Other Consolidated Financial Statement Detail

Supplemental Cash Flow Information

Supplemental disclosure of cash flow information for the years ended December 31, 2017, 2016 and 2015, is as follows:



	For the Years Ended December 31,
(In millions)	2017		2016		2015
Cash paid during the year for:
Interest	$	281.7	$	281.2	$	39.1
Income taxes	$	1,066.4	$	1,642.2	$	1,674.8

Non-cash Operating, Investing and Financing Activity

In the fourth quarter of 2017 we accrued $600.0 million upon reaching $15.0 billion and $16.0 billion in total cumulative sales of FUMADERM and TECFIDERA (together, the 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 2018. For additional information on this transaction, please read Note 22, Commitments and Contingencies, to these consolidated financial statements.

In connection with the construction of our large-scale biologics manufacturing facility in Solothurn, Switzerland, we accrued charges related to processing equipment and engineering services of approximately $150.0 million and $100.0 million in our consolidated balance sheets as of December 31, 2017 and 2016, respectively. For additional information on this matter, please read Note 11, Property, Plant and Equipment, to these consolidated financial statements.

In December 2016 we accrued $454.8 million related to the settlement and license agreement with Forward Pharma. For additional information on this transaction, please read Note 7, Intangible Assets and Goodwill, to these consolidated financial statements.

In February 2015 upon completion of our acquisition of Convergence, we recorded a contingent consideration obligation of $274.5 million as part of the purchase price. For additional information on this transaction, please read Note 2, Acquisitions, to these consolidated financial statements.

Other Income (Expense), Net

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



	For the Years Ended December 31,
(In millions)	2017			2016			2015
Interest income	$	78.5		$	63.4		$	22.1
Interest expense	(250.8		)	(260.0		)	(95.5		)
Gain (loss) on investments, net	(36.3		)	6.0			(3.8		)
Foreign exchange gains (losses), net	6.3			(9.8		)	(32.7		)
Other, net	(13.1		)	(17.0		)	(13.8		)
Total other income (expense), net	$	(215.4	)	$	(217.4	)	$	(123.7	)

Interest expense for the year ended December 31, 2017, includes a $5.2 million charge recognized in November 2017 upon the redemption of our 6.875% Senior Notes due March 1, 2018. For additional information on the redemption of these notes, please read Note 12, Indebtedness, to these consolidated financial statements.

Gain (loss) on investments, net for the year ended December 31, 2017, includes other than temporary impairments recorded on strategic investments and marketable debt securities during the year.

Other Current Assets

Other current assets include prepaid taxes totaling approximately $657.6 million and $817.0 million as of December 31, 2017 and 2016, respectively.

As a result of the Article 20 Procedure of ZINBRYTA, we impaired prepaid tax balances totaling $142.6 million. For additional information on the Article 20 Procedure of ZINBRYTA and resulting impairment of ZINBRYTA related assets, please read Note 20, Collaborative and Other Relationships, to these consolidated financial statements.

Accrued Expenses and Other

Accrued expenses and other consists of the following:



	As of December 31,
(In millions)	2017		2016
Current portion of contingent consideration obligations	$	844.6	$	580.8
Revenue-related reserves for discounts and allowances	572.0		438.6
Employee compensation and benefits	297.7		282.9
Royalties and licensing fees	206.7		195.8
Collaboration expenses	183.7		130.9
Construction in progress	159.7		134.0
Accrued TECFIDERA litigation settlement charge	—		454.8
Other	636.9		685.7
Total accrued expenses and other	$	2,901.3	$	2,903.5

Pricing of TYSABRI in Italy - AIFA

In the fourth quarter of 2011 Biogen Italia SRL, our Italian subsidiary, received a notice from the Italian National Medicines Agency (Agenzia Italiana del Farmaco or AIFA) that sales of TYSABRI after mid-February 2009 through mid-February 2011 exceeded by EUR30.7 million a reimbursement limit established pursuant to a Price Determination Resolution granted by AIFA in December 2006. In January 2012 we filed an appeal against AIFA in administrative court in Rome, Italy seeking a ruling that the reimbursement limit in the Price Determination Resolution should apply as written to only “the first 24 months” of TYSABRI sales, which ended in mid-February 2009. Since being notified in the fourth quarter of 2011 that AIFA believed a reimbursement limit was still 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.

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. As a result of this agreement in principle, we recorded a liability and reduction to revenue of EUR15.4 million at June 30, 2013, which approximated 50% of the claim related to the period from mid-February 2009 through mid-February 2011.

In June 2014 AIFA approved a resolution affirming that there is no reimbursement limit from and after February 2013. As a result, we recognized $53.5 million of TYSABRI revenues related to the periods February 2013 through June 2014 that were previously deferred.

In the first quarter of 2017 we reached an agreement with AIFA's Price and Reimbursement Committee resolving all of AIFA's claims relating to sales of TYSABRI in excess of the reimbursement limit for prior periods. As a result, in the first quarter of 2017, we recognized EUR41.8 million (approximately $45.0 million) in revenues for sales that were previously deferred. These amounts were previously accrued for and included in the table above in Other as of December 31, 2016.