SEC Comment Letter for GSK (GSK) — Jul 21, 2011
GSK plc
Date: July 21, 2011 · CIK: 0001131399 · Accession: 0000000000-11-044422
AI Filing Summary & Sentiment
File numbers found in text: 001-15170
Letter
July 21, 2011 Via E-mail Mr. Simon Dingemans Chief Financial Officer GlaxoSmithKline plc 980 Great West Road Brentford, TW8 9GS England
Re: GlaxoSmithKline plc Form 20-F for Fiscal Year Ended December 31, 2010 Filed March 4, 2011 File No. 001-15170
Dear Mr. Dingemans: We have reviewed your June 28, 2011 response to our May 31, 2011 letter and have the following comments.
Please respond to this letter within te n business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circ umstances, please tell us why in your response. Please furnish us a letter on EDGAR under the fo rm type label CORRESP that keys your responses to our comments.
After reviewing the information you provide in response to these comments, we may have additional comments. Notes to the financial statements
29 Other provisions, page 148 1. Please refer to prior comment two. We continue to believe that the underlying circumstances of the US Government investigation of your fo rmer manufacturing site at Cidra, Puerto Rico, Paxil product liability and anti-trust litig ation, the US Attorney’s investigation into your US sales and promotional practices and Av andia product liability cases are sufficiently dissimilar to warrant presentation of these legal proceedings in separate classes, consistent with your disclosure in Note 44. It does not ap pear that a single st atement about all legal and other disputes fulfils the requirements of paragraphs 85(a) and (b ) and 86(a) and (b) of IAS 37, as specified in paragraph 87 of IAS 37. Please provide us proposed disclosure to be included in an amendment to your filing disagg regating the disclosure in the table on page
Mr. Simon Dingemans GlaxoSmithKline plc. July 21, 2011 Page 2 148, showing the charges and amounts utilized for each class and period (e.g. disaggregation of the £4.111 billion charge for 2010 and th e £2.047 billion utili zed in 2010).
2. We believe the quantitative disclosures outside of the financial statements specified in SAB Topic 5Y Question 3 should be made for pr oduct liability claims, such as aggregate settlement costs, number of claims pending at each balance sheet date , the number of claims filed for each period presented, the number of claims dismissed, settled, or otherwise resolved for each period, and the average settle ment amount per claim. We also believe that historical and expected tre nds in these amounts and their reasonably likely effects on operating results and liquidity should also be disclosed pursuant to the SAB. Please provide us proposed disclosure to be included in an amendment to your filing addressing all of these disclosures. 3. Please refer to prior comment two. Please provi de us proposed disclosure to be included under Financial Review 2010 on page 34 in an amendment to your filing of the new information, specific events or other factor s that determined your recognition in 2010, instead of earlier periods, of legal obligations for the US Government investigation of your former manufacturing site at Cidra, Puerto Rico, Paxil product liability and anti-trust litigation, the US Attorney’s i nvestigation into your US sales and promotional practices and Avandia product liability cases. 4. Please refer to prior comment three. Consiste nt with guidance in paragraph 85 of IAS 37, please provide us proposed disclosure to be included in an amendment to your filing addressing the expected timing of resource out flows, the uncertainti es governing the amount or timing of these outflows and the major a ssumptions made about future events governing these outflows for each class of provision, part icularly the US Govern ment investigation of your former manufacturing site at Cidra, Puer to Rico, Paxil product liability and anti-trust litigation, the US Attorney’s i nvestigation into your US sales and promotional practices and Avandia product liability cases.
44 Legal proceedings, page 178
5. Please refer to prior comment four. For each class of contingent liability, where the possibility of a resource outflow in settlements is other than remote but you are unable to reliably estimate the financial effect, please pr ovide us proposed disclosu re to be included in an amendment to your filing describing the na ture of the underlying legal proceedings and related contingent liabilities.
Mr. Simon Dingemans GlaxoSmithKline plc. July 21, 2011 Page 3 You may contact Frank Wyman, Staff Accountant, at (202) 551-3660, or Lisa Vanjoske, Assistant Chief Accountant, at (202) 551-3614, if you have questi ons regarding the comments. In this regard, do not hesitate to contact me at (202) 551-3679.
Sincerely, /s/ Jim B. Rosenberg
Jim B. Rosenberg
Senior Assistant Chief Accountant
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July 21, 2011 Via E-mail Mr. Simon Dingemans Chief Financial Officer GlaxoSmithKline plc 980 Great West Road Brentford, TW8 9GS England Re: GlaxoSmithKline plc Form 20-F for Fiscal Year Ended December 31, 2010 Filed March 4, 2011 File No. 001-15170 Dear Mr. Dingemans: We have reviewed your June 28, 2011 response to our May 31, 2011 letter and have the following comments. Please respond to this letter within te n business days by providing the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circ umstances, please tell us why in your response. Please furnish us a letter on EDGAR under the fo rm type label CORRESP that keys your responses to our comments. After reviewing the information you provide in response to these comments, we may have additional comments. Notes to the financial statements 29 Other provisions, page 148 1. Please refer to prior comment two. We continue to believe that the underlying circumstances of the US Government investigation of your fo rmer manufacturing site at Cidra, Puerto Rico, Paxil product liability and anti-trust litig ation, the US Attorney’s investigation into your US sales and promotional practices and Av andia product liability cases are sufficiently dissimilar to warrant presentation of these legal proceedings in separate classes, consistent with your disclosure in Note 44. It does not ap pear that a single st atement about all legal and other disputes fulfils the requirements of paragraphs 85(a) and (b ) and 86(a) and (b) of IAS 37, as specified in paragraph 87 of IAS 37. Please provide us proposed disclosure to be included in an amendment to your filing disagg regating the disclosure in the table on page Mr. Simon Dingemans GlaxoSmithKline plc. July 21, 2011 Page 2 148, showing the charges and amounts utilized for each class and period (e.g. disaggregation of the £4.111 billion charge for 2010 and th e £2.047 billion utili zed in 2010). 2. We believe the quantitative disclosures outside of the financial statements specified in SAB Topic 5Y Question 3 should be made for pr oduct liability claims, such as aggregate settlement costs, number of claims pending at each balance sheet date , the number of claims filed for each period presented, the number of claims dismissed, settled, or otherwise resolved for each period, and the average settle ment amount per claim. We also believe that historical and expected tre nds in these amounts and their reasonably likely effects on operating results and liquidity should also be disclosed pursuant to the SAB. Please provide us proposed disclosure to be included in an amendment to your filing addressing all of these disclosures. 3. Please refer to prior comment two. Please provi de us proposed disclosure to be included under Financial Review 2010 on page 34 in an amendment to your filing of the new information, specific events or other factor s that determined your recognition in 2010, instead of earlier periods, of legal obligations for the US Government investigation of your former manufacturing site at Cidra, Puerto Rico, Paxil product liability and anti-trust litigation, the US Attorney’s i nvestigation into your US sales and promotional practices and Avandia product liability cases. 4. Please refer to prior comment three. Consiste nt with guidance in paragraph 85 of IAS 37, please provide us proposed disclosure to be included in an amendment to your filing addressing the expected timing of resource out flows, the uncertainti es governing the amount or timing of these outflows and the major a ssumptions made about future events governing these outflows for each class of provision, part icularly the US Govern ment investigation of your former manufacturing site at Cidra, Puer to Rico, Paxil product liability and anti-trust litigation, the US Attorney’s i nvestigation into your US sales and promotional practices and Avandia product liability cases. 44 Legal proceedings, page 178 5. Please refer to prior comment four. For each class of contingent liability, where the possibility of a resource outflow in settlements is other than remote but you are unable to reliably estimate the financial effect, please pr ovide us proposed disclosu re to be included in an amendment to your filing describing the na ture of the underlying legal proceedings and related contingent liabilities. Mr. Simon Dingemans GlaxoSmithKline plc. July 21, 2011 Page 3 You may contact Frank Wyman, Staff Accountant, at (202) 551-3660, or Lisa Vanjoske, Assistant Chief Accountant, at (202) 551-3614, if you have questi ons regarding the comments. In this regard, do not hesitate to contact me at (202) 551-3679. Sincerely, /s/ Jim B. Rosenberg Jim B. Rosenberg Senior Assistant Chief Accountant