AstraZeneca Annual Report and Form 20-F Information 2011

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RiskEconomic and financial risks continuedLimited third party insurance coverageRecent insurance loss experience in our industry, including product liability exposures, hasincreased the cost of, and narrowed the coverage afforded by, pharmaceutical companies’product liability insurance. To contain insurance costs in recent years, we have continued toadjust our coverage profile, accepting a greater degree of uninsured exposure. The Group hasnot held product liability insurance since February 2006. In addition, where claims are madeunder insurance policies, insurers may reserve the right to deny coverage on various grounds.TaxationThe integrated nature of our worldwide operations can produce conflicting claims from revenueauthorities as to the profits to be taxed in individual territories.The majority of the jurisdictions in which we operate have double tax treaties with other foreignjurisdictions, which enable us to ensure that our revenues and capital gains do not incur adouble tax charge.PensionsOur pension obligations are backed by assets invested across the broad investment market.Our most significant obligations relate to the UK pension fund.ImpactIf such denial of coverage is ultimately upheld, thiscould result in material additional charges to ourearnings. An example of a dispute with insurersrelating to the availability of insurance coverage andin relation to which costs incurred by the Group maynot ultimately be recovered through such coverageis included in Note 25 to the Financial Statements inthe Seroquel product liability section on page 187.ImpactThe resolution of these disputes can result in areallocation of profits between jurisdictions and anincrease or decrease in related tax costs, and hasthe potential to affect our cash flows and EPS.Claims, regardless of their merits or their outcome,are costly, divert management attention and mayadversely affect our reputation.If any of these double tax treaties should bewithdrawn or amended, especially in a territorywhere a member of the Group is involved in ataxation dispute with a tax authority in relation tocross-border transactions, such withdrawal oramendment could materially adversely affect ourfinancial condition and results of operations, ascould a negative outcome of a tax dispute or afailure by the tax authorities to agree throughcompetent authority proceedings. See the Financialrisk management policies section on page 93 fortax risk management policies and Note 25 to theFinancial Statements on page 189 for details ofcurrent tax disputes.ImpactSustained falls in these asset values will put a strainon funding which may result in requirements foradditional cash, restricting cash available forstrategic business growth. Similarly, if the liabilitiesrise as a result of a sustained low interest rateenvironment, there will be a strain on funding fromthe business. The likely increase in the IAS 19accounting deficit generated by any of these factorsmay cause the ratings agencies to review our creditrating, with the potential to negatively affect ourability to raise debt. See Note 18 to the FinancialStatements from page 165 for further details of theGroup’s pension obligations.138 RiskAstraZeneca Annual Report and Form 20-F Information 2011
Financial Statements140 Preparation of the Financial Statements and Directors’ Responsibilities140 Directors’ Responsibilities for, and Report on, Internal Control over Financial Reporting141 Auditor’s Reports on the Financial Statements and on Internal Control over FinancialReporting (Sarbanes‐Oxley Act Section 404)141 Independent Auditor’s Report to the Members of AstraZeneca PLC142 Consolidated Statement of Comprehensive Income143 Consolidated Statement of Financial Position144 Consolidated Statement of Changes in Equity145 Consolidated Statement of Cash Flows146 Group Accounting Policies150 Notes to the Group Financial Statements150 1 Product revenue information151 2 Operating profit152 3 Finance income and expense152 4 Taxation154 5 Earnings per $0.25 Ordinary Share154 6 Segment information156 7 Property, plant and equipment157 8 Goodwill158 9 Intangible assets160 10 Other investments160 11 Inventories160 12 Trade and other receivables160 13 Cash and cash equivalents161 14 Interest-bearing loans and borrowings161 15 Financial instruments164 16 Trade and other payables164 17 Provisions for liabilities and charges165 18 Post-retirement benefits169 19 Reserves170 20 Share capital of the Company170 21 Dividends to shareholders170 22 Acquisitions and disposals of business operations171 23 Financial risk management objectives and policies176 24 Employee costs and share plans for employees181 25 Commitments and contingent liabilities190 26 Leases190 27 Statutory and other information191 Principal Subsidiaries192 Independent Auditor’s Report to the Members of AstraZeneca PLC193 Company Balance Sheet194 Company Accounting Policies195 Notes to the Company Financial Statements195 1 Fixed asset investments195 2 Non-trade creditors195 3 Loans196 4 Reserves196 5 Reconciliation of movement in shareholders’ funds196 6 Share capital197 7 Litigation and environmental liabilities197 8 Statutory and other information198 Group Financial RecordFinancial StatementsAstraZeneca Annual Report and Form 20-F Information 2011Financial Statements 139
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healthAstraZeneca Annual Reportand
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Financial summary$33.6bnSales down
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China: We announcedour decision to
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OverviewOperational overview7979 pr
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Chairman’s StatementI would like
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Chief Executive Officer’s ReviewA
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The process of getting a drug to ma
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OverviewnovationInnovation drives p
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Our Strategy and PerformanceMore pe
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Using the full range of innovative
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Our strategyMissionto make the most
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Our strategic priorities to 2014Our
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Our performance in 2011Our performa
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Business shapePeopleResponsible bus
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Strategy and PerformanceaborationIm
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Delivering our strategyOur strategy
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Development projects20112010 129342
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Investing in capabilitiesA core com
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Patent expiries for our key markete
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our Established Markets footprint i
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Product qualityWe are committed to
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We have a global approach, supporte
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ComplianceWe ensure a culture of et
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tegrityBusiness ReviewWe are dedica
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Delivering our strategyResponsible
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India has the fastest growing numbe
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ProtestsAstraZeneca acknowledges th
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Also in 2011, the DIHR in collabora
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healthcollaborationRaising breast c
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Pipeline by Therapy Area at 31 Dece
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Therapy Area ReviewIn September, we
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Therapy Area ReviewGastrointestinal
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Therapy Area ReviewInfectionTherapy
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Therapy Area ReviewIn the pipelineI
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Therapy Area ReviewOur financial pe
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Therapy Area ReviewOncologyTherapy
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Therapy Area Reviewendpoints of pro
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Therapy Area ReviewOur financial pe
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healthinnovationReducing the number
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Geographical ReviewUSAstraZeneca is
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Geographical ReviewEmerging Markets
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Disciplined execution of our strate
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Financial ReviewMeasuring performan
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Financial ReviewResults of operatio
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Page 136 and 137: RiskCommercialisation and business
Page 138 and 139: RiskSupply chain and delivery risks
Page 142 and 143: Financial StatementsPreparation of
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Page 148 and 149: Financial StatementsGroup Accountin
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Page 162 and 163: Financial Statements10 Other invest
Page 164 and 165: Financial Statements15 Financial in
Page 166 and 167: Financial Statements15 Financial in
Page 168 and 169: Financial Statements18 Post-retirem
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Page 172 and 173: Financial Statements20 Share capita
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Page 178 and 179: Financial Statements24 Employee cos
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Financial Statements25 Commitments
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Financial Statements26 LeasesTotal
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Financial StatementsIndependent Aud
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Financial StatementsCompany Account
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Financial Statements4 ReservesShare
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Financial StatementsGroup Financial
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Development PipelineNCEsPhase III/R
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Development PipelineNCEsPhases I an
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Shareholder Information> For shares
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Shareholder InformationDocuments on
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Corporate InformationHistory and de
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GlossaryThe following abbreviations
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Index2011 performance summary 23Acc
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Contact informationRegistered offic
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AstraZeneca Annual Report and Form 20-F Information 2011

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