United states securities and exchange commission

Table of Contents
74
Our departure from these facilities shortened the 
expected useful lives of certain leasehold 
improvements and other assets at these facilities. As 
a result, we recorded additional depreciation expense 
to reflect the assets' new shorter useful lives. For the 
year ended December 31, 2016, we recognized 
approximately $45.5 million of this additional 
depreciation, which was recorded as cost of sales in 
our consolidated statements of income.
In the fourth quarter of 2016 we also recognized 
charges totaling $7.4 million for severance costs 
related to certain employees separated from Biogen 
in connection with this transaction. These amounts 
were substantially incurred and paid by the end of first 
quarter of 2017 and are reflected in restructuring 
charges in our consolidated statements of income.
2015 Cost Saving Initiatives
2015 Restructuring Charges
In October 2015 we announced a corporate 
restructuring, which included the termination of 
certain pipeline programs and an 11% reduction in 
workforce. Under this restructuring, cash payments 
were estimated to total approximately $120.0 million, 
of which $15.9 million were related to previously 
accrued 2015 incentive compensation, resulting in 
net restructuring charges totaling approximately 
$102.0 million. These amounts were substantially 
paid by the end of 2016.
During the years ended December 31, 2016 and 
2015, we recognized $8.0 million and $93.4 million, 
respectively, of restructuring charges related to our 
2015 restructuring program in our consolidated 
statements of income. Our restructuring reserve is 
included in accrued expenses and other in our 
consolidated balance sheets.
The following table summarizes the charges and 
spending related to our 2015 restructuring program:
(In millions)
Workforce
Reduction
Pipeline
Programs
Total
Restructuring reserve
as of December 31,
2015
$ 33.7 $
3.6 $ 37.3
Expense
4.9
5.4
10.3
Payment
(31.2)
(9.0)
(40.2)
Adjustments to
previous estimates,
net
(5.2)
2.9
(2.3)
Restructuring reserve
as of December 31,
2016
$
2.2 $
2.9 $
5.1
Payment
(1.7)
(2.9)
(4.6)
Restructuring reserve
as of December 31,
2017
$
0.5 $
— $
0.5
TECFIDERA Litigation Settlement Charge
As described above under "Amortization of 
Acquired Intangible Assets - TECFIDERA License Rights,” 
in January 2017 we entered into a settlement and 
license agreement with Forward Pharma pursuant to 
which we obtained U.S. and rest of world licenses to 
Forward Pharma's intellectual property, including 
Forward Pharma's intellectual property related to 
TECFIDERA. In exchange, we paid Forward 
Pharma $1.25 billion in cash. During the fourth 
quarter of 2016, we recognized a pre-tax charge 
of $454.8 million and in the first quarter of 2017 we 
recognized an intangible asset of $795.2 
million related to this agreement. The pre-tax charge 
recognized in the fourth quarter of 2016 represented 
the fair value of our licenses to Forward Pharma’s 
intellectual property for the period April 2014, when 
we started selling TECFIDERA, through December 31, 
2016.
For additional information on our TECFIDERA 
settlement and license agreement, please read Note 
7, Intangible Assets and Goodwill, to our consolidated 
financial statements included in this report.

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Other Income (Expense), Net
For 2017 compared to 2016, the change in other 
income (expense), net was primarily due to an 
increase in foreign currency exchange gains, an 
increase in interest income and a decrease in interest 
expense, partially offset by other than temporary 
impairments recorded on strategic investments and 
marketable debt securities during the year. 
Interest expense for the year ended December 
31, 2017, includes a net $5.2 million debt 
extinguishment charge recognized in November 2017 
upon redemption of our 6.875% Senior Notes due 
March 1, 2018. 
For additional information on this redemption 
and our outstanding indebtedness, please read Note 
12, Indebtedness, to our consolidated financial 
statements included in this report.
For 2016 compared to 2015, the change in other 
income (expense), net was primarily due to an 
increase in interest expense as a result of the 
issuance of our senior unsecured notes in the third 
quarter of 2015. This increase was partially offset by 
an increase in interest income on higher yields and 
cash, cash equivalents and marketable securities 
balances as well as a decrease in foreign exchange 
losses recognized during the year ended December 
31, 2016, compared to the prior year comparative 
period. 
Income Tax Provision
Our effective tax rate fluctuates from year to 
year due to the global nature of our operations. The 
factors that most significantly impact our effective tax 
rate include changes in tax laws, variability in the 
allocation of our taxable earnings among multiple 
jurisdictions, the amount and characterization of our 
research and development expenses, the levels of 
certain deductions and credits, acquisitions and 
licensing transactions.
Our effective tax rate for 2017 compared to 
2016 increased primarily due to the effect of the 
2017 Tax Act and the impairment of prepaid tax 
assets related to our ZINBRYTA program.
On December 22, 2017, the 2017 Tax Act was 
signed into law and has resulted in significant 
changes to the U.S. corporate income tax system. 
The 2017 Tax Act includes a federal statutory rate 
reduction from 35% to 21%, the elimination or 
reduction of certain domestic deductions and credits, 
the Transition Toll Tax and other changes to taxation 
of foreign subsidiaries.
Changes in tax rates and tax laws are accounted 
for in the period of enactment. Therefore, during the 
year ended December 31, 2017, we recorded a 
charge totaling $1,173.6 million related to our current 
estimate of the provisions of the 2017 Tax Act, 
including a $989.6 million expense under the 
Transition Toll Tax. The Transition Toll Tax will be paid 
over an eight-year period, starting in 2018, and will 
not accrue interest.

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