Item 15. Exhibits and Financial Statement Schedules

a.	(1) Consolidated Financial Statements:

The following financial statements are filed as part of this report:

Financial Statements		Page Number
Consolidated Statements of Income		F-2
Consolidated Statements of Comprehensive Income		F-3
Consolidated Balance Sheets		F-4
Consolidated Statements of Cash Flows		F-5
Consolidated Statements of Equity		F-6
Notes to Consolidated Financial Statements		F-9
Report of Independent Registered Public Accounting Firm		F-64

(2) Financial Statement Schedules

Schedules are omitted because they are not applicable, or are not required, or because the information is included in the consolidated financial statements and notes thereto.

(3) Exhibits

The exhibits listed on the Exhibit Index beginning on page A-1, which is incorporated herein by reference, are filed or furnished as part of this report or are incorporated into this report by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIOGEN IDEC INC.
By:	/S/ GEORGE A. SCANGOS
	George A. Scangos
	Chief Executive Officer

Date: February 4, 2015

Pursuant to the requirements the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name		Capacity		Date
/S/ GEORGE A. SCANGOS		Director and Chief Executive Officer (principal executive officer)		February 4, 2015
George A. Scangos
/S/ PAUL J. CLANCY		Executive Vice President, Finance and Chief Financial Officer (principal financial officer)		February 4, 2015
Paul J. Clancy
/S/ GREGORY F. COVINO		Vice President, Finance, Chief Accounting Officer (principal accounting officer)		February 4, 2015
Gregory F. Covino
/S/ STELIOS PAPADOPOULOS		Director and Chairman of the Board of Directors		February 4, 2015
Stelios Papadopoulos
/S/ ALEXANDER J. DENNER		Director		February 4, 2015
Alexander J. Denner
/S/ CAROLINE D. DORSA		Director		February 4, 2015
Caroline D. Dorsa
/S/ NANCY L. LEAMING		Director		February 4, 2015
Nancy L. Leaming
/S/ RICHARD C. MULLIGAN		Director		February 4, 2015
Richard C. Mulligan
/S/ ROBERT W. PANGIA		Director		February 4, 2015
Robert W. Pangia
/S/ BRIAN S. POSNER		Director		February 4, 2015
Brian S. Posner
/S/ ERIC K. ROWINSKY		Director		February 4, 2015
Eric K. Rowinsky
/S/ LYNN SCHENK		Director		February 4, 2015
Lynn Schenk
/S/ STEPHEN A. SHERWIN		Director		February 4, 2015
Stephen A. Sherwin

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

		Page Number
Consolidated Statements of Income		F-2
Consolidated Statements of Comprehensive Income		F-3
Consolidated Balance Sheets		F-4
Consolidated Statements of Cash Flows		F-5
Consolidated Statements of Equity		F-6
Notes to Consolidated Financial Statements		F-9
Report of Independent Registered Public Accounting Firm		F-64

F- 1

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

	For the Years Ended December 31,
	2014				2013				2012
Revenues:
Product, net	$	8,203,404			$	5,542,331			$	4,166,074
Unconsolidated joint business	1,195,389				1,126,017				1,137,923
Other	304,531				263,851				212,464
Total revenues	9,703,324				6,932,199				5,516,461
Cost and expenses:
Cost of sales, excluding amortization of acquired intangible assets	1,171,036				857,726				545,494
Research and development	1,893,422				1,444,053				1,334,919
Selling, general and administrative	2,232,342				1,712,051				1,277,465
Amortization of acquired intangible assets	489,761				342,948				202,204
Collaboration profit sharing	—				85,357				317,895
(Gain) loss on fair value remeasurement of contingent consideration	(38,893		)		(547		)		27,202
Restructuring charges	—				—				2,225
Total cost and expenses	5,747,668				4,441,588				3,707,404
Gain on sale of rights	16,758				24,898				46,792
Income from operations	3,972,414				2,515,509				1,855,849
Other income (expense), net	(25,781		)		(34,930		)		(744		)
Income before income tax expense and equity in loss of investee, net of tax	3,946,633				2,480,579				1,855,105
Income tax expense	989,942				601,014				470,554
Equity in loss of investee, net of tax	15,126				17,224				4,518
Net income	2,941,565				1,862,341				1,380,033
Net income attributable to noncontrolling interests, net of tax	6,781				—				—
Net income attributable to Biogen Idec Inc.	$	2,934,784			$	1,862,341			$	1,380,033
Net income per share:
Basic earnings per share attributable to Biogen Idec Inc.	$	12.42			$	7.86			$	5.80
Diluted earnings per share attributable to Biogen Idec Inc.	$	12.37			$	7.81			$	5.76
Weighted-average shares used in calculating:
Basic earnings per share attributable to Biogen Idec Inc.	236,359				236,919				237,938
Diluted earnings per share attributable to Biogen Idec Inc.	237,176				238,308				239,740

See accompanying notes to these consolidated financial statements.

F- 2

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	For the Years Ended December 31,
	2014				2013				2012
Net income attributable to Biogen Idec Inc.	$	2,934,784			$	1,862,341			$	1,380,033
Other comprehensive income:
Unrealized gains (losses) on securities available for sale:
Unrealized gains (losses) recognized during the period, net of tax of $80, $6,394 and $2,940	411				11,770				5,080
Less: reclassification adjustment for (gains) losses included in net income, net of tax of $3,462, $5,576 and $486	(6,429		)		(10,355		)		(903		)
Unrealized gains (losses) on securities available for sale, net of tax of $3,542, $818 and $2,454	(6,018		)		1,415				4,177
Unrealized gains (losses) on foreign currency forward contracts:
Unrealized gains (losses) recognized during the period, net of tax of $760, $1,721 and $1,396	101,792				(26,679		)		(11,808		)
Less: reclassification adjustment for (gains) losses included in net income, net of tax of $500, $533 and $3,360	(6,349		)		13,716				(31,713		)
Unrealized gains (losses) on foreign currency forward contracts, net of tax of $260, $1,187 and $4,756	95,443				(12,963		)		(43,521		)
Unrealized gains (losses) on pension benefit obligation	(11,950		)		2,096				(12,656		)
Currency translation adjustment	(109,218		)		37,012				23,230
Total other comprehensive income (loss), net of tax	(31,743		)		27,560				(28,770		)
Comprehensive income attributable to Biogen Idec Inc.	2,903,041				1,889,901				1,351,263
Comprehensive income attributable to noncontrolling interests, net of tax	6,781				—				65
Comprehensive income	$	2,909,822			$	1,889,901			$	1,351,328

See accompanying notes to these consolidated financial statements.

F- 3

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	As of December 31,
	2014				2013
ASSETS
Current assets:
Cash and cash equivalents	$	1,204,924			$	602,562
Marketable securities	640,460				620,167
Accounts receivable, net	1,292,445				824,406
Due from unconsolidated joint business, net	283,360				252,662
Inventory	804,022				659,003
Other current assets	447,462				226,134
Total current assets	4,672,673				3,184,934
Marketable securities	1,470,652				625,772
Property, plant and equipment, net	1,765,683				1,750,710
Intangible assets, net	4,028,507				4,474,653
Goodwill	1,760,249				1,232,916
Investments and other assets	618,795				594,350
Total assets	$	14,316,559			$	11,863,335
LIABILITIES AND EQUITY
Current liabilities:
Current portion of notes payable	$	3,136			$	3,494
Taxes payable	168,058				179,685
Accounts payable	229,178				219,913
Accrued expenses and other	1,819,334				1,355,187
Total current liabilities	2,219,706				1,758,279
Notes payable	582,061				592,433
Long-term deferred tax liability	50,656				232,554
Other long-term liabilities	650,096				659,231
Total liabilities	3,502,519				3,242,497
Commitments and contingencies
Equity:
Biogen Idec Inc. shareholders’ equity
Preferred stock, par value $0.001 per share	—				—
Common stock, par value $0.0005 per share	129				128
Additional paid-in capital	4,196,156				4,023,651
Accumulated other comprehensive loss	(59,488		)		(27,745		)
Retained earnings	9,283,919				6,349,135
Treasury stock, at cost; 22,562 shares and 19,641 shares, respectively	(2,611,706		)		(1,724,927		)
Total Biogen Idec Inc. shareholders’ equity	10,809,010				8,620,242
Noncontrolling interests	5,030				596
Total equity	10,814,040				8,620,838
Total liabilities and equity	$	14,316,559			$	11,863,335

See accompanying notes to these consolidated financial statements.

F- 4

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Years Ended December 31,
	2014				2013				2012
Cash flows from operating activities:
Net income	$	2,941,565			$	1,862,341			$	1,380,033
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	688,150				531,740				365,648
Share-based compensation	155,302				136,293				118,566
Deferred income taxes	(308,222		)		(245,077		)		(116,900		)
Other	(50,320		)		(27,612		)		28,822
Changes in operating assets and liabilities, net:
Accounts receivable	(512,389		)		(126,753		)		3,571
Inventory	(185,917		)		(243,960		)		(140,309		)
Other assets	(94,514		)		(160,188		)		(27,347		)
Accrued expenses and other current liabilities	244,378				284,049				273,372
Other liabilities and taxes payable	94,779				318,512				34,112
Other	(30,697		)		15,733				(39,671		)
Net cash flows provided by operating activities	2,942,115				2,345,078				1,879,897
Cash flows from investing activities:
Proceeds from sales and maturities of marketable securities	2,718,923				5,190,052				2,749,558
Purchases of marketable securities	(3,583,150		)		(3,278,091		)		(3,334,434		)
Acquisition of TYSABRI rights	—				(3,262,719		)		—
Contingent consideration related to Fumapharm AG acquisition	(375,000		)		(15,000		)		—
Acquisitions of businesses	—				—				(72,401		)
Purchases of property, plant and equipment	(287,751		)		(246,281		)		(254,548		)
Other	(15,998		)		7,371				(38,517		)
Net cash flows used in investing activities	(1,542,976		)		(1,604,668		)		(950,342		)
Cash flows from financing activities:
Purchase of treasury stock	(886,779		)		(400,309		)		(984,715		)
Proceeds from issuance of stock for share-based compensation arrangements	54,887				66,770				67,493
Excess tax benefit from share-based compensation	96,376				73,467				54,738
Repayments of borrowings	(2,674		)		(452,340		)		(2,428		)
Other	(17,683		)		(4,116		)		(12,566		)
Net cash flows used in financing activities	(755,873		)		(716,528		)		(877,478		)
Net increase (decrease) in cash and cash equivalents	643,266				23,882				52,077
Effect of exchange rate changes on cash and cash equivalents	(40,904		)		7,959				4,102
Cash and cash equivalents, beginning of the year	602,562				570,721				514,542
Cash and cash equivalents, end of the year	$	1,204,924			$	602,562			$	570,721

See accompanying notes to these consolidated financial statements.

F- 5

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

	Preferred stock							Common stock							Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Treasury stock							Total Biogen Idec Inc. shareholders’ equity				Noncontrolling interests				Total equity
	Shares			Amount				Shares			Amount							Shares			Amount
Balance, December 31, 2013	—			$	—			255,973			$	128			$	4,023,651			$	(27,745	)		$	6,349,135			(19,641	)		$	(1,724,927	)		$	8,620,242			$	596			$	8,620,838
Net income																							2,934,784											2,934,784				6,781				2,941,565
Other comprehensive income, net of tax																			(31,743		)													(31,743		)		—				(31,743		)
Distribution to noncontrolling interests																																		—				(9,051		)		(9,051		)
Other transactions with noncontrolling interests																																		—				6,704				6,704
Repurchase of common stock for Treasury pursuant to the 2011 share repurchase plan, at cost																											(2,921	)		(886,779		)		(886,779		)						(886,779		)
Issuance of common stock under stock option and stock purchase plans								342			—				54,887																			54,887								54,887
Issuance of common stock under stock award plan								811			1				(140,353		)																	(140,352		)						(140,352		)
Compensation expense related to share-based payments															165,004																			165,004								165,004
Tax benefit from share-based payments															92,967																			92,967								92,967
Balance, December 31, 2014	—			$	—			257,126			$	129			$	4,196,156			$	(59,488	)		$	9,283,919			(22,562	)		$	(2,611,706	)		$	10,809,010			$	5,030			$	10,814,040

See accompanying notes to these consolidated financial statements.

F- 6

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY - (Continued)

(In thousands)

	Preferred stock							Common stock							Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Treasury stock							Total Biogen Idec Inc. shareholders’ equity				Noncontrolling interests				Total equity
	Shares			Amount				Shares			Amount							Shares			Amount
Balance, December 31, 2012	—			$	—			254,237			$	127			$	3,854,525			$	(55,305	)		$	4,486,794			(17,655	)		$	(1,324,618	)		$	6,961,523			$	2,272			$	6,963,795
Net income																							1,862,341											1,862,341				—				1,862,341
Other comprehensive income, net of tax																			27,560															27,560				—				27,560
Deconsolidation of noncontrolling interests																																		—				(1,676		)		(1,676		)
Repurchase of common stock for Treasury pursuant to the 2011 share repurchase plan, at cost																											(1,986	)		(400,309		)		(400,309		)						(400,309		)
Issuance of common stock under stock option and stock purchase plans								767			—				66,770																			66,770								66,770
Issuance of common stock under stock award plan								969			1				(89,747		)																	(89,746		)						(89,746		)
Compensation expense related to share-based payments															146,210																			146,210								146,210
Tax benefit from share-based payments															45,893																			45,893								45,893
Balance, December 31, 2013	—			$	—			255,973			$	128			$	4,023,651			$	(27,745	)		$	6,349,135			(19,641	)		$	(1,724,927	)		$	8,620,242			$	596			$	8,620,838

See accompanying notes to these consolidated financial statements.

F- 7

BIOGEN IDEC INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY - (Continued)

(In thousands)

	Preferred stock							Common stock							Additional paid-in capital				Accumulated other comprehensive loss				Retained earnings				Treasury stock							Total Biogen Idec Inc. shareholders’ equity				Noncontrolling interests				Total equity
	Shares			Amount				Shares			Amount							Shares			Amount
Balance, December 31, 2011	—			$	—			255,633			$	128			$	4,185,048			$	(26,535	)		$	3,106,761			(13,518	)		$	(839,903	)		$	6,425,499			$	1,488			$	6,426,987
Net income																							1,380,033											1,380,033				—				1,380,033
Other comprehensive income, net of tax																			(28,770		)													(28,770		)		65				(28,705		)
Distributions to noncontrolling interests																																		—				1,199				1,199
Capital contributions from noncontrolling interests																																		—				73				73
Deconsolidation of noncontrolling interests															(3		)																	(3		)		(553		)		(556		)
Repurchase of common stock for Treasury pursuant to the 2011 share repurchase plan, at cost																											(7,811	)		(984,715		)		(984,715		)						(984,715		)
Retirement of common stock pursuant to the 2011 share repurchase plan, at cost								(3,674	)		(2		)		(499,998		)										3,674			500,000				—								—
Issuance of common stock under stock option and stock purchase plans								1,039			—				67,493																			67,493								67,493
Issuance of common stock under stock award plan								1,239			1				(71,358		)																	(71,357		)						(71,357		)
Compensation expense related to share-based payments															123,956																			123,956								123,956
Tax benefit from share-based payments															49,387																			49,387								49,387
Balance, December 31, 2012	—			$	—			254,237			$	127			$	3,854,525			$	(55,305	)		$	4,486,794			(17,655	)		$	(1,324,618	)		$	6,961,523			$	2,272			$	6,963,795

See accompanying notes to these consolidated financial statements.

F- 8

BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Summary of Significant Accounting Policies

Business Overview

Biogen Idec is a global biopharmaceutical company focused on discovering, developing, manufacturing and delivering therapies for neurological, autoimmune and hematologic disorders. Our principal marketed products include AVONEX, PLEGRIDY, TECFIDERA, TYSABRI, and FAMPYRA for multiple sclerosis (MS), ALPROLIX for hemophilia B and ELOCTATE for hemophilia A. We also collaborate on the development and commercialization of RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia and other conditions and share profits and losses for GAZYVA which is approved for the treatment of chronic lymphocytic leukemia.

Consolidation

Our consolidated financial statements reflect our financial statements, those of our wholly-owned subsidiaries and those of certain variable interest entities where we are the primary beneficiary. For consolidated entities where we own or are exposed to less than 100% of the economics, we record net income (loss) attributable to noncontrolling interests in our consolidated statements of income equal to the percentage of the economic or ownership interest retained in such entities by the respective noncontrolling parties. Intercompany balances and transactions are eliminated in consolidation.

In determining whether we are the primary beneficiary of an entity and therefore required to consolidate, we apply a qualitative approach that determines whether we have both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. These considerations impact the way we account for our existing collaborative relationships and other arrangements. We continuously assess whether we are the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in us consolidating or deconsolidating one or more of our collaborators or partners.

Use of Estimates

The preparation of our consolidated financial statements requires us to make estimates, judgments, and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments and methodologies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; our price to the customer is fixed or determinable; and collectability is reasonably assured.

Product Revenues

Revenues from product sales are recognized when title and risk of loss have passed to the customer, which is typically upon delivery. Product revenues are recorded net of applicable reserves for discounts and allowances.

Reserves for Discounts and Allowances

We establish reserves for trade term discounts, wholesaler incentives, Medicaid rebates, Veterans Administration (VA) and Public Health Service (PHS) discounts, managed care rebates, product returns and other governmental rebates or applicable allowances, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Reserves established for these discounts and allowances are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). These reserves are based on estimates of the amounts earned or to be claimed on the related sales. Our estimates take into consideration our historical experience, current contractual and statutory requirements, specific known market events and trends, industry date and forecasted customer buying and payment patterns. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

Product revenue reserves are categorized as follows: discounts, contractual adjustments and returns.

F- 9

BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Discounts include trade term discounts and wholesaler incentives. Trade term discounts and wholesaler incentives primarily relate to estimated obligations for credits to be granted to wholesalers for remitting payment on their purchases within established incentive periods and credits to be granted to wholesalers for compliance with various contractually-defined inventory management practices, respectively. We determine these reserves based on our historical experience, including the timing of customer payments.

Contractual adjustments primarily relate to Medicaid and managed care rebates, VA and PHS discounts, specialty pharmacy program fees and other governmental rebates or applicable allowances.

•

Medicaid rebates relate to our estimated obligations to states under established reimbursement arrangements. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in other current liabilities. Our liability for Medicaid rebates consists of estimates for claims that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid, and an estimate of potential claims that will be made for inventory that exists in the distribution channel at period end.

•

Governmental rebates or chargebacks, including VA and PHS discounts, represent our estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices we charge to wholesalers which provide those products. The wholesaler charges us for the difference between what the wholesaler pays for the products and the ultimate selling price to the qualified healthcare providers. Rebate and chargeback reserves are established in the same period as the related revenue is recognized, resulting in a reduction in product revenue and accounts receivable. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider from the wholesaler, and we generally issue credits for such amounts within a few weeks of the wholesaler notifying us about the resale. Our reserves for VA, PHS and chargebacks consists of amounts that we expect to issue for inventory that exists at the wholesalers that we expect will be sold to qualified healthcare providers and chargebacks that wholesalers have claimed for which we have not issued a credit.

•

Managed care rebates represent our estimated obligations to third parties, primarily pharmacy benefit managers. Rebate accruals are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability which is included in accrued expenses and other current liabilities. These rebates result from performance-based goals that are primarily based on attaining contractually specified sales volumes and growth and price increase limit allowances (price protection). The calculation of the accrual for these rebates is based on an estimate of the customer’s buying patterns and the resulting applicable contractual rebate rate(s) to be earned over a contractual period.

•	Other governmental rebates or applicable allowances primarily relate to mandatory rebates and discounts in markets where government-sponsored healthcare systems are the primary payors for healthcare.

Product returns are established for returns expected to be made by wholesalers and are recorded in the period the related revenue is recognized, resulting in a reduction to product sales. In accordance with contractual terms, wholesalers are permitted to return product for reasons such as damaged or expired product. The majority of wholesaler returns are due to product expiration. Expired product return reserves are estimated through a comparison of historical return data to their related sales on a production lot basis. Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product.

In addition to the discounts, rebates and product returns described above and classified as a reduction of revenue, we also maintain certain customer service contracts with distributors and other customers in the distribution channel that provide us with inventory management, data and distribution services. To the extent we can demonstrate a separable benefit and fair value for these services, we classify these payments within selling, general and administrative expenses.

We also distribute no-charge product to qualifying patients under our patient assistance and patient replacement goods program. This program is administered through our distribution partners, which ship product for qualifying patients from their own inventory received from us. Gross revenue and the related reserves are not recorded on product shipped under this program and cost of sales is recorded when the product is shipped.

F- 10

BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenues from Unconsolidated Joint Business

Revenues from unconsolidated joint business consists of (i) our share of pre-tax profits and losses in the U.S. for RITUXAN and GAZYVA; (ii) reimbursement of our selling and development expenses in the U.S. for RITUXAN; and (iii) revenue on sales in the rest of world for RITUXAN, which consist of our share of pre-tax co-promotion profits in Canada and royalty revenue on sales outside the U.S. and Canada by F. Hoffmann-La Roche Ltd. (Roche) and its sublicensees. Pre-tax co-promotion profits on RITUXAN are calculated and paid to us by Genentech in the U.S. and by Roche in Canada. Pre-tax co-promotion profits consist of U.S. and Canadian net sales to third-party customers less the cost to manufacture, third-party royalty expenses, distribution, selling, and marketing expenses, and joint development expenses incurred by Genentech, Roche and us. We record our share of the pretax co-promotion profits on RITUXAN in Canada and royalty revenues on sales outside the U.S. on a cash basis as we do not have the ability to estimate these profits or royalty revenue in the period incurred. Additionally, our share of the pre-tax profits on RITUXAN and GAZYVA in the U.S. includes estimates made by Genentech and those estimates are subject to change. Actual results may ultimately differ from our estimates. For additional information related to our collaboration with Genentech, please read Note 20, Collaborative and Other Relationships, to these consolidated financial statements.

Royalty Revenues

We receive royalty revenues on sales by our licensees of other products covered under patents that we own. We do not have future performance obligations under these license arrangements. We record these revenues based on estimates of the sales that occurred during the relevant period. The relevant period estimates of sales are based on interim data provided by licensees and analysis of historical royalties that have been paid to us, adjusted for any changes in facts and circumstances, as appropriate. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter. Historically, adjustments have not been material when compared to actual amounts paid by licensees. If we are unable to reasonably estimate royalty revenue or do not have access to the information, then we record royalty revenues on a cash basis.

Multiple-Element Revenue Arrangements

We may enter into transactions that involve the sale of products and related services under multiple element arrangements. In accounting for these transactions, we assess the elements of the contract and whether each element has standalone value and allocate revenue to the various elements based on their estimated selling price. The selling price of a revenue generating element can be based on current selling prices offered by us or another party for current products or management’s best estimate of a selling price. Revenue allocated to an individual element is recognized when all other revenue recognition criteria are met for that element.

Fair Value Measurements

We have certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

•	Level 1 — Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;

•	Level 2 — Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves and foreign currency spot rates; and

•	Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The majority of our financial assets have been classified as Level 2. Our financial assets (which include our cash equivalents, derivative contracts, marketable debt securities, and plan assets for deferred compensation) have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events.

We validate the prices provided by our third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources and analyzing pricing data in certain instances. After completing our validation procedures, we did not adjust or override any fair value measurements provided by our pricing services as of December 31, 2014 and 2013, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We also maintain venture capital investments classified as Level 3 whose fair value is initially measured at transaction prices and subsequently valued using the pricing of recent financing or by reviewing the underlying economic fundamentals and liquidation value of the companies. These investments include investments in certain venture capital funds which primarily invest in small privately-owned, venture-backed biotechnology companies. The fair value of our investments in these venture capital funds has been estimated using the net asset value of the fund. Gains and losses (realized and unrealized) included in earnings for the period are reported in other income (expense), net. The investments cannot be redeemed within the funds. Distributions from each fund will be received as the underlying investments of the fund are liquidated. We apply judgments and estimates when we validate the prices provided by third parties. While we believe the valuation methodologies are appropriate, the use of valuation methodologies is highly judgmental and changes in methodologies can have a material impact on our results of operations.

Other

The carrying amounts reflected in the consolidated balance sheets for cash equivalents, current accounts receivable, due from unconsolidated joint business, other current assets, accounts payable, and accrued expenses and other, approximate fair value due to their short-term maturities.

Cash and Cash Equivalents

We consider only those investments which are highly liquid, readily convertible to cash and that mature within three months from date of purchase to be cash equivalents. As of December 31, 2014 and 2013, cash equivalents were comprised of money market funds and commercial paper, overnight reverse repurchase agreements, and other debt securities with maturities less than 90 days from the date of purchase.

Accounts Receivable

The majority of our accounts receivable arise from product sales and primarily represent amounts due from our wholesale distributors, public hospitals and other government entities. We monitor the financial performance and creditworthiness of our large customers so that we can properly assess and respond to changes in their credit profile. We provide reserves against trade receivables for estimated losses that may result from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve.

In countries where we have experienced a pattern of payments extending beyond our contractual payment term and we expect to collect receivables greater than one year from the time of sale, we have discounted our receivables and reduced related revenues over the period of time that we estimate those amounts will be paid using the country’s market-based borrowing rate for such period. The related receivables are classified at the time of sale as non-current assets. We accrete interest income on these receivables, which is recognized as a component of other income (expense), net within our consolidated statement of income.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk include cash and cash equivalents, investments, derivatives, and accounts receivable. We attempt to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments as previously defined by us. We have established guidelines related to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. Our investment portfolio is maintained in accordance with our investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. We minimize credit risk resulting from derivative instruments by choosing only highly rated financial institutions as counterparties.

Concentrations of credit risk with respect to receivables, which are typically unsecured, are limited due to the wide variety of customers and markets using our products, as well as their dispersion across many different geographic areas. The majority of our accounts receivable arise from product sales in the United States and Europe and have standard payment terms which generally require payment within 30 to 90 days. We monitor the financial performance and creditworthiness of our large customers so that we can properly assess and respond to changes in their credit profile. We continue to monitor these conditions and assess their possible impact on our business. For additional information related to this concentration of credit risk, please read Note 4, Accounts Receivable to these consolidated financial statements.

As of December 31, 2014 and 2013, two wholesale distributors individually accounted for approximately 34.4% and 23.3%, and 34.5% and 15.7%, of consolidated trade receivables, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Marketable Securities and Other Investments

Marketable Debt Securities

Available-for-sale debt securities are recorded at fair market value and unrealized gains and losses are included in accumulated other comprehensive income (loss) in equity, net of related tax effects, unless the security has experienced a credit loss, we have determined that we have the intent to sell the security or we have determined that it is more likely than not that we will have to sell the security before its expected recovery. Realized gains and losses are reported in other income (expense), net, on a specific identification basis.

Marketable Equity Securities

Our marketable equity securities represent investments in publicly traded equity securities and are included in investments and other assets within our consolidated balance sheet. When assessing whether a decline in the fair value of a marketable equity security is other-than-temporary, we consider the fair market value of the security, the duration of the security’s decline, and prospects for the underlying business, including favorable or adverse clinical trial results, new product initiatives and new collaborative agreements with the companies in which we have invested.

Non-Marketable Equity Securities

We also invest in equity securities of companies whose securities are not publicly traded and where fair value is not readily available. These investments are recorded using either the cost method or the equity method of accounting, depending on our ownership percentage and other factors that suggest we have significant influence. We monitor these investments to evaluate whether any decline in their value has occurred that would be other-than-temporary, based on the implied value of recent company financings, public market prices of comparable companies, and general market conditions and are included in investments and other assets within our consolidated balance sheet.

Evaluating Investments for Other-than-Temporary Impairments

We conduct periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to certain investments. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses on available-for-sale securities that are determined to be temporary, and not related to credit loss, are recorded, net of tax, in accumulated other comprehensive income.

For available-for-sale debt securities with unrealized losses, management performs an analysis to assess whether we intend to sell or whether we would more likely than not be required to sell the security before the expected recovery of the amortized cost basis. Where we intend to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is reflected within earnings as an impairment loss.

Regardless of our intent to sell a security, we perform additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where we do not expect to receive cash flows sufficient to recover the amortized cost basis of a security.

For equity securities, when assessing whether a decline in value is other-than-temporary, we consider the fair market value of the security, the duration of the security’s decline, and the financial condition of the issuer. We then consider our intent and ability to hold the equity security for a period of time sufficient to recover our carrying value. Where we have determined that we lack the intent and ability to hold an equity security to its expected recovery, the security’s decline in fair value is deemed to be other-than-temporary and is reflected within earnings as an impairment loss.

Equity Method of Accounting

In circumstances where we have the ability to exercise significant influence over the operating and financial policies of a company in which we have an investment, we utilize the equity method of accounting for recording investment activity. In assessing whether we exercise significant influence, we consider the nature and magnitude of our investment, the voting and protective rights we hold, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Under the equity method of accounting, we record within our results of operations our share of income or loss of the other company.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Inventory

Inventories are stated at the lower of cost or market with cost determined in a manner that approximates the first-in, first-out (FIFO) method. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when selected for use in a clinical manufacturing campaign.

Capitalization of Inventory Costs

We capitalize inventory costs associated with our products prior to regulatory approval, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. We consider numerous attributes in evaluating whether the costs to manufacture a particular product should be capitalized as an asset. We assess the regulatory approval process and where the particular product stands in relation to that approval process, including any known safety or efficacy concerns, potential labeling restrictions and other impediments to approval. We evaluate our anticipated research and development initiatives and constraints relating to the product and the indication in which it will be used. We consider our manufacturing environment including our supply chain in determining logistical constraints that could hamper approval or commercialization. We consider the shelf life of the product in relation to the expected timeline for approval and we consider patent related or contract issues that may prevent or delay commercialization. We also base our judgment on the viability of commercialization, trends in the marketplace and market acceptance criteria. Finally, we consider the reimbursement strategies that may prevail with respect to the product and assess the economic benefit that we are likely to realize. We expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or significant delay of approval by necessary regulatory bodies.

Obsolescence and Unmarketable Inventory

We periodically review our inventories for excess or obsolescence and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. If the actual net realizable value is less than that estimated by us, or if it is determined that inventory utilization will further diminish based on estimates of demand, additional inventory write-downs may be required. Additionally, our products are subject to strict quality control and monitoring which we perform throughout the manufacturing process. In the event that certain batches or units of product no longer meet quality specifications, we will record a charge to cost of sales to write-down any unmarketable inventory to its estimated net realizable value. In all cases, product inventory is carried at the lower of cost or its estimated net realizable value. Amounts written-down due to unmarketable inventory are charged to cost of sales.

Property, Plant and Equipment

Property, plant and equipment are carried at cost, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The cost of normal, recurring, or periodic repairs and maintenance activities related to property, plant and equipment are expensed as incurred. The cost for planned major maintenance activities, including the related acquisition or construction of assets, is capitalized if the repair will result in future economic benefits.

Interest costs incurred during the construction of major capital projects are capitalized until the underlying asset is ready for its intended use, at which point the interest costs are amortized as depreciation expense over the life of the underlying asset. We also capitalize certain direct and incremental costs associated with the validation effort required for licensing by regulatory agencies of new manufacturing equipment for the production of a commercially approved drug. These costs primarily include direct labor and material and are incurred in preparing the equipment for its intended use. The validation costs are either amortized over the life of the related equipment or expensed as cost of sales when the product produced in the validation process is sold.

In addition, we capitalize certain internal use computer software development costs. If the software is an integral part of production assets, these costs are included in machinery and equipment and are amortized on a straight-line basis over the estimated useful lives of the related software, which generally range from three to five years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We generally depreciate or amortize the cost of our property, plant and equipment using the straight-line method over the estimated useful lives of the respective assets, which are summarized as follows:

Asset Category	Useful Lives
Land	Not depreciated
Buildings	15 to 40 years
Leasehold Improvements	Lesser of the useful life or the term of the respective lease
Furniture and Fixtures	5 to 7 years
Machinery and Equipment	5 to 20 years
Computer Software and Hardware	3 to 5 years

When we dispose of property, plant and equipment, we remove the associated cost and accumulated depreciation from the related accounts on our consolidated balance sheet and include any resulting gain or loss in our consolidated statement of income.

Intangible Assets

Our intangible assets consist of acquired and in-licensed rights and patents, developed technology, out-licensed patents, in-process research and development acquired after January 1, 2009, trademarks and trade names. Our intangible assets are recorded at fair value at the time of their acquisition and are stated within our consolidated balance sheets net of accumulated amortization and impairments, if applicable.

Intangible assets related to acquired and in-licensed rights and patents, developed technology and out-licensed patents are amortized over their estimated useful lives using the economic consumption method if anticipated future revenues can be reasonably estimated. The straight-line method is used when revenues cannot be reasonably estimated. Amortization is recorded as amortization of acquired intangible assets within our consolidated statements of income.

Acquired and in-licensed rights and patents primarily relate to our acquisition of all remaining rights to TYSABRI from Elan Pharma International, Ltd (Elan), an affiliate of Elan Corporation, plc. Developed technology primarily relates to our AVONEX product, which was recorded in connection with the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in 2003. We amortize the intangible assets related to TYSABRI and AVONEX using the economic consumption method based on revenue generated from the products underlying the related intangible assets. An analysis of the anticipated lifetime revenues of TYSABRI and AVONEX is performed annually during our long range planning cycle, which is generally updated in the third quarter of each year, and whenever events or changes in circumstances would significantly affect the anticipated lifetime revenues of TYSABRI or AVONEX.

Intangible assets related to trademarks, trade names and in-process research and development prior to commercialization are not amortized because they have indefinite lives, however, they are subject to review for impairment. We review our intangible assets with indefinite lives for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

Acquired In-process Research and Development (IPR&D)

Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the net cash flows to present value. The revenue and costs projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the projections consider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by us and our competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections. Upon the acquisition of IPR&D, we complete an assessment of whether our acquisition constitutes the purchase of a single asset or a group of assets. We consider multiple factors in this assessment, including the nature of the technology acquired, the presence or absence of separate cash flows, the development process and stage of completion, quantitative significance and our rationale for entering into the transaction.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

If we acquire a business as defined under applicable accounting standards, then the acquired IPR&D is capitalized as an intangible asset. If we acquire an asset or group of assets that do not meet the definition of a business, then the acquired IPR&D is expensed on its acquisition date. Future costs to develop these assets are recorded to research and development expense as they are incurred.

We review amounts capitalized as acquired IPR&D for impairment at least annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable.

When performing our impairment assessment, we calculate the fair value using the same methodology as described above. If the carrying value of our acquired IPR&D exceeds its fair value, then the intangible asset is written-down to its fair value.

Goodwill

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but reviewed for impairment. Goodwill is reviewed annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of the goodwill might not be recoverable.

We compare the fair value of our reporting unit to its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of our reporting unit, then we would need to determine the implied fair value of our reporting unit’s goodwill. If the carrying value of our reporting unit’s goodwill exceeds its implied fair value, then we would record an impairment loss equal to the difference. As described in Note 25, Segment Information to these consolidated financial statements, we operate in one operating segment which we consider our only reporting unit.

Impairment of Long-Lived Assets

Long-lived assets to be held and used, including property, plant and equipment and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable.

Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be disposed of are carried at fair value less costs to sell.

Contingent Consideration

The consideration for our acquisitions often includes future payments that are contingent upon the occurrence of a particular event. For acquisitions completed before January 1, 2009, we record contingent consideration resulting from a business combination when the contingency is resolved. For acquisitions that qualify as business combinations completed after January 1, 2009, we record an obligation for such contingent payments at fair value on the acquisition date. We estimate the fair value of contingent consideration obligations through valuation models that incorporate probability-adjusted assumptions related to the achievement of the milestones and thus likelihood of making related payments. We revalue these contingent consideration obligations each reporting period. Changes in the fair value of our contingent consideration obligations are recognized within our consolidated statements of income. Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows and reserves associated with products upon commercialization, changes in the assumed achievement or timing of any cumulative sales-based and development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval.

Discount rates in our valuation models represent a measure of the credit risk associated with settling the liability. The period over which we discount our contingent obligations is based on the current development stage of the product candidates, our specific development plan for that product candidate adjusted for the probability of completing the development step, and when the contingent payments would be triggered. In estimating the probability of success, we utilize data regarding similar milestone events from several sources, including industry studies and our own experience. These fair value measurements are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Derivative Instruments and Hedging Activities

We recognize all derivative instruments as either assets or liabilities at fair value in our consolidated balance sheets. Changes in the fair value of derivatives are recorded each period in current earnings or accumulated other comprehensive income (loss), depending on whether a derivative is designated as part of a hedge transaction and, if so, the type of hedge transaction. We classify the cash flows from these instruments in the same category as the cash flows from the hedged items. We do not hold or issue derivative instruments for trading or speculative purposes.

We assess, both at inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting the changes in cash flows or fair values of the hedged items. We also assess hedge ineffectiveness on a quarterly basis and record the gain or loss related to the ineffective portion to current earnings. If we determine that a forecasted transaction is no longer probable of occurring, we discontinue hedge accounting for the affected portion of the hedge instrument, and any related unrealized gain or loss on the contract is recognized in current earnings.

Translation of Foreign Currencies

The functional currency for most of our foreign subsidiaries is their local currency. For our non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of our foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income, a separate component of equity. For subsidiaries where the functional currency differs from the local currency, non-monetary assets and liabilities are translated at the rate of exchange in effect on the date assets were acquired while monetary assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign currency rates for the period. Translation adjustments of these subsidiaries are included in net income.

Royalty Cost of Sales

We make royalty payments to a number of third parties under license or purchase agreements associated with our acquisition of intellectual property. These royalty payments are typically calculated as a percentage (royalty rate) of the sales of our products within a particular year. That royalty rate may remain constant, increase or decrease within each year based on the total amount of sales during the annual period. Each quarterly period we estimate our total royalty obligation for the full year and recognize the proportional amount as cost of sales based on actual quarterly sales as a percentage of full year estimated sales. For example, if the level of net sales in any calendar year increases the royalty rate within the year, we will record our cost of sales at an even rate over the year, based on the estimated blended royalty rate.

Accounting for Share-Based Compensation

Our share-based compensation programs grant awards that have included stock options, restricted stock units which vest based on stock performance known as market stock units (MSUs), performance-vested restricted stock units which settle in cash (CSPUs), time-vested restricted stock units (RSUs), performance-vested restricted stock units which can be settled in cash or shares of our common stock (PUs) at the sole discretion of the Compensation and Management Development Committee of the Board of Directors and shares issued under our employee stock purchase plan (ESPP). We charge the estimated fair value of awards against income over the requisite service period, which is generally the vesting period. Where awards are made with non-substantive vesting periods (for instance, where a portion of the award vests upon retirement eligibility), we estimate and recognize expense based on the period from the grant date to the date on which the employee is retirement eligible.

The fair values of our stock option grants are estimated as of the date of grant using a Black-Scholes option valuation model. The estimated fair values of the stock options are then expensed over the options’ vesting periods.

The fair values of our MSUs are estimated using a lattice model with a Monte Carlo simulation. We apply an accelerated attribution method to recognize stock based compensation expense over the applicable service period, net of estimated forfeitures, when accounting for our MSUs. The probability of actual shares expected to be earned is considered in the grant date valuation, therefore the expense will not be adjusted to reflect the actual units earned.

The fair values of our RSUs are based on the market value of our stock on the date of grant. Compensation expense for RSUs is recognized straight-line over the applicable service period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We apply an accelerated attribution method to recognize stock based compensation expense when accounting for our CSPUs and PUs and the fair value of the liability is remeasured at the end of each reporting period through expected settlement. Compensation expense associated with CSPUs and PUs are based upon the stock price and the number of units expected to be earned after assessing the probability that certain performance criteria will be met and the associated targeted payout level that is forecasted will be achieved, net of estimated forfeitures. Cumulative adjustments are recorded each quarter to reflect changes in the stock price and estimated outcome of the performance-related conditions until the date results are determined and settled.

The purchase price of common stock under our ESPP is equal to 85% of the lower of (i) the market value per share of the common stock on the first business day of an offering period or (ii) the market value per share of the common stock on the purchase date. The fair value of the discounted purchases made under our ESPP is calculated using the Black-Scholes model. The fair value of the look-back provision plus the 15% discount is recognized as compensation expense over the 90 day purchase period.

Research and Development Expenses

Research and development expenses consist of upfront fees and milestones paid to collaborators and expenses incurred in performing research and development activities, which include compensation and benefits, facilities expenses, overhead expenses, clinical trial and related clinical manufacturing expenses, write-offs of pre-approved inventory that was previously capitalized that are determined to be no longer realizable, fees paid to contract research organizations (CROs) and other outside expenses. Research and development expenses are expensed as incurred. Payments we make for research and development services prior to the services being rendered are recorded as prepaid assets on our consolidated balance sheets and are expensed as the services are provided. We also accrue the costs of ongoing clinical trials associated with programs that have been terminated or discontinued for which there is no future economic benefit at the time the decision is made to terminate or discontinue the program.

From time to time, we enter into development agreements in which we share expenses with a collaborative partner. We record payments received from our collaborative partners for their share of the development costs as a reduction of research and development expense, except as discussed within Note 20, Collaborative and Other Relationships to these consolidated financial statements. Because an initial indication has been approved for both RITUXAN and GAZYVA, expenses incurred by Genentech in the ongoing development of RITUXAN and GAZYVA are not recorded as research and development expense, but rather reduce our share of profits recorded as a component of unconsolidated joint business revenues.

For collaborations with commercialized products, if we are the principal, we record revenue and the corresponding operating costs in their respective line items within our consolidated statements of income. If we are not the principal, we record operating costs as a reduction of revenue.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are primarily comprised of compensation and benefits associated with sales and marketing, finance, human resources, legal, information technology and other administrative personnel, outside marketing, advertising and legal expenses and other general and administrative costs.

Advertising costs are expensed as incurred. For the years ended December 31, 2014, 2013 and 2012, advertising costs totaled $92.9 million, $72.7 million and $54.3 million, respectively.

Income Taxes

The provision for income taxes includes federal, state, local and foreign taxes. Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences of temporary differences between the financial statement carrying amounts and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be recovered or settled. We evaluate the realizability of our deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized.

All tax effects associated with intercompany transfers of assets within our consolidated group, both current and deferred, are recorded as a prepaid tax or deferred charge and recognized through the consolidated statement of income when the asset transferred is sold to a third party or otherwise recovered through amortization of the asset's remaining economic life. If the asset transferred becomes impaired, for example through the discontinuation of a research program, we will expense any remaining deferred charge or prepaid tax.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. We evaluate uncertain tax positions on a quarterly basis and consider various factors, including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, information obtained during in process audit activities and changes in facts or circumstances related to a tax position. We also accrue for potential interest and penalties related to unrecognized tax benefits in income tax expense.

Contingencies

We are currently involved in various claims and legal proceedings. Loss contingency provisions are recorded if the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated or a range of loss can be determined. These accruals represent management’s best estimate of probable loss. Disclosure also is provided when it is reasonably possible that a loss will be incurred or when it is reasonably possible that the amount of a loss will exceed the recorded provision. On a quarterly basis, we review the status of each significant matter and assess its potential financial exposure. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to pending claims and litigation and may change our estimates. These changes in the estimates of the potential liabilities could have a material impact on our consolidated results of operations and financial position.

Earnings per Share

Basic earnings per share is computed using the two-class method. Under the two-class method, undistributed net income is allocated to common stock and participating securities based on their respective rights to share in dividends. We have determined that our Preferred Stock meets the definition of participating securities. We did not have any shares of Preferred Stock issued and outstanding during 2014, 2013 or 2012.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that we adopt as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard will be effective for us on January 1, 2017. We are currently evaluating the method of adoption and the potential impact that Topic 606 may have on our financial position and results of operations.

In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosure. The new standard expands secured borrowing accounting for repurchase-to-maturity transactions and repurchase financings and sets forth new disclosure requirements for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings. The new standard will be effective for us on April 1, 2015. The adoption of this standard is not expected to have an impact on our financial position or results of operations.

2.	Acquisitions

TYSABRI

On April 2, 2013, we acquired full ownership of all remaining rights to TYSABRI from Elan that we did not already own or control. Upon the closing of the transaction, we made an upfront payment of $3.25 billion to Elan, which was funded from our existing cash, and our collaboration agreement with Elan was terminated.

We accounted for this transaction as the acquisition of an asset as we did not acquire any employees from Elan nor did we acquire any significant processes that we did not previously perform or manage under the collaboration agreement. Under the collaboration agreement, we manufactured TYSABRI and collaborated with Elan on the product's marketing, commercial, regulatory, distribution and ongoing development activities. The collaboration agreement was designed to effect an equal sharing of worldwide profits and losses generated by the activities of the collaboration. For additional information related to this collaboration, please read Note 20, Collaborative and Other Relationships to these consolidated financial statements.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The $3.25 billion upfront payment was capitalized in the second quarter of 2013 as an intangible asset within our consolidated balance sheet as TYSABRI had reached technological feasibility. We adjusted the value of this intangible asset by $84.4 million related to deferred revenue from two sales-based milestones previously paid by Elan as well as transaction costs. The net intangible asset capitalized was $3,178.3 million. Commencing in the second quarter of 2013, we began amortizing this intangible asset over the estimated useful life using an economic consumption method based on actual and expected revenue generated from the sales of our TYSABRI product, which was 17 years.

Following the April 2, 2013 closing of the transaction, we began recording 100% of U.S. revenues, cost of sales and operating expenses related to TYSABRI within our consolidated statements of income. Under the terms of the acquisition agreement, we continued to share TYSABRI profits with Elan on an equal basis until April 30, 2013. We recorded the profit split for the month ended April 30, 2013, as cost of sales within our consolidated statements of income as we controlled TYSABRI effective April 2, 2013. Between May 1, 2013 and April 30, 2014, we made contingent payments to Elan of 12% on worldwide net sales of TYSABRI. Commencing May 1, 2014 and thereafter, we will make contingent payments to Elan of 18% on annual worldwide net sales up to $2.0 billion and 25% on annual worldwide net sales that exceed $2.0 billion. In 2014, the $2.0 billion threshold was pro-rated for the portion of 2014 remaining after the first 12 months expired. Royalty payments to Elan and other third parties are recognized as cost of sales within our consolidated statements of income.

Stromedix, Inc.

In March 2012, we completed our acquisition of all the outstanding stock of Stromedix, Inc. (Stromedix). The purchase price included a $75.0 million cash payment and up to a maximum of $487.5 million in contingent consideration in the form of development and approval milestones, of which $275.0 million related directly to the development and approval of STX-100 for the treatment of idiopathic pulmonary fibrosis (IPF). The acquisition was funded from our existing cash on hand and was accounted for as the acquisition of a business. In addition to acquiring the outstanding stock of the entity and obtaining the rights to STX-100, we obtained the services of key employees and the rights to a second antibody and an antibody conjugate, which are both in preclinical development.

Upon acquisition, we recorded a contingent consideration obligation of $122.2 million representing the fair value of the contingent consideration. This amount was estimated through a valuation model that incorporated industry-based probability-adjusted assumptions relating to the achievement of these milestones and the likelihood of us making payments. Subsequent changes in the fair value of this obligation are recognized as adjustments to contingent consideration and reflected within our consolidated statements of income. We allocated $219.2 million and $48.2 million of the total purchase price to acquired IPR&D and goodwill, respectively. During 2013, we adjusted the goodwill by $4.1 million to establish a deferred tax asset related to our transaction. For additional information related to our fair value of this obligation, please read Note 8, Fair Value Measurements to these consolidated financial statements.

Prior to the acquisition of Stromedix, we had an equity interest equal to approximately 5.0% of the company’s total capital stock (on an “as converted” basis) pursuant to a license agreement we entered into with Stromedix in 2007 for the development of the STX-100 product candidate. Based on the fair market value of this equity interest derived from the purchase price, we recognized a gain of approximately $9.0 million in 2012, which was recorded as a component of other income (expense), net within our consolidated statement of income.

3.	Gain on Sale of Rights

During the third quarter of 2012, we sold all of our rights, including rights to royalties, related to BENLYSTA (belimumab) to a DRI Capital managed fund (DRI). Under the terms of the BENLYSTA sale agreement, we received payments from DRI equal to a multiple of royalties payable by the Human Genome Sciences, Inc. and GlaxoSmithKline plc for the period covering October 2011 to September 2014 and a one-time contingency payment that could be paid to us if the cumulative royalties over the full royalty term exceed an agreed amount.

The payments received during 2014, 2013 and 2012 totaled $16.8 million, $24.9 million and $46.8 million, respectively. These payments were recorded as a gain on sale of rights within our consolidated statements of income.

The period under which we would receive royalties expired in September 2014. Therefore, we will not receive any additional payments under this agreement.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4.	Accounts Receivable

Our accounts receivable primarily arise from product sales in the U.S. and Europe and mainly represent amounts due from our wholesale distributors, public hospitals and other government entities. Amounts determined to be uncollectible are charged or written-off against the reserve. To date, our historical reserves and write-offs of accounts receivable have not been significant.

The credit and economic conditions within Italy, Spain and Portugal, among other members of the E.U. continue to remain uncertain. Uncertain credit and economic conditions have generally led to a lengthening of time to collect our accounts receivable in some of these countries. In Portugal and select regions in Spain, where our collections have slowed and a significant portion of these receivables are routinely being collected beyond our contractual payment terms and over periods in excess of one year, we have discounted our receivables and reduced related revenues based on the period of time that we estimate those amounts will be paid, to the extent such period exceeds one year, using the country’s market-based borrowing rate for such period. The related receivables are classified at the time of sale as non-current assets. We accrete interest income on these receivables, which is recognized as a component of other income (expense), net within our consolidated statements of income.

Our net accounts receivable balances from product sales in selected European countries are summarized as follows:

	As of December 31, 2014
(In millions)	Current Balance Included within Accounts Receivable, net				Non-Current Balance Included within Investments and Other Assets				Total
Spain	$	62.5			$	5.0			$	67.5
Italy	$	51.4			$	0.5			$	51.9
Portugal	$	15.1			$	7.6			$	22.7

	As of December 31, 2013
(In millions)	Current Balance Included within Accounts Receivable, net				Non-Current Balance Included within Investments and Other Assets				Total
Spain	$	113.3			$	6.8			$	120.1
Italy	$	76.1			$	2.4			$	78.5
Portugal	$	10.4			$	8.2			$	18.6

Approximately $14.2 million and $45.9 million of the total net accounts receivable balances for these countries were overdue more than one year as of December 31, 2014 and 2013, respectively. During the first quarter of 2014, we received approximately $59.6 million in payments from Spain related to receivables aged greater than one year.

Pricing of TYSABRI in Italy - AIFA

In the fourth quarter of 2011, Biogen Idec Italia SRL, our Italian subsidiary, received a notice from the Italian National Medicines Agency (Agenzia Italiana del Farmaco or AIFA) stating that sales of TYSABRI for the period from mid-February 2009 through mid-February 2011 exceeded by EUR30.7 million a reimbursement limit established pursuant to a Price Determination Resolution (Price Resolution) granted by AIFA in December 2006. In December 2011, based on our interpretation that the Price Resolution by its terms only applied to the first 24 months of TYSABRI sales (which began in mid-February 2007), we filed an appeal against AIFA in administrative court in Rome, Italy seeking a ruling that the reimbursement limit does not apply to the periods beginning in mid-February 2009 and that the position of AIFA is unenforceable. That appeal is pending. Since being notified in the fourth quarter of 2011 that AIFA believed a reimbursement limit was in effect, we deferred revenue on sales of TYSABRI as if the reimbursement limit were in effect for each biannual period beginning in mid-February 2009.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In July 2013, we negotiated an agreement in principle with AIFA's Price and Reimbursement Committee that would have resolved all of AIFA's claims relating to sales of TYSABRI in excess of the reimbursement limit for the periods from February 2009 through January 2013 for an aggregate repayment of EUR33.3 million. The agreement was sent to the Avvocatura Generale dello Stata (Attorney General) for its opinion. As a result of this agreement in principle, we recorded a liability and reduction to revenue of EUR15.4 million at June 30, 2013. That adjustment approximated 50% of the claim related to the period from February 2009 through January 2011 as the likelihood of making a payment to resolve AIFA's claims for that period was then probable and the amount could be estimated. This agreement in principle was not finalized, and AIFA and Biogen Idec Italia SRL remain in discussions about a resolution relating to the claims at issue in that agreement in principle. In October 2014, we proposed a revised settlement for the period from February 2009 through January 2013 of EUR35.6 million to be paid in one payment. We continue to believe that a settlement with AIFA relating to these claims is probable and have retained the EUR15.4 million liability recorded as of June 30, 2013.

In June 2014, AIFA approved a resolution, effective for a 24 month term, setting the price for TYSABRI in Italy. The resolution also eliminated the reimbursement limit from February 2013 going forward. As a result, we recognized $53.5 million of TYSABRI revenues related to the periods beginning February 2013 that were previously deferred. An aggregate amount of $77.6 million remains deferred as of December 31, 2014 related to the periods from mid-February 2011 through January 2013.

5. Reserves for Discounts and Allowances

As a result of our acquisition of all remaining rights to TYSABRI from Elan, we began recognizing reserves for discounts and allowances for U.S. TYSABRI revenue in the second quarter of 2013. Prior periods included reserves for discounts and allowances for rest of world TYSABRI revenue and worldwide AVONEX revenue. In addition, following our commercial launches of recent products, we began recognizing reserves for discounts and allowances related to these products' revenue. Gross product revenues for 2012 include sales of TYSABRI to Elan under our collaboration agreement, which did not have any corresponding reserves for discounts and allowances.

An analysis of the change in reserves is summarized as follows:

(In millions)	Discounts				Contractual Adjustments				Returns				Total
2014
Beginning balance	$	47.0			$	335.6			$	33.7			$	416.3
Current provisions relating to sales in current year	347.3				1,258.8				39.1				1,645.2
Adjustments relating to prior years	(1.0		)		(27.2		)		13.5				(14.7		)
Payments/returns relating to sales in current year	(299.7		)		(933.4		)		(4.1		)		(1,237.2		)
Payments/returns relating to sales in prior years	(46.0		)		(261.9		)		(33.1		)		(341.0		)
Ending balance	$	47.6			$	371.9			$	49.1			$	468.6

(In millions)	Discounts				Contractual Adjustments				Returns				Total
2013
Beginning balance	$	14.3			$	196.0			$	26.8			$	237.1
Current provisions relating to sales in current year	236.3				851.4				22.9				1,110.6
Adjustments relating to prior years	(0.7		)		(16.4		)		1.1				(16.0		)
Payments/returns relating to sales in current year	(189.7		)		(560.4		)		—				(750.1		)
Payments/returns relating to sales in prior years	(13.2		)		(135.0		)		(17.1		)		(165.3		)
Ending balance	$	47.0			$	335.6			$	33.7			$	416.3

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In millions)	Discounts				Contractual Adjustments				Returns				Total
2012
Beginning balance	$	11.9			$	120.0			$	23.7			$	155.6
Current provisions relating to sales in current year	96.5				534.2				22.0				652.7
Adjustments relating to prior years	(0.3		)		(4.7		)		(0.1		)		(5.1		)
Payments/returns relating to sales in current year	(83.6		)		(363.2		)		(4.3		)		(451.1		)
Payments/returns relating to sales in prior years	(10.2		)		(90.3		)		(14.5		)		(115.0		)
Ending balance	$	14.3			$	196.0			$	26.8			$	237.1

The total reserves above, included in our consolidated balance sheets, are summarized as follows:

	As of December 31,
(In millions)	2014				2013
Reduction of accounts receivable	$	124.6			$	151.4
Component of accrued expenses and other	344.0				264.9
Total reserves	$	468.6			$	416.3

6.	Inventory

The components of inventory are summarized as follows:

	As of December 31,
(In millions)	2014				2013
Raw materials	$	128.3			$	115.0
Work in process	511.5				435.4
Finished goods	164.2				108.6
Total inventory	$	804.0			$	659.0

As of December 31, 2014 our inventory includes $6.3 million associated with our ZINBRYTA (daclizumab high yield process) program, which has been capitalized in advance of regulatory approval. As of December 31, 2013, our inventory included $93.7 million associated with our ELOCTATE, ALPROLIX and PLEGRIDY programs, which were capitalized in advance of regulatory approval. ELOCTATE, ALPROLIX and PLEGRIDY were approved during 2014. For information on our pre-approval inventory policy, please read Note 1, Summary of Significant Accounting Policies to these consolidated financial statements

Amounts written down related to excess, obsolete, unmarketable or other inventory are charged to cost of sales, and totaled $50.6 million, $47.3 million, and $24.8 million for the years ended December 31, 2014, 2013, and 2012, respectively.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

7.	Intangible Assets and Goodwill

Intangible Assets

Intangible assets, net of accumulated amortization, impairment charges and adjustments, are summarized as follows:

			As of December 31, 2014												As of December 31, 2013
(In millions)	Estimated Life		Cost				Accumulated Amortization				Net				Cost				Accumulated Amortization				Net
Out-licensed patents	13-23 years		$	543.3			$	(481.7	)		$	61.6			$	578.0			$	(450.8	)		$	127.2
Developed technology	15-23 years		3,005.3				(2,396.8		)		608.5				3,005.3				(2,165.4		)		839.9
In-process research and development	Indefinite until commercialization		314.1				—				314.1				327.4				—				327.4
Trademarks and tradenames	Indefinite		64.0				—				64.0				64.0				—				64.0
Acquired and in-licensed rights and patents	6-17 years		3,280.4				(300.1		)		2,980.3				3,240.0				(123.8		)		3,116.2
Total intangible assets			$	7,207.1			$	(3,178.6	)		$	4,028.5			$	7,214.7			$	(2,740.0	)		$	4,474.7

Amortization of acquired intangible assets totaled $489.8 million, $342.9 million, and $202.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. The change in amortization of acquired intangible assets for the year ended December 31, 2014 was primarily driven by a $60.2 million increase in amortization of acquired and in-licensed rights and patents as we recognized a full year of expense related to our TYSABRI rights in 2014 versus nine months of expense in 2013, total impairment charges of $50.9 million related to one of our out-licensed patents and one of our IPR&D intangible assets, and lower expected lifetime revenues of AVONEX as discussed further below.

Out-licensed Patents

Out-licensed patents to third-parties primarily relate to patents acquired in connection with the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in 2003. During 2014, we recorded a charge of $34.7 million related to the impairment of one of our out-licensed patents to reflect a change in its estimated fair value, due to a change in the underlying competitive market for that product, which occurred during the first quarter of 2014. The charge is included in amortization of acquired intangible assets. The fair value of the intangible asset was based on a discounted cash flow calculated using Level 3 fair value measurements and inputs including estimated revenues.

Developed Technology

Developed technology primarily relates to our AVONEX product, which was recorded in connection with the merger of Biogen, Inc. and IDEC Pharmaceuticals Corporation in 2003. The net book value of this asset as of December 31, 2014, was $599.3 million. We amortize this intangible asset using the economic consumption method based on actual and expected revenues generated from the sales of our AVONEX product.

In-process Research and Development (IPR&D)

IPR&D represents the fair value assigned to research and development assets that we acquire that have not reached technological feasibility at the date of acquisition. Upon commercialization, we determine the estimated useful life.

An analysis of anticipated lifetime revenues and anticipated development costs is performed annually during our long- range planning cycle, which was updated in the third quarter of 2014. This analysis is based upon certain assumptions that we evaluate on a periodic basis, including anticipated future product sales, the expected impact of changes in the amount of development costs and the probabilities of our programs succeeding, the introduction of new products by our competitors and changes in our commercial and pipeline product candidates.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the third quarter of 2014, we updated the probabilities of success related to the early stage programs acquired through our recent acquisitions. The change in probability of success, combined with a delay in one of the projects, resulted in an impairment loss of $16.2 million in one of our IPR&D assets during 2014. In addition, we have adjusted the value of our contingent consideration liabilities to reflect these lower probabilities of success in connection with these earlier stage programs resulting in a net gain of $49.4 million in the third quarter of 2014. The impairment charge was included in amortization of acquired intangible assets and the gains were recorded in (gain) loss on fair value remeasurement of contingent consideration. The fair values of the intangible assets and contingent consideration liabilities were based on a probability-adjusted discounted cash flow calculation using Level 3 fair value measurements and inputs including estimated revenues and probabilities of success.

Acquired and In-licensed Rights and Patents

Acquired and in-licensed rights and patents primarily relate to our acquisition of all remaining rights to TYSABRI from Elan. The net intangible asset capitalized related to this acquisition was $3,178.3 million. In the second quarter of 2013, we began amortizing this intangible asset over the estimated useful life using an economic consumption method based on actual and expected revenues generated from the sales of our TYSABRI product. The net book value of this asset as of December 31, 2014 was $2,921.0 million. For a more detailed description of this transaction, please read Note 2, Acquisitions to these consolidated financial statements.

The increase in acquired and in-licensed rights and patents during 2014, was primarily related to the $20.0 million contingent payment due to the former owners of Syntonix, which became payable upon the approval of ALPROLIX in the U.S. by the U.S. Food and Drug Administration (FDA) in the first quarter of 2014. We have recorded an additional $7.8 million of acquired in-licensed rights and patents related to this consideration, along with a corresponding deferred tax liability of the same amount.

Estimated Future Amortization of Intangible Assets

Our amortization expense is based on the economic consumption of the intangible assets. Our most significant intangible assets are related to our AVONEX and TYSABRI products. Annually, during our long-range planning cycle, we perform an analysis of anticipated lifetime revenues of AVONEX and TYSABRI. This analysis is updated whenever events or changes in circumstances would significantly affect the anticipated lifetime revenues of either product.

Our most recent long range planning cycle was updated in the third quarter of 2014. Our analysis included an increase in the expected future product revenues of TYSABRI, resulting in a decrease in amortization expense as compared to prior quarters. Our analysis also included a decrease in the expected future product revenues of AVONEX, resulting in an increase in amortization expense as compared to prior quarters. The results of our TYSABRI and AVONEX analyses were impacted by changes in the estimated impact of TECFIDERA, as well as other existing and potential oral and alternative MS formulations, including PLEGRIDY, that may compete with TYSABRI and AVONEX. Based upon this recent analysis, the estimated future amortization for acquired intangible assets is expected to be as follows:

(In millions)	As of December 31, 2014
2015	$	344.3
2016	313.2
2017	286.3
2018	283.7
2019	273.6
Total	$	1,501.1

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill

The following table provides a roll forward of the changes in our goodwill balance:

	As of December 31,
(In millions)	2014				2013
Goodwill, beginning of year	$	1,232.9			$	1,201.3
Increase to goodwill	527.3				35.7
Other	—				(4.1		)
Goodwill, end of year	$	1,760.2			$	1,232.9

The increase in goodwill during 2014 was related to $600.0 million in contingent payments (exclusive of $72.7 million in tax benefits) made to the former shareholders of Fumapharm AG or holders of their rights. For additional information related to future contingent payments to the former shareholders of Fumapharm AG, please read Note 22, Commitments and Contingencies to these consolidated financial statements.

As of December 31, 2014, we had no accumulated impairment losses related to goodwill.

8.	Fair Value Measurements

The tables below present information about our assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques we utilized to determine such fair value:

(In millions)	As of December 31, 2014				Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	716.3			$	—			$	716.3			$	—
Marketable debt securities:
Corporate debt securities	1,063.0				—				1,063.0				—
Government securities	849.8				—				849.8				—
Mortgage and other asset backed securities	198.3				—				198.3				—
Marketable equity securities	6.9				6.9				—				—
Venture capital investments	14.5				—				—				14.5
Derivative contracts	72.7				—				72.7				—
Plan assets for deferred compensation	36.9				—				36.9				—
Total	$	2,958.4			$	6.9			$	2,937.0			$	14.5
Liabilities:
Derivative contracts	$	5.4			$	—			$	5.4			$	—
Contingent consideration obligations	215.5				—				—				215.5
Total	$	220.9			$	—			$	5.4			$	215.5

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(In millions)	As of December 31, 2013				Quoted Prices in Active Markets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	424.7			$	—			$	424.7			$	—
Marketable debt securities:
Corporate debt securities	439.8				—				439.8				—
Government securities	674.7				—				674.7				—
Mortgage and other asset backed securities	131.4				—				131.4				—
Marketable equity securities	11.2				11.2				—				—
Venture capital investments	21.9				—				—				21.9
Derivative contracts	3.8				—				3.8				—
Plan assets for deferred compensation	22.7				—				22.7				—
Total	$	1,730.2			$	11.2			$	1,697.1			$	21.9
Liabilities:
Derivative contracts	$	23.5			$	—			$	23.5			$	—
Contingent consideration obligations	280.9				—				—				280.9
Total	$	304.4			$	—			$	23.5			$	280.9

The fair value of Level 2 instruments classified as cash equivalents and marketable debt securities were determined through third party pricing services. For a description of our validation procedures related to prices provided by third party pricing services, refer to Note 1, Summary of Significant Accounting Policies: Fair Value Measurements, to these consolidated financial statements.

Marketable Equity Securities and Venture Capital Investments

Our marketable equity securities represent investments in publicly traded equity securities. Our venture capital investments, which are all Level 3 measurements, include investments in certain venture capital funds, accounted for at fair value, that primarily invest in small privately-owned, venture-backed biotechnology companies. These venture capital investments represented approximately 0.1% and 0.2% of total assets of December 31, 2014 and 2013, respectively.

The following table provides a roll forward of the fair value of our venture capital investments, which includes Level 3 measurements:

	As of December 31,
(In millions)	2014				2013
Fair value, beginning of year	$	21.9			$	20.3
Unrealized gains included in earnings	5.4				10.5
Unrealized losses included in earnings	(7.3		)		(6.3		)
Purchases	—				0.7
Settlements	(5.5		)		(3.3		)
Fair value, end of year	$	14.5			$	21.9

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Instruments

The fair values of our debt instruments, which are Level 2 liabilities, are summarized as follows:

	As of December 31,
(In millions)	2014				2013
Notes payable to Fumedica	$	12.6			$	17.5
6.875% Senior Notes due March 1, 2018	634.6				647.9
Total	$	647.2			$	665.4

The fair value of our notes payable to Fumedica was estimated using market observable inputs, including current interest and foreign currency exchange rates. The fair value of our 6.875% Senior Notes was determined through market, observable, and corroborated sources. For additional information related to our debt instruments, please read Note 12, Indebtedness to these consolidated financial statements.

Contingent Consideration Obligations

The following table provides a roll forward of the fair values of our contingent consideration obligations which includes Level 3 measurements:

	As of December 31,
(In millions)	2014				2013
Fair value, beginning of year	$	280.9			$	293.9
Additions	—				—
Changes in fair value	(38.9		)		(0.5		)
Payments	(26.5		)		(12.5		)
Fair value, end of year	$	215.5			$	280.9

As of December 31, 2014 and 2013, approximately $200.0 million and $251.9 million, respectively, of the fair value of our total contingent consideration obligations were reflected as components of other long-term liabilities within our consolidated balance sheets with the remaining balances reflected as a component of accrued expenses and other. For additional information related to the changes in fair value, please read Note 7, Intangible Assets and Goodwill to these consolidated financial statements.

In connection with our acquisition of Stromedix in March 2012, we recorded a contingent consideration obligation of $122.2 million. As of December 31, 2014 and 2013, the fair value of this contingent consideration obligation was $130.5 million and $140.7 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $419.0 million, discounted using a rate of 3.0%, which is a measure of the credit risk associated with settling the liability. For 2014 compared to 2013, the net decrease in the fair value of this obligation was primarily due changes in the probability and expected timing related to the achievement of certain remaining developmental milestones and in the discount rate.

Upon completion of our purchase of the noncontrolling interest in our joint venture investments in Biogen Dompé SRL and Biogen Dompé Switzerland GmbH in September 2011, we recorded a contingent consideration obligation of $38.8 million. As of December 31, 2014 and 2013, the fair value of this contingent consideration obligation was $15.5 million and $31.6 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $22.0 million, discounted using a rate of 2.0%, which is a measure of the credit risk associated with settling the liability. For 2014 compared to 2013, the net decrease in the fair value of this obligation was primarily due to payments of $16.5 million sales-based and regulatory approval milestones.

In connection with our acquisition of Biogen Idec International Neuroscience GmbH (BIN), formerly Panima Pharmaceuticals AG (Panima), in December 2010, we recorded a contingent consideration obligation of $81.2 million. As of December 31, 2014 and 2013, the fair value of this contingent consideration obligation was $69.5 million and $108.6 million, respectively. Our most recent valuation was determined based upon probability weighted net cash outflow projections of $362.5 million, discounted using a rate of 3.6%, which is a measure of the credit risk associated with settling the liability. For 2014 compared to 2013, the net decrease in the fair value of this obligation was primarily due to $10.0 million of payments of development milestones, changes in the probability and expected timing related to the achievement of certain remaining developmental milestones and in the discount rate.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Acquired IPR&D

In connection with our acquisition of Stromedix, we allocated $219.2 million of the total purchase price to acquired IPR&D, which was capitalized as an intangible asset. The amount allocated to acquired IPR&D was based on significant inputs not observable in the market and thus represented a Level 3 fair value measurement. These assets are tested for impairment annually, and whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable, until commercialization, after which time the IPR&D is amortized over its estimated economic life. For a more detailed description of this transaction, please read Note 2, Acquisitions to these consolidated financial statements.

There were no changes in valuation techniques or transfers between fair value measurement levels during the years ended December 31, 2014 and 2013. During the third quarter 2014, we updated the probabilities of success related to the early stage programs acquired through our recent acquisitions. We have adjusted the value of our contingent consideration liabilities to reflect these changes. For additional information, please read Note 7, Intangible Assets and Goodwill to these consolidated financial statements. For additional information related to the valuation techniques and inputs utilized in valuation of our financial assets and liabilities, please read Note 1, Summary of Significant Accounting Policies to these consolidated financial statements.

9. Financial Instruments

Marketable Securities

The following tables summarize our marketable debt and equity securities:

As of December 31, 2014 (In millions)	Fair Value				Gross Unrealized Gains				Gross Unrealized Losses				Amortized Cost
Available-for-sale:
Corporate debt securities
Current	$	370.4			$	—			$	(0.2	)		$	370.6
Non-current	692.6				0.2				(1.5		)		693.9
Government securities
Current	269.9				—				(0.1		)		270.0
Non-current	579.9				0.3				(0.4		)		580.0
Mortgage and other asset backed securities
Current	0.2				—				—				0.2
Non-current	198.1				0.2				(0.2		)		198.1
Total marketable debt securities	$	2,111.1			$	0.7			$	(2.4	)		$	2,112.8
Marketable equity securities, non-current	$	6.9			$	1.2			$	(0.2	)		$	5.9

As of December 31, 2013 (In millions)	Fair Value				Gross Unrealized Gains				Gross Unrealized Losses				Amortized Cost
Available-for-sale:
Corporate debt securities
Current	$	100.7			$	—			$	—			$	100.7
Non-current	339.1				0.4				(0.1		)		338.8
Government securities
Current	519.5				—				—				519.5
Non-current	155.2				—				(0.1		)		155.3
Mortgage and other asset backed securities
Current	—				—				—				—
Non-current	131.4				—				(0.1		)		131.5
Total marketable debt securities	$	1,245.9			$	0.4			$	(0.3	)		$	1,245.8
Marketable equity securities, non-current	$	11.2			$	8.7			$	—			$	2.5

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes our financial assets with maturities of less than 90 days from the date of purchase included within cash and cash equivalents on the accompanying consolidated balance sheet:

	As of December 31,
(In millions)	2014				2013
Commercial paper	$	54.2			$	1.2
Overnight reverse repurchase agreements	305.0				22.4
Money market funds	321.2				396.0
Short-term debt securities	35.9				5.1
Total	$	716.3			$	424.7

The carrying values of our commercial paper, including accrued interest, overnight reverse repurchase agreements, money market funds and our short-term debt securities approximate fair value due to their short term maturities.

Summary of Contractual Maturities: Available-for-Sale Securities

The estimated fair value and amortized cost of our marketable debt securities available-for-sale by contractual maturity are summarized as follows:

	As of December 31, 2014								As of December 31, 2013
(In millions)	Estimated Fair Value				Amortized Cost				Estimated Fair Value				Amortized Cost
Due in one year or less	$	640.5			$	640.8			$	620.2			$	620.2
Due after one year through five years	1,343.7				1,345.2				573.1				572.9
Due after five years	126.9				126.8				52.6				52.7
Total available-for-sale securities	$	2,111.1			$	2,112.8			$	1,245.9			$	1,245.8

The average maturity of our marketable debt securities available-for-sale as of December 31, 2014 and 2013, was 15 months and 13 months, respectively.

Proceeds from Marketable Debt Securities

The proceeds from maturities and sales of marketable debt securities and resulting realized gains and losses are summarized as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Proceeds from maturities and sales	$	2,718.9			$	5,190.1			$	2,749.6
Realized gains	$	0.7			$	6.6			$	2.1
Realized losses	$	0.5			$	2.1			$	3.5

Realized losses for the year ended December 31, 2014, primarily relate to sales of agency mortgage-backed securities and government securities. Realized losses for the year ended December 31, 2013, primarily relate to sales of agency mortgage-backed securities and corporate securities. Realized losses for the year ended December 31, 2012, primarily relate to sales of agency mortgage-backed securities.

Strategic Investments

As of December 31, 2014 and 2013, our strategic investment portfolio was comprised of investments totaling $47.8 million and $56.9 million, respectively, which are included in investments and other assets in our accompanying consolidated balance sheets.

Our strategic investment portfolio includes investments in marketable equity securities of certain biotechnology companies and our investments in venture capital funds accounted for at fair value which totaled $21.4 million and $33.1 million as of December 31, 2014 and 2013, respectively. Our strategic investment portfolio also includes other equity investments in privately-held companies and additional investments in venture capital funds accounted for under the cost method. The carrying value of these investments totaled $26.4 million and $23.8 million, as of December 31, 2014 and 2013, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10.	Derivative Instruments

Foreign Currency Forward Contracts - Hedging Instruments

Due to the global nature of our operations, portions of our revenues are earned in currencies other than the U.S. dollar. The value of revenues measured in U.S. dollars is therefore subject to changes in foreign currency exchange rates. In order to mitigate these changes we use foreign currency forward contracts to lock in exchange rates associated with a portion of our forecasted international revenues.

Foreign currency forward contracts in effect as of December 31, 2014 and 2013, had durations of 1 to 15 months and 1 to 18 months, respectively. These contracts have been designated as cash flow hedges and accordingly, to the extent effective, any unrealized gains or losses on these foreign currency forward contracts are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the tables below). Realized gains and losses for the effective portion of such contracts are recognized in revenue when the sale of product in the currency being hedged is recognized. To the extent ineffective, hedge transaction gains and losses are reported in other income (expense), net.

The notional value of foreign currency forward contracts that were entered into to hedge forecasted revenues is summarized as follows:

	Notional Amount As of December 31,
Foreign Currency: (In millions)	2014				2013
Euro	$	1,174.6			$	636.3
Canadian dollar	56.7				34.0
British pound sterling	34.5				72.3
Australian dollar	19.9				—
Japanese yen	16.6				—
Total foreign currency forward contracts	$	1,302.3			$	742.6

The portion of the fair value of these foreign currency forward contracts that was included in accumulated other comprehensive income (loss) within total equity reflected gains of $72.1 million and losses of $23.6 million and $11.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. We expect all contracts to be settled over the next 15 months and any amounts in accumulated other comprehensive income (loss) to be reported as an adjustment to revenue. We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its contractual obligations. As of December 31, 2014 and 2013, credit risk did not change the fair value of our foreign currency forward contracts.

The following table summarizes the effect of derivatives designated as hedging instruments on our consolidated statements of income:

For the Years Ended December 31,
Net Gains/(Losses) Reclassified from AOCI into Net Income (Effective Portion)														Net Gains/(Losses) Recognized into Net Income (Ineffective Portion)
Location		2014				2013				2012				Location		2014				2013				2012
Revenue		$	6.8			$	(13.2	)		$	35.1			Other income (expense)		$	(1.5	)		$	(0.2	)		$	4.8

Foreign Currency Forward Contracts - Other Derivatives

We also enter into other foreign currency forward contracts, usually with one month durations, to mitigate the foreign currency risk related to certain balance sheet positions. We have not elected hedge accounting for these transactions.

The aggregate notional amount of these outstanding foreign currency contracts was $365.2 million and $273.3 million as of December 31, 2014 and 2013, respectively. Net losses of $15.5 million and net gains of $5.2 million and $4.2 million related to these contracts were recognized as a component of other income (expense), net, for years ended December 31, 2014, 2013 and 2012, respectively.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Summary of Derivatives

While certain of our derivatives are subject to netting arrangements with our counterparties, we do not offset derivative assets and liabilities within our consolidated balance sheets.

The following table summarizes the fair value and presentation in our consolidated balance sheets for our outstanding derivatives including those designated as hedging instruments:

(In millions)	Balance Sheet Location	Fair Value As of December 31, 2014
Hedging Instruments:
Asset derivatives	Other current assets	$	69.5
	Investments and other assets	$	1.9
Liability derivatives	Accrued expenses and other	$	—
	Other long-term liabilities	$	—
Other Derivatives:
Asset derivatives	Other current assets	$	1.3
Liability derivatives	Accrued expenses and other	$	5.4

(In millions)	Balance Sheet Location	Fair Value As of December 31, 2013
Hedging Instruments:
Asset derivatives	Other current assets	$	0.6
Liability derivatives	Accrued expenses and other	$	23.4
Other Derivatives:
Asset derivatives	Other current assets	$	3.2
Liability derivatives	Accrued expenses and other	$	0.1

11.	Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Components of property, plant and equipment, net are summarized as follows:

	As of December 31,
(In millions)	2014				2013
Land	$	56.9			$	59.7
Buildings	947.7				961.5
Leasehold improvements	155.5				139.6
Machinery and equipment	1,011.3				944.5
Computer software and hardware	547.8				559.2
Furniture and fixtures	64.3				60.3
Construction in progress	168.6				144.2
Total cost	2,952.1				2,869.0
Less: accumulated depreciation	(1,186.4		)		(1,118.3		)
Total property, plant and equipment, net	$	1,765.7			$	1,750.7

Depreciation expense totaled $198.4 million, $187.8 million and $164.3 million for 2014, 2013 and 2012, respectively.

For 2014, 2013 and 2012, we capitalized interest costs related to construction in progress totaling approximately $6.4 million, $7.8 million and $25.4 million, respectively.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Weston Exit Costs

As a result of our decision to relocate our corporate headquarters to Cambridge, Massachusetts, we vacated part of our Weston, Massachusetts facility in the fourth quarter of 2013. We incurred a charge of $27.2 million in connection with this move. This charge represented our remaining lease obligation for the vacated portion of our Weston, Massachusetts facility, net of sublease income expected to be received. The term of our sublease to the vacated portion of our Weston, Massachusetts facility started in January 2014 and will continue through the remaining term of our lease agreement.

12.	Indebtedness

Our indebtedness is summarized as follows:

	As of December 31,
(In millions)	2014				2013
Current portion:
Note payable to Fumedica	$	3.1			$	3.5
Current portion of notes payable	$	3.1			$	3.5
Non-current portion:
6.875% Senior notes due March 1, 2018	573.5				580.1
Note payable to Fumedica	8.6				12.3
Non-current portion of notes payable	$	582.1			$	592.4

The following is a summary description of our principal indebtedness as of December 31, 2014:

Senior Notes

On March 4, 2008, we issued $550.0 million aggregate principal amount of 6.875% Senior Notes due March 1, 2018 that were originally priced at 99.184% of par. The discount is amortized as additional interest expense over the period from issuance through maturity. These notes are senior unsecured obligations. Interest on the notes is payable March 1 and September 1 of each year. The notes may be redeemed at our option at any time at 100% of the principal amount plus accrued interest and a specified make-whole amount. The notes contain a change of control provision that may require us to purchase the notes under certain circumstances. There is also an interest rate adjustment feature that requires us to pay interest at an increased rate on the notes if the credit rating on the notes declines below investment grade.

Upon the issuance of the 6.875% Senior Notes due in 2018, we entered into interest rate swap contracts where we received a fixed rate and paid a variable rate. These contracts were terminated in December 2008. Upon termination of these swaps, the carrying amount of the 6.875% Senior Notes due in 2018 was increased by $62.8 million and is being amortized using the effective interest rate method over the remaining life of the Senior Notes and is being recognized as a reduction of interest expense. As of December 31, 2014, $25.3 million remains to be amortized.

Notes Payable to Fumedica

In connection with our 2006 distribution agreement with Fumedica, we issued notes totaling 61.4 million Swiss Francs which were payable to Fumedica in varying amounts from June 2008 through June 2018. Our remaining note payable to Fumedica had a carrying value of 11.6 million Swiss Francs ($11.7 million) and 14.0 million Swiss Francs ($15.8 million) as of December 31, 2014 and 2013, respectively.

Credit Facility

In March 2013, we entered into a $750.0 million senior unsecured revolving credit facility, under which we were permitted to draw funds for working capital and general corporate purposes. The terms of the revolving credit facility included a financial covenant that required us to not exceed a maximum debt to EBITDA ratio. In March 2014, the revolving credit facility expired and was not renewed.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Debt Maturity

The total gross payments due under our debt arrangements are as follows:

(In millions)	As of December 31, 2014
2015	$	3.1
2016	3.2
2017	3.2
2018	553.2
2019	—
2020 and thereafter	—
Total	$	562.7

The fair value of our debt is disclosed in Note 8, Fair Value Measurements to these consolidated financial statements.

13.	Equity

Preferred Stock

We have 8,000,000 shares of Preferred Stock authorized, of which 1,750,000 shares are authorized as Series A, 1,000,000 shares are authorized as Series X junior participating and 5,250,000 are undesignated. Shares may be issued without a vote or action of stockholders from time to time in classes or series with the designations, powers, preferences, and the relative, participating, optional or other special rights of the shares of each such class or series and any qualifications, limitations or restrictions thereon as set forth in the instruments governing such shares. Any such Preferred Stock may rank prior to common stock as to dividend rights, liquidation preference or both, and may have full or limited voting rights and may be convertible into shares of common stock. We did not have any shares of Preferred Stock issued and outstanding during 2014, 2013 and 2012.

Common Stock

The following table describes the number of shares authorized, issued and outstanding of our common stock as of December 31, 2014 and 2013:

	As of December 31, 2014									As of December 31, 2013
(In thousands)	Authorized			Issued			Outstanding			Authorized			Issued			Outstanding
Common stock	1,000,000			257,126			234,563			1,000,000			255,973			236,332

Share Repurchases

In February 2011, our Board of Directors authorized the repurchase of up to 20.0 million shares of common stock. This authorization does not have an expiration date. In 2014, approximately 2.9 million shares were repurchased at a cost of $886.8 million. As of December 31, 2014, approximately 1.3 million shares of our common stock remained available for repurchase under the 2011 authorization.

We repurchased approximately 2.0 million shares at a cost of approximately $400.3 million under the 2011 authorization in 2013.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14.	Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss), net of tax by component:

(In millions)	Unrealized Gains (Losses) on Securities Available for Sale				Unrealized Gains (Losses) on Foreign Currency Forward Contracts				Unfunded Status of Postretirement Benefit Plans				Translation Adjustments				Total
Balance, December 31, 2013	$	5.6			$	(23.7	)		$	(19.6	)		$	10.0			$	(27.7	)
Other comprehensive income (loss) before reclassifications	0.4				101.7				(12.0		)		(109.2		)		(19.1		)
Amounts reclassified from accumulated other comprehensive income (loss)	(6.4		)		(6.3		)		—				—				(12.7		)
Net current period other comprehensive income (loss)	(6.0		)		95.4				(12.0		)		(109.2		)		(31.7		)
Balance, December 31, 2014	$	(0.4	)		$	71.7			$	(31.6	)		$	(99.2	)		$	(59.5	)

(In millions)	Unrealized Gains (Losses) on Securities Available for Sale				Unrealized Gains (Losses) on Foreign Currency Forward Contracts				Unfunded Status of Postretirement Benefit Plans				Translation Adjustments				Total
Balance, December 31, 2012	$	4.2			$	(10.7	)		$	(21.7	)		$	(27.1	)		$	(55.3	)
Other comprehensive income (loss) before reclassifications	11.8				(26.7		)		2.1				37.1				24.3
Amounts reclassified from accumulated other comprehensive income (loss)	(10.4		)		13.7				—				—				3.3
Net current period other comprehensive income (loss)	1.4				(13.0		)		2.1				37.1				27.6
Balance, December 31, 2013	$	5.6			$	(23.7	)		$	(19.6	)		$	10.0			$	(27.7	)

(In millions)	Unrealized Gains (Losses) on Securities Available for Sale				Unrealized Gains (Losses) on Foreign Currency Forward Contracts				Unfunded Status of Postretirement Benefit Plans				Translation Adjustments				Total
Balance, December 31, 2011	$	—			$	32.8			$	(9.0	)		$	(50.3	)		$	(26.5	)
Other comprehensive income (loss) before reclassifications	5.1				(11.8		)		(12.7		)		23.2				3.8
Amounts reclassified from accumulated other comprehensive income (loss)	(0.9		)		(31.7		)		—				—				(32.6		)
Net current period other comprehensive income (loss)	4.2				(43.5		)		(12.7		)		23.2				(28.7		)
Balance, December 31, 2012	$	4.2			$	(10.7	)		$	(21.7	)		$	(27.1	)		$	(55.3	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the amounts reclassified from accumulated other comprehensive income:

(In millions)	Income Statement Location	Amounts Reclassified from Accumulated Other Comprehensive Income
For the Years Ended December 31,
2014				2013				2012
Gains (losses) on securities available for sale	Other income (expense)	$	9.9			$	15.9			$	1.4
	Income tax benefit (expense)	(3.5		)		(5.5		)		(0.5		)
Gains (losses) on foreign currency forward contracts	Revenues	6.8				(13.2		)		35.1
	Income tax benefit (expense)	(0.5		)		(0.5		)		(3.4		)
Total reclassifications, net of tax		$	12.7			$	(3.3	)		$	32.6

15.	Earnings per Share

Basic and diluted earnings per share are calculated as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Numerator:
Net income attributable to Biogen Idec Inc.	$	2,934.8			$	1,862.3			$	1,380.0
Denominator:
Weighted average number of common shares outstanding	236.4				236.9				237.9
Effect of dilutive securities:
Stock options and employee stock purchase plan	0.1				0.3				0.5
Time-vested restricted stock units	0.5				0.8				1.0
Market stock units	0.2				0.3				0.3
Dilutive potential common shares	0.8				1.4				1.8
Shares used in calculating diluted earnings per share	237.2				238.3				239.7

Amounts excluded from the calculation of net income per diluted share because their effects were anti-dilutive were insignificant.

Earnings per share for the years ended December 31, 2014, 2013 and 2012, reflects, on a weighted average basis, the repurchase of 1.0 million shares, 0.9 million shares and 5.8 million shares, respectively, of our common stock under our share repurchase authorizations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

16.	Share-based Payments

Share-based Compensation Expense

The following table summarizes share-based compensation expense included within our consolidated statements of income:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Research and development	$	102.1			$	95.6			$	74.7
Selling, general and administrative	150.3				160.3				109.6
Subtotal	252.4				255.9				184.3
Capitalized share-based compensation costs	(10.0		)		(9.8		)		(5.4		)
Share-based compensation expense included in total cost and expenses	242.4				246.1				178.9
Income tax effect	(72.2		)		(73.3		)		(53.4		)
Share-based compensation expense included in net income attributable to Biogen Idec Inc.	$	170.2			$	172.8			$	125.5

The following table summarizes share-based compensation expense associated with each of our share-based compensation programs:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Stock options	$	—			$	0.6			$	2.3
Market stock units	37.4				32.8				23.3
Time-vested restricted stock units	115.4				103.5				93.0
Performance-vested restricted stock units settled in shares	—				—				0.1
Cash settled performance units	65.5				109.8				60.4
Performance units	21.9				—				—
Employee stock purchase plan	12.2				9.2				5.2
Subtotal	252.4				255.9				184.3
Capitalized share-based compensation costs	(10.0		)		(9.8		)		(5.4		)
Share-based compensation expense included in total cost and expenses	$	242.4			$	246.1			$	178.9

Windfall tax benefits from vesting of stock awards, exercises of stock options and ESPP participation were $96.4 million, $73.5 million and $54.7 million in 2014, 2013 and 2012, respectively. These amounts have been calculated under the alternative transition method.

As of December 31, 2014, unrecognized compensation cost related to unvested share-based compensation was approximately $198.5 million, net of estimated forfeitures. We expect to recognize the cost of these unvested awards over a weighted-average period of 1.9 years.

Share-Based Compensation Plans

We have three share-based compensation plans pursuant to which awards are currently being made: (i) the Biogen Idec Inc. 2006 Non-Employee Directors Equity Plan (2006 Directors Plan); (ii) the Biogen Idec Inc. 2008 Amended and Restated Omnibus Equity Plan (2008 Omnibus Plan); and (iii) the Biogen Idec Inc. 1995 Employee Stock Purchase Plan (ESPP).

Directors Plan

In May 2006, our stockholders approved the 2006 Directors Plan for share-based awards to our directors. Awards granted from the 2006 Directors Plan may include stock options, shares of restricted stock, restricted stock units, stock appreciation rights and other awards in such amounts and with such terms and conditions as may be determined by a committee of our Board of Directors, subject to the provisions of the plan. We have reserved a total of 1.6 million shares of common stock for issuance under the 2006 Directors Plan. The 2006 Directors Plan provides that awards other than stock options and stock appreciation rights will be counted against the total number of shares reserved under the plan in a 1.5-to-1 ratio.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Omnibus Plans

In June 2008, our stockholders approved the 2008 Omnibus Plan for share-based awards to our employees. Awards granted from the 2008 Omnibus Plan may include stock options, shares of restricted stock, restricted stock units, performance shares, shares of phantom stock, stock appreciation rights and other awards in such amounts and with such terms and conditions as may be determined by a committee of our Board of Directors, subject to the provisions of the plan. Shares of common stock available for issuance under the 2008 Omnibus Plan consist of 15.0 million shares reserved for this purpose, plus shares of common stock that remained available for issuance under our 2005 Omnibus Equity Plan on the date that our stockholders approved the 2008 Omnibus Plan, plus shares that were subject to awards under the 2005 Omnibus Equity Plan which remain unissued upon the cancellation, surrender, exchange or termination of such awards. The 2008 Omnibus Equity Plan provides that awards other than stock options and stock appreciation rights will be counted against the total number of shares available under the plan in a 1.5-to-1 ratio.

We have not made any awards pursuant to the 2005 Omnibus Equity Plan since our stockholders approved the 2008 Omnibus Plan, and do not intend to make any awards pursuant to the 2005 Omnibus Equity Plan in the future, except that unused shares under the 2005 Omnibus Equity Plan have been carried over for use under the 2008 Omnibus Plan.

Stock Options

We currently do not grant stock options to our employees or directors. Outstanding stock options previously granted to our employees and directors generally have a ten-year term and vest over a period of between one and four years, provided the individual continues to serve at Biogen Idec through the vesting dates. Options granted under all plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant. The estimated fair value of options, including the effect of estimated forfeitures, is recognized over the options’ vesting periods. The fair value of the stock options granted in 2010 was estimated as of the date of grant using a Black-Scholes option valuation model. There were no grants of stock options made in 2014, 2013 and 2012.

The expected life of options granted is derived using assumed exercise rates based on historical exercise patterns and represents the period of time that options granted are expected to be outstanding. Expected stock price volatility is based upon implied volatility for our exchange-traded options and other factors, including historical volatility. After assessing all available information on either historical volatility, implied volatility, or both, we have concluded that a combination of both historical and implied volatility provides the best estimate of expected volatility. The risk-free interest rate used is determined by the market yield curve based upon risk-free interest rates established by the Federal Reserve, or non-coupon bonds that have maturities equal to the expected term. The dividend yield of zero is based upon the fact that we have not historically granted cash dividends, and do not expect to issue dividends in the foreseeable future. Stock options granted prior to January 1, 2006 were valued based on the grant date fair value of those awards, using the Black-Scholes option pricing model, as previously calculated for pro-forma disclosures.

The following table summarizes our stock option activity:

	Shares			Weighted Average Exercise Price
Outstanding at December 31, 2013	384,000			$	55.49
Granted	—			$	—
Exercised	(163,000	)		$	53.46
Cancelled	—			$	—
Outstanding at December 31, 2014	221,000			$	56.98

The total intrinsic values of options exercised in 2014, 2013 and 2012 totaled $42.7 million, $86.2 million, and $63.0 million, respectively. The aggregate intrinsic values of options outstanding as of December 31, 2014 totaled $62.6 million. The weighted average remaining contractual term for options outstanding as of December 31, 2014 was 3.0 years. As of December 31, 2014, all of the options outstanding were exercisable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the amount of tax benefit realized for stock options and cash received from the exercise of stock options:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Tax benefit realized for stock options	$	13.0			$	29.4			$	20.9
Cash received from the exercise of stock options	$	8.5			$	28.1			$	38.8

Market Stock Units (MSUs)

MSUs awarded to employees prior to 2014 vested in four equal annual increments beginning on the first anniversary of the grant date. Participants may ultimately earn between 0% and 150% of the target number of units granted based on actual stock performance. MSUs awarded to employees in 2014 vest in three equal annual increments beginning on the first anniversary of the grant date, and participants may ultimately earn between 0% and 200% of the target number of units granted based on actual stock performance. The vesting of these awards is subject to the respective employee’s continued employment. The number of MSUs granted represents the target number of units that are eligible to be earned based on the attainment of certain market-based criteria involving our stock price. The number of MSUs earned is calculated at each annual anniversary from the date of grant over the respective vesting periods, resulting in multiple performance periods. Accordingly, additional MSUs may be issued or currently outstanding MSUs may be cancelled upon final determination of the number of awards earned. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period.

The following table summarizes our MSU activity:

	Shares			Weighted Average Grant Date Fair Value
Unvested at December 31, 2013	550,000			$	128.04
Granted (a)	246,000			$	395.22
Vested	(363,000	)		$	107.89
Forfeited	(30,000	)		$	192.85
Unvested at December 31, 2014	403,000			$	219.29

(a)

MSUs granted in 2014 include approximately 22,000, 27,000, 37,000 and 33,000 MSUs issued in 2014 based upon the attainment of performance criteria set for 2013, 2012, 2011 and 2010, respectively, in relation to awards granted in those years. The remainder of MSUs granted during 2014 include awards granted in conjunction with our annual awards made in February 2014 and MSUs granted in conjunction with the hiring of employees. These grants reflect the target number of shares eligible to be earned at the time of grant.

We value grants of MSUs using a lattice model with a Monte Carlo simulation. This valuation methodology utilizes several key assumptions, including the 60 calendar day average closing stock price on grant date for MSUs awarded prior to 2014, the 30 calendar day average closing stock price on the date of grant for MSUs awarded in 2014, expected volatility of our stock price, risk-free rates of return and expected dividend yield. The assumptions used in our valuation are summarized as follows:

	For the Years Ended December 31,
	2014		2013
Expected dividend yield	—%		—%
Range of expected stock price volatility	31.7% - 35.1%		21.7% - 25.7%
Range of risk-free interest rates	0.1% - 0.7%		0.1% - 0.7%
30 calendar day average stock price on grant date	$280.88 - $335.65		**
60 calendar day average stock price on grant date	**		$150.33 - $240.14
Weighted-average per share grant date fair value	$395.22		$193.45

The total fair values of MSUs vested in 2014, 2013 and 2012 totaled $117.4 million, $50.9 million, and $29.6 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash Settled Performance Units (CSPUs)

CSPUs awarded to employees vest in three equal annual increments beginning on the first anniversary of the grant date. The vesting of these awards is subject to the respective employee’s continued employment with such awards settled in cash. The number of CSPUs granted represents the target number of units that are eligible to be earned based on the attainment of certain performance measures established at the beginning of the performance period, which ends on December 31 of each year. Participants may ultimately earn between 0% and 200% of the target number of units granted based on the degree of actual performance metric achievement. Accordingly, additional CSPUs may be issued or currently outstanding CSPUs may be cancelled upon final determination of the number of units earned. CSPUs awarded prior to 2014 are settled in cash based on the 60 calendar day average closing stock price through each vesting date once the actual vested and earned number of units is known. CSPUs awarded in 2014 will be settled in cash based on the 30 calendar day average closing stock price through each vesting date, once the actual vested and earned number of units is known. Since no shares are issued, these awards will not dilute equity. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period.

The following table summarizes our CSPU activity:

	Shares
Unvested at December 31, 2013	514,000
Granted (a)	177,000
Vested	(316,000	)
Forfeited	(40,000	)
Unvested at December 31, 2014	335,000

(a)

CSPUs granted in 2014 include approximately 106,000 CSPUs issued in 2014 based upon the attainment of performance criteria set for 2013 in relation to awards granted in 2013. The remainder of the CSPUs granted in 2014 include awards granted in conjunction with our annual awards made in February 2014 and CSPUs granted in conjunction with the hiring of employees. These grants reflect the target number of shares eligible to be earned at the time of grant.

The total cash paid in settlement of CSPUs vested in 2014, 2013 and 2012 totaled $92.8 million, $48.3 million, and $28.7 million, respectively.

Performance-vested Restricted Stock Units (PUs)

Beginning in the first quarter of 2014, we revised our long term incentive program to include a new type of award granted to certain employees in the form of restricted stock units that may be settled in cash or shares at the sole discretion of the Compensation and Management Development Committee of our Board of Directors. These awards are structured and accounted for the same way as the cash settled performance units, and vest in three equal annual increments beginning on the first anniversary of the grant date. The number of PUs granted represents the target number of units that are eligible to be earned based on the attainment of certain performance measures established at the beginning of the performance period, which ends on December 31 of each year. Participants may ultimately earn between 0% and 200% of the target number of units granted based on the degree of actual performance metric achievement. Accordingly, additional PUs may be issued or currently outstanding PUs may be cancelled upon final determination of the number of units earned. PUs settling in cash are based on the 30 calendar day average closing stock price through each vesting date once the actual vested and earned number of units is known. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period.

The following table summarizes our PU activity:

	Shares
Unvested at December 31, 2013	—
Granted	57,000
Vested	—
Forfeited	—
Unvested at December 31, 2014	57,000

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Time-Vested Restricted Stock Units (RSUs)

RSUs awarded to employees generally vest no sooner than one-third per year over three years on the anniversary of the date of grant, or upon the third anniversary of the date of the grant, provided the employee remains continuously employed with us, except as otherwise provided in the plan. Shares of our common stock will be delivered to the employee upon vesting, subject to payment of applicable withholding taxes. RSUs awarded to directors for service on our Board of Directors vest on the first anniversary of the date of grant, provided in each case that the director continues to serve on our Board of Directors through the vesting date. Shares of our common stock will be delivered to the director upon vesting and are not subject to any withholding taxes. The fair value of all RSUs is based on the market value of our stock on the date of grant. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period.

The following table summarizes our RSU activity:

	Shares			Weighted Average Grant Date Fair Value
Unvested at December 31, 2013	1,660,000			$	135.95
Granted (a)	464,000			$	321.72
Vested	(885,000	)		$	117.74
Forfeited	(102,000	)		$	193.24
Unvested at December 31, 2014	1,137,000			$	221.01

(a)	RSUs granted in 2014 primarily represent RSUs granted in conjunction with our annual awards made in February 2014 and awards made in conjunction with the hiring of new employees. RSUs granted in 2014 also include approximately 9,000 RSUs granted to our Board of Directors.

RSUs granted in 2013 and 2012 had weighted average grant date fair values of $176.53 and $124.54, respectively.

The total fair values of RSUs vested in 2014, 2013 and 2012 totaled $281.1 million, $209.7 million, and $191.9 million, respectively.

Employee Stock Purchase Plan (ESPP)

The following table summarizes our ESPP activity:

	For the Years Ended December 31,
(In millions, except share amounts)	2014				2013				2012
Shares issued under ESPP	180,000				245,000				274,000
Cash received under ESPP	$	46.4			$	38.7			$	28.7

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

17.	Income Taxes

Income Tax Expense

Income before income tax provision and the income tax expense consist of the following:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Income before income taxes (benefit):
Domestic	$	2,557.4			$	1,953.0			$	1,398.0
Foreign	1,389.2				527.6				457.1
Total	$	3,946.6			$	2,480.6			$	1,855.1
Income tax expense (benefit):
Current:
Federal	$	1,159.5			$	700.9			$	507.9
State	65.2				98.4				35.6
Foreign	73.4				46.8				44.0
Total	1,298.1				846.1				587.5
Deferred:
Federal	$	(280.9	)		$	(200.6	)		$	(133.0	)
State	(21.0		)		(35.9		)		(13.0		)
Foreign	(6.3		)		(8.6		)		29.1
Total	(308.2		)		(245.1		)		(116.9		)
Total income tax expense	$	989.9			$	601.0			$	470.6

The 2012 deferred tax expense on foreign earnings includes an expense of $33.1 million related to capitalized interest at our Denmark manufacturing facility. Of this amount, $29.0 million represents the correction of an error in our accounting that had accumulated over several prior years. We do not consider this correction to be material.

Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets and liabilities are summarized as follows:

	As of December 31,
(In millions)	2014				2013
Deferred tax assets:
Tax credits	$	69.0			$	64.1
Inventory, other reserves, and accruals	217.3				169.6
Intangibles, net	251.7				124.2
Net operating loss	20.6				14.7
Share-based compensation	86.0				85.0
Other	60.0				84.8
Valuation allowance	(11.5		)		(1.5		)
Total deferred tax assets	$	693.1			$	540.9
Deferred tax liabilities:
Purchased intangible assets	$	(432.8	)		$	(550.8	)
Unrealized gain on investments and cumulative translation adjustment	—				(3.2		)
Inventory, other reserves and accruals	(1.1		)		(24.9		)
Depreciation, amortization and other	(105.9		)		(112.6		)
Total deferred tax liabilities	$	(539.8	)		$	(691.5	)

In addition to deferred tax assets and liabilities, we have recorded prepaid tax and deferred charges related to intercompany transactions. As of December 31, 2014 and 2013, the total deferred charges and prepaid taxes were $238.9 million and $248.9 million, respectively.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During 2013, we recorded a deferred charge of $203.7 million in connection with an intercompany transfer of the intellectual property for ZINBRYTA. The net book value of this deferred charge as of December 31, 2014 and 2013 was $179.9 million and $193.5 million, respectively. The deferred charge will be amortized to income tax expense over the economic life of the ZINBRYTA program. If the ZINBRYTA program were to be discontinued, we will accelerate the amortization of this deferred charge and record an expense equal to its remaining net book value.

Tax Rate

A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:

	For the Years Ended December 31,
	2014			2013			2012
Statutory rate	35.0	%		35.0	%		35.0	%
State taxes	1.2			3.1			0.9
Taxes on foreign earnings	(9.5	)		(6.7	)		(6.2	)
Credits and net operating loss utilization	(1.1	)		(2.6	)		(3.5	)
Purchased intangible assets	1.2			1.5			1.2
Manufacturing deduction	(1.8	)		(6.6	)		(2.1	)
Other permanent items	0.5			0.8			(0.4	)
Contingent consideration	(0.4	)		—			0.5
Other	—			(0.3	)		—
Effective tax rate	25.1	%		24.2	%		25.4	%

Our effective tax rate for 2014 compared to 2013 increased primarily as a result of the absence of a benefit related to the 2013 change in our uncertain tax position related to our U.S. federal manufacturing deduction and our unconsolidated joint business described below under "Accounting for Uncertainty in Income Taxes", lower current year expenses eligible for the orphan drug credit and a lower relative manufacturing deduction due to unqualified products, partially offset by a higher percentage of our 2014 income being earned outside the U.S.

Our effective tax rate for 2013 compared to 2012 decreased primarily as a result of a change in our uncertain tax position related to our U.S. federal manufacturing deduction and our unconsolidated joint business, described below under "Accounting for Uncertainty in Income Taxes", lower intercompany royalties owed by a foreign wholly owned subsidiary to a U.S. wholly owned subsidiary on the international sales of one of our products, the reinstatement of the federal research and development tax credit and the 2012 correction of an error in our deferred tax accounting, which increased our rate in the prior year. These favorable items were partially offset by higher relative earnings in the U.S. from the commercial launch of TECFIDERA, lower orphan drug credits due to reduced expenditures in eligible clinical trials and higher state taxes.

As of December 31, 2014, we had net operating losses and general business credit carry forwards for federal income tax purposes of approximately $28.5 million and $6.6 million, respectively, which begin to expire in 2020. Additionally, for state income tax purposes, we had net operating loss carry forwards of approximately $108.1 million, which begin to expire in 2015. For state income tax purposes, we also had research and investment credit carry forwards of approximately $116.8 million, which begin to expire in 2015. For foreign income tax purposes, we had $29.4 million of net operating loss carryforwards, which begin to expire in 2020.

In assessing the realizability of our deferred tax assets, we have considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In making this determination, under the applicable financial reporting standards, we are allowed to consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. Our estimates of future taxable income take into consideration, among other items, our estimates of future income tax deductions related to the exercise of stock options. Based upon the level of historical taxable income and income tax liability and projections for future taxable income over the periods in which the deferred tax assets are utilizable, we believe it is more likely than not that we will realize the benefits of the deferred tax assets of our wholly owned subsidiaries. In the event that actual results differ from our estimates or we adjust our estimates in future periods, we may need to establish a valuation allowance, which could materially impact our financial position and results of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 2014, undistributed foreign earnings of non-U.S. subsidiaries included in consolidated retained earnings and other basis differences aggregated approximately $4.6 billion. We intend to reinvest these earnings indefinitely in operations outside the U.S. The residual U.S. tax liability, if cumulative amounts were repatriated, would be between $1.5 billion to $1.6 billion as of December 31, 2014.

Accounting for Uncertainty in Income Taxes

A reconciliation of the beginning and ending amount of our unrecognized tax benefits is summarized as follows:

(In millions)	2014				2013				2012
Balance at January 1,	$	110.1			$	125.9			$	64.4
Additions based on tax positions related to the current period	20.8				11.9				13.0
Additions for tax positions of prior periods	86.1				71.7				69.8
Reductions for tax positions of prior periods	(23.4		)		(92.1		)		(18.6		)
Statute expirations	(1.6		)		(1.9		)		(1.9		)
Settlements	(60.5		)		(5.4		)		(0.8		)
Balance at December 31,	$	131.5			$	110.1			$	125.9

We and our subsidiaries are routinely examined by various taxing authorities. We file income tax returns in the U.S. federal jurisdiction, various U.S. states, and foreign jurisdictions. With few exceptions, including the proposed disallowance we discuss below, we are no longer subject to U.S. federal tax examination for years before 2013 or state, local, or non-U.S. income tax examinations for years before 2004.

Included in the balance of unrecognized tax benefits as of December 31, 2014, 2013 and 2012 are $53.6 million, $32.5 million and $109.5 million (net of the federal benefit on state issues), respectively, of unrecognized tax benefits that, if recognized, would affect the effective income tax rate in future periods.

We recognize potential interest and penalties accrued related to unrecognized tax benefits in income tax expense. In 2014, we recognized a net interest expense of $4.1 million. During 2013, we recognized net interest expense of $4.5 million. In 2012, we recognized a net interest expense of approximately $0.1 million. We have accrued approximately $17.6 million and $11.3 million for the payment of interest as of December 31, 2014 and 2013, respectively.

In December 2014, we received a notice of assessment from the Danish Tax Authority (SKAT) for fiscal 2009, regarding withholding taxes and the treatment of certain intercompany transactions involving our Danish affiliate and another of our affiliates. The audits of our tax filings for 2010 through 2013 are not completed but have been prepared in a manner consistent with prior filings, with similar transactions, which may result in an assessment for those years. The total amount assessed for 2009 is $51.1 million, including interest. For all periods potentially under dispute, we believe that positions taken in our tax filings are valid and we are contesting the assessment vigorously.

Federal Uncertain Tax Positions

During 2013, we received updated technical guidance from the IRS concerning our current and prior year filings and calculation of our U.S. federal manufacturing deduction and overall tax classification of our unconsolidated joint business. Based on this guidance we reevaluated the level of our unrecognized benefits related to uncertain tax positions, and recorded a $49.8 million income tax benefit. This benefit is for a previously unrecognized position and relates to years 2005 through 2012. We recorded an offsetting expense of $11.3 million for non-income based state taxes, which is recorded in other income (expense) within our consolidated statements of income.

In October 2011, in conjunction with our examination, the IRS proposed a disallowance of approximately $130 million in deductions for tax years 2007, 2008 and 2009 related to payments for services provided by our wholly owned Danish subsidiary located in Hillerød, Denmark. We believe that these items represent valid deductible business expenses and are vigorously defending our position. We have initiated a mutual agreement procedure between the IRS and SKAT for the years 2001 through 2009, in an attempt to reach agreement on the issue. In addition, we have applied for a bilateral advanced pricing agreement for the years 2010 through 2014 to resolve similar issues for the subsequent years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the year ended December 31, 2014, the net effect of adjustments to our uncertain tax positions was a net expense of $2.0 million. It is reasonably possible that we will adjust the value of our uncertain tax positions related to our unconsolidated joint business and certain transfer pricing issues as we receive additional information from various taxing authorities, including reaching settlements with the authorities. In addition, the IRS and other national tax authorities routinely examine our intercompany transfer pricing with respect to intellectual property related transactions and it is possible that they may disagree with one or more positions we have taken with respect to such valuations.

18.	Other Consolidated Financial Statement Detail

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information for the years ended December 31, 2014, 2013 and 2012, is as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Cash paid during the year for:
Interest	$	41.2			$	53.6			$	65.4
Income taxes	$	1,163.2			$	643.2			$	526.6

Non-cash Investing and Financing Activity

In the fourth quarter of 2014, we accrued $250.0 million upon reaching $4.0 billion in total cumulative sales of Fumapharm Products. The amount, net of tax benefit, was accounted for as an increase to goodwill in accordance with the accounting standard applicable to business combinations when we acquired Fumapharm and is expected to be paid in the first quarter of 2015. For additional information related to this transaction, please read Note 22, Commitment and Contingencies to these consolidated financial statements.

In July and November 2013, the construction of two office buildings in Cambridge, Massachusetts was completed and we started leasing the facilities. Upon completion of the construction of the buildings, we determined that we were no longer considered the owner of the buildings because we did not have any unusual or significant continuing involvement. Consequently, we derecognized the buildings and their associated financing obligation of approximately $161.5 million from our consolidated balance sheet.

In March 2012, upon completion of our acquisition of Stromedix, we recorded $219.2 million of in-process research and development and $48.2 million of goodwill. In addition, we also recorded a contingent consideration obligation of $122.2 million.

Other Income (Expense), Net

Components of other income (expense), net, are summarized as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Interest income	$	12.2			$	8.2			$	29.5
Interest expense	(29.5		)		(31.9		)		(36.5		)
Impairments on investments	—				(2.8		)		(5.5		)
Gain (loss) on investments, net	11.8				21.7				10.6
Foreign exchange gains (losses), net	(11.6		)		(15.2		)		(2.5		)
Other, net	(8.7		)		(14.9		)		3.7
Total other income (expense), net	$	(25.8	)		$	(34.9	)		$	(0.7	)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accrued Expenses and Other

Accrued expenses and other consists of the following:

	As of December 31,
(In millions)	2014				2013
Employee compensation and benefits	$	393.8			$	343.4
Revenue-related rebates	344.0				264.9
Current portion of contingent consideration obligations	265.5				54.0
Royalties and licensing fees	172.4				160.7
Deferred revenue	120.9				172.7
Clinical development expenses	65.9				55.2
Other	456.8				304.3
Total accrued expenses and other	$	1,819.3			$	1,355.2

Other Long-Term Liabilities

Other long-term liabilities consists of the following:

	As of December 31,
(In millions)	2014				2013
Employee compensation and benefits	$	200.7			$	161.5
Contingent consideration obligation	200.0				251.9
Taxes payable	142.2				177.1
Other	107.2				68.7
Total other long-term liabilities	$	650.1			$	659.2

19.	Investments in Variable Interest Entities

Consolidated Variable Interest Entities

Our consolidated financial statements include the financial results of variable interest entities in which we are the primary beneficiary.

Knopp

In August 2010, we entered into a license agreement with Knopp Neurosciences, Inc. (Knopp), a subsidiary of Knopp Holdings, LLC, for the development, manufacture and commercialization of dexpramipexole. Under the terms of the license agreement we made a $26.4 million upfront payment and agreed to pay Knopp development and sales-based milestone payments as well as royalties on future commercial sales. In addition, we also purchased 30.0% of the Class B common shares of Knopp for $60.0 million. Upon entering into the license agreement, we began consolidating the results of Knopp as we determined that we had the power through the license agreement to direct the activities that most significantly impacted its economic performance and were therefore its primary beneficiary.

At the end of December 2012, we learned that a Phase 3 trial investigating dexpramipexole in people with amyotrophic lateral sclerosis (ALS) did not meet its primary endpoint and failed to show efficacy in its key secondary endpoints. Based on these results, we discontinued development of dexpramipexole in ALS. In 2013, we terminated our license agreement and executed our put option on our Class B common shares. We deconsolidated the results of Knopp upon termination of the license agreement.

During the year ended December 31, 2012, $113.0 million of expense was reflected within our consolidated statements of income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Neurimmune SubOne AG

In 2007, we entered into a collaboration agreement with Neurimmune SubOne AG (Neurimmune), a subsidiary of Neurimmune AG, for the development and commercialization of antibodies for the treatment of Alzheimer’s disease. Neurimmune conducts research to identify potential therapeutic antibodies and we are responsible for the development, manufacturing and commercialization of all products. Our anti-amyloid beta antibody, BIIB037 program, for Alzheimer’s disease resulted from this collaboration. In December 2014, we reported positive interim data from the Phase 1b trial of BIIB037. Based upon our current development plans, we may pay Neurimmune up to $335.0 million in remaining milestone payments, of which $60.0 million is due upon the initiation of a late stage clinical trial. We may also pay royalties in the low-to-mid-teens on sales of any resulting commercial products.

We determined that we are the primary beneficiary of Neurimmune because we have the power through the collaboration to direct the activities that most significantly impact the entity’s economic performance and are required to fund 100% of the research and development costs incurred in support of the collaboration agreement. Accordingly, we consolidate the results of Neurimmune.

Amounts that are incurred by Neurimmune for research and development expenses in support of the collaboration that we reimburse are reflected in research and development expense in our consolidated statements of income. In the second quarter of 2014, we recorded a $10.0 million milestone payment in connection with the achievement of certain clinical goals in the Phase 1 trial of our BIIB037 program for Alzheimer’s disease, which was reflected as a charge to noncontrolling interests, net of tax, within our consolidated statements of income. Future milestone payments will be reflected within our consolidated statements of income as a charge to the noncontrolling interest, net of tax, when such milestones are achieved. During the years ending December 31, 2014, 2013 and 2012, $44.1 million, $27.2 million and $13.3 million, respectively, of expense was reflected within our consolidated statements of income.

The assets and liabilities of Neurimmune are not significant to our financial position or results of operations as it is a research and development organization. We have provided no financing to Neurimmune other than previously contractually required amounts.

Ataxion, Inc.

In February 2014, we paid $1.6 million for preferred stock of Ataxion, Inc. (Ataxion) and entered into an option agreement which gives us the right to purchase all outstanding shares of Ataxion at any time until 30 days after delivery of a Phase 1 clinical trial study report. Ataxion is a discovery-stage biopharmaceutical company developing product candidates focused on a group of orphan genetic disorders referred to as hereditary ataxias. We committed to make additional investments in Ataxion's preferred shares of up to $6.2 million if certain development milestones are achieved. In December 2014, we made an additional investment of $2.3 million in Ataxion as the first development milestone was achieved. If we exercise our option to purchase the outstanding shares of Ataxion, we could pay additional amounts upon achievement of clinical and commercial milestones.

In the Ataxion relationship, through our fixed price option to purchase the company, purchases of equity and presence on the program advisory committee, we are deemed to be the primary beneficiary of Ataxion, a variable interest entity. Therefore, we consolidate the results of Ataxion. As part of the initial consolidation of Ataxion, we recorded an IPR&D intangible asset of $3.5 million and assigned that amount to minority interest within our shareholders' equity.

The assets and liabilities of Ataxion are not significant to our financial position or results of operations as it is a research and development organization. We have provided no financing to Ataxion other than contractually required amounts.

Unconsolidated Variable Interest Entities

We have relationships with other variable interest entities that we do not consolidate as we lack the power to direct the activities that significantly impact the economic success of these entities. These relationships include investments in certain biotechnology companies.

As of December 31, 2014 and 2013, the total carrying value of our investments in biotechnology companies that we have determined to be variable interest entities, but do not consolidate as we do not have the power to direct their activities, totaled $7.9 million and $5.5 million, respectively. Our maximum exposure to loss related to these variable interest entities is limited to the carrying value of our investments.

We have entered into research collaborations with certain variable interest entities where we are required to fund certain development activities. These development activities are included in research and development expense within our consolidated statements of income, as they are incurred. We have provided no financing to these variable interest entities other than previously contractually required amounts.

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20.	Collaborative and Other Relationships

In connection with our business strategy, we have entered into various collaboration agreements which provide us with rights to develop, produce and market products using certain know-how, technology and patent rights maintained by our collaborative partners. Terms of the various collaboration agreements may require us to make milestone payments upon the achievement of certain product research and development objectives and pay royalties on future sales, if any, of commercial products resulting from the collaboration.

Depending on the collaborative arrangement, we may record funding receivables or payable balances with our partners, based on the nature of the cost-sharing mechanism and activity within the collaboration. Our significant collaboration arrangements are discussed below.

Genentech (Roche Group)

We collaborate with Genentech on the development and commercialization of RITUXAN. In addition, in the U.S., we share operating profits and losses relating to GAZYVA with Genentech. The Roche Group and its sub-licensees maintain sole responsibility for the development, manufacturing and commercialization of GAZYVA in the U.S.

Our collaboration agreement will continue in effect until we mutually agree to terminate the collaboration, except that if we undergo a change in control, as defined in the collaboration agreement, Genentech has the right to present an offer to buy the rights to RITUXAN and we must either accept Genentech’s offer or purchase Genentech’s rights on the same terms as its offer. Genentech will also be deemed concurrently to have purchased our rights to any other anti-CD20 products in development in exchange for a royalty and our rights to GAZYVA in exchange for the compensation described in the table below. Our collaboration with Genentech was created through a contractual arrangement and not through a joint venture or other legal entity.

RITUXAN

Genentech is responsible for the worldwide manufacturing of RITUXAN. Development and commercialization rights and responsibilities under this collaboration are divided as follows:

U.S.

We share with Genentech co-exclusive rights to develop, commercialize and market RITUXAN in the U.S.

Canada

We and Genentech have assigned our rights under our collaboration agreement with respect to Canada to Roche.

Outside the U.S. and Canada

We have granted Genentech exclusive rights to develop, commercialize and market RITUXAN outside the U.S. and Canada. Under the terms of separate sublicense agreements between Genentech and Roche, development and commercialization of RITUXAN outside the U.S. and Canada is the responsibility of Roche and its sublicensees. We do not have any direct contractual arrangements with Roche or it sublicensees.

Under the terms of the collaboration agreement, Roche pays us royalties between 10% and 12% on sales of RITUXAN outside the U.S. and Canada, with the royalty period lasting 11 years from the first commercial sale of RITUXAN on a country-by-country basis. The royalty periods for the substantial portion of the royalty-bearing sales in the rest of world markets expired during 2012 and 2013. We expect future revenue on sales of RITUXAN in the rest of world will be limited to our share of pre-tax co-promotion profits in Canada.

GAZYVA

Prior to approval, we recognized 35% of the development and commercialization expenses as research and development expense and selling, general and administrative expense, respectively, in our consolidated statements of income. After GAZYVA was approved by the FDA in the fourth quarter of 2013, we began to recognize our share of the development and commercialization expenses as a reduction of our share of pre-tax profits in revenues from unconsolidated joint business.

Commercialization of GAZYVA will impact our percentage of the co-promotion profits for RITUXAN, as summarized in the table below.

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Ocrelizumab

Genentech is solely responsible for further development and commercialization of ocrelizumab, a humanized anti-CD20 monoclonal antibody currently in development for MS, and funding future costs. Genentech cannot develop ocrelizumab in CLL, NHL or RA. We will receive tiered royalties between 13.5% and 24% on U.S. sales of ocrelizumab if approved for commercial sale by the FDA. Commercialization of ocrelizumab does not impact the percentage of the co-promotion profits we receive for RITUXAN.

Profit-sharing Formula

RITUXAN

Our current pretax co-promotion profit-sharing formula provides for a 30% share on the first $50.0 million of co-promotion operating profits earned each calendar year. Our share of annual co-promotion profits in excess of $50.0 million varies, as summarized in the table below, upon the following events:

Until GAZYVA First Non-CLL FDA Approval	40.0	%
After GAZYVA First Non-CLL FDA Approval until First GAZYVA Threshold Date	39.0	%
After First GAZYVA Threshold Date until Second GAZYVA Threshold Date	37.5	%
After Second GAZYVA Threshold Date	35.0	%

First Non-CLL GAZYVA FDA Approval means the FDA’s first approval of GAZYVA in an indication other than CLL.

First GAZYVA Threshold Date means the earlier of (1) the date of the First Non-CLL GAZYVA FDA approval if U.S. gross sales of GAZYVA for the preceding consecutive 12 month period were at least $150.0 million or (2) the first day of the calendar quarter after the date of the First Non-CLL GAZYVA FDA Approval that U.S. gross sales of GAZYVA within any consecutive 12 month period have reached $150.0 million.

Second GAZYVA Threshold Date means the first day of the calendar quarter after U.S. gross sales of GAZYVA within any consecutive 12 month period have reached $500.0 million. The Second GAZYVA Threshold Date can be achieved regardless of whether GAZYVA has been approved in a non-CLL indication.

In addition, should the FDA approve an anti-CD20 product other than ocrelizumab or GAZYVA that is acquired or developed by Genentech and subject to the collaboration agreement, our share of the co-promotion operating profits would be between 30% and 38% based on certain events.

GAZYVA

Our current pretax profit-sharing formula provides for a 35% share on the first $50.0 million of operating profits earned each calendar year. Our share of annual profits in excess of $50.0 million varies, as summarized in the table below, upon the following events:

Until First GAZYVA Threshold Date	39.0	%
After First GAZYVA Threshold Date until Second GAZYVA Threshold Date	37.5	%
After Second GAZYVA Threshold Date	35.0	%

Our share of operating losses on GAZYVA is 35%.

Unconsolidated Joint Business Revenues

During the first quarter of 2013, we reduced our share of RITUXAN revenues from unconsolidated joint business by approximately $49.7 million, of which revenue on sales in the rest of world for RITUXAN was reduced by $41.2 million and pre-tax profits in the U.S. were reduced by $8.5 million, to reflect our share of the royalties and interest awarded to Hoechst in its arbitration with Genentech.

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Revenues from unconsolidated joint business are summarized as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Biogen Idec’s share of pre-tax profits in the U.S. for RITUXAN and GAZYVA (1)	$	1,114.1			$	1,085.2			$	1,031.7
Reimbursement of selling and development expenses in the U.S. for RITUXAN	3.0				2.1				1.6
Revenue on sales in the rest of world for RITUXAN	78.3				38.7				104.6
Total unconsolidated joint business revenues	$	1,195.4			$	1,126.0			$	1,137.9

(1) GAZYVA sales began in the fourth quarter of 2013.

In 2014, 2013, and 2012, the 40% profit-sharing threshold was met during the first quarter.

Prior to regulatory approval, we record our share of the expenses incurred by the collaboration for the development of anti-CD20 products in research and development expense in our consolidated statements of income. We incurred $25.7 million and $35.4 million in development expense for the years ended December 31, 2013 and 2012, respectively. After an anti-CD20 product is approved, we record our share of the development expenses related to that product as a reduction of our share of pre-tax profits in revenues from unconsolidated joint business.

Elan

On April 2, 2013, we acquired full ownership of all remaining rights to TYSABRI from Elan that we did not already own or control. Upon the closing of the transaction, our collaboration agreement with Elan was terminated. For additional information related to this transaction, please read Note 2, Acquisitions to these consolidated financial statements.

We previously collaborated with Elan on the development, manufacture and commercialization of TYSABRI. Under the terms of our collaboration agreement, we manufactured TYSABRI and collaborated with Elan on the product’s marketing, commercial distribution and ongoing development activities. The agreement was designed to effect an equal sharing of profits and losses generated by the activities of our collaboration. Under the agreement, however, once sales of TYSABRI exceeded specific thresholds, Elan was required to make milestone payments to us in order to continue sharing equally in the collaboration’s results.

In the U.S., we previously sold TYSABRI to Elan who then sold the product to third party distributors. Our sales price to Elan in the U.S. was set prior to the beginning of each quarterly period to effect an approximate equal sharing of the gross profit between Elan and us. We recognized revenue for sales in the U.S. of TYSABRI upon Elan’s shipment of the product to the third party distributors, at which time all revenue recognition criteria had been met. We incurred manufacturing and distribution costs, research and development expenses, commercial expenses, and general and administrative expenses related to TYSABRI. We recorded these expenses to their respective line items within our consolidated statements of income when they were incurred. Research and development and sales and marketing expenses were shared equally with Elan and the reimbursement of these expenses was recorded as reductions of the respective expense categories. During the years ended December 31, 2013 and 2012, we recorded $11.7 million and $43.7 million, respectively, as reductions of research and development expense resulting from reimbursements from Elan. In addition, for the years ended December 31, 2013 and 2012, we recorded $20.6 million and $99.9 million, respectively, as reductions of selling, general and administrative expense resulting from reimbursements from Elan.

In the rest of world, we previously were responsible for distributing TYSABRI to customers and were primarily responsible for all operating activities. Generally, we recognized revenue for sales of TYSABRI in the rest of world at the time of product delivery to our customers. We made payments to Elan which effected an equal sharing of rest of world collaboration operating profits. These payments also included the reimbursement we paid to Elan for half of the third-party royalties that Elan paid on behalf of the collaboration relating to rest of world sales. These amounts were reflected in the collaboration profit sharing line in our consolidated statements of income. For the years ended December 31, 2013 and 2012, $85.4 million and $317.9 million, respectively, was reflected in the collaboration profit sharing line for our collaboration with Elan.

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Acorda

In 2009, we entered into a collaboration and license agreement with Acorda Therapeutics, Inc. (Acorda) to develop and commercialize products containing fampridine in markets outside the U.S. We also have responsibility for regulatory activities and the future clinical development of related products in those markets.

In July 2011, the EC granted a conditional marketing authorization for fampridine in the E.U., under the trade name FAMPYRA, which triggered a $25.0 million milestone payment. This payment was made to Acorda in 2011 and was capitalized as an intangible asset.

Under the terms of the collaboration and license agreement, we pay Acorda tiered royalties based on the level of ex-U.S. net sales. We may pay up to $375.0 million of additional milestone payments to Acorda, based on the successful achievement of certain regulatory and commercial milestones. The next expected milestone would be $15.0 million, due if ex-U.S. net sales reach $100.0 million over a period of four consecutive quarters. We will capitalize these additional milestones as intangible assets upon achievement of the milestone which will then be amortized utilizing an economic consumption model and recognized as amortization of acquired intangible assets. Royalty payments are recognized as a cost of goods sold.

In connection with the collaboration and license agreement, we have also entered into a supply agreement with Acorda for the commercial supply of FAMPYRA. This agreement is a sublicense arrangement of an existing agreement between Acorda and Alkermes, who acquired Elan Drug Technologies, the original party to the license with Acorda. During the years ending December 31, 2014, 2013 and 2012, total cost of sales related to royalties and commercial supply of FAMPRYA reflected within our consolidated statement of income were $29.2 million, $24.3 million and $20.2 million, respectively.

Swedish Orphan Biovitrum AB

In January 2007, we acquired 100% of the stock of Syntonix. Syntonix had previously entered into a collaboration agreement with Swedish Orphan Biovitrum AB (Sobi) to jointly develop and commercialize Factor VIII and Factor IX hemophilia products, including ELOCTATE and ALPROLIX. In February 2010, we restructured the collaboration agreement and assumed full development responsibilities and costs, as well as manufacturing rights. In addition, the cross-royalty rates were reduced and commercial rights for certain territories were changed. As a result, we now have commercial rights for North America (the Biogen Idec North America Territory) and for rest of the world markets outside of Europe, Russia, Turkey and certain countries in the Middle East (the Biogen Idec Direct Territory). Subject to the exercise of an option right that Sobi controls, Sobi will have commercial rights in Europe, Russia, Turkey and certain countries in the Middle East (the Sobi Territory). The collaboration agreement was amended and restated in April 2014. (References to the collaboration agreement refer to the amended and restated collaboration agreement).

Under the terms of the collaboration agreement, following our submission of a MAA to the EMA for each product developed under the collaboration, Sobi may exercise an option to take over final regulatory approval, pre-launch and commercialization activities in the Sobi Territory by making a payment into escrow of $10.0 million per product. In November 2014, Sobi exercised its option to assume development and commercialization of ELOCTA (trade name for ELOCTATE in the E.U.) within the Sobi Territory and deposited $10.0 million to be held in escrow. Upon EMA regulatory approval of each such product, Sobi will be liable to reimburse us 50% of the sum of all shared manufacturing and development expenses incurred by us from October 1, 2009 through the earlier of the date on which Sobi is registered as the marketing authorization holder for the applicable product or 90 days post-regulatory approval, as well as 100% of certain development expenses incurred exclusively for the benefit of the Sobi Territory (the Opt-In Consideration). Through December 31, 2014, approximately $175 million in expenditures for ELOCTA may be reimbursable by Sobi under the collaboration agreement due to its election to assume development and commercialization of ELOCTA within the Sobi Territory and approximately $150 million in expenditures for ALPROLIX may be reimbursable by Sobi under the collaboration agreement if Sobi should exercise its option right with respect to ALPROLIX. The escrow payment made with respect to each product will be applied to the amount of the Opt-In Consideration to be reimbursed by Sobi. To effect Sobi’s reimbursement to us for the Opt-In Consideration exceeding the escrow payment for the applicable product, the cross-royalty structure for direct sales in each company’s respective territories will be adjusted until the Opt-In Consideration is paid in full (the Reimbursement Period). The mechanism for reimbursement is outlined in the table below.

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Under the collaboration agreement, amounts are payable as follows:

					Rates should Sobi exercise its option right(3)
Royalty and Net Revenue Share Rates:	Method		Rate prior to 1st commercial sale in the Sobi Territory:		Base Rate following 1st commercial sale in the Sobi Territory:		Rate during the Reimbursement Period:
Sobi rate to Biogen Idec on net sales in the Sobi Territory	Royalty		N/A		10 to 12%		Base Rate plus 5%
Biogen Idec rate to Sobi on net sales in the Biogen Idec North America Territory	Royalty		2%		10 to 12%		Base Rate less 5%
Biogen Idec rate to Sobi on net sales in the Biogen Idec Direct Territory	Royalty		2%		15 to 17%		Base Rate less 5%
Biogen Idec rate to Sobi on net revenue(1) from the Biogen Idec Distributor Territory(2)	Net Revenue Share		10%		50%		Base Rate less 15%

(1)	Net revenue represents Biogen Idec’s pre-tax receipts from third-party distributors, less expenses incurred by Biogen Idec in the conduct of commercialization activities supporting the distributor activities.

(2)	The Biogen Idec Distributor Territory represents Biogen Idec territories where sales are derived utilizing a third-party distributor.

(3)	A credit will be issued to Sobi against its reimbursement of the Opt-in Consideration in an amount equal to the difference in the rate paid by Biogen Idec to Sobi on sales in the Biogen Idec territories for certain periods prior to the first commercial sale in the Sobi Territory versus the rate that otherwise would have been payable on such sales.

If the reimbursement of the Opt-in Consideration has not been achieved within six years of the first commercial sale of such product, we maintain the right to require Sobi to pay any remaining balances due to us within 90 days of the six year anniversary date of the first commercial sale.

Should Sobi not exercise its option right with respect to ALPROLIX or should Sobi terminate the collaboration agreement with respect to one or both products, we will obtain full worldwide development and commercialization rights for such affected products and we will be obligated to pay royalties to Sobi subject to separate terms, as defined in the collaboration agreement. In addition, if EMA approval for any product is not granted within 18 months of the applicable EMA filing date, Sobi shall have the right to require that the escrow payment be refunded and revoke its option right for such product.

AbbVie Biotherapeutics, Inc.

We have a collaboration agreement with AbbVie Biotherapeutics, Inc., a subsidiary of AbbVie, Inc. (AbbVie) aimed at advancing the development and commercialization of ZINBRYTA in MS. Under the agreement, development and commercialization costs and profits in North America and the E.U. are shared equally and we are responsible for the manufacture of ZINBRYTA.

Based upon our current development plans, we may incur up to an additional $60.0 million of payments upon achievement of development and commercial milestones related to the development of ZINBRYTA, of which $16.0 million will be due upon filing with the FDA and EMA.

A summary of activity related to this collaboration is as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Total development expense incurred by the collaboration	$	117.8			$	133.4			$	128.0
Biogen Idec’s share of development expense reflected within our consolidated statements of income	$	67.4			$	71.0			$	65.6

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Isis Pharmaceuticals, Inc.

Long-Term Strategic Research Collaboration

In September 2013, we entered into a six year research collaboration with Isis Pharmaceuticals Inc. (Isis) under which both companies collaborate to perform discovery level research and then develop and commercialize antisense or other therapeutics for the treatment of neurological disorders. Under the collaboration, Isis will perform research on a set of neurological targets identified within the agreement. Once the research has reached a specific stage of development, we will make the determination whether antisense is the preferred approach to develop a therapeutic candidate or whether another modality is preferred. If antisense is selected, Isis will continue development and identify a product candidate. If another modality is used, we will assume the responsibility for identifying a product candidate and developing it.

Under the terms of this agreement, we paid Isis an upfront amount of $100.0 million. Of this payment, we recorded prepaid research and discovery services of approximately $25.0 million, representing the value of the Isis full time equivalent employee resources which are required by the collaboration to provide research and discovery services to us over the next six years. The remaining $75.0 million of the upfront payment was recorded as research and development expense in the third quarter of 2013, the period in which we entered into the collaboration, as it represents the purchase of intellectual property that has not reached technological feasibility.

Isis is also eligible to receive milestone payments, license fees and royalty payments for all product candidates developed through this collaboration, with the specific amount dependent upon the modality of the product candidate advanced by us. During 2014, we made payments of $20.0 million to Isis related to the advancement of ISIS-BIIB3Rx to treat a neurodegenerative disease.

For non-ALS antisense product candidates, Isis will be responsible for global development through the completion of a Phase 2 trial and we will provide advice on the clinical trial design and regulatory strategy. For ALS antisense product candidates, we are responsible for global development, clinical trial design and regulatory strategy. We have an option to license a product candidate until completion of the Phase 2 trial. If we exercise our option, we will pay Isis up to a $70.0 million license fee and assume global development, regulatory and commercialization responsibilities. Isis could receive additional milestone payments upon the achievement of certain regulatory milestones of up to $130.0 million, plus additional amounts related to the cost of clinical trials conducted by Isis under the collaboration, and royalties on future sales if we successfully develop the product candidate after option exercise.

For product candidates using a different modality, we will be responsible for global development through all stages and will owe Isis up to $90.0 million upon the achievement of certain regulatory milestones.

Product Collaborations

In December, June and January 2012, we entered into three separate exclusive, worldwide option and collaboration agreements with Isis Pharmaceuticals, Inc. (Isis) under which both companies will develop and commercialize antisense therapeutics for up to three gene targets, Isis’ product candidates for the treatment of myotonic dystrophy type 1 (DM1), and the antisense investigational candidate, ISIS-SMNRx for the treatment of spinal muscular atrophy (SMA), respectively.

Antisense Therapeutics

Under the terms of the December 2012 agreement, for up to three gene targets we provided Isis with an upfront payment of $30.0 million and will make potential additional payments, prior to licensing, of up to $10.0 million based on the development of the selected product candidate as well as a mark-up of the cost estimate of the Phase 1 and Phase 2 trials. Isis will be responsible for global development of any product candidate through the completion of a Phase 2 trial and we will provide advice on the clinical trial design and regulatory strategy. We have an option to license the product candidate until completion of the Phase 2 trial. If we exercise our option, we will pay Isis up to a $70.0 million license fee and assume global development, regulatory and commercialization responsibilities. Isis could receive up to another $130.0 million in milestone payments upon the achievement of certain regulatory milestones as well as royalties on future sales if we successfully develop the product candidate after option exercise.

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ISIS-DMPKRx

Under the terms of the June 2012 agreement for the DM1 candidate, we provided Isis with an upfront payment of $12.0 million and will make potential additional payments, prior to licensing, of up to $59.0 million based on the development of the selected product candidate. During 2014 and 2013, we made payments of $14.0 million and $10.0 million, respectively, to Isis related to the selection and advancement of ISIS-DMPKRx to treat DM1. Isis will be responsible for global development of any product candidate through the completion of a Phase 2 trial and we will provide advice on the clinical trial design and regulatory strategy. We also have an option to license the product candidate until completion of the Phase 2 trial. If we exercise our option, we will pay Isis up to a $70.0 million license fee and assume global development, regulatory and commercialization responsibilities. Isis could receive up to another $130.0 million in milestone payments upon the achievement of certain regulatory milestones as well as royalties on future sales if we successfully develop the product candidate after option exercise.

During the years ending December 31, 2014, 2013 and 2012, $10.9 million, $11.2 million and $22.0 million, respectively, were reflected within our consolidated statements of income.

ISIS-SMNRx

Under the terms of the January 2012 agreement for the antisense investigation drug, ISIS-SMNRx, we paid Isis $29.0 million as an upfront payment.

During 2014, we amended the agreement to adjust the amount of potential additional payments and terms of the exercise of our opt-in right to license ISIS-SMNRx. Consistent with the initial agreement, Isis remains responsible for conducting the pivotal/Phase 3 trials. We are providing input on the clinical trial design and regulatory strategy for the development of ISIS-SMNRx. During 2014, we made clinical trial payments of $57.3 million to Isis related to the advancement of the program. We are recognizing these payments as research and development expenses as the trial costs are incurred.

We may exercise our opt-in right upon completion of and data review of the first successful Phase 2/3 trial or completion of both Phase 2/3 trials. An amendment in December 2014 provided for additional opt-in scenarios, based on the filing or the acceptance of a new drug application or marketing authorization application with the FDA or EMA. Under the amended collaboration agreement, we may pay Isis up to approximately $325.0 million in a license fee and payments, including $100.0 million in payments associated with the clinical development of ISIS-SMNRx prior to licensing, a license fee and $150.0 million in milestone payments upon the achievement of certain regulatory milestones as well as royalties on future sales of ISIS-SMNRx if we successfully develop ISIS-SMNRx after option exercise.

During the years ending December 31, 2014, 2013 and 2012, $27.7 million, $13.6 million and $39.6 million, respectively, were reflected within our consolidated statements of income.

Eisai Co., Ltd.

BAN2401 and E2609 Collaboration

On March 4, 2014, we entered into a collaboration agreement with Eisai Co., Ltd. (Eisai) to jointly develop and commercialize two Eisai product candidates for the treatment of Alzheimer’s disease, BAN2401, a monoclonal antibody that targets amyloid-beta aggregates, and E2609, a BACE inhibitor, (Eisai Collaboration Agreement). Under the Eisai Collaboration Agreement, Eisai serves as the global operational and regulatory lead for both compounds and all costs, including research, development, sales and marketing expenses, will be shared equally by us and Eisai. Following marketing approval in major markets, such as the U.S., the E.U. and Japan, we will co-promote BAN2401 and E2609 with Eisai and share profits equally. In smaller markets, Eisai will distribute these products and pay us a royalty. The Eisai Collaboration Agreement also provides the parties with certain rights and obligations in the event of a change in control of either party.

The Eisai Collaboration Agreement also provides Eisai an option to jointly develop and commercialize BIIB037, our anti-amyloid beta antibody candidate for Alzheimer’s disease (BIIB037 Option) and an option to jointly develop and commercialize one of our anti-tau monoclonal antibodies (Anti-Tau Option). Upon exercise of each of the BIIB037 Option and the Anti-Tau Option, we will execute a separate collaboration agreement with Eisai on terms and conditions that mirror the Eisai Collaboration Agreement.

BIIB037 Option

Eisai may exercise the BIIB037 Option after either (i) completion of both the current Phase 1b clinical trial for BIIB037 and the current Phase 2 clinical trial for BAN2401 (Post-Phase 2 BIIIB037 Option), or (ii) completion of the Phase 3 clinical trial for BIIB037 (Post-Phase 3 BIIB037 Option) under certain conditions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The consideration we will receive if Eisai exercises the Post-Phase 2 BIIB037 Option depends on the development status of BAN2401. If BAN2401 is then determined to advance to Phase 3, we will be entitled to receive a single payment from Eisai upon regulatory approval of BIIB037 and we will no longer be required to pay Eisai any milestone payments for products containing BAN2401 under the Eisai Collaboration Agreement. If the development of BAN2401 has instead been terminated, we will receive development and commercial milestone payments from Eisai (Post-Phase 2 BIIB037 Milestone Payments). If Eisai does not exercise its Post-Phase 2 BIIB037 Option, we may elect to terminate the Eisai Collaboration Agreement with respect to BAN2401 but, under certain conditions, will have the option to reinstate the Eisai Collaboration Agreement after completion of a BAN2401 Phase 3 clinical trial.

If Eisai exercises its Post-Phase 3 BIIB037 Option, Eisai will be required to pay us all Phase 3 development and commercialization costs plus a mark-up and an amount equal to any unpaid Post-Phase 2 BIIB037 Milestone Payments that would have been payable if Eisai had exercised its Post-Phase 2 BIIB037 Option.

Anti-Tau Option

Eisai may exercise the Anti-Tau Option after completion of the Phase 1 clinical trial of such anti-tau monoclonal antibody. If Eisai exercises its Anti-Tau Option, we will receive an upfront payment from Eisai and will be entitled to additional development and commercial milestone payments.

Upon the effective date of the Eisai Collaboration Agreement, we paid Eisai $100.0 million and recorded $17.7 million, reflecting the fair value of the options granted under the Eisai Collaboration Agreement, both of which were classified as research and development expense within our consolidated statements of income. During the second quarter of 2014, Eisai exercised its option under the Eisai Collaboration Agreement to expand the joint development and commercialization activities to include Japan. Upon such exercise, we paid Eisai an additional $35.0 million, and recorded $21.6 million in the second quarter of 2014 as research and development expense within our consolidated statements of income, which represented the difference between the payment made upon exercise of the option and the fair value of that option recorded as research and development expense upon closing of the agreement in the first quarter of 2014. We could pay Eisai up to an additional $1.0 billion under the Eisai Collaboration Agreement based on the future achievement of certain development, regulatory and commercial milestones.

A summary of activity related to this collaboration is as follows:

	For the Years Ended December 31,
(In millions)	2014				2013				2012
Total development expense incurred by the collaboration	$	57.5			$	—			$	—
Biogen Idec’s share of development expense, excluding upfront and milestone payments, reflected within our consolidated statements of income	$	29.1			$	—			$	—

For additional information related to our obligations for the payment of milestones and royalties related to our development and commercialization of BIIB037 and certain anti-tau antibodies, please read about our relationship with Neurimmune in Note 19, Investments in Variable Interest Entities to these consolidated financial statements.

Sangamo BioSciences, Inc.

On February 22, 2014, we completed an exclusive worldwide research, development and commercialization collaboration and license agreement with Sangamo BioSciences, Inc. (Sangamo) under which both companies will develop and commercialize product candidates for the treatment of two inherited blood disorders, sickle cell disease and beta-thalassemia. The collaboration is currently in the research stage of development.

Under the terms of the agreement, we paid Sangamo an upfront payment of $20.0 million in cash, with additional payments of up to approximately $300.0 million based on the achievement of certain development, regulatory and commercial milestones, plus royalties based on sales. We recorded the $20.0 million upfront payment as research and development expense. Under this arrangement, Sangamo will be responsible for identifying a product candidate for the treatment of beta-thalassemia and advancing that candidate through a completed Phase 1 human clinical trial, at which point we would assume responsibility for development. We will jointly develop a sickle cell disease candidate through the potential filing of an investigative new drug application, after which we would assume clinical responsibilities. We will lead the global development and commercialization efforts and Sangamo will have the option to assume co-promotion responsibilities in the U.S.

During the year ended December 31, 2014, $28.9 million of expense was reflected within our consolidated statements of income.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Research and Discovery Arrangements

During the year ended December 31, 2014, we entered into several research, discovery and other related arrangements that resulted in $40.0 million recorded as research and development expense within our consolidated statements of income and $3.6 million recorded as prepaid research and development assets within our consolidated balance sheets.

During the year ended December 31, 2013, we entered into research, discovery and other arrangements that resulted in $35.0 million recorded as investments and other assets within our consolidated balance sheets and $4.0 million recorded as research and development expense within our consolidated statements of income.

These additional arrangements include the potential for future milestone payments based on clinical and commercial development over a period of several years.

Samsung Bioepis

In February 2012, we entered into a joint venture agreement with Samsung BioLogics Co. Ltd. (Samsung Biologics), establishing an entity, Samsung Bioepis, to develop, manufacture and market biosimilar pharmaceuticals. Samsung Biologics contributed 280.5 billion South Korean won (approximately $250.0 million) for an 85% stake in Samsung Bioepis and we contributed approximately 49.5 billion South Korean won (approximately $45.0 million) for the remaining 15% ownership interest. Our investment is limited to this contribution as we have no obligation to provide any additional funding. As of December 31, 2014, our ownership interest has decreased to approximately 10% as Samsung Bioepis has secured additional equity financing from Samsung Biologics and we have not participated in such financing. We maintain an option to purchase additional stock in Samsung Bioepis that would allow us to increase our ownership percentage up to 49.9%. The exercise of this option is within our control and is based on paying for 49.9% of the total investment made by Samsung Biologics into Samsung Bioepis in excess of what we have already contributed during the agreement plus interest.

On December 17, 2013, pursuant to our rights under the joint venture agreement with Samsung Biologics, we entered into an agreement with Samsung Bioepis to commercialize anti-TNF biosimilar product candidates in Europe and in the case of one anti-TNF biosimilar, Japan. Under the terms of this agreement, we paid $36.0 million, which was recorded as a research and development expense within our consolidated statements of income as the programs they relate to had not achieved regulatory approval. Samsung Bioepis is eligible to receive an additional $85.0 million in additional milestones related to clinical development and regulatory approval of the product candidates. Upon commercialization, there will be a 50% profit share with Samsung Bioepis.

Samsung Biologics has the power to direct the activities of Samsung Bioepis which will most significantly and directly impact its economic performance. We account for this investment under the equity method of accounting as we maintain the ability to exercise significant influence over Samsung Bioepis through a presence on the entity’s Board of Directors and our contractual relationship. Under the equity method, we record our original investment at cost and subsequently adjust the carrying value of our investments for our share of equity in the entity’s income or losses according to our percentage of ownership. If losses accumulate, we will record our share of losses until our investment has been fully depleted. Once our investment has been fully depleted, we will recognize additional losses only if we provide or are required to provide additional funding. As of December 31, 2014 and 2013, the carrying value of our investment in Samsung Bioepis totaled 9.1 billion and 25.2 billion South Korean won (approximately $8.6 million and $23.9 million), respectively, which is classified as a component of investments and other assets within our consolidated balance sheets. We recognize our share of the results of operations related to our investment in Samsung Bioepis one quarter in arrears when the results of the entity become available, which is reflected as equity in loss of investee, net of tax within our consolidated statements of income. During the years ended December 31, 2014, 2013 and 2012, we recognized a loss on our investment of $15.1 million, $17.2 million and $4.5 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Simultaneous with the formation of Samsung Bioepis, we entered into a license agreement, a technical development services agreement and a manufacturing agreement with Samsung Bioepis. Under the terms of the license agreement, we granted Samsung Bioepis an exclusive license to use, develop, manufacture, and commercialize biosimilar products created by Samsung Bioepis using Biogen Idec product-specific technology. In exchange, we will receive single digit royalties on all biosimilar products developed and commercialized by Samsung Bioepis. Under the terms of the technical development services agreement, we provide Samsung Bioepis technical development and technology transfer services, which include, but are not limited to, cell culture development, purification process development, formulation development, and analytical development. Under the terms of our manufacturing agreement, we manufacture clinical and commercial quantities of bulk drug substance of biosimilar products for Samsung Bioepis pursuant to contractual terms. Under limited circumstances, we may also supply Samsung Bioepis with quantities of drug product of biosimilar products for use in clinical trials through arrangements with third party contract manufacturers. For the years ended December 31, 2014, 2013 and 2012, we recognized $58.5 million, $43.1 million and $13.3 million, respectively, in other revenues in relation to these services, which is reflected as a component of other revenues within our consolidated statement of income.

21.	Litigation

’755 Patent Litigation

On May 28, 2010, Biogen Idec MA Inc. (BIMA) filed a complaint in the U.S. District Court for the District of New Jersey alleging infringement by Bayer Healthcare Pharmaceuticals Inc. (Bayer) (manufacturer, marketer and seller of BETASERON and manufacturer of EXTAVIA), EMD Serono, Inc. (manufacturer, marketer and seller of REBIF), Pfizer, Inc. (co-marketer of REBIF), and Novartis Pharmaceuticals Corp. (marketer and seller of EXTAVIA) of our U.S. Patent No. 7,588,755 (’755 Patent), which claims the use of interferon beta for immunomodulation or treating a viral condition, viral disease, cancers or tumors. The complaint seeks monetary damages, including lost profits and royalties. Bayer had previously filed a complaint against us in the same court, on May 27, 2010, seeking a declaratory judgment that it does not infringe the ’755 Patent and that the patent is invalid, and seeking monetary relief in the form of attorneys' fees, costs and expenses. The court has consolidated the two lawsuits, and we refer to the two actions as the “Consolidated ’755 Patent Actions.”

Bayer, Pfizer, Novartis and EMD Serono have all filed counterclaims in the Consolidated ’755 Patent Actions seeking declaratory judgments of patent invalidity and non-infringement, and seeking monetary relief in the form of costs and attorneys' fees, and EMD Serono and Bayer have each filed a counterclaim seeking a declaratory judgment that the ’755 Patent is unenforceable based on alleged inequitable conduct. Bayer has also amended its complaint to seek such a declaration. No trial date has been set.

Italian National Medicines Agency

In the fourth quarter of 2011, Biogen Idec Italia SRL received notice from the Italian National Medicines Agency (Agenzia Italiana del Farmaco or AIFA) that sales of TYSABRI after mid-February 2009 exceeded a reimbursement limit established pursuant to a Price Determination Resolution (Price Resolution) granted by AIFA in December 2006. On December 23, 2011, we filed an appeal in the Regional Administrative Tribunal of Lazio (Il Tribunale Amministrativo Regionale per il Lazio) in Rome seeking a ruling that the reimbursement limit in the Price Resolution should apply as written to only “the first 24 months” of TYSABRI sales, which ended in mid-February 2009. The appeal is still pending. Earlier this year AIFA approved a resolution affirming that that there is no reimbursement limit from and after February 2013. AIFA and Biogen Idec Italia SRL are discussing a possible resolution for the period from mid-February 2009 through January 2013.

Average Manufacturer Price Litigation

On September 6, 2011, we and several other pharmaceutical companies were served with a complaint originally filed under seal on October 28, 2008 in the United States District Court for the Eastern District of Pennsylvania by Ronald Streck on behalf of himself and the United States, 24 states and the District of Columbia (collectively the “States”). The complaint alleges that Biogen Idec violated the False Claims Act, 31 U.S.C. § 3729 et seq. and local statutory counterparts by under reporting Average Manufacturer Price (AMP) information to the Centers for Medicare and Medicaid Services. The United States and the States have declined to intervene. We believe we have good and valid defenses. We have not formed an opinion that an unfavorable outcome under the remaining claims is either “probable” or “remote”. Trial is scheduled for the first half of 2016.

Government Matters

We have learned that state and federal governmental authorities are investigating our sales and promotional practices and have received related subpoenas. We have also received a subpoena from the federal government for documents relating to our relationship with certain pharmacy benefit managers. We are cooperating with the government in these matters.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Qui Tam Litigation

In August, 2012, we learned that a relator, on behalf of the United States and certain states, filed a suit under seal on February 17, 2011 against us, Elan Corporation, plc, and Elan Pharmaceuticals, Inc. in the United States District Court for the Western District of Virginia. We have neither seen nor been served with the complaint, but understand that it was filed under the Federal False Claims Act.

Forward Pharma Litigation

On November 18, 2014 Forward Pharma A/S (“Forward Pharma”) filed suit against us in the Regional Court of Dusseldorf, Germany alleging that TECFIDERA infringes German Utility Model DE 20 2005 022 112 U1, which was registered on April 24, 2014, published on June 5, 2014 and expires in October 2015.

Forward Pharma seeks a declaration of infringement and a determination of damages. We believe that we have good and valid defenses to the complaint and will vigorously defend against it. We have not formed an opinion that an unfavorable outcome is either “probable” or “remote” and are unable to estimate the magnitude or range of any potential loss.

Product Liability and Other Legal Proceedings

We are also involved in product liability claims and other legal proceedings generally incidental to our normal business activities. While the outcome of any of these proceedings cannot be accurately predicted, we do not believe the ultimate resolution of any of these existing matters would have a material adverse effect on our business or financial condition.

22.	Commitments and Contingencies

Leases

We rent laboratory and office space and certain equipment under non-cancelable operating leases. These lease agreements contain various clauses for renewal at our option and, in certain cases, escalation clauses typically linked to rates of inflation. Rental expense under these leases, net of amounts recognized in relation to exiting our Weston, Massachusetts facility, which terminate at various dates through 2028, amounted to $62.4 million in 2014. Rent expense was $56.1 million in 2013 and $49.0 million in 2012. In addition to rent, the leases may require us to pay additional amounts for taxes, insurance, maintenance and other operating expenses.

As of December 31, 2014, minimum rental commitments under non-cancelable leases, net of income from subleases, for each of the next five years and total thereafter were as follows:

(In millions)	2015				2016				2017				2018				2019				Thereafter				Total
Minimum lease payments (1)	$	67.8			$	70.8			$	70.6			$	61.7			$	58.9			$	411.3			$	741.1
Less: income from subleases	(5.6		)		(6.0		)		(6.0		)		(6.3		)		(6.3		)		(35.2		)		(65.4		)
Net minimum lease payments	$	62.2			$	64.8			$	64.6			$	55.4			$	52.6			$	376.1			$	675.7

(1)

As a result of our decision to relocate our corporate headquarters to Cambridge, Massachusetts, we vacated part of our Weston, Massachusetts facility in the fourth quarter of 2013. We incurred a charge of $27.2 million in connection with this move. This charge represented our remaining lease obligation for the vacated portion of our Weston, Massachusetts facility, net of sublease income expected to be received. The term of our sublease to the vacated portion of our Weston, Massachusetts facility started in January 2014 and will continue through the remaining term of our lease agreement.

Under certain of our lease agreements, we are contractually obligated to return leased space to its original condition upon termination of the lease agreement. At the inception of a lease with such conditions, we record an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. In subsequent periods, for each such lease, we record interest expense to accrete the asset retirement obligation liability to full value and depreciate each capitalized asset retirement obligation asset, both over the term of the associated lease agreement. Our asset retirement obligations were not significant as of December 31, 2014 or 2013.

Tax Related Obligations

We exclude liabilities pertaining to uncertain tax positions from our summary of contractual obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of December 31, 2014, we have approximately $80.2 million of net liabilities associated with uncertain tax positions.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Funding Commitments

As of December 31, 2014, we have several on-going clinical studies in various clinical trial stages. Our most significant clinical trial expenditures are to CROs. The contracts with CROs are generally cancellable, with notice, at our option. We have recorded accrued expenses of approximately $41.6 million on our consolidated balance sheet for expenditures incurred by CROs as of December 31, 2014. We have approximately $472.3 million in cancellable future commitments based on existing CRO contracts as of December 31, 2014.

Contingent Development, Regulatory and Commercial Milestone Payments

Based on our development plans as of December 31, 2014, we have committed to make potential future milestone payments to third parties of up to approximately $2.8 billion as part of our various collaborations, including licensing and development programs. Payments under these agreements generally become due and payable only upon achievement of certain development, regulatory or commercial milestones. Because the achievement of these milestones had not occurred as of December 31, 2014, such contingencies have not been recorded in our financial statements. Amounts related to contingent milestone payments are not considered contractual obligations as they are contingent on the successful achievement of certain development, regulatory approval and commercial milestones.

TYSABRI Contingent Payments

On April 2, 2013, we acquired full ownership of all remaining rights to TYSABRI from Elan that we did not already own or control. Under the terms of the acquisition agreement, we are obligated to make contingent payments to Elan of 18% on annual worldwide net sales up to $2.0 billion and 25% on annual worldwide net sales that exceed $2.0 billion. Royalty payments to Elan and other third parties are recognized as cost of sales within our consolidated statements of income.

Contingent Consideration related to Business Combinations

In connection with our purchase of the noncontrolling interests in our joint venture investments in Biogen Dompé SRL and Biogen Dompé Switzerland GmbH and our acquisitions of Stromedix, Biogen Idec International Neuroscience GmbH (BIN) and Biogen Idec Hemophilia Inc. (BIH), we may pay up to approximately $850 million in remaining milestones based upon the achievement of certain events. These milestones may not be achieved.

As the acquisitions of the noncontrolling interests in our joint venture investments and our acquisitions of Stromedix and BIN, formerly Panima Pharmaceuticals AG, occurred after January 1, 2009, we record contingent consideration liabilities at their fair value on the acquisition date and revalue these obligations each reporting period. For additional information related to our acquisition of Stromedix please read Note 2, Acquisitions, to our consolidated financial statements included in this report.

BIH

In connection with our acquisition of BIH, formerly Syntonix, in January 2007, we agreed to pay up to an additional $80.0 million if certain milestone events associated with the development of BIH’s lead product, ALPROLIX are achieved. The first $40.0 million contingent payment was achieved in the first quarter of 2010. We paid an additional $20.0 million during the second quarter of 2014 as ALPROLIX was approved for the treatment of hemophilia B. A second $20.0 million contingent payment will occur if prior to the tenth anniversary of the closing date, a marketing authorization is granted by the EMA for ALPROLIX.

Fumapharm AG

In 2006, we acquired Fumapharm AG. As part of this acquisition we acquired FUMADERM and TECFIDERA (together, Fumapharm Products). We paid $220.0 million upon closing of the transaction and agreed to pay an additional $15.0 million if a Fumapharm Product was approved for MS in the U.S. or E.U. In the second quarter of 2013, we paid this $15.0 million contingent payment as TECFIDERA was approved in the U.S. for MS by the FDA. We are also required to make additional contingent payments to former shareholders of Fumapharm AG or holders of their rights based on the attainment of certain cumulative sales levels of Fumapharm Products and the level of total net sales of Fumapharm Products in the prior twelve month period, as defined in the acquisition agreement.

During 2014, we paid a $25.0 million contingent payment as we reached the $1.0 billion cumulative sales level related to the Fumapharm Products in 2013, a $150.0 million contingent payment as we reached the $2.0 billion cumulative sales level related to Fumapharm Products in the second quarter of 2014, a $200.0 million contingent payment as we reached the $3.0 billion cumulative sales level in the third quarter of 2014 and accrued $250.0 million upon reaching $4.0 billion in total cumulative sales of Fumapharm Products, in the fourth quarter of 2014.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We will owe an additional $300.0 million contingent payment for every additional $1.0 billion in cumulative sales level of Fumapharm Products reached if the prior 12 months sales of the Fumapharm Products exceed $3.0 billion, until such time as the cumulative sales level reaches $20.0 billion, at which time no further contingent payment shall be due. These payments will be accounted for as an increase to goodwill as incurred, in accordance with the accounting standard applicable to business combinations when we acquired Fumapharm. Any portion of the payment which is tax deductible will be recorded as a reduction to goodwill. Payments are due within 60 days following the end of the quarter in which the applicable cumulative sales level has been reached.

23.	Guarantees

As of December 31, 2014 and 2013, we did not have significant liabilities recorded for guarantees.

We enter into indemnification provisions under our agreements with other companies in the ordinary course of business, typically with business partners, contractors, clinical sites and customers. Under these provisions, we generally indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of our activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments we could be required to make under these indemnification provisions is unlimited. However, to date we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these agreements is minimal. Accordingly, we have no liabilities recorded for these agreements as of December 31, 2014 and 2013.

24.	Employee Benefit Plans

We sponsor various retirement and pension plans. Our estimates of liabilities and expenses for these plans incorporate a number of assumptions, including expected rates of return on plan assets and interest rates used to discount future benefits.

401(k) Savings Plan

We maintain a 401(k) Savings Plan which is available to substantially all regular employees in the U.S. over the age of 21. Participants may make voluntary contributions. We make matching contributions according to the 401(k) Savings Plan’s matching formula. All matching contributions and participant contributions vest immediately. The 401(k) Savings Plan also holds certain transition contributions on behalf of participants who previously participated in the Biogen, Inc. Retirement Plan. The expense related to our 401(k) Savings Plan primarily consists of our matching contributions.

Expense related to our 401(k) Savings Plan totaled $49.3 million, $39.3 million and $32.8 million for the years ended December 31, 2014, 2013 and 2012, respectively.

Deferred Compensation Plan

We maintain a non-qualified deferred compensation plan, known as the Supplemental Savings Plan (SSP), which allows a select group of management employees in the U.S. to defer a portion of their compensation. The SSP also provides certain credits to highly compensated U.S. employees, which are paid by the company. These credits are known as the Restoration Match. The deferred compensation amounts are accrued when earned. Such deferred compensation is distributable in cash in accordance with the rules of the SSP. Deferred compensation amounts under such plan as of December 31, 2014 and 2013 totaled approximately $105.2 million and $84.7 million, respectively, and are included in other long-term liabilities within the accompanying consolidated balance sheets. The SSP also holds certain transition contributions on behalf of participants who previously participated in the Biogen, Inc. Retirement Plan. The Restoration Match and participant contributions vest immediately. Distributions to participants can be either in one lump sum payment or annual installments as elected by the participants.

Pension Plans

Our retiree benefit plans include defined benefit plans for employees in our affiliates in Switzerland and Germany as well as other insignificant defined benefit plans in certain other countries in which we maintain an operating presence.

Our Swiss plan is a government-mandated retirement fund that provides employees with a minimum investment return. The minimum investment return is determined annually by Swiss government and was 1.75% in 2014 and 1.5% in 2013 and 2012, respectively. Under this plan, both we and certain of our employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. Employer contributions must be in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary, and gender. As of December 31, 2014 and 2013, the Plan had an unfunded net pension obligation of approximately $31.9 million and $22.6 million, respectively, and plan assets which totaled approximately $43.9 million and $38.1 million, respectively. In 2014, 2013 and 2012, we recognized expense totaling $9.8 million, $10.9 million and $3.8 million, respectively, related to our Swiss plan.

The obligations under the German plan are unfunded and totaled $24.8 million and $20.0 million as of December 31, 2014 and 2013, respectively. Net periodic pension cost related to the German plan totaled $3.5 million, $3.3 million and $1.9 million for the years ended December 31, 2014, 2013 and 2012, respectively.

25.	Segment Information

We operate as one operating segment, which is focused on discovering, developing, manufacturing and delivering therapies for neurological, autoimmune and hematologic disorders, and, therefore, our chief operating decision-maker manages the operations of our company as a single operating segment. Enterprise-wide disclosures about product revenues, other revenues and long-lived assets by geographic area and information relating to major customers are presented below. Revenues are primarily attributed to individual countries based on location of the customer or licensee.

Revenue by product is summarized as follows:

	For the Years Ended December 31,
	2014												2013												2012
(In millions)	United States				Rest of World				Total				United States				Rest of World				Total				United States				Rest of World				Total
Multiple Sclerosis (MS):
AVONEX	$	1,956.7			$	1,056.4			$	3,013.1			$	1,902.4			$	1,103.1			$	3,005.5			$	1,793.7			$	1,119.4			$	2,913.1
PLEGRIDY	27.8				16.7				44.5				—				—				—				—				—				—
TECFIDERA	2,426.6				482.6				2,909.2				864.4				11.7				876.1				—				—				—
TYSABRI	1,025.1				934.4				1,959.5				814.2				712.3				1,526.5				383.1				752.8				1,135.9
FAMPYRA	—				80.2				80.2				—				74.0				74.0				—				57.4				57.4
Hemophilia:
ALPROLIX	72.1				3.9				76.0				—				—				—				—				—				—
ELOCTATE	58.4				—				58.4				—				—				—				—				—				—
Other product revenues:
FUMADERM	—				62.5				62.5				—				60.2				60.2				—				59.7				59.7
Total product revenues	$	5,566.7			$	2,636.7			$	8,203.4			$	3,581.0			$	1,961.3			$	5,542.3			$	2,176.8			$	1,989.3			$	4,166.1

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Geographic Information

The following tables contain certain financial information by geographic area:

December 31, 2014 (In millions)	U.S.				Europe(1)				Germany				Asia				Other				Total
Product revenues from external customers	$	5,566.7			$	1,383.9			$	811.8			$	112.8			$	328.2			$	8,203.4
Revenues from unconsolidated joint business	$	1,117.1			$	7.7			$	—			$	—			$	70.6			$	1,195.4
Other revenues from external customers	$	212.6			$	31.6			$	1.8			$	58.5			$	—			$	304.5
Long-lived assets	$	1,055.5			$	701.9			$	2.5			$	2.6			$	3.2			$	1,765.7
December 31, 2013 (In millions)	U.S.				Europe(1)				Germany				Asia				Other				Total
Product revenues from external customers	$	3,581.0			$	1,170.2			$	417.7			$	93.2			$	280.2			$	5,542.3
Revenues from unconsolidated joint business	$	1,087.3			$	1.6			$	—			$	3.2			$	33.9			$	1,126.0
Other revenues from external customers	$	193.5			$	26.1			$	1.2			$	43.1			$	—			$	263.9
Long-lived assets	$	984.4			$	758.3			$	2.5			$	2.1			$	3.3			$	1,750.7
December 31, 2012 (In millions)	U.S.				Europe(1)				Germany				Asia				Other				Total
Product revenues from external customers	$	2,176.8			$	1,216.2			$	409.2			$	93.2			$	270.7			$	4,166.1
Revenues from unconsolidated joint business	$	1,033.3			$	14.3			$	—			$	27.5			$	62.8			$	1,137.9
Other revenues from external customers	$	170.2			$	27.9			$	1.1			$	13.3			$	—			$	212.5
Long-lived assets	$	996.6			$	738.6			$	1.9			$	2.9			$	2.2			$	1,742.2

(1)	Represents amounts related to Europe less those attributable to Germany.

Revenues from Unconsolidated Joint Business

Approximately 12%, 16% and 21% of our total revenues in 2014, 2013 and 2012, respectively, are derived from our joint business arrangement with Genentech. For additional information related to our collaboration with Genentech, please read Note 20, Collaborative and Other Relationships to these consolidated financial statements.

Significant Customers

We recorded revenue from two wholesalers accounting for 33% and 27% of gross product revenues in 2014, 32% and 24% of gross product revenues in 2013, and 20% and 10% of gross product revenues in 2012, respectively.

Other

As of December 31, 2014, 2013 and 2012, approximately $676.0 million, $731.1 million and $713.4 million, respectively, of our long-lived assets were related to our manufacturing facilities in Denmark. For 2014 compared to 2013, the decrease in the balance of our manufacturing facilities in Denmark was due to foreign currency exchange rates.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

26.	Quarterly Financial Data (Unaudited)

(In millions, except per share amounts)	First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Total Year
2014	(a)				(b) (c)				(b)				(b)
Product revenues	$	1,742.8			$	2,056.3			$	2,117.3			$	2,287.0			$	8,203.4
Unconsolidated joint business revenues	$	296.9			$	303.3			$	290.7			$	304.5			$	1,195.4
Other revenues	$	90.1			$	61.9			$	103.4			$	49.2			$	304.5
Total revenues	$	2,129.8			$	2,421.5			$	2,511.4			$	2,640.7			$	9,703.3
Gross profit (1)	$	1,850.5			$	2,129.6			$	2,208.8			$	2,343.4			$	8,532.3
Net income	$	479.7			$	723.1			$	856.1			$	882.6			$	2,941.6
Net income attributable to Biogen Idec Inc.	$	480.0			$	714.5			$	856.9			$	883.5			$	2,934.8
Basic earnings per share attributable to Biogen Idec Inc.	$	2.03			$	3.02			$	3.63			$	3.75			$	12.42
Diluted earnings per share attributable to Biogen Idec Inc.	$	2.02			$	3.01			$	3.62			$	3.74			$	12.37

(In millions, except per share amounts)	First Quarter				Second Quarter				Third Quarter				Fourth Quarter				Total Year
2013	(d)				(e)				(e) (f)				(e)
Product revenues	$	1,095.8			$	1,385.9			$	1,453.6			$	1,607.1			$	5,542.3
Unconsolidated joint business revenues	$	264.6			$	288.8			$	303.2			$	269.4			$	1,126.0
Other revenues	$	54.7			$	48.8			$	71.0			$	89.4			$	263.9
Total revenues	$	1,415.1			$	1,723.5			$	1,827.8			$	1,965.9			$	6,932.2
Gross profit (1)	$	1,281.4			$	1,492.8			$	1,593.1			$	1,707.3			$	6,074.5
Net income	$	426.7			$	490.7			$	487.6			$	457.3			$	1,862.3
Net income attributable to Biogen Idec Inc.	$	426.7			$	490.7			$	487.6			$	457.3			$	1,862.3
Basic earnings per share attributable to Biogen Idec Inc.	$	1.80			$	2.07			$	2.06			$	1.94			$	7.86
Diluted earnings per share attributable to Biogen Idec Inc.	$	1.79			$	2.06			$	2.05			$	1.92			$	7.81

(1) Gross profit is calculated as total revenues minus cost of sales, excluding amortization of acquired intangible assets.

Full year amounts may not sum due to rounding.

(a)	Net income and net income attributable to Biogen Idec Inc., for the first quarter of 2014, includes charges to research and development expense of $117.7 million recorded upon entering into the collaboration agreement with Eisai.

(b)	Product revenues and total revenues for the second, third and fourth quarters of 2014 includes net revenues related to ALPROLIX, ELOCTATE and PLEGRIDY. Commercial sales of ALPROLIX commenced in the second quarter of 2014 and commercial sales of ELOCTATE and PLEGRIDY commenced in the third quarter of 2014.

(c)	Product revenues and total revenues for the second quarter of 2014 includes the recognition of $53.5 million of revenue previously deferred in Italy relating to the pricing agreement with AIFA.

(d)	Our share of revenues from unconsolidated joint business reflects a charge of $41.5 million for damages and interest awarded to Hoechst in Genentech's arbitration with Hoechst for RITUXAN.

(e)	Product revenues and total revenues for the second, third and fourth quarters of 2013 includes 100% of net revenues related to sales of TYSABRI as a result of our acquisition of all remaining rights to TYSABRI from Elan on April 2, 2013 and net revenues related to sales of TECFIDERA, which was approved by the FDA in March 2013 and commenced commercial sales in April 2013.

(f)	Net income and net income attributable to Biogen Idec Inc., for the third quarter of 2013, includes a charge to research and development expense of $75.0 million related to an upfront payment made in connection with our collaboration agreement entered into with Isis.

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BIOGEN IDEC INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

27. Subsequent Events

Convergence Pharmaceuticals

On January 11, 2015, we announced that we plan to acquire Convergence Pharmaceuticals (Convergence), a clinical-stage biopharmaceutical company with a focus on developing ion channel-modulating product candidates for neuropathic pain. The acquisition will be centered on the development of Convergence’s Phase 2 clinical candidate (CNV1014802), which has demonstrated clinical activity in proof of concept studies for trigeminal neuralgia (TGN), a chronic orphan disease consisting of debilitating, episodic facial pain. Additionally, CNV1014802 has demonstrated proof of concept for treating pain associated with lumbosacral radiculopathy, more commonly known as sciatica, and has potential applicability in several other neuropathic pain states.

Under the terms of the transaction, we will pay Convergence shareholders an upfront payment of $200.0 million. Convergence shareholders are eligible to receive additional payments up to $475.0 million contingent on future milestones.

Completion of the transaction is subject to customary closing conditions, including antitrust clearance in the U.S. under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Biogen Idec Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, equity and cash flows present fairly, in all material respects, the financial position of Biogen Idec Inc. and its subsidiaries at December 31, 2014 and December 31, 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

February 4, 2015

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EXHIBIT INDEX

Exhibit No.		Description
2.1†		Asset Purchase Agreement among Biogen Idec International Holding Ltd., Elan Pharma International Limited and Elan Pharmaceuticals, Inc., dated as of February 5, 2013. Filed as Exhibit 2.1 to our Current Report on Form 8-K/A filed on February 12, 2013.
3.1		Amended and Restated Certificate of Incorporation, as amended. Filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.
3.2		Second Amended and Restated Bylaws, as amended. Filed as Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
4.1		Reference is made to Exhibit 3.1 for a description of the rights, preferences and privileges of our Series A Preferred Stock and Series X Junior Participating Preferred Stock.
4.2		Indenture between Biogen Idec and The Bank of New York Trust Company, N.A. dated as of February 26, 2008. Filed as Exhibit 4.1 to our Registration Statement on Form S-3 (File No. 333-149379).
4.3		First Supplemental Indenture between Biogen Idec and The Bank of New York Trust Company, N.A. dated as of March 4, 2008. Filed as Exhibit 4.1 to our Current Report on Form 8-K filed on March 4, 2008.
10.1		Credit Agreement among Biogen Idec, Bank of America, N.A. as administrative agent, swing line lender and L/C issuer and the other lenders party thereto. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.
10.2†		Expression Technology Agreement between Biogen Idec and Genentech. Inc. dated March 16, 1995. Filed as an exhibit to Biogen Idec’s Quarterly Report on Form 10-Q for the quarter ended March 31, 1995.
10.3		Letter Agreement between Biogen Idec and Genentech, Inc. dated May 21, 1996. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 6, 1996.
10.4†		Second Amended and Restated Collaboration Agreement between Biogen Idec and Genentech, Inc. dated as of October 18, 2010. Filed as Exhibit 10.5 to our Annual Report on Form 10-K for the year ended December 31, 2010.
10.5†		Letter agreement regarding GA101 financial terms between Biogen Idec and Genentech, Inc. dated October 18, 2010. Filed as Exhibit 10.6 to our Annual Report on Form 10-K for the year ended December 31, 2010.
10.6*		Biogen Idec Inc. 2008 Amended and Restated Omnibus Equity Plan. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.
10.7*		Form of performance unit award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.
10.8*		Form of market stock unit award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.
10.9*		Form of restricted stock unit award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 1, 2008.
10.10*		Form of nonqualified stock option award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.2 to our Current Report on Form 8-K filed on August 1, 2008.
10.11*		Form of cash-settled performance shares award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
10.12*		Form of performance shares award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.12 to our Annual Report on Form 10-K for the year ended December 31, 2013.
10.13*		Form of market stock unit award agreement under the Biogen Idec Inc. 2008 Omnibus Equity Plan. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2010.
10.14*		Biogen Idec Inc. 2006 Non-Employee Directors Equity Plan, as amended. Filed as Appendix A to our Definitive Proxy Statement on Schedule 14A filed on April 28, 2010.
10.15*		Amendment to Biogen Idec Inc. 2006 Non-Employee Directors Equity Plan dated June 1, 2011. Filed as Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011.
10.16*		Biogen Idec Inc. 2005 Omnibus Equity Plan. Filed as Appendix A to our Definitive Proxy Statement on Schedule 14A filed on April 15, 2005.

A- 1

Exhibit No.		Description
10.17*		Amendment No. 1 to the Biogen Idec Inc. 2005 Omnibus Equity Plan dated April 4, 2006. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
10.18*		Amendment No. 2 to the Biogen Idec Inc. 2005 Omnibus Equity Plan dated February 12, 2007. Filed as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007.
10.19*		Amendment to the Biogen Idec Inc. 2005 Omnibus Equity Plan dated April 18, 2008. Filed as Exhibit 10.7 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.
10.20*		Amendment to Biogen Idec Inc. 2005 Omnibus Equity Plan dated October 13, 2008. Filed as Exhibit 10.30 to our Annual Report on Form 10-K for the year ended December 31, 2008.
10.21*		Biogen Idec Inc. 2003 Omnibus Equity Plan. Filed as Exhibit 10.73 to our Current Report on Form 8-K filed on November 12, 2003.
10.22*		Amendment to Biogen Idec Inc. 2003 Omnibus Equity Plan. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.
10.23*		Amendment to Biogen Idec Inc. 2003 Omnibus Equity Plan dated April 18, 2008. Filed as Exhibit 10.6 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008.
10.24*		Amendment to Biogen Idec Inc. 2003 Omnibus Equity Plan dated October 13, 2008. Filed as Exhibit 10.34 to our Annual Report on Form 10-K for the year ended December 31, 2008.
10.25*		Biogen Idec Inc. 1995 Employee Stock Purchase Plan as amended and restated effective April 6, 2005. Filed as Appendix B to our Definitive Proxy Statement on Schedule 14A filed on April 15, 2005.
10.26*		Biogen Idec Inc. 2008 Performance-Based Management Incentive Plan. Filed as Appendix B to Biogen Idec’s Definitive Proxy Statement on Schedule 14A filed on May 8, 2008.
10.27*		Voluntary Executive Supplemental Savings Plan, as amended and restated effective January 1, 2004. Filed as Exhibit 10.13 to our Annual Report on Form 10-K for the year ended December 31, 2003.
10.28*		Supplemental Savings Plan, as amended and restated effective January 1, 2012. Filed as Exhibit 10.39 to our Annual Report on Form 10-K for the year ended December 31, 2011.
10.29*		Voluntary Board of Directors Savings Plan, as amended and restated effective January 1, 2012. Filed as Exhibit 10.40 to our Annual Report on Form 10-K for the year ended December 31, 2011.
10.30*		Biogen Idec Inc. Executive Severance Policy — U.S. Executive Vice President, as amended effective January 1, 2014. Filed as Exhibit 10.39 to our Annual Report on Form 10-K for the year ended December 31, 2013.
10.31*		Biogen Idec Inc. Executive Severance Policy — International Executive Vice President, as amended effective January 1, 2014. Filed as Exhibit 10.40 Annual Report on Form 10-K for the year ended December 31, 2013.
10.32*		Biogen Idec Inc. Executive Severance Policy — U.S. Senior Vice President, as amended effective October 13, 2008. Filed as Exhibit 10.53 to our Annual Report on Form 10-K for the year ended December 31, 2008.
10.33*		Biogen Idec Inc. Executive Severance Policy — International Senior Vice President, as amended effective October 13, 2008. Filed as Exhibit 10.54 to our Annual Report on Form 10-K for the year ended December 31, 2008.
10.34*		Annual Retainer Summary for Board of Directors. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2014.
10.35*		Form of indemnification agreement for directors and executive officers. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 7, 2011.
10.36*		Employment Agreement between Biogen Idec and George A. Scangos amended as of August 23, 2013. Filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 26, 2013.
10.37*		Letter regarding employment arrangement of Paul J. Clancy dated August 17, 2007. Filed as Exhibit 10.49 to our Annual Report on Form 10-K for the year ended December 31, 2007.
10.38*		Letter regarding employment arrangement of Douglas E. Williams dated December 7, 2010. Filed as Exhibit 10.57 to our Annual Report on Form 10-K for the year ended December 31, 2011.
10.39*		Letter regarding employment arrangement of Steven H. Holtzman dated November 19, 2010. Filed as Exhibit 10.58 to our Annual Report on Form 10-K for the year ended December 31, 2011.
10.40*		Letter regarding employment arrangement of Kenneth DiPietro dated December 12, 2011. Filed as Exhibit 10.49 to our Annual Report on Form 10-K for the year ended December 31, 2012.
10.41*		Letter regarding employment arrangement of Alfred Sandrock. Filed as Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

A- 2

Exhibit No.		Description
10.42*		Letter agreement regarding separation arrangement of Raymond Pawlicki dated November 5, 2013. Filed as Exhibit 10.51 to our Annual Report on Form 10-K for the year ended December 31, 2013.
10.43*+		Letter regarding employment arrangement of Adam Koppel.
10.44*+		Letter regarding employment arrangement of Adriana Karaboutis.
21		Subsidiaries. Filed as Exhibit 21 to our annual report on Form 10-K for the year ended December 31, 2012.
23+		Consent of PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm.
31.1+		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2+		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1++		Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101++		The following materials from Biogen Idec Inc.’s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity and (vi) Notes to Consolidated Financial Statements.

^	References to “our” filings mean filings made by Biogen Idec Inc. and filings made by IDEC Pharmaceuticals Corporation prior to the merger with Biogen, Inc. Unless otherwise indicated, exhibits were previously filed with the Securities and Exchange Commission under Commission File Number 0-19311 and are incorporated herein by reference.

*	Management contract or compensatory plan or arrangement.

†	Confidential treatment has been granted or requested with respect to portions of this exhibit.

+	Filed herewith.

+	+	Furnished herewith.

A- 3