Bristol-Myers Squibb  The following is summarized financial information for interests in the partnerships with Sanofi for the territory covering Europe and  Asia, which are not consolidated but are accounted for using the equity method:  $^{ }$Cost of products sold includes discovery royalties of $133 million in 2012, $184 million in 2011 and $307 million in 2010, which are  paid directly to Sanofi. All other expenses are shared based on the applicable ownership percentages. Current assets and current  liabilities include approximately $293 million in 2012, $400 million in 2011 and $567 million in 2010 related to receivables/payables  attributed to cash distributions to BMS and Sanofi as well as intercompany balances between partnerships within the territory. The  remaining current assets and current liabilities consist of third-party trade receivables, inventories and amounts due to BMS and  Sanofi for the purchase of inventories, royalties and expense reimbursements.  $^{ }$In September 2012, BMS and Sanofi restructured the terms of the codevelopment and cocommercialization agreements discussed  above. Effective as of January 1, 2013, subject to the receipt of regulatory approvals in certain countries, Sanofi will assume the  worldwide operations of the alliance with the exception of  Plavix  for the U.S. and Puerto Rico. The alliance for  Plavix  in these two  markets will continue unchanged through December 2019 under the same terms as in the original alliance arrangements. In exchange  for the rights being assumed by Sanofi, BMS will receive quarterly royalties from January 1, 2013 until December 31, 2018 and a  terminal payment from Sanofi of $200 million at the end of 2018. All ongoing disputes between the companies have been resolved,  including a one-time payment of $80 million by BMS to Sanofi related to the  Avalide  supply disruption in the U.S. in 2011 (accrued  for in 2011).  BMS has a worldwide commercialization agreement with Otsuka Pharmaceutical Co., Ltd. (Otsuka), to codevelop and copromote  Abilify , for the treatment of schizophrenia, bipolar mania disorder and major depressive disorder, excluding certain Asian countries. The U.S. portion of the amended commercialization and manufacturing agreement expires upon the expected loss of product  exclusivity in April 2015. The contractual share of  Abilify  net sales recognized by BMS was 58% in 2010 and 53.5% in 2011 and  51.5% in 2012.  $^{ }$In the UK, Germany, France and Spain, BMS receives 65% of third-party net sales. In these countries and the U.S., third-party  customers are invoiced by BMS on behalf of Otsuka and alliance revenue is recognized when  Abilify  is shipped and all risks and  rewards of ownership have transferred to third party customers. BMS recognizes all of the net sales in certain countries where it is the  exclusive distributor for the product or has an exclusive right to sell  Abilify .  $^{ }$BMS purchases the product from Otsuka and performs finish manufacturing for sale to third-party customers by BMS or Otsuka. Under the terms of the amended agreement, BMS paid Otsuka $400 million, which is amortized as a reduction of net sales through the  expected loss of U.S. exclusivity in April 2015. The unamortized amount is included in other assets. Otsuka receives a royalty based  on 1.5% of total U.S. net sales, which is included in cost of products sold. Otsuka is responsible for 30% of the U.S. expenses related  to the commercialization of  Abilify  from 2010 through 2012. BMS also receives additional reimbursement from Otsuka for costs  incurred by BMS in excess of the resource requirements specified in the agreement.  $^{ }$Beginning January 1, 2013, BMS will receive the following percentages of U.S. annual net sales. Net sales will be initially recognized  at 35% and adjusted to reflect the actual level of net sales in 2013:  Otsuka Share as a % of U.S. Net  Sales $0 to $2.7 billion 50 %  $2.7 billion to $3.2 billion  20 $3.2 billion to $3.7 billion  7 %  $3.7 billion to $4.0 billion  2 $4.0 billion to $4.2 billion  1 %  In excess of $4.2 billion  20 38 Year Ended December 31,  Dollars in Millions 2012 2011 2010 Net sales $  1,077  $   1,469 $  1,879 Cost of products sold   624   811  1,047 Gross profit   453   658  832 Marketing, selling and administrative   47   75  129 Advertising and product promotion   8   15  29 Research and development   2   5  16 Other (income)/expense   1  (1) Net income  $  394  $   562 $  659 Current assets  $  417  $   584 $  751 Current liabilities   584