Asset Impairments, Restructuring, and Other Special Charges

12 Months Ended

Dec. 31, 2011

Asset Impairments, Restructuring, and Other Special Charges [Abstract]

Asset Impairments, Restructuring, And Other Special Charges [Text Block]

Note 5: Asset Impairments, Restructuring, and Other Special Charges

The components of the charges included in asset impairments, restructuring, and other special charges in our consolidated statements of operations are described below.

	2011	2010	2009
Severance	$251.8	$142.0	$   99.0
Asset impairments and other special charges	149.6	50.0	363.7
Product liability and other special charges – legal settlement	-	-	230.0
Asset impairments, restructuring, and other special charges	$401.4	$192.0	$692.7

Severance

Severance costs listed above, substantially all of which have been paid, are primarily the result of the 2009 initiative to reorganize global operations, streamline various functions of the business, and reduce total employees, as well as other previously announced strategic actions to reduce our cost structure and global workforce. Included in the 2009 severance charges is $61.1 million related to the sale of our Tippecanoe Laboratories manufacturing site, which is further described below.

Asset Impairments and Other Special Charges

For the year ended December 31, 2011, we incurred $149.6 million of asset impairments and other special charges primarily consisting of $85.0 million for returned product and contractual commitments related to the withdrawal of Xigris from the market and $56.1 million related to our decision to vacate certain leased premises, a decision that was as a result of our 2009 initiative to reorganize global operations, streamline various functions of the business, and reduce total employees.

For the year ended December 31, 2010, we incurred $50.0 million of asset impairments and other special charges primarily consisting of lease termination costs and asset impairments outside the United States.

In 2009, we recognized non-cash asset impairments and other special charges of $363.7 million primarily due to the sale of our Tippecanoe Laboratories manufacturing site to an affiliate of Evonik Industries AG (Evonik) in early 2010. In connection with the sale of the site, we entered into a nine-year supply and services agreement, whereby Evonik will manufacture final and intermediate step API for certain of our human and animal health products. The fair value of assets used in determining impairment charges was based on contracted sales prices.

Product Liability and Other Special Charges

In 2009, we incurred other special charges of $230.0 million related to advanced discussions with the attorneys general for several states, seeking to resolve their Zyprexa-related claims. The charges represented the then-current probable and estimable exposures in connection with the states' claims. Refer to Note 15 for additional information.