Fair Value 0 4,688
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses 0 (21)
Total, Estimated Fair Value 0 4,688
Non-U.S. Government Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses (30,505) (86)
Less Than 12 Months, Estimated Fair Value 24,741 44,317
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses (30,505) (86)
Total, Estimated Fair Value 24,741 44,317
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses (5) (1,749)
Less Than 12 Months, Estimated Fair Value 224,989 419,425
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses (5) (1,749)
Total, Estimated Fair Value 224,989 419,425
Certificates Of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses (18) (13)
Less Than 12 Months, Estimated Fair Value 1,019,982 39,987
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses (18) (13)
Total, Estimated Fair Value 1,019,982 39,987
Residential Mortgage And Asset-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses 0 (1,239)
Less Than 12 Months, Estimated Fair Value 0 197,330
12 Months or Greater, Gross Unrealized Losses 0 0
12 Months or Greater, Estimated Fair Value 0 0
Total, Gross Unrealized Losses 0 (1,239)
Total, Estimated Fair Value 0 197,330
Student Loan-Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less Than 12 Months, Gross Unrealized Losses 0 0
Less Than 12 Months, Estimated Fair Value 0 0
12 Months or Greater, Gross Unrealized Losses (4,548) (5,129)
12 Months or Greater, Estimated Fair Value 46,952 70,771
Total, Gross Unrealized Losses (4,548) (5,129)
Total, Estimated Fair Value $ 46,952 $ 70,771
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet59.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Narrative) (Details) (USD $)
In Billions, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Derivative Financial Instruments [Abstract]
Notional amounts on foreign currency exchange forward contracts outstanding $ 4.03 $ 3.55
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet60.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Fair Values Of Derivative Instruments On Condensed Consolidated Balance Sheets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value $ 100,475 $ 64,461
Liability Derivatives, Fair Value 5,710 38,553
Derivatives Designated As Hedges [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value 100,235 64,365
Liability Derivatives, Fair Value 5,672 38,515
Derivatives Designated As Hedges [Member] | Foreign Currency Exchange Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value 77,066 59,276
Derivatives Designated As Hedges [Member] | Foreign Currency Exchange Contracts [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value 23,169 5,089
Derivatives Designated As Hedges [Member] | Foreign Currency Exchange Contracts [Member] | Other Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value 5,052 36,493
Derivatives Designated As Hedges [Member] | Foreign Currency Exchange Contracts [Member] | Other Long-Term Obligations [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value 620 2,022
Derivatives Not Designated As Hedges [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value 240 96
Liability Derivatives, Fair Value 38 38
Derivatives Not Designated As Hedges [Member] | Foreign Currency Exchange Contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value 240 96
Derivatives Not Designated As Hedges [Member] | Foreign Currency Exchange Contracts [Member] | Other Accrued Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair Value $ 38 $ 38
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet61.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative Financial Instruments (Summary Of The Effect Of Foreign Currency Exchange Contracts On Consolidated Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Derivative Financial Instruments [Abstract]
Net gains recognized in OCI (effective portion) $ 1,664 $ 115,073
Net gains (losses) reclassified from accumulated OCI into product sales (effective portion) (78,647) 73,720
Net gains (losses) recognized in interest and other income, net (ineffective portion and amounts excluded from effectiveness testing) (17,237) 887
Net gains recognized in interest and other income, net $ 22,084 $ 66,639
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet62.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Acquisitions (Narrative) (Details) (USD $)
3 Months Ended 12 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2011
Arresto Biosciences, Inc. [Member]
Mar. 31, 2011
Arresto Biosciences, Inc. [Member]
Jan. 14, 2011
Arresto Biosciences, Inc. [Member]
Dec. 31, 2010
Arresto Biosciences, Inc. [Member]
Dec. 31, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Apr. 02, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Mar. 31, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Feb. 28, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Jan. 14, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Jul. 08, 2010
CGI Pharmaceuticals, Inc. [Member]
Dec. 31, 2011
CGI Pharmaceuticals, Inc. [Member]
Jun. 30, 2010
CGI Pharmaceuticals, Inc. [Member]
Apr. 15, 2009
CV Therapeutics, Inc. [Member]
Mar. 31, 2011
CV Therapeutics, Inc. [Member]
Dec. 31, 2010
CV Therapeutics, Inc. [Member]
Apr. 15, 2009
Ranexa [Member]
Apr. 15, 2009
Lexiscan [Member]
Apr. 15, 2009
Marketed Products [Member]
CV Therapeutics, Inc. [Member]
Apr. 15, 2009
Intangible Assets - IPR&D [Member]
CV Therapeutics, Inc. [Member]
Apr. 15, 2009
2.75% Senior Subordinated Convertible Notes Due 2012 [Member]
CV Therapeutics, Inc. [Member]
Apr. 15, 2009
3.25% Senior Subordinated Convertible Notes due 2013
CV Therapeutics, Inc. [Member]
Apr. 15, 2009
2.0% Senior Subordinated Convertible Debentures Due 2023 [Member]
CV Therapeutics, Inc. [Member]
Apr. 15, 2009
GS-9667 [Member]
CV Therapeutics, Inc. [Member]
Business Acquisition [Line Items]
Total cash paid for acquisition $ 221,700,000 $ 373,700,000 $ 91,000,000 $ 1,380,000,000
Aggregate consideration transferred for the acquisition 225,000,000 375,000,000 102,100,000 1,392,558,000
Acquisition-date fair value of total consideration transferred to acquire company 227,100,000 484,300,000
Contingent consideration paid 5,400,000 110,600,000 11,100,000
Acquisition-date fair value of intangible assets 117,000,000 149,200,000 2,900,000
Present value discount rate 16.00% 11.00% 18.00%
Goodwill resulting from acquisition 134,482,000 134,482,000 336,951,000 336,951,000 70,111,000 341,910,000
Potential payments based on the achievement of milestones 225,000,000
Maximum consideration of acquisition 120,000,000
Maximum value of contingent consideration 29,000,000
Fair value of intangible assets related to IPR&D 138,900,000 93,400,000
Intangible assets related to the marketed products 688,400,000 262,800,000 951,200,000
Asset impairment charges 26,600,000 136,000,000 26,630,000 136,000,000 0 26,600,000
Indefinite-lived intangible assets 266,200,000 29,530,000 266,200,000 29,530,000
Percentage of shares acquired on outstanding shares of common stock 89.00%
Fair value of vested stock options 15,700,000
Business acquisition, equity interest issued or issuable, basis for determining value

In accordance with the merger agreement, the number of Gilead stock options and restricted stock units into which assumed CV Therapeutics' stock options and restricted stock units were converted was determined based on an option conversion ratio. This conversion ratio was calculated by taking the per share acquisition price of $20.00 and dividing it by the average closing price of our common stock for the five consecutive trading days immediately preceding (but not including) the closing date of April 17, 2009, which was $46.24 per share. The fair value of stock options assumed was calculated using a Black-Scholes valuation model with the following assumptions: market price of $44.54 per share, which was the closing price of our common stock on the acquisition date; expected term ranging from 0.1 to 5.2 years; risk-free interest rate ranging from 0.1% to 1.7%; expected volatility ranging from 37.4% to 43.2%; and no dividend yield. The fair value of restricted stock units assumed was calculated using the acquisition-date closing price of $44.54 per share for our common stock.

Completed IPR&D project 2,900,000
Estimated fair value of unvested stock options and restricted stock units assumed 11,200,000
Deferred tax assets resulting from the acquisition primarily related to federal and state net operating loss and tax credit carryforwards 413,816,000
Deferred tax liabilities resulting from the acquisition primarily related to the difference between the book basis and tax basis of the intangible assets 426,861,000
Deferred tax liability reduced as result of impairment charges 49,700,000
Valuation allowance related to deferred tax assets 9,209,000 13,040,000 9,209,000 13,040,000 15,100,000
Senior Notes, stated interest rate 2.75% 3.25% 2.00%
Senior subordinated convertible notes - maturity date Dec 31, 2012 Dec 31, 2013 Dec 31, 2023
Fair value of consideration transferred for business acquisition $ 225,000,000 $ 375,000,000 $ 102,100,000 $ 1,392,558,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet63.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Acquisitions (Fair Values Of The Assets Acquired And Liabilities Assumed) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Arresto Biosciences, Inc. [Member]
Jan. 14, 2011
Arresto Biosciences, Inc. [Member]
Jan. 14, 2011
Arresto Biosciences, Inc. [Member]
Deferred Tax Assets [Member]
Jan. 14, 2011
Arresto Biosciences, Inc. [Member]
Deferred Tax Liabilities [Member]
Dec. 31, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Apr. 02, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Jul. 08, 2010
CGI Pharmaceuticals, Inc. [Member]
Jul. 08, 2010
CGI Pharmaceuticals, Inc. [Member]
Deferred Tax Assets [Member]
Jul. 08, 2010
CGI Pharmaceuticals, Inc. [Member]
Deferred Tax Liabilities [Member]
Business Acquisition [Line Items]
IPR&D $ 117,000 $ 149,200 $ 26,630
Goodwill 134,482 134,482 336,951 336,951 70,111
Deferred tax assets (liabilities) 17,417 (41,705) 12,656 (6,313)
Other net liabilities assumed (125) (1,853) (984)
Total consideration transferred $ 227,069 $ 484,298 $ 102,100
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet64.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Acquisitions (Schedule Of Assets Acquired And Liabilities Assumed) (Details) (CV Therapeutics, Inc. [Member], USD $)
Apr. 15, 2009
Business Acquisition, Contingent Consideration [Line Items]
Goodwill $ 341,910,000
Deferred tax assets 413,816,000
Deferred tax liabilities (426,861,000)
Cash and cash equivalents 129,087,000
Marketable securities 116,363,000
Accounts receivable 9,136,000
Inventories 50,455,000
Prepaids and other current assets 60,671,000
Property, plant and equipment 11,672,000
Other assets 20,162,000
Accounts payable (5,089,000)
Accrued and other current liabilities (87,898,000)
Convertible senior notes (303,060,000)
Other liabilities (27,906,000)
Total other net liabilities (26,407,000)
Total consideration transferred 1,392,558,000
Marketed Products [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible assets - marketable products 951,200,000
Intangible Assets - IPR&D [Member]
Business Acquisition, Contingent Consideration [Line Items]
Intangible assets - IPR&D $ 138,900,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet65.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Restructuring (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
CVT/Cardiovascular Restructuring [Member] | Selling, General And Administrative Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and related cost $ 10.6 $ 26.2
Total amount to be incurred in connection with our restructuring plan 43.5
CVT/Cardiovascular Restructuring [Member] | Research Development Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and related cost 3.4 25.7
Total amount to be incurred in connection with our restructuring plan 29.1
CVT/Cardiovascular Restructuring [Member] | Facilities-Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and related cost 6.7
Durham Restructuring [Member] | Selling, General And Administrative Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and related cost 14.6
Durham Restructuring [Member] | Research Development Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and related cost $ 10.4
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet66.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Restructuring (Schedule Of Restructuring Reserve By Type Of Cost) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Employee Severance And Termination Benefits [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning balance $ 434 $ 9,689 $ 0
Costs incurred during the period 0 2,190 33,797
Costs paid or settled during the period (434) (11,445) (24,108)
Balance, ending balance 0 434 9,689
Facilities-Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning balance 14,533 9,335 0
Costs incurred during the period 6,683 9,727 9,880
Costs paid or settled during the period (9,969) (4,529) (545)
Balance, ending balance $ 11,247 $ 14,533 $ 9,335
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet67.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Total inventory $ 1,389,983 $ 1,203,809
Joint Venture, Gilead And BMS [Member]
Total inventory $ 995,700 $ 811,900
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet68.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories (Schedule Of Inventories) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Inventories [Abstract]
Raw materials $ 697,621 $ 408,015
Work in process 466,499 454,652
Finished goods 225,863 341,142
Total $ 1,389,983 $ 1,203,809
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet69.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Property, Plant And Equipment (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2011
Property, Plant And Equipment [Abstract]
Purchase cost of office building and land located in Foster city $ 28.3
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet70.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Property, Plant And Equipment (Schedule Of Property, Plant And Equipment) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Property, Plant and Equipment [Line Items]
Buildings and improvements (including leasehold improvements) $ 500,040 $ 501,401
Laboratory and manufacturing equipment 199,693 168,711
Office and computer equipment 211,936 116,479
Capitalized leased equipment 10,878 10,865
Construction in progress 60,746 82,334
Subtotal 983,293 879,790
Less accumulated depreciation and amortization (including $10,546 and $10,451relating to capitalized leased equipment for 2011 and 2010, respectively) (358,263) (316,367)
Subtotal 625,030 563,423
Land 149,376 137,812
Total 774,406 701,235
Capitalized Leased Equipment [Member]
Property, Plant and Equipment [Line Items]
Depreciation on capitalized leased equipments $ 10,546 $ 10,451
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet71.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets (Narrative) (Details) (USD $)
12 Months Ended 3 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2010
IPR&D [Member]
Dec. 31, 2011
Arresto Biosciences, Inc. [Member]
IPR&D [Member]
Dec. 31, 2011
Calistoga Pharmaceuticals, Inc. [Member]
IPR&D [Member]
Dec. 31, 2011
CV Therapeutics [Member]
Dec. 31, 2010
CV Therapeutics [Member]
IPR&D [Member]
Dec. 31, 2011
CGI Pharmaceuticals [Member]
IPR&D [Member]
Dec. 31, 2010
CGI Pharmaceuticals [Member]
IPR&D [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization expense $ 69,600,000 $ 59,900,000 $ 43,400,000
Weighted-average amortization period of intangible assets, in years 10
Indefinite-lived intangible assets 266,200,000 29,530,000 29,500,000 117,000,000 149,200,000 2,900,000 26,600,000
Impairment charges 136,000,000 26,600,000
Finite-lived intangible assets $ 976,195,000 $ 973,295,000 $ 2,900,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet72.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets (Schedule Of Carrying Amount Of Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Intangible Assets [Abstract]
Goodwill $ 1,004,102 $ 532,669
Finite-lived intangible assets 796,664 863,393
Indefinite-lived intangible assets 266,200 29,530
Total $ 2,066,966 $ 1,425,592
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet73.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets (Schedule Of Changes In The Carrying Amount Of Goodwill) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Arresto Biosciences, Inc. [Member]
Jan. 14, 2011
Arresto Biosciences, Inc. [Member]
Dec. 31, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Apr. 02, 2011
Calistoga Pharmaceuticals, Inc. [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Balance at December 31, 2010 $ 1,004,102 $ 532,669
Goodwill resulting from acquisition 134,482 134,482 336,951 336,951
Balance at December 31, 2011 $ 1,004,102 $ 532,669
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet74.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets (Schedule Of Finite-Lived Intangible Assets) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount $ 976,195 $ 973,295
Accumulated Amortization 179,531 109,902
Ranexa [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount 688,400 688,400
Accumulated Amortization 97,099 54,795
Lexiscan [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount 262,800 262,800
Accumulated Amortization 69,723 43,979
Other [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount 24,995 22,095
Accumulated Amortization $ 12,709 $ 11,128
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet75.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Intangible Assets (Estimated Future Amortization Expense) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Intangible Assets [Abstract]
2012 $ 63,345
2013 64,283
2014 66,735
2015 73,261
2016 100,048
Total $ 367,672
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet76.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Collaborative Arrangements (Details)
12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2007
PARI GmbH [Member]
USD ($)
Dec. 31, 2011
Roche [Member]
USD ($)
Dec. 31, 2010
Roche [Member]
USD ($)
Dec. 31, 2009
Roche [Member]
USD ($)
Dec. 31, 2011
Japan Tobacco Inc. [Member]
USD ($)
Dec. 31, 2008
Japan Tobacco Inc. [Member]
USD ($)
Dec. 31, 2006
Japan Tobacco Inc. [Member]
USD ($)
Dec. 31, 2011
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2010
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2009
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2008
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2007
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2006
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2004
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2002
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2011
Astellas US LLC and Astellas Pharma US, Inc. [Member]
USD ($)
Dec. 31, 2010
Astellas US LLC and Astellas Pharma US, Inc. [Member]
USD ($)
Dec. 31, 2009
Astellas US LLC and Astellas Pharma US, Inc. [Member]
USD ($)
Jul. 31, 2009
Tibotec Pharmaceuticals [Member]
USD ($)
Jul. 31, 2009
Tibotec Pharmaceuticals [Member]
EUR (€)
Dec. 31, 2011
Tibotec Pharmaceuticals [Member]
USD ($)
Dec. 31, 2011
Tibotec Pharmaceuticals [Member]
EUR (€)
Dec. 31, 2010
Tibotec Pharmaceuticals [Member]
USD ($)
Dec. 31, 2010
Tibotec Pharmaceuticals [Member]
EUR (€)
Dec. 31, 2009
Tibotec Pharmaceuticals [Member]
USD ($)
Dec. 31, 2009
Tibotec Pharmaceuticals [Member]
EUR (€)
Dec. 31, 2005
Up-front Payment [Member]
Japan Tobacco Inc. [Member]
USD ($)
Dec. 31, 2011
Fourteen Percentage Of Royalty Payable As Net Sales [Member]
USD ($)
Dec. 31, 2011
Eighteen Percentage Of Royalty Payable As Net Sales [Member]
USD ($)
Dec. 31, 2011
Twenty Two Percentage Of Royalty Payable As Net Sales [Member]
USD ($)
Dec. 31, 2008
Ranexa Product [Member]
Roche [Member]
USD ($)
Dec. 31, 2006
Ranexa Product [Member]
Roche [Member]
USD ($)
Dec. 31, 2009
Hepsera Product [Member]
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2008
Hepsera Product [Member]
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2007
Hepsera Product [Member]
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2011
Volibris Product [Member]
USD ($)
Dec. 31, 2010
Volibris Product [Member]
USD ($)
Dec. 31, 2009
Volibris Product [Member]
USD ($)
Dec. 31, 2011
Volibris Product [Member]
Glaxo Smith Kline Inc. [Member]
USD ($)
Dec. 31, 2011
Lexiscan Product [Member]
Astellas US LLC and Astellas Pharma US, Inc. [Member]
USD ($)
Dec. 31, 2010
Lexiscan Product [Member]
Astellas US LLC and Astellas Pharma US, Inc. [Member]
USD ($)
Dec. 31, 2009
Lexiscan Product [Member]
Astellas US LLC and Astellas Pharma US, Inc. [Member]
EUR (€)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total assets held by the joint venture with BMS $ 1,620,000,000 $ 1,450,000,000
Total liabilities held by the joint venture with BMS 1,270,000,000 759,500,000
Amount paid to reduce the royalty rate 13,500,000
Research and development expense 16,000,000 7,000,000 5,000,000 24,700,000 17,900,000 22,100,000 17,900,000 52,400,000 35,700,000 15,000,000
Percentage of royalty payment 14.00% 18.00% 22.00%
Net sales of third party 200,000,000 200,000,000 400,000,000
Royalty revenues 268,827,000 545,970,000 491,818,000 75,500,000 386,500,000 392,700,000 39,700,000 48,000,000 32,400,000 9,900,000 10,200,000 9,400,000 51,300,000 43,200,000 19,700,000
Payment in accordance with agreement 9,000,000 11,000,000
Number of years amortized over its useful patent life 11
Up-front payment received 20,000,000 10,000,000
Milestone payments received 20,000,000 11,000,000 10,000,000 17,000,000 10,000,000
Sales limit for achievement 75,000,000 100,000,000
Deferred revenue recognized 24,500,000 3,400,000 3,600,000 9,800,000 8,700,000 8,300,000
Future milestone receivables 80,000,000
Research and development reimbursement contract maximum $ 100,000,000 € 71,500,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet77.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Long-Term Obligations (Narrative) (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
1 Months Ended 12 Months Ended 1 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
May 31, 2011
Aug. 31, 2010
May 31, 2010
Apr. 30, 2009
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2011
Warrants Expiring In 2011 [Member]
Dec. 31, 2011
Warrants Expiring In 2013 [Member]
Dec. 31, 2011
Warrants Expiring In 2014 [Member]
Dec. 31, 2011
Warrants Expiring In 2016 [Member]
Apr. 30, 2006
Warrants Expiring In 2011 And 2013 [Member]
Jul. 31, 2010
Warrants Expiring In 2014 And 2016 [Member]
Apr. 30, 2006
May 2011 And May 2013 Notes Conversion Requirements [Member]
Apr. 30, 2006
May 2011 And May 2013 Convertible Notes Hedges And Warrants [Member]
Jul. 31, 2010
May 2014 And May 2016 Convertible Notes Hedges And Warrants [Member]
Apr. 30, 2006
May 2014 And May 2016 Convertible Notes Hedges And Warrants [Member]
Dec. 31, 2011
May 2016 Convertible Senior Notes [Member]
Apr. 30, 2006
May 2011 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2011 Convertible Senior Notes [Member]
Apr. 30, 2006
May 2013 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2013 Convertible Senior Notes [Member]
Jul. 31, 2010
May 2014 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2014 Convertible Senior Notes [Member]
Jul. 31, 2010
May 2016 Convertible Senior Notes [Member]
Dec. 31, 2011
May 2016 Convertible Senior Notes [Member]
Dec. 31, 2011
December 2014 Senior Unsecured Notes [Member]
Dec. 31, 2011
December 2016 Senior Unsecured Notes [Member]
Dec. 31, 2011
December 2021 Senior Unsecured Notes [Member]
Mar. 31, 2011
December 2021 Senior Unsecured Notes [Member]
Mar. 31, 2011
April 2021 Senior Unsecured Notes [Member]
Dec. 31, 2011
December 2041 Senior Unsecured Notes [Member]
Dec. 31, 2011
Senior Unsecured Notes [Member]
Apr. 30, 2006
Total May 2011 And 2013 Convertible Senior Notes [Member]
Dec. 31, 2011
Total May 2011 And 2013 Convertible Senior Notes [Member]
Dec. 31, 2010
Total May 2011 And 2013 Convertible Senior Notes [Member]
Dec. 31, 2009
Total May 2011 And 2013 Convertible Senior Notes [Member]
Jul. 31, 2010
Total May 2014 And May 2016 Convertible Senior Notes [Member]
Dec. 31, 2011
Total May 2014 And May 2016 Convertible Senior Notes [Member]
Dec. 31, 2010
Total May 2014 And May 2016 Convertible Senior Notes [Member]
Apr. 30, 2006
Total May 2014 And May 2016 Convertible Senior Notes [Member]
Dec. 31, 2011
Maximum [Member]
Dec. 31, 2011
Minimum [Member]
Debt Instrument [Line Items]
Repayment of May 2011 Notes $ 650,000,000
Cash paid related to the conversion spread of the May 2011 Notes 36,100,000
Cash received from the convertible note hedges related to the May 2011 Notes 36,100,000
Number of trading days taking in consideration for conversion 20 20
Number of consecutive trading day taking in consideration for conversion 30 30
Percentage of conversion price per share 130.00% 130.00%
Percentage of principal amount plus accrued and unpaid interest 101.00% 101.00% 100.00% 100.00%
Convertible senior notes, effective interest rate on the liability components 5.70% 5.80% 3.50% 4.00%
Senior Notes, stated interest rate 0.50% 0.63% 1.00% 1.63% 2.40% 3.05% 4.40% 4.50% 5.65%
Initial conversion ratio 25.8048 26.246 22.1845 22.0214
Principal amount applied to initial conversion ratio 1,000 1,000 1,000 1,000 1,000
Payments of debt issuance costs 5,800,000 20,000,000 23,800,000 37,500,000
Debt instrument conversion price per share $ 45.41 $ 38.75 $ 38.75 $ 38.1 $ 38.1 $ 45.08 $ 45.08 $ 45.41
Number of business day period after any measurement period 5
Number of consecutive trading days for each trading day 10
Percentage of principal amount of notes less than the product of the last reported sale price 98.00%
Payments to acquire convertible note hedges 0 362,622,000 0 379,100,000 362,600,000
Proceeds from Issuance of Warrants 0 155,425,000 0 235,500,000 155,400,000
Net cost of convertible note hedge and warrant transactions 143,700,000 207,200,000
Effective conversion price $ 50.8 $ 53.9 $ 56.76 $ 60.1
Common stock covered by the Convertible Note Hedges, subject to anti-dilution adjustments 33.8 55.3
Common stock underlying the warrants, subject to anti-dilution adjustments 33.8 55.3
Repurchase of common stock relating to sale of notes, shares 16.7
Repurchase of common stock relating to sale of notes, value 544,900,000
Interest expense, long-term debt 46,300,000 67,900,000 64,600,000 84,900,000 34,900,000
Principal amount of senior notes 650,000,000 650,000,000 1,250,000,000 1,250,000,000 750,000,000 700,000,000 1,250,000,000 1,000,000,000 1,000,000,000 3,700,000,000
Percentage of principal amount of the notes to be redeemed 100.00% 100.00% 100.00% 100.00%
Additional basis points for redemptuon of notes 35 35 40 20 40
Additional basis points for interest rate under credit agreement 32 20
Borrowing under the credit agreement 4,000,000
Proceeds from Lines of Credit 500,000,000 400,000,000 0 500,000,000 400,000,000
Amount available under the credit agreement 1,250,000,000
Warrants exercise price 50.8 53.9 56.76 60.1
Repayments of Lines of Credit 500,000,000 0 500,000,000 400,000,000
Converted value in excess of principal for convertible debt. $ 48,300,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet78.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Long-Term Obligations ( Schedule of Carrying Amount of Senior Notes) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Debt Instrument [Line Items]
Total debt, net $ 7,605,734 $ 3,477,564
Less current portion (May 2011 convertible senior notes) 0 638,991
Total long-term debt, net 7,605,734 2,838,573
May 2011 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Total debt, net 0 638,991
May 2013 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Total debt, net 607,036 576,884
May 2014 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Total debt, net 1,181,525 1,153,805
May 2016 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Total debt, net 1,132,293 1,107,884
December 2014 Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Total debt, net 749,078 0
December 2016 Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Total debt, net 698,864 0
April 2021 Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Total debt, net 992,066 0
December 2021 Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Total debt, net 1,247,138 0
December 2041 Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Total debt, net $ 997,734 $ 0
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet79.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Long-Term Obligations (Schedule Of Information About Equity And Liability Components Of Convertible Senior Notes 2011 And 2013 Notes) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Debt Instrument [Line Items]
Carrying Value of Equity Component $ 255,517
May 2011 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Carrying Value of Equity Component 0 147,481
Net Carrying Amount of Liability Component 0 638,991
Unamortized Discount of Liability Component 0 (10,996)
May 2013 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Carrying Value of Equity Component 193,231 193,231
Net Carrying Amount of Liability Component 607,036 576,884
Unamortized Discount of Liability Component (42,831) (72,983)
Total May 2011 And 2013 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Carrying Value of Equity Component 193,231 340,712
Net Carrying Amount of Liability Component 607,036 1,215,875
Unamortized Discount of Liability Component $ (42,831) $ (83,979)
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet80.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Long-Term Obligations (Schedule Of Information About Equity And Liability Components Of Convertible Senior Notes 2014 And 2016 Notes) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Debt Instrument [Line Items]
Carrying Value of Equity Component $ 255,517
May 2014 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Carrying Value of Equity Component 107,496 107,496
Net carrying amount of liability component 1,181,525 1,153,805
Unamortized Discount of Liability Component (68,475) (96,195)
May 2016 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Carrying Value of Equity Component 152,039 152,039
Net carrying amount of liability component 1,132,293 1,107,884
Unamortized Discount of Liability Component (117,707) (142,116)
Total May 2014 And 2016 Convertible Senior Notes [Member]
Debt Instrument [Line Items]
Carrying Value of Equity Component 259,535 259,535
Net carrying amount of liability component 2,313,818 2,261,689
Unamortized Discount of Liability Component $ (186,182) $ (238,311)
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet81.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Commitments And Contingencies (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Lease expense under our operating leases $ 48.1 $ 41.7 $ 37.3
Purchase Commitments, 2012 990.2
Purchase Commitments, 2013 119.9
Purchase Commitments, 2014 82.6
Purchase Commitments, 2015 64.6
Purchase Commitments, 2016 60.7
Actual payments for purchases related to active pharmaceutical ingredients $ 1,530 $ 835.7 $ 1,030
Maximum [Member]
Operating lease expiration date 2030
Minimum [Member]
Operating lease expiration date 2012
Seattle Washington [Member]
Operating lease expiration date 2020
Contractual term of operating lease 10
Extended lease expiration date 2035
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet82.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Commitments And Contingencies (Schedule Of Aggregate Non-Cancelable Future Minimum Rental Payments Under Operating Leases) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Commitments And Contingencies [Abstract]
2012 $ 43,635
2013 36,302
2014 30,027
2015 23,961
2016 17,814
Thereafter 53,215
Total $ 204,954
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet83.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' Equity (Narrative) (Details) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Jan. 31, 2010
January 2010 Stock Repurchase Program; $1B [Member]
Oct. 31, 2007
October 2007 Stock Repurchase Program; $3B [Member]
Jan. 31, 2011
January 2011 Stock Repurchase Program; $5B, 3-Year [Member]
Dec. 31, 2011
January 2011 Stock Repurchase Program; $5B, 3-Year [Member]
May 31, 2010
May 2010 Stock Repurchase Program; $5B, 3-Year [Member]
Dec. 31, 2010
May 2010 Stock Repurchase Program; $5B, 3-Year [Member]
Dec. 31, 2011
Series A Junior Participating Preferred Stock [Member]
Apr. 30, 2009
CV Therapeutics Plans [Member]
Dec. 31, 2011
General Rights Plan [Member]
Dec. 31, 2011
Stock Option Plans [Member]
years
Dec. 31, 2011
Two Thousand Four Plan [Member]
Dec. 31, 2011
Performance Based Share Awards [Member]
years
Dec. 31, 2010
Performance Based Share Awards [Member]
Dec. 31, 2009
Performance Based Share Awards [Member]
Dec. 31, 2011
Employee Stock Purchase Plan [Member]
years
Dec. 31, 2011
Restricted Stock Units (RSUs) [Member]
years
Dec. 31, 2010
Restricted Stock Units (RSUs) [Member]
Dec. 31, 2009
Restricted Stock Units (RSUs) [Member]
Oct. 31, 1999
Maximum [Member]
First Amendment of Rights Plan [Member]
Oct. 31, 2003
Maximum [Member]
Second Amendment of Rights Plan [Member]
Oct. 31, 1999
Minimum [Member]
First Amendment of Rights Plan [Member]
Oct. 31, 2003
Minimum [Member]
Second Amendment of Rights Plan [Member]
Equity Issuance Since Inception [Line Items]
Authorized common stock repurchase program $ 1,000,000,000 $ 3,000,000,000 $ 5,000,000,000 $ 5,000,000,000
Aggregate purchase price of the stock repurchased and retired under the stock repurchase programs 2,380,000,000 4,020,000,000 998,100,000 403,100,000 3,020,000,000
Number of shares retired under the stock repurchase programs 59,900,000 109,900,000 21,800,000
Incremental common shares attributable to accelerated share repurchase agreements 1,400,000
Average purchase price per share of the stock repurchased and retired under the stock repurchase programs $ 45.69 $ 39.8 $ 36.57
Remaining authorized amount of stock repurchases 4,600,000,000 1,980,000,000
Decrease in common stock and APIC 186,200,000 319,800,000 61,700,000
Excess of purchase price over par value charged against retained earnings 2,210,000,000 3,710,000,000 940,800,000
Preferred stock, shares authorized 5,000,000 5,000,000 800,000
Preferred stock, shares outstanding 0 0
Preferred Stock, Participation Rights

The Rights Plan provides for the distribution of a preferred stock purchase right as a dividend for each share of our common stock. The purchase rights are not currently exercisable. Under certain conditions involving an acquisition or proposed acquisition by any person or group of 15% or more of our common stock, the purchase rights permit the holders (other than the 15% holder) to purchase our common stock at a 50% discount from the market price at that time, upon payment of a specified exercise price per purchase right. In addition, in the event of certain business combinations, the purchase rights permit the purchase of the common stock of an acquirer at a 50% discount from the market price at that time. Under certain conditions, the purchase rights may be redeemed by our Board in whole, but not in part, at a price of $0.0025 per purchase right. The purchase rights have no voting privileges and are attached to and automatically trade with our common stock.

Number of shares authorized for future issuance 47,406,212
Options assumed from acquisition and converted into options to purchase common stock 1,800,000
Number of shares authorized for grant 121,594,183
Total intrinsic value of options exercised 194,500,000 262,300,000 379,800,000
Total fair value of stock options vested 96,400,000 124,600,000 162,900,000
Number of options outstanding that are expected to vest 8,734,108
Weighted average exercise price of options outstanding that are expected to vest $ 43.79
Intrinsic Value of options outstanding that are expected to vest 10,300,000
Weighted average remaining contractual life of options outstanding that are expected to vest, years 7.6
Aggregate intrinsic value of stock options outstanding 557,200,000
Aggregate intrinsic value of stock options exercisable 545,800,000
Weighted-average remaining contractual life for options outstanding, years 4.8
Weighted-average remaining contractual life for options exercisable, years 4.1
Unrecognized compensation cost related to equity awards 163,000,000 26,900,000 7,300,000 218,900,000
Unrecognized compensation costs, weighted-average period of recognition, years 2.4 1.3 1.4 3.3
Share based awards granted 603,400 412,505 426,305 4,215,000 1,974,000 1,368,000
Payout percentage, minimum 0.00%
Payout percentage, maximum 200.00%
Share based awards weighted-average grant date fair values $ 38.44 $ 54.25 $ 61.89 $ 38.79 $ 40.9 $ 48.24
Stock-based compensation expense 192,378,000 200,041,000 185,758,000 24,600,000 21,300,000 14,900,000
Awards vesting period three
Percentage of purchase price lower than fair market value of common stock 85.00%
Shares issued under Employee Stock Purchase Plan 1,199,739
Value of shares issued under Employee Stock Purchase Plan 35,013,000 32,307,000 34,873,000 35,000,000
Shares reserved for issuance 33,280,000
Shares available for issuance 5,367,672
Percentage proposed acquisition by group 15.00%
Discount from the market price 50.00%
Price per purchase right that may be redeemed by our board in whole $ 0.0025
The exercise price of each class of warrants or rights outstanding 100 400 15 100
Maximum shares of full value awards 25,000,000
Total fair value of RSUs that vested $ 25,400,000 $ 13,100,000 $ 1,700,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet84.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' Equity (Schedule Of Summary Of Activity Under Stock Option Plans) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Stockholders' Equity [Abstract]
Shares, Outstanding, beginning of year 60,251 69,193 76,811
Shares, Granted and assumed 2,445 4,836 7,286
Shares, Forfeited (1,523) (2,348) (2,393)
Shares, Expired (1,117) (759) (440)
Shares, Exercised (9,175) (10,671) (12,071)
Shares, Outstanding, end of year 50,881 60,251 69,193
Shares, Exercisable, end of year 41,418 45,018 47,090
Weighted- Average Exercise Price, Outstanding, beginning of year $ 30.32 $ 28.09 $ 24.7
Weighted- Average Exercise Price, Granted and assumed $ 38.35 $ 44.27 $ 48.87
Weighted- Average Exercise Price, Forfeited $ 43.33 $ 43.16 $ 39.33
Weighted- Average Exercise Price, Expired $ 47.83 $ 53.27 $ 64.08
Weighted- Average Exercise Price, Exercised $ 19.26 $ 17.68 $ 15.56
Weighted- Average Exercise Price, Outstanding, end of year $ 31.91 $ 30.32 $ 28.09
Weighted- Average Exercise Price, Exercisable, end of year $ 29.22 $ 25.92 $ 22.36
Weighted-average grant date fair value of options granted during the year $ 12.33 $ 14.24 $ 17
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet85.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' Equity (Schedule Of Restricted Stock Units Activity) (Details) (Restricted Stock Units (RSUs) [Member], USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Outstanding, beginning of year 2,649,000 1,251,000 0
Weighted Average Grant-Date Fair Value Per Share, Outstanding, beginning of year $ 42.99 $ 48.25 $ 0
Shares, Granted and assumed 4,215,000 1,974,000 1,368,000
Weighted Average Grant-Date Fair Value Per Share, Granted and assumed $ 38.79 $ 40.9 $ 48.24
Shares, Vested (587,000) (274,000) (37,000)
Weighted Average Grant-Date Fair Value Per Share, Vested $ 43.23 $ 47.79 $ 44.54
Shares, Forfeited (454,000) (302,000) (80,000)
Weighted Average Grant-Date Fair Value Per Share, Forfeited $ 41.09 $ 46.82 $ 49.84
Shares, Outstanding, end of year 5,823,000 2,649,000 1,251,000
Weighted Average Grant-Date Fair Value Per Share, Outstanding, end of year $ 40.07 $ 42.99 $ 48.25
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet86.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stock-Based Compensation (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Stock-Based Compensation [Abstract]
Capitalized amount of stock-based compensation costs to inventory $ 8.6 $ 10.9 $ 11.4
Capitalized amount of stock-based compensation cost remained in inventory $ 2 $ 1.8 $ 1.1
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet87.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stock-Based Compensation (Schedule Of Stock-Based Compensation Expenses Included In Consolidated Statements Of Income) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Component of Operating Other Cost and Expense [Line Items]
Stock-based compensation expenses included in total costs and expenses $ 192,378 $ 200,041 $ 185,758
Income tax effect (47,325) (52,331) (46,486)
Stock-based compensation expense, net of tax 145,053 147,710 139,272
Cost Of Goods Sold [Member]
Component of Operating Other Cost and Expense [Line Items]
Stock-based compensation expenses included in total costs and expenses 8,433 10,180 10,859
Research And Development Expenses [Member]
Component of Operating Other Cost and Expense [Line Items]
Stock-based compensation expenses included in total costs and expenses 73,490 84,048 82,893
Selling, General And Administrative Expenses [Member]
Component of Operating Other Cost and Expense [Line Items]
Stock-based compensation expenses included in total costs and expenses $ 110,455 $ 105,813 $ 92,006
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet88.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stock-Based Compensation (Schedule Of Assumptions To Calculate The Estimated Fair Value Of The Awards) (Details)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Expected dividend yield 0.00% 0.00% 0.00%
Stock Options [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Expected volatility 29.00% 31.00% 35.00%
Expected term in years 5.6 5.4 5.3
Risk-free interest rate 2.20% 2.30% 2.10%
ESPP [Member]
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Expected volatility 30.00% 35.00% 37.00%
Expected term in years 1.4 1.3 1.3
Risk-free interest rate 0.80% 0.40% 0.70%
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet89.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Comprehensive Income (Loss) (Other Comprehensive Income (loss) related to Securities and Cash Flow Hedges) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Comprehensive Income (Loss) [Abstract]
Net unrealized gain (loss) related to available-for-sale securities, net of tax impact of $(3,305), $(6,624) and $(11,724) for 2011, 2010 and 2009, respectively $ (24,067,000) $ 13,450,000 $ 21,689,000
Net unrealized gain (loss) related to cash flow hedges, net of tax impact of $(93), $(9,149) and $10,682 for 2011, 2010 and 2009, respectively 1,571,000 105,924,000 (19,016,000)
Less reclassification adjustments, net of tax impact of $(6,725), $(9,028) and $(32,532)for 2011, 2010 and 2009, respectively (55,049,000) 74,289,000 58,130,000
Other comprehensive income (loss) 32,553,000 45,085,000 (55,457,000)
Tax impact of net unrealized gain (loss) related to available-for-sale securities (3,305,000) (6,624,000) (11,724,000)
Tax impact of net unrealized gain (loss) related to cash flow hedges (93,000) (9,149,000) 10,682,000
Tax impact of reclassification adjustments $ (6,725,000) $ (9,028,000) $ (32,532,000)
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet90.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Comprehensive Income (Loss) (Accumulated Other Comprehensive Income (Loss), Net Of Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Comprehensive Income (Loss) [Abstract]
Net unrealized gain (loss) on available-for-sale securities $ (26,748) $ 16,528
Net unrealized gain on cash flow hedges 97,444 21,615
Cumulative foreign currency translation adjustment (12,496) (7,232)
Accumulated other comprehensive income $ 58,200 $ 30,911
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet91.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Segment Information (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Segment Reporting Information [Line Items]
Major customers percentage of total revenues, minimum 10.00%
Property, plant and equipment, net $ 774,406 $ 701,235
Percentage of total net book value of property plant and equipment 98.00% 98.00%
United States [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment, net 597,900 519,400
Ireland [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment, net 109,000 112,200
Canada [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment, net $ 51,700 $ 53,900
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet92.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Segment Information (Schedule Of Product Sales) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
Product sales $ 8,102,359 $ 7,389,921 $ 6,469,311
AmBisome [Member]
Segment Reporting Information [Line Items]
Product sales 330,156 305,856 298,597
Letairis [Member]
Segment Reporting Information [Line Items]
Product sales 293,426 240,279 183,949
Ranexa [Member]
Segment Reporting Information [Line Items]
Product sales 320,004 239,832 131,062
Other Products [Member]
Segment Reporting Information [Line Items]
Product sales 109,057 66,956 16,829
Antiviral Products [Member]
Segment Reporting Information [Line Items]
Product sales 7,049,716 6,536,998 5,838,874
Antiviral Products [Member] | Atripla [Member]
Segment Reporting Information [Line Items]
Product sales 3,224,518 2,926,579 2,382,113
Antiviral Products [Member] | Truvada [Member]
Segment Reporting Information [Line Items]
Product sales 2,875,141 2,649,908 2,489,682
Antiviral Products [Member] | Viread [Member]
Segment Reporting Information [Line Items]
Product sales 737,867 732,240 667,510
Antiviral Products [Member] | Hepsera [Member]
Segment Reporting Information [Line Items]
Product sales 144,679 200,592 271,595
Antiviral Products [Member] | Complera [Member]
Segment Reporting Information [Line Items]
Product sales 38,747 0 0
Antiviral Products [Member] | Emtriva [Member]
Segment Reporting Information [Line Items]
Product sales $ 28,764 $ 27,679 $ 27,974
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet93.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Segment Information (Schedule Of Total Revenues From External Customers And Collaboration Partners By Geographic Region) (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Segment Reporting Information [Line Items]
Total revenues $ 2,200,378 [1] $ 2,121,660 [1] $ 2,137,253 [1] $ 1,926,094 [1] $ 1,998,687 [2] $ 1,937,656 [2] $ 1,927,224 [2] $ 2,085,853 [2] $ 8,385,385 $ 7,949,420 $ 7,011,383
United States [Member]
Segment Reporting Information [Line Items]
Total revenues 4,608,343 4,224,035 3,599,313
Outside Of The United States [Member]
Segment Reporting Information [Line Items]
Total revenues 3,777,042 3,725,385 3,412,070
Outside Of The United States [Member] | France [Member]
Segment Reporting Information [Line Items]
Total revenues 587,292 519,700 468,314
Outside Of The United States [Member] | United Kingdom [Member]
Segment Reporting Information [Line Items]
Total revenues 518,377 450,368 393,036
Outside Of The United States [Member] | Spain [Member]
Segment Reporting Information [Line Items]
Total revenues 498,201 456,647 451,115
Outside Of The United States [Member] | Italy [Member]
Segment Reporting Information [Line Items]
Total revenues 392,052 345,189 323,709
Outside Of The United States [Member] | Germany [Member]
Segment Reporting Information [Line Items]
Total revenues 370,403 274,991 293,111
Outside Of The United States [Member] | Switzerland [Member]
Segment Reporting Information [Line Items]
Total revenues 179,582 458,606 448,203
Outside Of The United States [Member] | Other European Countries [Member]
Segment Reporting Information [Line Items]
Total revenues 578,792 665,237 603,068
Outside Of The United States [Member] | Other Countries [Member]
Segment Reporting Information [Line Items]
Total revenues $ 652,343 $ 554,647 $ 431,514
[1] During the fourth quarter of 2011, we recorded $26.6 million of impairment charges in R&D expense, related to certain IPR&D assets acquired from CGI. See Notes 5 and 9.
[2] During the fourth quarter of 2010, we recorded $136.0 million of impairment charges in R&D expense, related to certain IPR&D assets acquired from CV Therapeutics. See Notes 5 and 9.
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet94.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Segment Information (Schedule Of Revenues From Each Customer Who Individually Accounted For 10% Or More Of Total Revenues) (Details)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Cardinal Health, Inc. [Member]
Segment Reporting Information [Line Items]
Percentage of total revenues from customers 17.00% 17.00% 18.00%
McKesson Corp. [Member]
Segment Reporting Information [Line Items]
Percentage of total revenues from customers 14.00% 14.00% 13.00%
AmerisourceBergen Corp. [Member]
Segment Reporting Information [Line Items]
Percentage of total revenues from customers 12.00% 12.00% 11.00%
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet95.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Narrative) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Operating Loss Carryforwards [Line Items]
Foreign pre-tax income $ 1,480,000,000 $ 1,370,000,000 $ 1,330,000,000
Cumulative unremitted foreign earnings that are permanently invested 5,840,000,000 4,480,000,000
Tax liability if remitted 2,050,000,000 1,600,000,000
Change in valuation allowance (3,800,000) 11,900,000 1,100,000
Tax credit carryforwards, expiration dates 2016
Total federal, state and foreign unrecognized tax benefits 146,908,000 126,516,000 106,506,000 121,424,000
Unrecognized tax benefits that would impact effective tax rate 120,600,000 106,500,000
Unrecognized tax benefits, accrued interest and penalties 17,700,000 12,300,000
U.S. Federal [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards 594,400,000
Tax credit carryforwards 21,300,000
Operating loss carryforwards, expiration date 2016
State [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards 1,450,000,000
Tax credit carryforwards $ 27,500,000
Operating loss carryforwards, expiration date 2012
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet96.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Schedule Of Provision For Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
Current $ 704,412 $ 852,822 $ 719,777
Deferred 68,391 (29,854) (47,608)
Federal Total 772,803 822,968 672,169
Current 62,631 139,819 153,376
Deferred (17,450) 17,464 9,150
State Total 45,181 157,283 162,526
Current 39,921 43,094 42,860
Deferred 4,040 454 (1,191)
Foreign Total 43,961 43,548 41,669
Provision for income taxes $ 861,945 $ 1,023,799 $ 876,364
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet97.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Schedule Of Difference Between Provision For Income Taxes And Federal Statutory Income Tax Rate To Income Before Provision For Income Taxes) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
Income before provision for income taxes $ 3,651,004 $ 3,913,548 $ 3,501,956
Tax at federal statutory rate 1,277,852 1,369,742 1,225,685
State taxes, net of federal benefit 27,894 106,250 111,095
Foreign earnings at different rates (443,879) (435,767) (399,993)
Research and other credits (32,403) (33,072) (43,045)
Net unbenefited stock compensation 14,860 13,188 4,269
Other 17,621 3,458 (21,647)
Provision for income taxes $ 861,945 $ 1,023,799 $ 876,364
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet98.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Components Of Deferred Tax Assets And Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Income Taxes [Abstract]
Net operating loss carryforwards $ 260,907 $ 308,854
Stock-based compensation 156,715 142,242
Reserves and accruals not currently deductible 116,564 109,806
Deferred revenue 37,314 49,194
Depreciation related 45,223 58,875
Research and other credit carryforwards 30,350 25,151
Capitalized intangibles 5,227 5,839
Other, net 58,172 88,669
Total deferred tax assets before valuation allowance 710,472 788,630
Valuation allowance (9,209) (13,040)
Total deferred tax assets 701,263 775,590
Intangibles (330,184) (322,168)
Unremitted foreign earnings (15,928) (15,928)
Other (14,562) (20,774)
Total deferred tax liabilities (360,674) (358,870)
Net deferred tax assets $ 340,589 $ 416,720
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet99.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income Taxes (Schedule Of Total Gross Unrecognized Tax Benefit Liabilities) (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
Balance, beginning of period $ 126,516 $ 106,506 $ 121,424
Tax positions related to current year, Additions 21,113 24,320 25,036
Tax positions related to current year, Reductions 0 (3,303) (8,380)
Tax positions related to prior years, Additions 11,171 25,581 37,014
Tax positions related to prior years, Reductions (4,896) (23,474) (36,277)
Settlements (3,067) (2,160) (31,517)
Lapse of statute of limitations (3,929) (954) (794)
Balance, end of period $ 146,908 $ 126,516 $ 106,506
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet100.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Deferred Compensation Plans (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Deferred Compensation Plans [Abstract]
Percentage of employees contribution to eligible annual compensation 60.00%
Percentage of employers contribution 50.00% 50.00% 50.00%
Amount of annual maximum match $ 5,000 $ 5,000 $ 5,000
Percentage of officers and other senior grade level employees 70.00%
Percentage of officers and other senior grade level employees on annual bonus 100.00%
Percentage of contribution by directors on annual retainer fee 100.00%
Total matching contribution expense under Gilead plan $ 18,800,000 $ 11,200,000 $ 10,200,000
Phantom shares outstanding 35,376
Percentage of restricted stock units award deferred to directors 100.00%
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet101.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Subsequent Events (Details) (USD $)
0 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 0 Months Ended
Jan. 17, 2012
Nov. 30, 2011
Dec. 31, 2011
Jan. 31, 2012
Term Loan Credit Agreement [Member]
Jan. 12, 2012
Term Loan Credit Agreement [Member]
Jan. 31, 2012
Short Term Revolving Credit Agreement [Member]
Jan. 12, 2012
Short Term Revolving Credit Agreement [Member]
Jan. 31, 2012
Five Year Revolving Credit Agreement [Member]
Jan. 12, 2012
Five Year Revolving Credit Agreement [Member]
Jan. 12, 2012
Swing Line Loan Sub-Facility [Member]
Jan. 12, 2012
Letter Of Credit Sub-Facility [Member]
Jan. 17, 2012
2012 Senior Unsecured Notes [Member]
Jan. 17, 2012
Bank Debt [Member]
Subsequent Event [Line Items]
Acquisition cash tender offer $ 11,100,000,000
Acquisition financed with cash on hand 5,200,000,000
Acquisition financed with debts 3,700,000,000 2,200,000,000
Line Of Credit Facility 1,250,000,000 1,000,000,000 750,000,000 1,250,000,000
Line of credit facility additional borrowings 30,000,000 25,000,000
Borrowed from banks $ 1,000,000,000 $ 400,000,000 $ 750,000,000
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet102.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Quarterly Results Of Operations (Schedule Of Quarterly Results Of Operations) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2011
Sep. 30, 2011
Jun. 30, 2011
Mar. 31, 2011
Dec. 31, 2010
Sep. 30, 2010
Jun. 30, 2010
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Quarterly Results Of Operations [Abstract]
Total revenues $ 2,200,378 [1] $ 2,121,660 [1] $ 2,137,253 [1] $ 1,926,094 [1] $ 1,998,687 [2] $ 1,937,656 [2] $ 1,927,224 [2] $ 2,085,853 [2] $ 8,385,385 $ 7,949,420 $ 7,011,383
Gross profit on product sales 1,548,887 [1] 1,533,870 [1] 1,505,725 [1] 1,389,467 [1] 1,433,901 [2] 1,387,975 [2] 1,350,536 [2] 1,347,633 [2]
Net income 661,759 [1] 737,538 [1] 742,459 [1] 647,303 [1] 626,365 [2] 702,163 [2] 709,127 [2] 852,094 [2] 2,789,059 2,889,749 2,625,592
Net income attributable to Gilead 665,145 [1] 741,124 [1] 746,227 [1] 651,141 [1] 629,419 [2] 704,876 [2] 712,061 [2] 854,901 [2] 2,803,637 2,901,257 2,635,755
Net income per share attributable to Gilead common stockholders-basic $ 0.88 [1] $ 0.97 [1] $ 0.95 [1] $ 0.82 [1] $ 0.78 [2] $ 0.85 [2] $ 0.81 [2] $ 0.95 [2] $ 3.62 $ 3.39 $ 2.91
Net income per share attributable to Gilead common stockholders-diluted $ 0.87 [1] $ 0.95 [1] $ 0.93 [1] $ 0.8 [1] $ 0.76 [2] $ 0.83 [2] $ 0.79 [2] $ 0.92 [2] $ 3.55 $ 3.32 $ 2.82
In-process research and development impairment charges $ 26,600 $ 136,000 $ 26,630 $ 136,000 $ 0
[1] During the fourth quarter of 2011, we recorded $26.6 million of impairment charges in R&D expense, related to certain IPR&D assets acquired from CGI. See Notes 5 and 9.
[2] During the fourth quarter of 2010, we recorded $136.0 million of impairment charges in R&D expense, related to certain IPR&D assets acquired from CV Therapeutics. See Notes 5 and 9.
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/Sheet103.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Schedule II: Valuation And Qualifying Accounts (Schedule II: Valuation And Qualifying Accounts) (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation allowance for deferred tax assets, acquisitions $ 7,500,000 $ 9,900,000
Accounts Receivable Allowances [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period 150,942,000 [1] 132,810,000 [1] 90,694,000 [1]
Additions/Charged to Expense 1,228,006,000 [1] 818,132,000 [1] 606,504,000 [1]
Deductions 1,172,958,000 [1] 800,000,000 [1] 564,388,000 [1]
Balance at End of Period 205,990,000 [1] 150,942,000 [1] 132,810,000 [1]
Valuation Allowances For Deferred Tax Assets [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period 13,040,000 [2] 1,078,000 [2] 0 [2]
Additions/Charged to Expense 436,000 [2] 12,127,000 [2] 15,103,000 [2]
Deductions 4,267,000 [2] 165,000 [2] 14,025,000 [2]
Balance at End of Period $ 9,209,000 [2] $ 13,040,000 [2] $ 1,078,000 [2]
[1] Allowances are for doubtful accounts, sales returns, cash discounts and chargebacks.
[2] Valuation allowance for deferred tax assets includes $7.5 million and $9.9 million as of December 31, 2011 and 2010, respectively, related to our acquisitions.
------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2 Content-Location: file:///C:/60ed4a6b_53f0_42af_8428_1467e20389b2/Worksheets/filelist.xml Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" ------=_NextPart_60ed4a6b_53f0_42af_8428_1467e20389b2--