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Roche Holdings, Inc. Annual Report 2010


Roche Holdings, Inc. Annual Report 2010

Management Report and Consolidated Financial Statements for the year ended on December 31, 2010

Annual Report 2010 - Roche Holdings, Inc. Consolidated Financial Statements


Management Report

1. Review of the twelve months ended December 31, 2010 Important events In 2010 the Roche Holdings, Inc. (RHI) Group achieved a solid operating performance. Sales increased by 1% to $17.1 billion as the underlying growth of both the Pharmaceuticals and Diagnostics Division compensated for the expected decline in Tamiflu sales and the initial impacts of the U.S. healthcare reforms. Effective March 26, 2009 the RHI Group obtained full ownership of Genentech, Inc. and substantially completed the relating integration and restructuring activities in 2010. Restructuring expenses of $0.4 billion (2009: $1.9 billion) were incurred. In 2010, the RHI Goup continued to pay down the debt which had been issued to finance the Genentech transaction. A total of $8.2 billion of debt was repaid, which includes the early redemption of 2.5 billion of notes in September 2010. In addition, the RHI Group resolved to early redeem $1.0 billion of notes maturing in March 2014. These notes will be redeemed on March 24, 2011. On November 17, 2010 the Roche Group announced the details of its global ‘Operational Excellence’ program, which is a proactive and comprehensive initiative to reinforce the Roche Group’s long-term innovation capability in the face of increased business challenges including pricing pressures in the United States and elsewhere. In the United States, implementation plans include reducing the work force by 3,550 positions and the main areas affected are in manufacturing, sales and marketing, product development as well as research and early development. This initiative is scheduled to be implemented in 2011 and 2012. Initial charges of $0.4 billion were included in the 2010...