Elan Corporation (ELN)

 

At December 31, 2007, all of our liquid investments were invested in bank deposits and funds. In December 2007, due to dislocations in the capital markets, one of these funds was closed. As a result, the total carrying value of our holding in the fund of $274.8 million (current: $268.1 million; non-current: $6.7 million) at December 31, 2007 no longer qualified as cash equivalents and was presented as an investment. The balance had been reclassified to current and non-current debt securities based on the expected liquidation of investments in the fund. In conjunction with the closure of the fund, an impairment charge of $13.1 million (2007: $3.8 million) was incurred in 2008, $10.9 million of which was included within net investment losses and the remaining $2.2 million (2007: $3.8 million) was classified within net interest expense. At December 31, 2008, the total fair market value of our remaining holding of $27.7 million in the fund was held in current debt securities. The remaining underlying securities in the fund have various contractual maturity dates through 2050.

 

 

At December 31, 2007, all of Elan’s liquid investments were invested in bank deposits and funds. In December 2007, due to dislocations in the capital markets, one of these funds was closed. As a result, the total carrying value of our holding in the fund of $274.8 million (current: $268.1 million; non-current: $6.7 million) at December 31, 2007 no longer qualified as cash equivalents. The balance has been reclassified to current and non-current debt securities based on the expected liquidation of investments in the fund. Since December 31, 2007, Elan has reduced the amount invested in this fund to approximately $100 million and has moved approximately $175 million into bank deposits and United States treasury funds. In conjunction with the closure of the fund, a charge of $3.8 million was incurred and has been classified within net interest expense for 2007. There were no equivalent charges in 2006 or 2005.