SEC Info - Shire plc - ‘10-K’ for 12/31/09

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Shire plc – ‘10-K’ for 12/31/09 – ‘XML.R41’

On: Friday, 2/26/10, at 12:40pm ET · For: 12/31/09 · Accession #: 950103-10-520 · File #: 0-29630

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/26/10  Shire plc                         10-K       12/31/09   62:8.1M                                   Davis Polk & … LLP 01/FA

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   2.87M 
 2: EX-10.26    Material Contract                                   HTML     37K 
 3: EX-21       Subsidiaries List                                   HTML     47K 
 4: EX-23.1     Consent of Experts or Counsel                       HTML     19K 
 5: EX-23.2     Consent of Experts or Counsel                       HTML     19K 
 6: EX-31.1     Certification -- §302 - SOA'02                      HTML     26K 
 7: EX-31.2     Certification -- §302 - SOA'02                      HTML     26K 
 8: EX-32.1     Certification -- §906 - SOA'02                      HTML     20K 
47: XML         IDEA XML File -- Definitions and References          XML    131K 
55: XML         IDEA XML File -- Filing Summary                      XML     94K 
52: XML.R1      Document And Entity Information                      XML     89K 
53: XML.R2      Consolidated Balance Sheets                          XML    268K 
32: XML.R3      Consolidated Balance Sheets (Parentheticals)         XML     57K 
37: XML.R4      Consolidated Balance Sheets (Parentheticals in       XML     33K 
                GBP)                                                             
45: XML.R5      Consolidated Statements of Operations                XML    365K 
44: XML.R6      Consolidated Statements of Operations                XML     51K 
                (Parentheticals)                                                 
59: XML.R7      Consolidated Statement of Changes in Shareholders'   XML   1.03M 
                Equity                                                           
22: XML.R8      Consolidated Statements of Comprehensive Income      XML    122K 
43: XML.R9      Components of Accumulated Other Comprehensive        XML     51K 
                Income                                                           
20: XML.R10     Consolidated Statements of Comprehensive Income      XML     59K 
                (Parentheticals)                                                 
19: XML.R11     Consolidated Statements of Cash Flows                XML    545K 
31: XML.R12     Description Of Operations                            XML     35K 
49: XML.R13     Summary Of Significant Accounting Policies           XML     80K 
33: XML.R14     Business combinations                                XML     79K 
34: XML.R15     Termination costs                                    XML     38K 
41: XML.R16     Gain on sale of product rights                       XML     35K 
62: XML.R17     Reorganization costs                                 XML     43K 
29: XML.R18     Intergration and Acquisition costs                   XML     35K 
15: XML.R19     Accounts receivable, net                             XML     38K 
36: XML.R20     Inventories                                          XML     37K 
48: XML.R21     Assets held for sale                                 XML     35K 
25: XML.R22     Prepaid expenses and other current assets            XML     37K 
46: XML.R23     Investments                                          XML     40K 
35: XML.R24     Property Plant and Equipment, net                    XML     38K 
58: XML.R25     Goodwill                                             XML     39K 
51: XML.R26     Other intangible assets, net                         XML     43K 
38: XML.R27     Accounts payable and accrued expenses                XML     43K 
42: XML.R28     Other current liabilities                            XML     37K 
18: XML.R29     Long-term debt                                       XML     40K 
21: XML.R30     Other long-term debt                                 XML     36K 
26: XML.R31     Other non-current liabilities                        XML     37K 
30: XML.R32     Derivative instruments                               XML     45K 
40: XML.R33     Fair value measurement                               XML     53K 
50: XML.R34     Commitments and contingencies                        XML     56K 
17: XML.R35     Shareholders Equity                                  XML     41K 
23: XML.R36     Earnings per share                                   XML     52K 
54: XML.R37     Segmental reporting                                  XML     97K 
57: XML.R38     Interest expense                                     XML     36K 
39: XML.R39     Other income (expenses), net                         XML     39K 
60: XML.R40     Retirement benefits                                  XML     34K 
24: XML.R41     Taxation                                             XML     86K 
61: XML.R42     Share-based compensation plans                       XML     71K 
28: XML.R43     Restatement of previously issued financial           XML     35K 
                statements                                                       
16: XML.R44     Income Access Share Trust Financial Statements       XML     62K 
27: XML.R45     Valuation and Qualifying Accounts Schedule           XML     45K 
56: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    206K 
 9: EX-101.INS  XBRL Instance -- shpgf-20091231                      XML    826K 
11: EX-101.CAL  XBRL Calculations -- shpgf-20091231_cal              XML    203K 
12: EX-101.DEF  XBRL Definitions -- shpgf-20091231_def               XML     86K 
13: EX-101.LAB  XBRL Labels -- shpgf-20091231_lab                    XML    822K 
14: EX-101.PRE  XBRL Presentations -- shpgf-20091231_pre             XML    468K 
10: EX-101.SCH  XBRL Schema -- shpgf-20091231                        XSD     99K

‘XML.R41’ — Taxation

This Financial Report is an XBRL XML File.

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<div style="font-size:12pt">30. Taxation The components of pre tax income/(loss) from continuing operations are as follows: <table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td><td height="17" width="103" align="right">2007 </td></tr><tr><td height="17" width="414" align="left">Year to December 31,</td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td></tr><tr><td height="17" width="414" align="left">Republic of Ireland</td><td height="17" width="103" align="right">(232.3)</td><td height="17" width="103" align="right">(83.5)</td><td height="17" width="103" align="right">(99.5)</td></tr><tr><td height="17" width="414" align="left">UK</td><td height="17" width="103" align="right">62.8 </td><td height="17" width="103" align="right">39.2 </td><td height="17" width="103" align="right">94.7 </td></tr><tr><td height="17" width="414" align="left">US</td><td height="17" width="103" align="right">552.2 </td><td height="17" width="103" align="right">238.7 </td><td height="17" width="103" align="right">27.6 </td></tr><tr><td height="17" width="414" align="left">IPR&D</td><td height="17" width="103" align="right">(1.6)</td><td height="17" width="103" align="right">(263.1)</td><td height="17" width="103" align="right">(1,866.4)</td></tr><tr><td height="17" width="414" align="left">Other jurisdictions</td><td height="17" width="103" align="right">261.9 </td><td height="17" width="103" align="right">334.3 </td><td height="17" width="103" align="right">445.5 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">___________</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">643.0 </td><td height="17" width="103" align="right">265.6 </td><td height="17" width="103" align="right">(1,398.1)</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">___________</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr></table>The provision/(benefit) for income taxes by location of the taxing jurisdiction for the years to December 31, consisted of the following: <table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="414" align="left">Year to December 31,</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td><td height="17" width="103" align="right">2007 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="17" width="414" align="right"> </td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">___________</td></tr><tr><td height="17" width="414" align="left">Current income taxes:</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr><tr><td height="17" width="414" align="left">Republic of Ireland</td><td height="17" width="103" align="right"> - </td><td height="17" width="103" align="right"> - </td><td height="17" width="103" align="right">0.2 </td></tr><tr><td height="17" width="414" align="left">US federal tax</td><td height="17" width="103" align="right">154.3 </td><td height="17" width="103" align="right">12.0 </td><td height="17" width="103" align="right">84.5 </td></tr><tr><td height="17" width="414" align="left">US state and local taxes</td><td height="17" width="103" align="right">14.4 </td><td height="17" width="103" align="right">6.4 </td><td height="17" width="103" align="right">4.9 </td></tr><tr><td height="17" width="414" align="left">UK corporation tax</td><td height="17" width="103" align="right"> - </td><td height="17" width="103" align="right">0.3 </td><td height="17" width="103" align="right">20.3 </td></tr><tr><td height="17" width="414" align="left">Other </td><td height="17" width="103" align="right">16.8 </td><td height="17" width="103" align="right">(10.8)</td><td height="17" width="103" align="right">24.8 </td></tr><tr><td height="17" width="414" align="right"> </td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td></tr><tr><td height="17" width="414" align="left">Total current taxes</td><td height="17" width="103" align="right"> 185.5 </td><td height="17" width="103" align="right"> 7.9 </td><td height="17" width="103" align="right">134.7 </td></tr><tr><td height="17" width="414" align="right"> </td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left">Deferred taxes:</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="414" align="left">Republic of Ireland</td><td height="17" width="103" align="right">(1.0)</td><td height="17" width="103" align="right">(1.3)</td><td height="17" width="103" align="right">9.1 </td></tr><tr><td height="17" width="414" align="left">US federal tax</td><td height="17" width="103" align="right">(24.5)</td><td height="17" width="103" align="right">75.2 </td><td height="17" width="103" align="right">(91.4)</td></tr><tr><td height="17" width="414" align="left">US state and local taxes</td><td height="17" width="103" align="right">(32.2)</td><td height="17" width="103" align="right">(17.2)</td><td height="17" width="103" align="right">(5.2)</td></tr><tr><td height="17" width="414" align="left">UK corporation tax</td><td height="17" width="103" align="right">6.1 </td><td height="17" width="103" align="right">29.8 </td><td height="17" width="103" align="right">14.4 </td></tr><tr><td height="17" width="414" align="left">Other </td><td height="17" width="103" align="right">4.6 </td><td height="17" width="103" align="right">3.6 </td><td height="17" width="103" align="right">(6.1)</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td></tr><tr><td height="17" width="414" align="left">Total deferred taxes</td><td height="17" width="103" align="right">(47.0)</td><td height="17" width="103" align="right">90.1 </td><td height="17" width="103" align="right">(79.2)</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td></tr><tr><td height="17" width="414" align="left">Total income taxes(1)</td><td height="17" width="103" align="right">138.5 </td><td height="17" width="103" align="right">98.0 </td><td height="17" width="103" align="right">55.5 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td><td height="17" width="103" align="right">__________</td></tr></table>(1) Total income taxes relate solely to continuing operations as there is no tax provision/(benefit) relating to discontinued operations for the years to December 31, 2009, 2008 or 2007. The reconciliation of income/(loss) from continuing operations before income taxes, noncontrolling interests and equity in earnings of equity method investees at the statutory tax rate to the provision for income taxes is shown in the table below: <table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">Year to December 31,</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="left"> </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left"> </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td><td height="17" width="103" align="right">2007 </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left"> </td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="11" width="22" align="left"> </td><td height="11" width="397" align="right"> </td><td height="11" width="103" align="right">___________</td><td height="11" width="103" align="right">___________</td><td height="11" width="103" align="right">___________</td></tr><tr><td width="419" align="left" height="37" colspan="2">Income/(loss) from continuing operations before income taxes and equity in earnings of equity method investees </td><td height="37" width="103" align="right">643.0 </td><td height="37" width="103" align="right">265.6 </td><td height="37" width="103" align="right">(1,398.1)</td></tr><tr><td height="13" width="22" align="left"> </td><td height="13" width="397" align="right"> </td><td height="13" width="103" align="right">___________</td><td height="13" width="103" align="right">___________</td><td height="13" width="103" align="right">___________</td></tr><tr><td width="419" align="left" height="17" colspan="2">Statutory tax rate(1) (2)</td><td height="17" width="103" align="right">25.0% </td><td height="17" width="103" align="right">25.0% </td><td height="17" width="103" align="right">30.0% </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td width="419" align="left" height="17" colspan="2">Adjustments to derive effective rate: </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td width="419" align="left" height="17" colspan="2">Non-deductible items: </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td width="419" align="left" height="17" colspan="2">IPR&D </td><td height="17" width="103" align="right"> - </td><td height="17" width="103" align="right">12.1% </td><td height="17" width="103" align="right">(40.0%)</td></tr><tr><td width="419" align="left" height="17" colspan="2">Other permanent differences:</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">US Research and development credit</td><td height="17" width="103" align="right">(5.2%)</td><td height="17" width="103" align="right">(9.1%)</td><td height="17" width="103" align="right">2.0% </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">Effect of the convertible bond</td><td height="17" width="103" align="right">2.0% </td><td height="17" width="103" align="right">(5.0%)</td><td height="17" width="103" align="right">0.5% </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">Intangible asset amortization(3)</td><td height="17" width="103" align="right">0.1% </td><td height="17" width="103" align="right">(6.5%)</td><td height="17" width="103" align="right">1.5% </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">Disposals not subject to tax</td><td height="17" width="103" align="right"> - </td><td height="17" width="103" align="right">-</td><td height="17" width="103" align="right">2.2% </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">Intra-group items(4)</td><td height="17" width="103" align="right">(11.8%)</td><td height="17" width="103" align="right">6.2% </td><td height="17" width="103" align="right">0.6% </td></tr><tr><td height="17" width="22" align="left"> </td><td height="17" width="397" align="left">Other permanent items</td><td height="17" width="103" align="right">2.2% </td><td height="17" width="103" align="right">1.4% </td><td height="17" width="103" align="right">(0.2%)</td></tr><tr><td width="419" align="left" height="17" colspan="2">Other items: </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td width="419" align="left" height="17" colspan="2">Change in valuation allowance </td><td height="17" width="103" align="right">1.3% </td><td height="17" width="103" align="right">12.4% </td><td height="17" width="103" align="right">0.3% </td></tr><tr><td width="419" align="left" height="17" colspan="2">Difference in taxation rates </td><td height="17" width="103" align="right">8.5% </td><td height="17" width="103" align="right">3.1% </td><td height="17" width="103" align="right">1.3% </td></tr><tr><td width="419" align="left" height="17" colspan="2">Change in provisions for uncertain tax positions </td><td height="17" width="103" align="right">2.3% </td><td height="17" width="103" align="right">1.9% </td><td height="17" width="103" align="right">(2.7%)</td></tr><tr><td width="419" align="left" height="17" colspan="2">Prior year adjustment </td><td height="17" width="103" align="right">(2.7%)</td><td height="17" width="103" align="right">(9.2%)</td><td height="17" width="103" align="right">0.8% </td></tr><tr><td width="419" align="left" height="17" colspan="2">Change in tax rates </td><td height="17" width="103" align="right">1.9% </td><td height="17" width="103" align="right">(0.2%)</td><td height="17" width="103" align="right">(0.5%)</td></tr><tr><td width="419" align="left" height="17" colspan="2">Other </td><td height="17" width="103" align="right">(2.1%)</td><td height="17" width="103" align="right">4.8% </td><td height="17" width="103" align="right">0.2% </td></tr><tr><td height="13" width="22" align="left"> </td><td height="13" width="397" align="left"> </td><td height="13" width="103" align="right">___________</td><td height="13" width="103" align="right">___________</td><td height="13" width="103" align="right">___________</td></tr><tr><td width="419" align="left" height="17" colspan="2">Provision for income taxes on continuing operations </td><td height="17" width="103" align="right">21.5% </td><td height="17" width="103" align="right">36.9% </td><td height="17" width="103" align="right">(4.0%)</td></tr><tr><td height="10" width="22" align="left"> </td><td height="10" width="397" align="left"> </td><td height="10" width="103" align="right">___________</td><td height="10" width="103" align="right">___________</td><td height="10" width="103" align="right">___________</td></tr></table> (1) In addition to being subject to the Irish Corporation tax rate of 25% (2007: UK Corporation tax rate of 30%), in 2009 the Company is also subject to income tax in other territories in which the Company operates, including: Canada (19.5%); France (33.3%); Germany (15%); Italy (27.5%); Malta (35%); the Netherlands (25.5%); Spain (30%); Sweden (28%); Switzerland (8.5%); United Kingdom (28.5%) and the US (35%). The rates quoted represent the headline federal income tax rates in each territory, and do not include any state taxes or equivalents or surtaxes or other taxes charged in individual territories, and do not purport to represent the effective tax rate for the Company in each territory. (2) During 2008 Shire introduced a new holding company resident in the Republic of Ireland, as a result the reconciliation of income from continuing operations before income taxes, noncontrolling interests and equity in earnings of equity method investees for the year to December 31, 2008 has been prepared using the Irish non-trading corporation tax rate of 25% which is the rate applicable to Shire plc. In 2007 the reconciliation of income from continuing operations before income taxes, noncontrolling interests and equity in earnings of equity method investees was prepared using the UK corporation tax rate of 30%. (3) The permanent difference results from tax deductible amortization available following inter-company asset transfers for which the recognition of a deferred tax asset is prohibited. (4) Intra-group items principally relate to the effect of inter-company dividends, capital receipts (either taxable or non-taxable) and other intra-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Company’s consolidated income/(loss) from continuing operations before income taxes, noncontrolling interests and equity in earnings of equity method investees. Provisions for uncertain tax positions The Company files income tax returns in the Republic of Ireland, the UK, the US (both federal and state) and various other jurisdictions (see footnote (1) to the table above for major jurisdictions). With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 1999. Tax authorities in various jurisdictions are in the process of auditing the Company’s tax returns for fiscal periods from 1999; these tax audits cover a range of issues, including transfer pricing, potential restrictions on the utilization of net operating losses, potential taxation of overseas dividends and controlled foreign companies’ rules. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="19" width="414" align="left"> </td><td height="19" width="103" align="right">2009 </td><td height="19" width="103" align="right">2008 </td><td height="19" width="103" align="right">2007 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td></tr><tr><td height="17" width="414" align="left">Balance at January 1</td><td height="17" width="103" align="right">228.7 </td><td height="17" width="103" align="right">292.2 </td><td height="17" width="103" align="right">234.4 </td></tr><tr><td height="17" width="414" align="left">Increases based on tax positions related to the current year</td><td height="17" width="103" align="right">4.2 </td><td height="17" width="103" align="right">30.5 </td><td height="17" width="103" align="right">25.6 </td></tr><tr><td height="17" width="414" align="left">Reductions based on tax positions taken in the current year</td><td height="17" width="103" align="right">(0.2)</td><td height="17" width="103" align="right">-</td><td height="17" width="103" align="right">(12.5)</td></tr><tr><td height="17" width="414" align="left">Increases for tax positions taken in prior years</td><td height="17" width="103" align="right">25.2 </td><td height="17" width="103" align="right">3.9 </td><td height="17" width="103" align="right">51.7 </td></tr><tr><td height="18" width="414" align="left">Reductions for tax positions taken in prior years(1)</td><td height="18" width="103" align="right">(19.4)</td><td height="18" width="103" align="right">(17.4)</td><td height="18" width="103" align="right">(10.4)</td></tr><tr><td height="17" width="414" align="left">Decreases resulting from settlements with the taxing authorities</td><td height="17" width="103" align="right">(16.1)</td><td height="17" width="103" align="right">(16.6)</td><td height="17" width="103" align="right">-</td></tr><tr><td height="17" width="414" align="left">Reductions as a result of expiration of the statute of limitations</td><td height="17" width="103" align="right"> - </td><td height="17" width="103" align="right">(13.8)</td><td height="17" width="103" align="right">(38.3)</td></tr><tr><td height="18" width="414" align="left">Foreign currency translation adjustments(2)</td><td height="18" width="103" align="right">31.6 </td><td height="18" width="103" align="right">(50.1)</td><td height="18" width="103" align="right">41.7 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td></tr><tr><td height="18" width="414" align="left">Balance at December 31(3)</td><td height="18" width="103" align="right">254.0 </td><td height="18" width="103" align="right">228.7 </td><td height="18" width="103" align="right">292.2 </td></tr><tr><td height="17" width="414" align="left"> </td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td><td height="17" width="103" align="right">___________</td></tr></table>(1) Included within this amount is $nil (2008: increase of $3.2 million, 2007: a reduction of $4.0 million) which affected the purchase price allocation of New River (2) Recognized within Other Comprehensive Income (3) The full amount of which would affect the effective rate if recognized The Company considers it reasonably possible that the total amount of unrecognized tax benefits recorded at December 31, 2009 could decrease by approximately $17 million in the next twelve months as a result of the conclusion of audits currently being conducted by various tax authorities. While tax audits remain open, the Company also considers it reasonably possible that issues may be raised by tax authorities resulting in increases to the balance of unrecognized tax benefits, however an estimate of such an increase cannot be made. The Company is required in certain tax jurisdictions to make advance deposits to tax authorities on receipt of a tax assessment. These payments have been offset against the income tax liability within the balance sheet but have not reduced the provision for unrecognized tax benefits. The Company recognizes interest and penalties accrued related to unrecognized tax benefits within income taxes. During the years ended December 31, 2009, 2008 and 2007, the Company recognized $21.3 million, $26.1 million and $18.0 million in interest and penalties and the Company had a liability of $111.5 million and $76.2 million for the payment of interest and penalties accrued at December 31, 2009 and 2008, respectively. Deferred taxes The significant components of deferred tax assets and liabilities and their balance sheet classifications, as at December 31, are as follows: <table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">December 31,</td><td height="17" width="103" align="right">December 31,</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left">Deferred tax assets:</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="512" align="left">Deferred revenue</td><td height="17" width="103" align="right">24.6 </td><td height="17" width="103" align="right">9.1 </td></tr><tr><td height="17" width="512" align="left">Inventory & warranty provisions</td><td height="17" width="103" align="right">28.4 </td><td height="17" width="103" align="right">26.4 </td></tr><tr><td height="17" width="512" align="left">Losses carried forward (including tax credits)</td><td height="17" width="103" align="right">278.5 </td><td height="17" width="103" align="right">295.0 </td></tr><tr><td height="17" width="512" align="left">Provisions for product returns and doubtful accounts</td><td height="17" width="103" align="right">66.9 </td><td height="17" width="103" align="right">54.7 </td></tr><tr><td height="17" width="512" align="left">Restructuring</td><td height="17" width="103" align="right">1.5 </td><td height="17" width="103" align="right">2.0 </td></tr><tr><td height="17" width="512" align="left">Intangible assets</td><td height="17" width="103" align="right">17.8 </td><td height="17" width="103" align="right">17.7 </td></tr><tr><td height="17" width="512" align="left">Share-based compensation</td><td height="17" width="103" align="right">45.0 </td><td height="17" width="103" align="right">38.7 </td></tr><tr><td height="17" width="512" align="left">Excess of tax value over book value of assets</td><td height="17" width="103" align="right">26.4 </td><td height="17" width="103" align="right">8.7 </td></tr><tr><td height="17" width="512" align="left">Other</td><td height="17" width="103" align="right">26.1 </td><td height="17" width="103" align="right">19.4 </td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left">Gross deferred tax assets</td><td height="17" width="103" align="right">515.2 </td><td height="17" width="103" align="right">471.7 </td></tr><tr><td height="17" width="512" align="left">Less: valuation allowance</td><td height="17" width="103" align="right">(149.2)</td><td height="17" width="103" align="right">(119.3)</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">366.0 </td><td height="17" width="103" align="right">352.4 </td></tr><tr><td height="17" width="512" align="left">Deferred tax liabilities:</td><td height="17" width="103" align="right"> </td><td height="17" width="103" align="right"> </td></tr><tr><td height="17" width="512" align="left">Intangible assets</td><td height="17" width="103" align="right">(448.4)</td><td height="17" width="103" align="right">(503.7)</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left">Net deferred tax liabilities</td><td height="17" width="103" align="right">(82.4)</td><td height="17" width="103" align="right">(151.3)</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr><tr><td height="17" width="512" align="left">Balance sheet classifications:</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr><tr><td height="17" width="512" align="left">Deferred tax assets - current</td><td height="17" width="103" align="right">135.8 </td><td height="17" width="103" align="right">89.5 </td></tr><tr><td height="17" width="512" align="left">Deferred tax assets - non-current</td><td height="17" width="103" align="right">79.0 </td><td height="17" width="103" align="right">118.1 </td></tr><tr><td height="17" width="512" align="left">Deferred tax liabilities - current</td><td height="17" width="103" align="right">(2.9)</td><td height="17" width="103" align="right">(10.9)</td></tr><tr><td height="17" width="512" align="left">Deferred tax liabilities - non-current</td><td height="17" width="103" align="right">(294.3)</td><td height="17" width="103" align="right">(348.0)</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">(82.4)</td><td height="17" width="103" align="right">(151.3)</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr></table>During the year to December 31, 2009 the net deferred tax liability has decreased primarily as a result of: a reduction in deferred tax liabilities on intangible assets acquired through business combinations; the benefit of a change in the effective State tax rate following a change in Massachusetts state tax law on the net state deferred tax balances; and increases in the excess of tax over book value of assets following the capitalization of R&D payments for tax purposes. At December 31, 2009, the Company had a valuation allowance of $149.2 million (2008: $119.3 million) to reduce its deferred tax assets to estimated realizable value. These valuation allowances related primarily to operating loss, capital loss and tax-credit carry-forwards in Ireland (2009: $56.3 million, 2008 $42.0 million); the US (2009: $40.6 million, 2008: $65.5 million); Germany (2009: $24.2 million, 2008: $nil); and other foreign tax jurisdictions (2009: $28.1 million, 2008: $11.8 million). The net increase in valuation allowances of $29.9 million is principally due to an increase of $40.2 million and $20.7 million in respect of losses and other temporary differences in European jurisdictions and US affiliates outside the Company’s US consolidated tax group, respectively, as the Company’s management considers that there is insufficient future taxable income, taxable temporary differences and feasible tax-planning strategies to overcome cumulative losses and therefore it is more likely than not that the relevant deferred tax assets would not be realized. This increase is partially offset by a decrease in valuation allowances relating to state tax credits and loss carry forwards of $31.2 million following Massachusetts state tax changes in 2009. At December 31, 2009, based upon a consideration in combination of the profit history of the relevant affiliates, projections of future taxable income over the periods in which temporary differences are anticipated to reverse, any restrictions on uses of loss carryforwards and prudent and feasible tax-planning strategies, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the valuation allowances. However, the amount of the deferred tax asset considered realizable could be adjusted in the future if these factors are revised in future periods. The approximate NOLs, capital losses and tax credit carry-forwards as at December 31, are as follows:<table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">2009 </td><td height="17" width="103" align="right">2008 </td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="right">$’M</td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left">US federal tax NOLs</td><td height="17" width="103" align="right">31.2 </td><td height="17" width="103" align="right">-</td></tr><tr><td height="17" width="512" align="left">US state tax NOLs</td><td height="17" width="103" align="right">57.0 </td><td height="17" width="103" align="right">94.2 </td></tr><tr><td height="17" width="512" align="left">UK NOLs</td><td height="17" width="103" align="right">103.3 </td><td height="17" width="103" align="right">114.0 </td></tr><tr><td height="17" width="512" align="left">Republic of Ireland NOLs</td><td height="17" width="103" align="right">319.9 </td><td height="17" width="103" align="right">238.4 </td></tr><tr><td height="17" width="512" align="left">Foreign tax jurisdictions</td><td height="17" width="103" align="right">168.4 </td><td height="17" width="103" align="right">88.7 </td></tr><tr><td height="17" width="512" align="left">R&D tax credits </td><td height="17" width="103" align="right">124.6 </td><td height="17" width="103" align="right">208.1 </td></tr><tr><td height="17" width="512" align="left">Capital losses</td><td height="17" width="103" align="right">-</td><td height="17" width="103" align="right">27.3 </td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="right">____________</td><td height="17" width="103" align="right">____________</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr><tr><td width="718" align="left" height="17" colspan="3">The NOLs, capital losses and tax credit carry-forwards shown above have the following expiration dates:</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="left"> </td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">December 31,</td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">2009 </td></tr><tr><td height="17" width="512" align="left"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">$’M</td></tr><tr><td height="17" width="512" align="right"> </td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">___________</td></tr><tr><td height="17" width="512" align="left">Within 1 year</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">10.1 </td></tr><tr><td height="17" width="512" align="left">Within 1 to 2 years</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">4.3 </td></tr><tr><td height="17" width="512" align="left">Within 2 to 3 years</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">2.9 </td></tr><tr><td height="17" width="512" align="left">Within 3 to 4 years</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">-</td></tr><tr><td height="17" width="512" align="left">Within 4 to 5 years</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">0.3 </td></tr><tr><td height="17" width="512" align="left">Within 5 to 6 years</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">1.7 </td></tr><tr><td height="17" width="512" align="left">After 6 years</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">362.0 </td></tr><tr><td height="17" width="512" align="left">Indefinitely</td><td height="17" width="103" align="left"> </td><td height="17" width="103" align="right">423.1 </td></tr></table>At December 31, 2009 the Company had not recorded deferred taxes on approximately $6.2 billion (2008: $3.7 billion) of un-remitted earnings of the Company’s foreign subsidiaries. At December 31, 2009 these earnings are expected to be permanently reinvested overseas. It is not practical to compute the estimated deferred tax liability on these earnings.</div>

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<NonNumericTextHeader> 30. TaxationThe components of pre tax income/(loss) from continuing operations are as </NonNumericTextHeader>

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2 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/25/10  SEC                               UPLOAD¶     9/11/17    1:21K  Shire plc
 4/14/10  SEC                               UPLOAD¶     9/11/17    1:31K  Shire plc

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Filing Submission 0000950103-10-000520 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Shire plc – ‘10-K’ for 12/31/09 – ‘XML.R41’

On: Friday, 2/26/10, at 12:40pm ET · For: 12/31/09 · Accession #: 950103-10-520 · File #: 0-29630

Previous ‘10-K’: ‘10-K’ on 2/27/09 for 12/31/08 · Next: ‘10-K’ on 2/23/11 for 12/31/10 · Latest: ‘10-K’ on 2/20/18 for 12/31/17 · 2 References: By: SEC – ‘UPLOAD’ on 5/25/10 By: SEC – ‘UPLOAD’ on 4/14/10

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘XML.R41’ — Taxation

This Financial Report is an XBRL XML File.

2 Subsequent Filings that Reference this Filing

Previous ‘10-K’: ‘10-K’ on 2/27/09 for 12/31/08 · Next: ‘10-K’ on 2/23/11 for 12/31/10 · Latest: ‘10-K’ on 2/20/18 for 12/31/17 · 2 References:

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents