Notes to the Roche Group Consolidated Financial Statements I Roche Group
`
`Pharmaceuticals legal cases
`
`Accutane. Hoffmann- La Roche Inc. ('HLR') and various other Roche affiliates have been named as defendants in numerous legal
`actions in the US and elsewhere relating to the acne medication Accutane. The litigation alleges that Accutane caused certain serious
`conditions, including, but not limited to, inflammatory bowel disease ('180'), birth defects and psychiatric disorders. In 2009 HLR
`announced that, following a re-evaluation of its portfolio of medicines that are now available from generic manufacturers, rapidly
`declining brand sales in the US and high costs from personal-injury lawsuits that it continues to defend vigorously, it had decided to
`immediately discontinue the manufacture and distribution of the product in the US.
`
`All of the actions pending in federal court alleging I8D were consolidated for pre-trial proceedings in a Multi- District Litigation ('MDL:)
`in the US District Court for the Middle District of Florida. Tampa Division. In August 201 5 the MDL was closed. During the pendency of
`the MDL the District Court granted summary judgment in favour of HLR for all of the federal 180 cases that had proceeded and all were
`affirmed by the US Court of Appeals for the Eleventh Circuit. All of the actions pending in state court in New Jersey alleging 180 were
`consolidated for pre-trial proceedings in the Superior Court of New Jersey, Law Division, Atlantic County.
`
`Since 1 January 2015 there have been approximately 2.720 cases dismissed in the US and at 31 December 2015 HLR was defending
`approximately 3.900 actions involving approximately 3,990 plaintiffs brought in various federal and state courts throughout the US for
`personal injuries allegedly resulting from their use of Accutane.
`
`In February 2015 the Superior Court of New Jersey. Law Division. Atlantic County. held an eight- day evidentiary hearing on whether
`plaintiffs' experts can testify that Accutane causes Crohn's disease. On 20 February 2015 the Superior Court barred plaintiffs' experts
`because their methods did not meet the requirements for scientific reliability. On 8 May 2015 the Superior Court entered an order
`dismissing with prejudice an agreed-upon list of 2,076 Crohn's disease cases that were subject to the Superior Court's February 2015
`order. On 12 May 2015 the Superior Court entered an order granting summary judgment and dismissing 18 cases filed by New Jersey
`residents on the basis that the drug label was adequate as a matter of law since 2002. In July 2015 the Superior Court granted HLR's
`motion for summary judgment as to the adequacy of the label for post-2002 ingestion cases in 44 other jurisdictions. The Superior Court
`applied New Jersey law to all of the jurisdictions and granted HLR's motion dismissing approximately 511 cases. In the alternative. the
`Superior Court applied the home state law and granted summary judgment in 24 jurisdictions and denied it in 20 jurisdictions: this would
`have resulted in 389 cases being dismissed. The plaintiffs have appealed the decisions related to Crohn's disease and the drug label.
`
`At 31 December 2015 juries in the New Jersey Superior Court have ruled in favour of the plaintiff in eight cases. assessing compensatory
`damages totalling USO 59 million. For the eight cases that were ruled in favour of the plaintiff by the Superior Court. HLR is in the process
`of appealing three cases (USD 20 million) and five cases have had their verdicts reversed in favour of HLR (USO 39 million), of which
`one case (USO 25 million) is on appeal to the New Jersey Supreme Court.
`
`Additional trials may be scheduled for 20 16. Individual trial results depend on a variety of factors. including many that are unique to
`the particular case and therefore the trial results to date may not be predictive of future trial results. The Group continues to defend
`vigorously the remaining personal injury cases and claims,
`
`Avastln/Lucentls Investigations. On 14 February 2013 the Italian Antitrust Authority ('AGCM') announced an investigation to determine
`whether Roche, Genentech and Novartis had entered into an agreement to restrict competition in the Italian market for drugs, with
`reference in particular to Avastin (marketed by Roche) and Lucentis (marketed by Novart is). Avastin and Lucentis are two different
`drugs that were developed and approved for different therapeutic purposes and contain different active pharmaceutical ingredients. On
`5 March 2014 the AGCM issued a verdict that alleges that Roche and Novartis colluded to artificially differentiate Avastin and Lucentis
`in order to foster the sales of Lucentis in Italy. The AGCM fined Roche EUR 90.5 million and Novartis EUR 92 million. Roche appealed
`the AGCM verdict to the Tribunale Amministrativo Regionale del Lazio ('TAR'), On 2 December 2014 the TAR upheld the decision by the
`AGCM. Roche strongly disagrees with the verdict of the TAR and has appealed. On 30 May 2014 the Italian Ministry of Health notified
`Roche S.p.A. of its intention to seek damages related to this matter. In July 2014 Roche paid the EUR 90.5 million fine under protest to
`avoid additional penalty fees and recorded an expense within general and administration. The fine and related interest will be reimbursed
`if Roche wins the case. The outcome of these matters cannot be determined at this time.
`
`Tarceva subpoena. On 2 November 2011 Genentech received a subpoena from the US Department of Justice ('DOJ'). requesting
`documents and information related to the promotion of Tarceva. a prescription product initially approved for the treatment of locally
`advanced or metastatic non-small cell lung cancer after failure of at least one prior chemotherapy regimen, and later approved for
`additional indications. Genentech is cooperating with the associated investigation. On 6 May 2014 government representatives presented
`for the first time the government's civil liability theory, specifically that Genentech allegedly participated in the off-label promotion of
`Tarceva causing the submission of false claims for reimbursement under the Civil False Claims Act. On 14 August 2015 the government
`closed its criminal investigation against Genentech. Genentech continues to have discussions with the government on its civil liability
`theory. The outcome of this matter cannot be determined at this time.
`
`https://www.roche.com/dam/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Roche Finance Report 2015 I 7 5
`
`Novartis Exhibit 2275.0077
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Roche Group I Notes to the Roche Group Consolidated Financial Statements
`
`Rituxan arbitration. In October 2008 Genentech and Biogen Idec Inc. filed a complaint in California against Sanofi-Aventis Deutschland
`GmbH, Sanofi-Aventis US LLC and Sanofi-Aventis US Inc. ('Sanofi') seeking a declaratory judgment that certain Genentech products,
`including Rituxan, do not infringe Sanofi's US Patent Nos. 5,849,522 and 6,218,140 and that the '522 and '140 patents are invalid. Sanofi
`alleged that Rituxan and another Genentech product infringe certain claims of the '522 and '140 patents. In March 2011 the district court
`ruled as a matter of law that Genentech and Biogen Idec do not infringe the asserted patent claims. In May 2011 Sanofi appealed the
`court's non-infringement ruling, The appellate court affirmed the district court's judgment of no patent infringement.
`
`In addition in October 2008 Sanofi affiliate Hoechst GmbH ('Hoechst') filed with the ICC International Court of Arbitration (Paris)
`a request for arbitration with Genentech, relating to a terminated patent-licence agreement between one of Hoechst's predecessors
`and Genentech that pertained to the above- mentioned patents and related patents outside the US. Hoechst sought payment of patent(cid:173)
`licence royalties on sales of certain Genentech products, including Rituxan, damages for breach of contract, and other relief. In various
`arbitral awards in September 2012 and February 2013, the arbitrator found Genentech liable to Hoechst for patent-licence royalties on
`Rituxan, and he awarded the royalties and interest that Hoechst had sought. In February 2013 the Group recorded a back royalty expense
`of CHF 42 million, net of the assumed reimbursement of a portion of the Group's obligation by its co- promotion partner in the US.
`
`Hoechst initiated proceedings in the US, France and Germany seeking to enforce the arbitral awards. In October 2013 Genentech paid
`the awarded royalties and interest to Hoechst under protest. Genentech is seeking annulment of the arbitral awards through proceedings
`it initiated in the Court of Appeal of Paris. There was a hearing in those proceedings in June 2014. In September 2014 the Paris Court
`of Appeal stayed the annulment proceedings to seek guidance from the EU Court of Justice on a specific legal question that had been
`raised by Genentech relating to the arbitral award's non-compliance under EU competition laws. In November 2014 Hoechst filed notices
`of appeal to the French Supreme Court seeking to review the Paris Court of Appeal's decision to seek guidance from the EU Court of
`Justice. On 18 November 20 15 the French Supreme Court denied Hoechst's challenge to the decision of the Paris Court of Appeals to
`refer the specific legal question to the EU Court of Justice. The EU Court of Justice held a hearing on 20 January 2016 and a judgment
`is expected later in 2016. The outcome of this matter cannot be determined at this time.
`
`Average Wholesale Prices lltlgatlon. HLR and Roche Laboratories Inc. ('RLI'). along with approximately 50 other brand and generic
`pharmaceutical companies, have been named as defendants in several legal actions in the US relating to the pricing of pharmaceutical
`drugs and State Medicaid reimbursement. The primary allegation in these litigations is that the pharmaceutical companies misrepresented
`or otherwise reported inaccurate Average Wholesale Prices ('AWP') and/or Wholesale Acquisition Costs ('WAC') for their drugs, which
`prices were allegedly relied upon by the States in calculating Medicaid reimbursements to entities such as retail pharmacies. The States,
`through their respective Attorney General. are seeking repayment of the amounts they claim were over-reimbursed. The time period
`associated with these cases is 1991 through 2005. At 31 December 2015 HLR and RLI are defending one AWP action filed in the state of
`New Jersey. HLR and RU are vigorously defending themselves and no trial date has been set. The outcome of this matter cannot be
`determined at this time.
`
`Boniva litigation. HLR. Genentech and various other Roche affiliates (collectively 'Roche') have been named as defendants in numerous
`legal actions in the US and Canada relating to the post-menopausal osteoporosis medication Boniva. In these litigations, the plaintiffs
`allege that Boniva caused either osteonecrosis of the jaw or atypical femoral fractures. At 31 December 2015 Roche is defending
`approximately 290 actions involving approximately 340 plaintiffs brought in federal and state courts throughout the US and one action
`brought in the Court of the Queen's Bench, Province of Saskatchewan. Canada, for personal injuries allegedly resulting from the use of
`Boniva. All of these cases are in the early discovery stages of litigation. Individual trial results depend on a variety of factors. including
`many that are unique to the particular case. Roche is vigorously defending itself in these matters. The outcome of these matters cannot
`be determined at this time.
`
`EMA investigation. On 23 October 2012 the European Medicines Agency ('EMA') announced that it would start an infringement
`procedure to investigate allegations regarding an alleged breach of medicines safety reporting obligations in relation to 19 centrally
`authorised medicines. On 19 November 2013 the EMA announced the results of the Pharmacovigilance Risk Assessment Committee
`assessment of Roche's medicines. The EMA found no impact regarding the benefit-risk balance of any of Roche's medicines and
`confirmed the benefit-risk profiles based on available safety information. The EMA and other health authorities have confirmed all
`medicines remain authorised without changes to the treatment advice for patients and healthcare professionals. All corrective and
`preventative actions resulting from the inspections are being implemented. A re-inspection by authorities in November 2013 led
`to certain findings which Roche is now addressing. On 14 April 2014 the EMA issued its report to the European Commission that
`summarises the EMA's findings in relation to the investigation. On 6 July 2015 the European Commission issued a notification to the
`EMA, returning the case file to the EMA for a new period of inquiry. The EMA has a year to adopt a revised report for submission
`to the European Commission. The outcome of this matter cannot be determined at this time.
`
`76 I Roche Finance Report 2015
`https://www.roche.com/dam/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Novartis Exhibit 2275.0078
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`20. Debt
`
`Debt: movements in carrying value of recognised liabilities in millions of CHF
`
`At 1 January
`Proceeds from issue of bonds and notes
`Redemption and repurchase of bonds and notes
`Increase (decrease) in commercial paper
`Increase (decrease) in other debt
`Net (gains) losses on redemption and repurchase of bonds and notes•
`Loss on major debt restructuri ng 3
`Amortisation of debt discount 3
`Business combinations•
`Net foreign currency transaction (gains) losses
`Currency translation effects and other
`At 31 December
`
`Bonds and notes
`Commercial paper
`Amounts due to banks and other financial institutions
`Finance lease obligations'
`Other borrowings
`Total d ebt
`
`Long- term debt
`Short- term debt
`Total debt
`
`There are no pledges on the Group's assets in connection with debt.
`
`Notes to the Roche Group Consolidated Financial Statements I Roche Group
`
`2015
`25,714
`2,663
`(4,058)
`(79 1)
`130
`79
`38 1
`19
`14
`(448)
`(452)
`23,251
`
`20,007
`2,50 1
`717
`5
`2 1
`23,251
`
`17,1 00
`6, 151
`23,251
`
`201~
`18,643
`6,407
`(3,662)
`2,342
`124
`215
`429
`20
`-
`(592)
`1,788
`25,714
`
`2 1,589
`3,314
`626
`177
`8
`25,714
`
`19,347
`6,367
`25,714
`
`https://www.roche.com/dam/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Roche Finance Report 20 15 I 77
`
`Novartis Exhibit 2275.0079
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Effective interest rate
`Underlying
`Including
`instrument
`hedging
`
`2015
`
`2014
`
`2013
`
`1,41%
`
`0,62%
`
`842
`
`841
`
`-
`
`6.01%
`0.92%
`
`1,499
`1,501
`
`2,606
`1,493
`
`6.37%
`2.34%
`
`2,98%
`
`3.40%
`3,14%
`
`7,43%
`4.16%
`
`0.61%
`0.90%
`
`n/a
`
`n/a
`n/a
`
`n/a
`n/a
`
`n/a
`n/a
`
`5,70%
`
`5,78%
`
`5.70%
`2.07%
`2.12%
`
`6.36%
`n/a
`0.89%
`
`3,702
`
`-
`-
`-
`-
`
`1,280
`
`1,279
`
`1,629
`
`1.629
`979
`
`1,213
`630
`
`296
`494
`
`-
`
`2,270
`1,079
`595
`
`1,536
`630
`
`2,145
`-
`
`296
`494
`
`-
`-
`
`739
`
`1,316
`
`2,523
`1,200
`
`2,571
`1,222
`-
`
`Roche Group I Notes to the Roche Group Consolidated Financial Statements
`
`Bonds and notes
`
`Recognised liabilities and ef fect ive interest rates of bonds and notes in millions of CHF
`
`US dollar notes - fixed rate
`1.35% notes due 29 September 2017. principal USD 0.85 billion
`(ISIN: US771196BC54)
`6.0% notes due 1 March 2019. principal USD 4.5 billion,
`outstanding USD 1.46 billion (ISIN: USU75000AM82 and US771196AS16)
`2.25% notes due 29 September 2019, principal USD 1.5 billion (ISIN: US771196BA98)
`2.875% notes due 29 September 2021, principal USD 1.3 billion
`(ISIN: US771196B871)
`3.35% notes due 30 September 2024, principal USD 1.65 billion
`(ISIN: US771196BE11)
`3.0% notes due 10 November 2025, principal USD 1,0 billion (ISIN: US771196BJ08)
`7.0% notes due 1 March 2039, principal USD 2.5 billion,
`outstanding USD 1,27 billion (ISIN: USU75000AN65 and US771196AU61)
`4.0% notes due 28 November 204 4, principal USD 0.65 billion (ISIN: US771196BH42)
`
`US dollar notes - floating rate
`Notes due 29 September 2017. principal USD 0.3 billion (ISIN: US7711968D38)
`Notes due 30 September 2019, principal USD 0.5 billion (ISIN: US771 196AZ58)
`
`Euro Medium Term Note programme - fixed rate
`5,5% notes due 4 March 2015. principal GBP 1,25 billion (ISIN: XS0415625283)
`5.625% notes due 4 March 2016, principal EUR 2.75 billion,
`outstanding EUR 2.1 billion (ISIN: XS0415624120)
`2.0% notes due 25 June 2018, principal EUR 1.0 billion (ISIN: XS0760139773)
`2.0% notes due 13 March 2020. principal USD 600 million (ISIN: XS1 197832089)
`6.5% notes due 4 March 2021, principal EUR 1.75 billion.
`outstanding EUR 1.32 billion (ISIN: XS0415624716)
`5.375% notes due 29 August 2023, principal GBP 250 million.
`outstanding GBP 200 million (ISIN: XS0175478873)
`0.875% notes due 25 February 2025, principal EUR 1.0 billion (ISIN: XS1 195056079)
`
`6.66%
`
`6.97%
`
`1,415
`
`2,090
`
`2,128
`
`5,46%
`0.93%
`
`n/a
`n/a
`
`291
`1,076
`
`305
`
`290
`-
`
`Swiss franc bonds - fixed rate
`4.5% bonds due 23 March 2017, principal CHF 1.5 billion (ISIN: CH0039139263)
`1.0% bonds due 21 September 2018, principal CHF 0.6 billion (ISIN: CH0180513068)
`1.625% bonds due 23 September 2022. principal CHF 0.5 billion
`(ISIN: CH0180513183)
`
`4.77%
`1.04%
`
`n/a
`0.86%
`
`1,495
`603
`
`1,492
`602
`
`1,489
`599
`
`1.64%
`
`1.36%
`
`499
`
`499
`
`499
`
`Genentech Senior Notes
`4.75% Senior Notes due 15 July 2015, principal USD 1.0 billion
`(ISIN: US368710AG46)
`5.25% Senior Notes due 15 July 2035, principal USD 500 million,
`outstanding USD 325 million (ISIN: US368710AC32)
`Total bonds and notes
`
`4,87%
`
`5.39%
`
`n/a
`
`n/a
`
`-
`
`989
`
`888
`
`321
`2 0,007
`
`346
`21,589
`
`444
`17,293
`
`78 I Roche Finance Report 2015
`https://www.roche.com/dam/jcr: 7 4af99eb-b51 a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Novartis Exhibit 2275.0080
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Notes to the Roche Group Consolidated Financial Statements I Roche Group
`
`Bonds and notes maturity in millions of CHF
`
`Within one year
`Between one and two years
`Between two and three years
`Between three and four years
`Between four and five years
`More than five years
`Total bonds and notes
`
`Unamortised discount included in carrying value of bonds and notes in millions of CHF
`
`US dollar notes
`Euro notes
`Swiss franc bonds
`Pound sterling notes
`Total unamortised discount
`
`Issuance of bonds and notes - 2 015
`
`2015
`2,931
`2,634
`1,682
`
`2,832
`
`595
`
`9.333
`20,007
`
`2015
`
`85
`15
`9
`2
`111
`
`2014
`
`2.409
`2,523
`2,629
`
`1,802
`
`3.912
`8,314
`21 ,589
`
`2014
`
`103
`19
`
`10
`3
`135
`
`2013
`1,040
`2,204
`2,571
`
`1,489
`1,821
`
`8,168
`17,293
`
`2013
`
`109
`24
`13
`
`5
`151
`
`On 25 February 2015 the Group issued EUR 1.0 billion fixed rate notes with a coupon of 0,875% under the Euro Medium Term Note
`programme. The notes will mature on 25 February 2025 and are listed on the Luxembourg Stock Exchange. The Group received
`CHF 1,072 million aggregate net proceeds from the issuance and sale of these fixed notes.
`
`On 13 March 2015 the Group issued USO 600 million fixed rate notes with a coupon of 2.0% under the Euro Medium Term Note
`programme. The notes will mature on 13 March 2020 and are listed on the Luxembourg Stock Exchange. The Group received
`CHF 598 million aggregate net proceeds from the issuance and sale of these fixed notes.
`
`On 10 November 2015 the Group completed an offering of USO 1.0 billion fixed rate notes with a coupon of 3.0%. The notes will mature
`on 10 November 2025. The Group received CHF 993 million aggregate net proceeds from the issuance and sale of these fixed notes.
`
`Major debt restructuring. In September 2015 the Group decided to do a major debt restructuring. The Group raised net proceeds of
`CHF 993 million through the debt offering described above. All newly issued debt is senior. unsecured and has been guaranteed by
`Roche Holding Ltd. The Group repurchased USO 337 million 7.0% fixed rate notes due 1 March 2039, USO 543 million 6.0% fixed rate
`notes due 1 March 2019. USO 25 million 5.25% fixed rate Genentech Senior Notes due 15 July 2035 and EUR 433 million 6.5% fixed rate
`notes due 4 March 2021. This major debt restructuring resulted in a loss on repurchase of CHF 381 million.
`
`Issuance of bonds and notes - 2014
`
`lnterMune acquisition. In September 2014 the Group financed the lnterMune acquisition (see Note 5) by a combination of the Group's
`own funds. debt securities and commercial paper. The Group raised net proceeds of approximately CHF 5.5 billion through a debt
`offering as described below. All newly issued debt is senior. unsecured and has been guaranteed by Roche Holding Ltd.
`
`https://www.roche.com/dam/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Roche Finance Report 2015 I 79
`
`Novartis Exhibit 2275.0081
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`
`https://www.roche.com/dam/jcr:74af99eb-b51a-4f13-88b2-aacaf9f53c0c/en/fb15e.pdf
`
`Novartis Exhibit 2275.0082
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Notes to the Roche Group Consolidated Financial Statements I Roche Group
`
`Partlal repurchase of euro notes. On 6 November 2015 the Group repurchased EUR 433 million of the 6.5% fixed rate notes due
`on 4 March 2021. The cash outflow was CHF 618 million. plus accrued interest and there was a loss on repurchase of CHF 141 million.
`The effective interest rate of these notes was 6.66%.
`
`Early partial redemption of US dollar-denominated notes in 2016. On 30 December 2015 the Group resolved to exercise its option
`to call for early partial redemption of the 6.0% fixed rate notes due 1 March 20 19, The Group will redeem an outstanding principal of
`USO 600 million on 24 March 2016 at an amount equal to the sum of the present values of the remaining scheduled payments of these
`notes discounted to the redemption date at the US Treasury rate plus 0.50%, together with accrued and unpaid interest on the principal.
`A cash outflow of approximately USO 661 million, plus accrued interest. is expected on redemption. The Group has revised the carrying
`value of these notes to take into account the changes to the amounts and timings of the estimated cash flows. The revised carrying value
`of these notes at 3 1 December 2015 is USO 669 million (CHF 661 million). The increase in carrying value of USO 74 million (CHF 72 million)
`is recorded within financing costs (see Note 3) as a loss on redemption. The effective interest rate of these notes is 6.37%.
`
`Redemption a nd repurchase of bonds and notes - 2014
`
`During 2014 the Group completed the early repurchase of GBP 419 million of fixed rate notes and completed the early redemption of
`USO 2.5 billion of fixed rate notes.
`
`Cash flows from issuance, redemption and repurchase of bonds and notes
`
`Cash inflows from issuance of bonds and notes in millions of CHF
`
`Euro Medium Term Note programme - Euro notes
`Euro Medium Term Note programme - US dollar notes
`US dollar notes
`Total cash inffows from issuance of bonds and notes
`
`Cash outflows from redemption and repurchase of bonds and notes in millions of CHF
`
`Euro Medium Term Note programme - Pound sterling notes
`Euro Medium Term Note programme - Euro notes
`US dollar notes
`Total cash outflows from redemption and repurchase of bonds and notes
`
`2015
`1,072
`598
`993
`2 ,663
`
`2015
`(71 0)
`(618)
`(2,730)
`(4,068)
`
`2014
`
`-
`-
`
`6,407
`6,407
`
`2014
`(653)
`
`-
`
`(3.009)
`(3,662)
`
`Commercial paper
`
`Roche Holdings, Inc. commercial paper program. Roche Holdings, Inc. has an established commercial paper program under which
`it can issue up to USO 7.5 billion of unsecured commercial paper notes guaranteed by Roche Holding Ltd, During the second half of
`2015 the existing committed credit line available as a back-stop supporting the commercial paper program has been changed from
`EUR 3.9 billion to USO 4.5 billion and a new committed credit line of USO 3.0 billion has been added. The total committed credit lines
`that are available as a back-stop supporting the commercial paper program are USO 7.5 billion at 31 December 2015, The maturity of
`the notes under the program cannot exceed 365 days from the date of issuance. At 31 December 2015 unsecured commercial paper
`notes with a principal amount of USO 2.5 billion and an average interest rate of 0.2% were outstanding.
`
`Movements in commercial paper obligations in millions of CHF
`
`At 1 January
`Net cash proceeds (payments)
`Currency translation effects
`At 31 December
`
`https://www.roche.com/darn/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`2015
`3,314
`(791)
`(22)
`2,501
`
`2014
`702
`2,342
`270
`3,314
`
`Roche Finance Report 2015 I 81
`
`Novartis Exhibit 2275.0083
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`
`https://www.roche.com/dam/jcr:74af99eb-b51a-4f13-88b2-aacaf9f53c0c/en/fb15e.pdf
`
`Novartis Exhibit 2275.0084
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Notes to the Roche Group Consolidated Financial Statements I Roche Group
`
`Changes in equity attributabl e to Roche shareholders in mDlions of CHF
`
`Reserves
`
`Fair value
`
`Hedging
`
`Translation
`
`Total
`
`76
`
`(6,968)
`
`19,586
`
`8,863
`
`94
`(1 17)
`17
`(6)
`
`(466)
`382
`29
`5
`
`- ---- ----
`
`(1 ,009)
`23
`
`(1 ,007)
`23
`
`353
`(14)
`(11 0)
`5
`(812)
`
`----
`
`(986)
`
`(986)
`
`8,051
`
`(6,807)
`155
`(6)
`20,979
`
`---
`
`(7,954)
`
`-
`
`-
`-
`-
`-
`
`(466)
`382
`29
`5
`
`1
`-
`
`-
`-
`-
`-
`(49)
`
`(49)
`
`-
`-
`-
`27
`
`166
`
`-
`
`94
`(117)
`17
`(6)
`
`-
`-
`-
`-
`
`1
`-
`
`-
`-
`-
`-
`(11)
`
`(11)
`
`-
`-
`-
`155
`
`$hare capital
`
`Retained
`earnings
`
`160
`
`26,152
`
`8,863
`
`---- ---- --
`
`353
`(14)
`(11 0)
`5
`2:S.
`
`9,097
`
`(6,807)
`155
`(6)
`28,591
`
`- ---- ---- -- ------ ---
`
`160
`
`Year ended 31 December 2015
`At 1 January 2015
`
`Net income recogn ised in income statement
`
`Available-for- sale investments
`- Fair value gains (losses) taken to equity
`- Transferred to income statement
`-
`Income taxes•
`- Non- controlling interests
`Cash flow hedges
`- Gains (losses) taken to equity
`- Transferred to income statement al
`-
`Income taxes'
`- Non- controlling interests
`Currency translation of foreign operations
`- Exchange differences
`- Non-controll ing interests
`Defined benefit plans
`- Remeasurement gains (losses) 25
`- Limit on asset recognition"
`-
`Income taxes'
`- Non- controlling interests
`Other comprehensive income, net of tax
`
`Total comprehensive income
`
`Dividends
`Equity compensation plans, net of transactions in own equity
`Changes in non- controlling interests•
`At 31 December 2015
`
`a) The entire amount transferred to the income statement was reported in 'Other financial income (expense)'.
`
`Genentech transaction
`
`The Group completed the purchase of the non-controlling interests in Genentech effective 26 March 2009. Based on the International
`Accounting Standard 27 'Separate Financial Statements' (IAS 27) and consistent with the International Financial Reporting Standard 1 o
`'Consolidated Financial Statements' (IFRS 10), which was adopted by the Group in 2013, this transaction was accounted for in full as an
`equity transaction. As a consequence, the carrying amount of the consolidated equity of the Group at that time was reduced by
`CHF 52,2 billion. of which CHF 8,5 billion was allocated to eliminate the book value of Genentech non- controlling interests, This
`accounting effect significantly impacted the Group's net equity, but has no effect on the Group's business or its dividend policy.
`
`https://www.roche.com/dam/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Roche Finance Report 2015 I 13
`
`Novartis Exhibit 2275.0085
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Roche Group I Notes to the Roche Group Consolidated Financial Statements
`
`Share capital
`
`At 3 1 December 201 5 the authorised and issued share capital of Roche Holding Ltd, which is the Group's parent company, consisted
`of 160 million shares with a nominal value of CHF 1.00 each, as in the preceding year. The shares are bearer shares and the Group does
`not maintain a register of shareholders. Based on information supplied to the Group. a shareholder group with pooled voting rights owns
`45.01% (2014: 45,0 1%) of the issued shares. On 24 March 2011 the shareholder group announced that it would continue the shareholder
`pooling agreement existing since 1948 with a modified shareholder composition. The shareholder group with pooled voting rights now
`holds 72,0 18,000 shares. corresponding to 45.01% of the shares issued. This figure does not include any shares without pooled voting
`rights that are held outside this group by individual members of the group. Ms Maja Oeri. formerly a member of the pool, now holds
`8,091.900 shares representing 5.057% of the voting rights independently of the pool. This is further described in Note 30. Based on
`information supplied to the Group, Novartis Ltd. Basel. and its affiliates own 33.333% (participation below 331/3%) of the issued shares
`(2014: 33.333%),
`
`Non-voting equity securities (Genussscheine}
`
`At 3 1 December 2015, 702.562.700 non-voting equity securities have been authorised and were in issue as in the preceding year.
`Under Swiss company law these non-voting equity securities have no nominal value, are not part of the share capital and cannot be
`issued against a contribution which would be shown as an asset in the balance sheet of Roche Holding Ltd, Each non-voting equity
`security confers the same rights as any of the shares to participate in the net profit and any remaining proceeds from liquidation
`following repayment of the nominal value of the shares and. if any, participation certificates. In accordance with the law and the Articles
`of Incorporation of Roche Holding Ltd. the Company is entitled at all times to exchange all or some of the non-voting equity securities
`into shares or participation certificates.
`
`Dividends
`
`On 3 March 2015 the shareholders approved the distribution of a dividend of CHF 8.00 per share and non-voting equity security
`(2014: CHF 7.80) in respect of the 2014 business year. The distribution to holders of outstanding shares and non-voting equity securities
`totalled CHF 6,807 million (2014: CHF 6,617 million) and has been recorded against retained earnings in 2015. The Board of Directors
`has proposed dividends for the 2015 business year of CHF 8.10 per share and non-voting equity security which. if approved. would result
`in a total distribution to shareholders of CHF 6,987 million. This is subject to approval at the Annual General Meeting on 1 March 2016.
`
`Own equity Instruments
`
`Holdings of own equity instruments in equivalent number of non-voting equity securities
`
`Shares
`Non-voting equity securities
`Total
`
`201 5
`(millions)
`0.1
`10.5
`10.6
`
`2014
`(millions)
`0.4
`12.4
`12.8
`
`Own equity instruments are recorded within equity at original purchase cost. At 3 1 December 2015 the fair value of shares was
`CHF 19 million and non-voting equity securities was CHF 2.9 billion. Own equity instruments are held for the Group's potential conversion
`obligations that may arise from the Group's equity compensation plans (see Note 26).
`
`Reserves
`
`Fair value reserve- The fair value reserve represents the cumulative net change in the fair value of available-for-sale financial assets until
`the asset is sold, impaired or otherwise disposed of.
`
`Hedging reserve. The hedging reserve represents the effective portion of the cumulative net change in the fair value of cash flow
`hedging instruments related to hedged transactions that have not yet occurred.
`
`Translation reserve. The translation reserve represents the cumulative currency translation differences relating to the consolidation of
`Group companies that use functional currencies other than Swiss francs.
`
`84 I Roche Finance Report 2015
`https://www.roche.com/dam/jcr: 7 4af99eb-b51a-4f13-88b2-aacaf9f53c0den/fb15e.pdf
`
`Novartis Exhibit 2275.0086
`Regeneron v. Novartis, IPR2021-00816
`
`

`

`Notes to the Roche Group Consolidated Financial Statements I Roche Group
`
`22. Subsidiaries
`
`Chugal
`
`Effective 1 October 2002 the Roche Group and Chugai completed an alliance to create a leading research-driven Japanese
`pharmaceutical company, which was formed by the merger of Chugai and Roche's Japanese pharmaceuticals subsidiary, Nippon Roche.
`The merged company is known as Chugai.
`
`Consolidated subsidiary. Chugai is a fully consolidated subsidiary of the Group. This is based on the Group's interest in Chugai at
`31 December 2015 of 61.39% (2014: 61.46%) and the Roche relationship with Chugai that is founded on the Basic Alliance. Licensing and
`Research Collaboration Agreements.
`
`The common stock of Chugai is publicly traded and is listed on the Tokyo Stock