•

restructuring costs relating to associates and joint ventures are eliminated.

The following table presents our Business Operating Income for the year ended December 31, 2012.

*(€ million)*


Net sales	28,871		3,897		2,179		—		34,947
Other revenues	933		44		33		—		1,010
Cost of sales	(8,759	)	(1,635	)	(701	)	—		(11,095	)
Research and development expenses	(4,219	)	(539	)	(164	)	—		(4,922	)
Selling and general expenses	(7,666	)	(611	)	(669	)	(1	)	(8,947	)
Other operating income and expenses	98		(7	)	3		14		108
Share of profit/(loss) of associates and joint ventures	432		(1	)	(7	)	—		424
Net income attributable to non-controlling interests	(171	)	—		(1	)	—		(172	)

Business operating income	9,519		1,148		673		13		11,353

The following table presents our Business Operating Income for the year ended December 31, 2011.

*(€ million)*


Net sales	27,890		3,469		2,030		—		33,389
Other revenues	1,622		25		22		—		1,669
Cost of sales	(8,368	)	(1,404	)	(654	)	—		(10,426	)
Research and development expenses	(4,101	)	(564	)	(146	)	—		(4,811	)
Selling and general expenses	(7,376	)	(542	)	(617	)	(1	)	(8,536	)
Other operating income and expenses	(13	)	—		(7	)	24		4
Share of profit/(loss) of associates and joint ventures	1,088		1		—		13		1,102
Net income attributable to non-controlling interests	(246	)	—		(1	)	—		(247	)

Business operating income	10,496		985		627		36		12,144

The following table presents our Business Operating Income for the year ended December 31, 2010.

*(€ million)*


Net sales	26,576		3,808		1,983		—		32,367
Other revenues	1,623		28		18		—		1,669
Cost of sales	(7,316	)	(1,371	)	(615	)	—		(9,302	)
Research and development expenses	(3,884	)	(517	)	(155	)	—		(4,556	)
Selling and general expenses	(6,962	)	(603	)	(604	)	(2	)	(8,171	)
Other operating income and expenses	177		14		(6	)	(108	)	77
Share of profit/(loss) of associates and joint ventures	1,009		19		—		8		1,036
Net income attributable to non-controlling interests	(258	)	1		—		—		(257	)

Business operating income	10,965		1,379		621		(102	)	12,863

(€ million)    Pharmaceuticals Vaccines Other Total
Net sales
   26,576 3,808 —    30,384
Other revenues    1,623 28 —    1,651
Cost of sales    (7,316 ) (1,371 ) —    (8,687 )
Research and development expenses    (3,884 ) (517 ) —    (4,401 )
Selling and general expenses    (6,962 ) (603 ) (2 ) (7,567 )
Other operating income and expenses    177 14 (108 ) 83
Share of profit/loss of associates and joint ventures⁽¹⁾    1,009 19 8 1,036
Net income from the held-for-exchange Merial business    —    —    418 418
Net income attributable to non-controlling interests    (258 ) 1 —    (257 )
Business operating income
   10,965 1,379 316 12,660

⁽¹⁾

~~Net of tax~~

The following table ~~presents~~(in accordance with paragraph 28 of IFRS 8) reconciles our Business Operating Income to our Income before tax and associates and joint ventures for the ~~year~~years ended December 31, ~~2009.~~2012, 2011 and 2010:

(€ million)    Pharmaceuticals Vaccines Other Total
Net sales
   25,823 3,483 —    29,306
Other revenues    1,412 31 —    1,443
Cost of sales    (6,527 ) (1,326 ) —    (7,853 )
Research and development expenses    (4,091 ) (491 ) (1 ) (4,583 )
Selling and general expenses    (6,762 ) (561 ) (2 ) (7,325 )
Other operating income and expenses    387 (3 ) 1 385
Share of profit/loss of associates and joint ventures⁽¹⁾    792 41 8 841
Net income from the held-for-exchange Merial business    —    —    241 241
Net income attributable to non-controlling interests    (426 ) (1 ) —    (427 )
Business operating income
   10,608 1,173 247 12,028

⁽¹⁾

~~Net of tax~~

*(€ million)*


Business Operating Income	11,353		12,144		12,863

Share of profit/(loss) of associates and joint ventures ⁽¹⁾	(424	)	(1,102	)	(1,036	)
Net income attributable to non-controlling interests ⁽²⁾	172		247		257
Amortization of intangible assets	(3,291	)	(3,314	)	(3,529	)
Impairment of intangible assets	(117	)	(142	)	(433	)
Fair value remeasurement of contingent consideration liabilities	(192	)	15		—
Expenses arising from the impact of acquisitions on inventories ⁽³⁾	(23	)	(476	)	(142	)
Restructuring costs	(1,141	)	(1,314	)	(1,384	)
Other gains and losses and litigation ⁽⁴⁾	—		(327	)	(138	)
Impact of the non-depreciation of property, plant and equipment of Merial (in accordance with IFRS 5)	—		—		77

Operating Income	6,337		5,731		6,535

Financial expense	(553	)	(552	)	(468	)
Financial income	93		140		106

Income before tax and associates and joint ventures	5,877		5,319		6,173

⁽¹⁾: Excluding restructuring costs of associates and joint ventures and expenses arising from the impact of acquisitions on associates and joint ventures.
⁽²⁾: Excluding the share of restructuring and other adjusting items attributable to non-controlling interests.
⁽³⁾: This line comprises the workdown of inventories remeasured at fair value at the acquisition date.
⁽⁴⁾: See Note D.28. to our consolidated financial statements included at Item 18 of this annual report.

Business Net Income

In addition to net income, we use a non-GAAP financial measure that we refer to as ~~“business~~"business net ~~income”~~income" to evaluate our ~~Group’s~~Group's performance. Business net income, which is defined below, represents the aggregate business operating income of all of our operating segments, less net financial expenses and the relevant income tax ~~charges.~~effects. We believe that this non-GAAP financial measure allows investors to understand the performance of our Group because it segregates the results of operations of our current business activities, as opposed to reflecting the impact of past transactions such as acquisitions.

Our management uses business net income to manage and to evaluate our performance, and we believe it is appropriate to disclose this non-GAAP financial measure, as a supplement to our IFRS reporting, in order to assist investors in analyzing the factors and trends affecting our business performance. Our management also intends to use business net income as the basis for proposing the dividend policy for the Group. Accordingly, management believes that an ~~investor’s~~investor's understanding of trends in our dividend policy is enhanced by disclosing business net income.

We have also decided to report ~~“business~~"business earnings per ~~share”~~share". Business earnings per share is a specific non-GAAP financial measure, which we define as business net income divided by the weighted average number

of shares outstanding. Our management intends to give earnings guidance based on business earnings per share. We also present business earnings per share on a diluted basis.

Business net income is defined as ~~“Net~~"Net income attributable to equity holders of ~~sanofi-aventis”~~Sanofi", determined under IFRS, excluding (i) amortization of intangible assets; (ii) impairment of intangible assets; (iii) fair value

remeasurement of contingent consideration liabilities; (iv) other impacts associated with acquisitions (including impacts of acquisitions on associates and joint ventures); ~~(iv)~~(v) restructuring costs (including restructuring costs relating to associates and joint ventures),; (vi) other gains and losses, ~~on disposals~~and litigation; (vii) the impact of ~~non-current assets,~~the non-depreciation of the property, plant and ~~costs or provisions associated~~equipment of Merial starting September 18, 2009 and continuing through 2010 (in accordance with ~~litigation; (v)~~IFRS 5); (viii) the tax effect related to the items listed in (i) through ~~(iv),~~(vii); as well as ~~(vi)~~(ix) effects of major tax disputes and, ~~(vii)~~as an exception for 2011, the retroactive effect (2006-2010) on the tax liability resulting from the agreement signed on December 22, 2011 by France and the United States on transfer prices (APA-Advance Pricing Agreement), for which the amount is deemed to be significant, and (x) the share of non-controlling interests in items (i) through ~~(vi)~~(ix). ~~The items listed in (iv) — except for restructuring costs related to associates~~Items (i), (ii), (iii), (v) and ~~joint ventures —~~(vi) correspond to those reported in the income statement line items ~~“Restructuring costs”~~"Amortization of intangible assets", "Impairment of intangible assets", "Fair value remeasurement of contingent consideration liabilities", "Restructuring costs" and ~~“Gains~~"Other gains and losses, ~~on disposals,~~ and ~~litigation”~~litigation", as defined in ~~Note~~Notes B.19. and B.20. to our consolidated financial statements.

The following table reconciles our business net income to our Net income attributable to equity holders of ~~sanofi-aventis~~Sanofi for the years ended December 31, ~~2010, 2009~~2012, 2011 and ~~2008:~~2010:

*(€ million)*


Business net income		8,179		8,795		9,215

(i)	Amortization of intangible assets	(3,291	)	(3,314	)	(3,529	)
(ii)	Impairment of intangible assets	(117	)	(142	)	(433	)
(iii)	Fair value remeasurement of contingent consideration liabilities	(192	)	15		—
(iv)	Expenses arising from the impact of acquisitions on inventories ⁽¹⁾	(23	)	(476	)	(142	)
(v)	Restructuring costs	(1,141	)	(1,314	)	(1,384	)
(vi)	Other gains and losses, and litigation ⁽²⁾	—		(327	)	(138	)
(vii)	Impact of the non-depreciation of the property, plant and equipment of Merial (IFRS 5)	—		—		77
(viii)	Tax effects on the items listed above, comprising:	1,580		1,905		1,856
	— amortization of intangible assets	1,159		1,178		1,183
	— impairment of intangible assets	42		37		143
	— fair value remeasurement of contingent consideration liabilities	2		34		—
	— expenses arising from the impact of acquisitions on inventories	7		143		44
	— restructuring costs	370		399		466
	— other gains and losses, and litigation	—		114		46
	— non-depreciation of property, plant and equipment of Merial (IFRS 5)	—		—		(26	)
(iv)/(ix)	Other tax items ⁽³⁾	—		577		—
(x)	Share of items listed above attributable to non-controlling interests	3		6		3
(iv)/(v)	Restructuring costs and expenses arising from the impact of acquisitions on associates and joint ventures ⁽⁴⁾	(31	)	(32	)	(58	)

Net income attributable to equity holders of Sanofi		4,967		5,693		5,467

⁽¹⁾: This line comprises the workdown of inventories remeasured at fair value at the acquisition date.
⁽²⁾: See Note D.28. to our consolidated financial statements included at Item 18 of this annual report.
⁽³⁾: In 2011, this line item includes €349 million relating to the effect of the Franco-American Advance Pricing Agreement (APA), and a €228 million reduction in deferred tax liabilities on remeasurements of intangible assets of Merial as a result of changes in tax legislation in the United Kingdom.
⁽⁴⁾: This line shows the portion of major restructuring costs incurred by associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (workdown of acquired inventories, amortization and impairment of intangible assets, and impairment of goodwill).

The following table sets forth the calculation of our business net income for the years ended December 31, 2012, 2011 and 2010:

(€ million)    2010 2009 2008
Business net income
   9,215 8,629 7,314
(i) Amortization of intangible assets    (3,529 ) (3,528 ) (3,483 )
(ii) Impairment of intangible assets    (433 ) (372 ) (1,554 )
(iii) Expenses arising from the impact of acquisitions on inventories ⁽¹⁾    (30 ) (27 ) (2 )
(iv) Restructuring costs    (1,372 ) (1,080 ) (585 )
(iii)/(iv) Other items ⁽²⁾    (138 ) —    114
(v) Tax effects of:    1,841    1,629 1,904
– amortization of intangible assets    1,181    1,126 1,189
– impairment of intangible assets    143    136 537
– expenses arising from the impact of acquisitions on inventories    9    7 1
– restructuring costs    462    360 196
– other items    46    —    (19 )
(iii)/(vi) Other tax items ⁽³⁾    —    106 221
(vii) Share of items listed above attributable to non-controlling interests    3    1 —
(iii) Expenses arising from the impact of the Merial acquisition ⁽⁴⁾    (32 ) (66 ) (50 )
(iii)/(iv) Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures ⁽⁵⁾    (58 ) (27 ) (28 )
Net income attributable to equity holders of sanofi-aventis
   5,467 5,265 3,851

*(€ million)*


Business operating income	11,353		12,144		12,863

Financial income and expenses	(460	)	(412	)	(362	)
Income tax expense	(2,714	)	(2,937	)	(3,286	)

Business net income	8,179		8,795		9,215

⁽¹⁾ ~~This line comprises the workdown of inventories remeasured at fair value at the acquisition date.~~

⁽²⁾ ~~Other items comprise :~~

~~– gain on sale of investment in Millennium~~

~~– reversals of/charges to provisions for risks~~

~~(138~~

)

⁽³⁾ ~~Other tax items comprise :~~

~~– provisions for/settlements of tax disputes~~

~~221~~

~~– reversal of deferred taxes following ratification of the Franco-American Treaty~~

~~106~~

⁽⁴⁾ This line comprises: until September 17, 2009, amortization and impairment charged against the intangible assets of Merial; and from September 18, 2009, (i) the impact of the discontinuation of depreciation of the property, plant and equipment of Merial in accordance with IFRS 5 (see Note B.7. to our consolidated financial statements) and (ii) the expense arising from the workdown of inventories remeasured at fair value at acquisition date.

⁽⁵⁾ This line shows the portion of major restructuring costs incurred by associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (workdown of acquired inventories, amortization and impairment of intangible assets, and impairment of goodwill).

The most significant reconciliation items in the table above relate to the purchase accounting effect of our acquisitions, particularly the amortization and impairment of intangible assets. We believe that excluding these non-cash charges enhances an ~~investor’s~~investor's understanding of our underlying economic performance because we do not consider that the excluded charges reflect the combined ~~entity’s~~entity's ongoing operating performance. Rather, we believe that each of the excluded charges reflects the decision to acquire the businesses concerned.

The purchase-accounting effects on net income primarily relate to:

•: charges to cost of sales resulting from the workdown of acquired ~~inventory that was written up to~~inventories remeasured at fair value, net of tax;

•

charges related to the impairment of goodwill; and

•

charges related to the amortization and impairment of intangible assets, net of tax and non-controlling interests.

We believe (subject to the limitations described below) that disclosing business net income enhances the comparability of our operating performance, for the following reasons:

•: the elimination of charges related to the purchase accounting effect of our acquisitions (particularly amortization and impairment of finite-lived intangible assets) enhances the comparability of our ongoing operating performance relative to our peers in the pharmaceutical industry that carry these intangible assets (principally patents and trademarks) at low book values either because they are the result of in-house research and development that has already been expensed in prior periods or because they were acquired through business combinations that were accounted for as poolings-of-interest;

•

the elimination of selected items, such as the increase in cost of sales arising from the workdown of inventories remeasured at fair value, gains and losses on disposals of non-current assets and costs and provisions associated with major litigation, improves comparability from one period to the next; and

•

the elimination of restructuring costs relating to the implementation of our transformation strategy enhances comparability because these costs are directly, and only, incurred in connection with transformation processes such as the rationalization of our research and development structures.

We remind investors, however, that business net income should not be considered in isolation from, or as a substitute for, net income attributable to equity holders of ~~sanofi-aventis~~Sanofi reported in accordance with IFRS. In addition, we strongly encourage investors and potential investors not to rely on any single financial measure but to review our financial statements, including the notes thereto, and our other publicly filed reports, carefully and in their entirety.

There are material limitations associated with the use of business net income as compared to the use of IFRS net income attributable to equity holders of ~~sanofi-aventis~~Sanofi in evaluating our performance, as described below:

•

The results presented by business net income cannot be achieved without incurring the following costs that the measure excludes:

•: Amortization of intangible assets. Business net income excludes the amortization charges related to intangible assets. Most of these amortization charges relate to intangible assets that we have acquired. Although amortization is a non-cash charge, it is important for investors to consider it because it represents an allocation in each reporting period of a portion of the purchase price that we

paid for certain intangible assets that we have acquired through acquisitions. For example, in connection with our acquisition of Aventis in 2004, we paid an aggregate of €31,279 million for these amortizable intangible assets (which, in general, were to be amortized over their useful lives, representing an average amortization period of eight years) and €5,007 million for in-progress research & development. More recently, in connection with our acquisition of Genzyme in April 2011, we paid an aggregate of €7,877 million for amortizable intangible assets (average amortization period of eight and a half years) and €2,148 million for in-progress research & development. A large part of our revenues could not be generated without owning acquired intangible assets.

•

~~Amortization of intangible assets~~. Business net income excludes the amortization charges related to intangible assets. Most of these amortization charges relate to intangible assets that we have acquired. Although amortization is a non-cash charge, it is important for investors to consider it because it represents an allocation in each reporting period of a portion of the purchase price that we paid for certain intangible assets that we have acquired through acquisitions. For example, in connection with our acquisition of Aventis in 2004, we paid an aggregate of €31,279 million for these amortizable intangible assets (which, in general, were to be amortized over their useful lives, which represented an average amortization period of eight years) and €5,007 million for in-progress research & development. A large part of our revenues could not be generated without owning acquired intangible assets.

•

~~Restructuring costs.~~ Business net income does not reflect restructuring costs even though it does reflect the benefits of the optimization of our activities, such as our research and development activities, much of which we could not achieve in the absence of restructuring costs.

•: Restructuring costs. Business net income does not reflect restructuring costs even though it does reflect the benefits of the optimization of our activities, such as our research and development activities, much of which we could not achieve in the absence of restructuring costs.

•: In addition, the results presented by business net income are intended to represent the ~~Group’s~~Group's underlying performance, but items such as gains and losses on disposals and provisions associated with major litigation may recur in future years.

We compensate for the above-described material limitations by using business net income only to supplement our IFRS financial reporting and by ensuring that our disclosures provide sufficient information for a full understanding of all adjustments included in business net income. In addition, subject to applicable law, we may in the future decide to report additional non-GAAP financial measures which, in combination with business net income, may compensate further for some of the material limitations described above.

In determining the level of future dividend payments, and in analyzing dividend policy on the basis of business net income, our management intends to take into account the fact that many of the adjustments reflected in business net income have no effect on the underlying amount of cash available to pay dividends. However, although the adjustments relating to the elimination of the effect of the purchase accounting treatment of the Aventis acquisition and other acquisitions represent non-cash charges, the adjustments relating to restructuring costs represent significant cash charges in the periods following the closing of the acquisition.

This Item 5 contains a discussion and analysis of business net income on the basis of consolidated financial data. Because our business net income is not a standardized measure, it may not be comparable with the non-GAAP financial measures of other companies using the same or a similar non-GAAP financial measure.

Presentation of Net Sales

In the discussion below, we present our consolidated net sales for ~~2010, 2009~~2012, 2011 and ~~2008.~~2010. We break down our net sales among various categories, including by business segment, product and geographic region. We refer to our consolidated net sales as ~~“reported”~~"reported" sales.

In addition to reported sales, we analyze non-GAAP financial measures designed to isolate the impact on our net sales of currency exchange rates and changes in group structure.

When we refer to changes in our net sales ~~“at~~"at constant exchange ~~rates”~~rates", we exclude the effect of exchange rates by recalculating net sales for the ~~current year~~relevant period using the exchange rates that were used for the previous ~~year.~~period. See Note B.2 to our consolidated financial statements for further information relating to the manner in which we translate into euros transactions recorded in other currencies.

When we refer to our net sales on a ~~“constant~~"constant structure ~~basis”~~basis", we eliminate the effect of changes in structure by restating the net sales for the previous period as follows:

•: by including sales from an entity or with respect to product rights acquired in the current period for a portion of the previous period equal to the portion of the current period during which we owned them, based on sales information we receive from the party from whom we ~~make~~made the acquisition;

•

similarly, by excluding sales for a portion of the previous period when we have sold an entity or rights to a product in the current period; and

•: for a change in consolidation method, by recalculating the previous period on the basis of the method used for the current period.

A reconciliation of our reported net sales to our net sales at constant exchange rates ~~and on a constant structure basis~~ is provided at “—"— Results of Operations — Year Ended December 31, ~~2010~~2012 Compared with Year Ended December 31, ~~2009~~2011 — Net ~~Sales”~~Sales" and at “—"— Results of Operations — Year Ended December 31, ~~2009~~2011 Compared with Year Ended December 31, ~~2008~~2010 — Net ~~Sales”~~Sales" below.

Financial Presentation of Alliances

We have entered into a number of alliances for the development, co-promotion and/or co-marketing of our products. We believe that a presentation of our two principal alliances is useful to an understanding of our financial statements.

The financial impact of the alliances on the ~~Company’s~~Company's income statement is described in “—"— Results of Operations — Year Ended December 31, ~~2010~~2012 Compared with Year Ended December 31, ~~2009”~~2011" and “—"— Year Ended December 31, ~~2009~~2011 Compared with Year Ended December 31, ~~2008”~~2010", in particular in “—"— Net ~~sales”~~sales", “—"— Other ~~Revenues”~~Revenues", “—"— Share of Profit/Loss of Associates and Joint ~~Ventures”~~Ventures" and “—"— Net Income Attributable to Non-Controlling ~~Interests”~~Interests".

Alliance Arrangements with Bristol-Myers Squibb

Our revenues, expenses and operating income are affected significantly by the presentation of our alliance with Bristol-Myers Squibb (BMS) in our consolidated financial statements.

On September 27, 2012 Sanofi and BMS restructured their alliance following the loss of exclusivity of Plavix® and Avapro®/Avalide® in many major markets. Under the terms of the revised agreement, which came into effect on January 1, 2013, BMS has returned to Sanofi its rights to Plavix® and Avapro®/Avalide® in all markets worldwide with the exception of Plavix® in the U.S. and Puerto Rico, giving Sanofi sole control and freedom to operate commercially. In exchange, starting January 1, 2013 BMS will receive royalty payments on Sanofi's sales of branded and unbranded Plavix® worldwide, excluding the U.S. and Puerto Rico, and on sales of branded and unbranded Avapro®/Avalide® worldwide, in each case through 2018; BMS will also receive a terminal payment of $200 million from Sanofi in December 2018. Plavix® rights in the U.S. and Puerto Rico will continue unchanged under the terms of the existing agreement through December 2019.

~~There~~ In addition, under the terms of this new agreement ongoing disputes between the companies related to the alliance have been resolved. The resolution of these disputes includes various commitments by both companies, including a one-time payment of $80 million by BMS to Sanofi in relation to the Avalide® supply disruption in the U.S. in 2011.

As of December 31, 2012, there are three principal marketing arrangements that are used:

•: Co-marketing. Under the co-marketing system, each company markets the products independently under its own brand names. We record our own sales and related costs in our consolidated financial statements.
•: Exclusive Marketing. Under the exclusive marketing system, one company has the exclusive right to market the products. We record our own sales and related costs in our consolidated financial statements.
•: Co-promotion. Under the co-promotion system, the products are marketed through the alliance arrangements (either by contractual arrangements or by separate entities) under a single brand name. The accounting treatment of the co-promotion agreement depends upon who has majority ownership and operational management in that territory, as discussed below.

•

~~Co-marketing~~~~. Under the co-marketing system, each company markets the products independently under its own brand names. We record our own sales and related costs in our consolidated financial statements.~~

•

~~Exclusive Marketing~~~~. Under the exclusive marketing system, one company has the exclusive right to market the products. We record our own sales and related costs in our consolidated financial statements.~~

•

~~Co-promotion~~. Under the co-promotion system, the products are marketed through the alliance arrangements (either by contractual arrangements or by separate entities) under a single brand name. The accounting treatment of the co-promotion agreement depends upon who has majority ownership and operational management in that territory, as discussed below.

The alliance arrangements as of December 31, 2012 include two royalty streams that are applied on a worldwide basis (excluding Japan and other opt out countries), regardless of the marketing system and regardless of which company has majority ownership and operational management:

•

~~Discovery Royalty~~~~. As inventor of the two molecules, we earn an adjustable discovery royalty on all Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^® ~~and Plavix~~^® ~~/ Iscover~~^® sold in alliance countries regardless of the marketing system. The discovery royalty earned in territories under operational management of BMS is reflected in our consolidated income statement in “Other revenues.”

•

~~Development Royalty~~~~. In addition to the discovery royalty, we and BMS are each entitled to a development royalty related to certain know-how and other intellectual property in connection with sales of Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^® ~~and Plavix~~^® ~~/ Iscover~~^®.

•: Discovery Royalty. As inventor of the two molecules, we earn an adjustable discovery royalty on part of Aprovel®/Avapro®/Karvea®/Karvezide® and Plavix®/Iscover® sold in alliance countries regardless of the marketing system. The discovery royalty earned in territories under operational management of BMS is reflected in our consolidated income statement in "Other revenues."
•: Development Royalty. In addition to the discovery royalty, we and BMS are each entitled to a development royalty related to certain know-how and other intellectual property in connection with sales of Aprovel®/Avapro®/Karvea®/Karvezide® and Plavix®/Iscover®.
•: We record development royalties paid to BMS in our consolidated income statement as an increase to our cost of sales in countries where we consolidate sales of the products. We record development royalties that we receive as ~~“other revenues”~~"other revenues" in countries where BMS consolidates sales of the products.

Under the alliance arrangements as of December 31, 2012, there are two territories, one under our operational management and the other under the operational management of BMS. The territory under our operational management consists of Europe and most of Africa and Asia, while the territory under the operational management of BMS consists of the rest of the world (excluding Japan). In Japan, ~~Aprovel~~^®Aprovel® has been marketed jointly by Shionogi Pharmaceuticals and Dainippon Sumitomo Pharma Co. Ltd since June 2008. Our alliance with BMS does not cover distribution rights to ~~Plavix~~^®Plavix® in Japan, which is marketed by ~~sanofi-aventis.~~

Sanofi.

Territory under our operational ~~management~~management.. In the territory under our operational management, the marketing arrangements and recognition of operations by the Group are as follows:

•

~~we use the co-promotion system for most of the countries in Western Europe for Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^® ~~and Plavix~~^® ~~/ Iscover~~^® ~~and for certain Asian countries for Plavix~~^® ~~/ Iscover~~^®. We record 100% of all alliance revenues and expenses in our consolidated financial statements. We also record, as selling and general expenses, payments to BMS for the cost of BMS’s personnel involved in the promotion of the products. BMS’s share of the operating income of the alliances is recorded as “non-controlling interests”;

•

~~we use the co-marketing system in Germany, Spain and Greece for both Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^® ~~and Plavix~~^® ~~/ Iscover~~^® ~~and in Italy for Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^®~~; and~~

•
~~we have the exclusive right to market Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^® ~~and Plavix~~^® ~~/ Iscover~~^® ~~in Eastern Europe, Africa, the Middle East, and certain Asian countries (excluding Japan); we have the exclusive right to market Aprovel~~^® ~~in Scandinavia and Ireland, and Plavix~~^® ~~in Malaysia.~~

•: we use the co-promotion system for most of the countries in Western Europe for Aprovel®/Avapro®/Karvea®/Karvezide® and Plavix®/Iscover® and for certain Asian countries for Plavix®/Iscover®. We record 100% of all alliance revenues and expenses in our consolidated financial statements. We also record, as selling and general expenses, payments to BMS for the cost of BMS's personnel involved in the promotion of the products. BMS's share of the operating income of the alliances is recorded as "non-controlling interests";
•: we use the co-marketing system in Germany, Spain and Greece for both Aprovel®/Avapro®/Karvea®/Karvezide® and Plavix®/Iscover® and in Italy for Aprovel®/Avapro®/Karvea®/Karvezide®; and
•: we have the exclusive right to market Aprovel®/Avapro®/Karvea®/Karvezide® and Plavix®/Iscover® in Eastern Europe, Africa, the Middle East, and certain Asian countries (excluding Japan); we have the exclusive right to market Aprovel® in Scandinavia and Ireland, and Plavix® in Malaysia.

Territory under BMS operational ~~management~~management.. In the territory under BMS operational management, the marketing arrangements and recognition of operations by the Group are as follows:

•

~~we use the co-promotion system in the United States, Canada and Puerto Rico, where the products are sold through the alliances under the operational management of BMS. With respect to Avapro~~^® ~~(the brand name used in the United States for Aprovel~~^®~~) and Plavix~~^®, we record our share of the alliance’s operating income under “share of profit/loss of associates and joint ventures”. We also record payments from BMS for the cost of our personnel in connection with the promotion of the product as a deduction from our selling and general expenses;

•

~~we use the co-marketing system in Brazil, Mexico, Argentina and Australia for Plavix~~^® ~~/ Iscover~~^® ~~and Aprovel~~^® ~~/ Avapro~~^® ~~/ Karvea~~^® ~~/ Avalide~~^® ~~and in Colombia for Plavix~~^® ~~/ Iscover~~^®~~; and~~

•: we use the co-promotion system in the United States, Canada and Puerto Rico, where the products are sold through the alliances under the operational management of BMS. With respect to Avapro® (the brand name used in the United States for Aprovel®) and Plavix®, we record our share of the alliance's operating income under "share of profit/loss of associates and joint ventures". We also record payments from BMS for the cost of our personnel in connection with the promotion of the product as a deduction from our selling and general expenses;
•: we use the co-marketing system in Brazil, Mexico, Argentina and Australia for Plavix®/Iscover® and Aprovel®/Avapro®/Karvea®/Karvezide® and in Colombia for Plavix®/Iscover®; and
•: we have the exclusive right to market the products in certain other countries of Latin America.

In countries where the products are marketed by BMS on a co-marketing basis, or through alliances under the operational management of BMS, we also earn revenues from the sale of the active ingredients for the products to BMS or such entities, which we record as ~~“Net sales”~~"Net sales" in our consolidated income statement.

Alliance Arrangements with Regeneron

Our relationship with Regeneron began in 2003 with an agreement for the co-development of the anti-angiogenic agent Zaltrap®. We expanded our relationship in 2007 and created a strategic R&D collaboration on fully human monoclonal antibodies.

Collaboration agreement on Zaltrap® (aflibercept)

Zaltrap® (aflibercept) is a solution administered by intravenous perfusion, used in association with 5-fluorouracil, leucovorin and irinotecan (FOLFIRI) as a treatment for metastatic colorectal cancer that is resistant to or has progressed following an oxaliplatin-containing regimen.

In September 2003, Sanofi and Regeneron signed an agreement to collaborate on the development and commercialization of Zaltrap®. Under the terms of this agreement (as amended in 2005), Sanofi is responsible for funding 100% of the development costs, co-promotion rights are shared between Sanofi and Regeneron, and the profits generated from sales of Zaltrap® worldwide (except Japan) are shared equally. Sales of Zaltrap® made by subsidiaries under the control of Sanofi are recognized in consolidated net sales, and the associated costs incurred by those subsidiaries are recognized as operating expenses in the consolidated income statement. Regeneron's share of the profits is recognized in the line item "Other operating expenses", a component of operating income.

Under the terms of the same agreement, Regeneron agreed to repay 50% of the development costs initially funded by Sanofi. Contractually, this amount represents 5% of the residual repayment obligation per quarter, but may not exceed Regeneron's profit share for the quarter unless Regeneron voluntarily decides to make a larger payment in a given quarter.

The agreement also stipulates milestone payments to be made by Sanofi on receipt of specified marketing approvals for Zaltrap® in the United States, within the European Union and in Japan.

In the United States, Zaltrap® is a registered trademark of Regeneron Pharmaceuticals, Inc. The product was approved by the U.S. Food and Drug Administration ("FDA") in August 2012, and has been marketed in the United States since that date. On February 5, 2013, the European Commission granted marketing authorization in the European Union for Zaltrap®. Regeneron has not elected to co-promote Zaltrap® at launch in the major market countries defined as United States, France, Italy, Spain, United Kingdom, Germany and Canada.

In Japan, Sanofi will develop and commercialize Zaltrap®, with Regeneron entitled to receive a royalty.

Collaboration agreement on the discovery, development and commercialization of human therapeutic antibodies

In November 2007, Sanofi and Regeneron signed additional agreements under which Sanofi committed to funding the development costs of Regeneron's human monoclonal antibody research program until 2017, up to a maximum of $160 million a year (see Note D.21. to our consolidated financial statements included at Item 18 of this annual report). Sanofi has an option to license for further development any antibodies discovered by Regeneron that attain Investigational New Drug (IND) status.

If such an option is exercised, Sanofi is primarily responsible for funding, and co-develops the antibody with Regeneron. Sanofi and Regeneron would share co-promotion rights and profits on sales of the co-developed antibodies. Development costs for the drug candidate are shared between the companies, with Sanofi generally funding these costs up front, except that following receipt of the first positive Phase III trial results for a co-developed drug candidate, subsequent Phase III trial-related costs for that drug candidate are shared 80% by Sanofi and 20% by Regeneron. Once a product begins to be marketed, Regeneron will progressively repay out of its profits 50% of the development costs borne by Sanofi for all antibodies licensed by Sanofi. However, Regeneron are not required to apply more than 10% of its share of the profits from collaboration products in any calendar quarter towards reimbursing Sanofi for these development costs. Under the terms of the collaboration agreement, Sanofi may also be required to make milestone payments based on aggregate sales of antibodies. In 2012, six antibodies were in clinical development; two of which were in Phase III.

If Sanofi does not exercise its licensing option for an antibody under development, Sanofi will be entitled to receive a royalty once the antibody begins to be marketed.

Alliance arrangements with Warner Chilcott (previously with Procter & Gamble Pharmaceuticals)

Our agreement with Warner Chilcott (“("the Alliance ~~Partner”~~Partner") covers the worldwide development and marketing arrangements of ~~Actonel~~^®Actonel®, except Japan for which we hold no rights. Until October 30, 2009, this agreement was between ~~sanofi-aventis~~Sanofi and Procter & Gamble Pharmaceuticals (P&G). Since the sale by P&G of its pharmaceutical business to Warner Chilcott on October 30, 2009, ~~Actonel~~^®Actonel® has been marketed in collaboration with Warner Chilcott. The local marketing arrangements may take various forms.

•

•: Co-promotion,whereby sales resources are pooled but only one of the two parties to the alliance agreement (sanofi-aventis or the Alliance Partner) invoices product sales. Co-promotion is carried out under contractual agreements and is not based on any specific legal entity. The Alliance Partner sells the product and incurs all of the related costs in France and Canada. This co-promotion scheme formerly included Germany, Belgium and Luxembourg until December 31, 2007, the Netherlands until March 31, 2008, and the United States and Puerto Rico until March 31, 2010. We recognize our share of revenues under the agreement in our income statement as a component of operating income in the line item “Other operating income”. Since April 1, 2010, we have received royalties from the Alliance Partner on sales made by the Alliance Partner in the United States and Puerto Rico. In the secondary co-promotion territories (the United Kingdom until December 31, 2008, Ireland, Sweden, Finland, Greece, Switzerland, Austria, Portugal and Australia), we sell the product and recognize all the revenues from sales of the product along with the corresponding expenses. The share due to the Alliance Partner is recognized in “Cost of sales”;

•

~~Co-marketing~~, which applies in Italy whereby each party to the alliance agreement sells the product in the country under its own brand name, and recognizes all revenues and expenses from its own operations in its respective income statement. Each company also markets the product independently under its own brand name in Spain, although Spain is not included in the co-marketing territory.

•

~~Warner Chilcott only territories~~: the product has been marketed by the Alliance Partner independently in Germany, Belgium and Luxembourg since January 1, 2008, in the Netherlands since April 1, 2008 and in the United Kingdom since January 1, 2009. We recognize our share of revenues under the alliance agreement in “Other operating income”; and

•

~~sanofi-aventis only territories~~: we have exclusive rights to sell the product in all other territories. We recognize all revenues and expenses from our own operations in our income statement, but in return for these exclusive rights pay the Alliance Partner a royalty based on actual sales. This royalty is recognized in “Cost of sales”.

~~Further~~ to the ~~termination~~alliance agreement (Sanofi or the Alliance Partner) invoices product sales. Co-promotion is carried out under contractual agreements and is not based on any specific legal entity. The Alliance Partner sells the product and incurs all of ~~an ancillary supply~~the related costs in France and Canada. This co-promotion scheme formerly included Germany, Belgium and Luxembourg until December 31, 2007, the Netherlands until March 31, 2008, and the United States and Puerto Rico until March 31, 2010. We recognize our share of revenues under the agreement in our income statement as a component of operating income in the line item "Other operating income". Since April 1, 2010, we have received royalties from the Alliance Partner on sales made by the Alliance Partner in the United States and Puerto Rico. In the secondary co-promotion territories (the United Kingdom until December 31, 2008, Ireland, Sweden, Finland, Greece, Switzerland, Austria, Portugal and Australia), we sell the product and recognize all the revenues from sales of the product along with the corresponding expenses. The share due to the Alliance Partner is recognized in "Cost of sales";

•

Co-marketing, which applies in Italy, whereby each party to the alliance agreement sells the product in the country under its own brand name, and recognizes all revenues and expenses from its own operations in its respective income statement. Each company also markets the product independently under its own brand name in Spain, although Spain is not included in the co-marketing territory;

•

Warner Chilcott ~~sanofi-aventis~~only territories: the product has been marketed by the Alliance Partner independently in Germany, Belgium and Luxembourg since January 1, 2008, in the Netherlands since April 1, 2008 and in the United Kingdom since January 1, 2009. We recognize our share of revenues under the alliance agreement in "Other operating income"; and

•

Sanofi only territories: we have exclusive rights to sell the product in all other territories. We recognize all revenues and expenses from our own operations in our income statement, but in return for these exclusive rights we pay the Alliance Partner a royalty based on actual sales. This royalty is recognized in "Cost of sales".

In 2010, Sanofi and Warner Chilcott ~~have begun~~began negotiations on the future of their alliance arrangements. In an arbitration proceeding, an arbitration panel decided on July 14, 2011 that the termination by Warner Chilcott of an ancillary agreement did not lead to the termination of the Actonel® Alliance. Pursuant to this decision, the alliance will remain in effect until January 1, 2015.

Impact of Exchange Rates

We report our consolidated financial statements in euros. Because we earn a significant portion of our revenues in countries where the euro is not the local currency, our results of operations can be significantly affected by exchange rate movements between the euro and other currencies, primarily the U.S. dollar and, to a lesser extent, the Japanese yen, and currencies in emerging countries. We experience these effects even though certain of these countries do not account for a large portion of our net sales. In ~~2010,~~2012, we earned ~~29.5%~~31.1% of our net sales in the United States. A decrease in the value of the U.S. dollar against the euro has a negative impact on our revenues, which is not offset by an equal reduction in our costs and therefore negatively affects our operating income. A decrease in the value of the U.S. dollar has a particularly significant impact on our operating income, which is higher in the United States than elsewhere, and on the contribution to net income of our alliance with BMS in the United States, which is

under the operational management of BMS, as described at “—"— Financial Presentation of Alliances — Alliance arrangements with Bristol-Myers ~~Squibb”~~Squibb" above.

For a description of positions entered into to manage operational foreign exchange risks as well as our hedging policy, see ~~“Item~~"Item 11. Quantitative and Qualitative Disclosures about Market ~~Risk”~~Risk", and ~~“Item~~"Item 3. Key Information — D. Risk Factors — Risks Related to Financial Markets — Fluctuations in currency exchange rates could adversely affect our results of operations and financial ~~condition”~~condition".

Divestments

In August 2012, Sanofi sold its 39.1% interest in Société Financière des Laboratoires de Cosmétologie Yves Rocher, in line with the Group's desire to focus on strategic activities.

In December 2011 Sanofi sold the Dermik dermatology business to Valeant Pharmaceuticals International Inc., for €321 million (see Note D.1.3. to our consolidated financial statements included at Item 18 of this annual report).

There were no material divestments in ~~2010, 2009 or 2008.~~

2010.

Acquisitions

•: The principal acquisitions during 2012 are described below:

In April 2012, Sanofi strengthened its presence in biosurgery by acquiring a 100% equity interest in Pluromed, Inc. (Pluromed), an American medical devices company. Pluromed has developed a proprietary polymer technology — Rapid Transition Polymers (RTP™) — pioneering the use of plugs that can be injected into blood vessels to improve the safety, efficacy and economics of medical interventions.

In March 2012, Merial (Sanofi's Animal Health division) completed the acquisition of Newport Laboratories, a privately held company based in Worthington, Minnesota (United States), which is a leader in autogenous vaccines for the bovine and swine markets.

The impact of these two acquisitions on our consolidated financial statements is not material.

In October 2012, Sanofi signed an agreement to acquire Genfar S.A. (Genfar), a Colombian pharmaceutical company that is a major player in Colombia and other countries in Latin America. Genfar is the second-largest generics manufacturer in Colombia by sales, and the leader by volumes sold. Closing of the deal is subject to certain conditions, and is expected to take place in the first quarter of 2013.

In December 2012, Sanofi announced that an agreement had been reached to acquire the animal health division of Dosch Pharmaceuticals Pvt Ltd, an Indian company, allowing Merial to enter this strategic animal health market. Closing of the deal is subject to regulatory approval, and is expected to take place during the first half of 2013.

•: The principal acquisitions during 2011 are described below:

In February 2011, Sanofi completed the acquisition of 100% of the share capital of BMP Sunstone Corporation (BMP Sunstone), a pharmaceutical company that develops a portfolio of branded pharmaceutical and healthcare products in China. See Note D.1.2. to our consolidated financial statements included at Item 18 of this annual report.

In April 2011, Sanofi acquired Genzyme Corporation (Genzyme), a major biotechnology company headquartered in Cambridge, Massachussets (United States), with primary areas of focus in rare diseases, renal endocrinology, oncology and biosurgery. The transaction was completed in accordance with the terms of the public exchange offer at a price of $74 in cash plus the issuance to Genzyme shareholders of one contingent value right (CVR) per share. The total purchase price amounted to €14.8 billion. The purchase price allocation is disclosed in Note D.1.2. to our consolidated financial statements included at Item 18 of this annual report.

In October 2011, Sanofi acquired Topaz Pharmaceuticals Inc. (Topaz), a U.S. pharmaceutical research company that developed an innovative anti-parasitic product for treating head lice. An upfront payment of $35 million was made on completion of the transaction. According to the agreement, future milestone payments may be made upon market approval and depending on the achievement of sales targets. See Note D.1.2. to our consolidated financial statements included at Item 18 of this annual report. The total amount of payments (including the upfront payment) could reach $207.5 million.

In November 2011, Sanofi acquired the business of Universal Medicare Private Limited (Universal), a major producer of nutraceuticals in India. An upfront payment of €83 million was made on completion of the transaction. See Note D.1.2. to our consolidated financial statements included at Item 18 of this annual report.

In December 2011, Sanofi co-invested in Warp Drive Bio, an innovative start-up biotechnology company, along with two venture capital firms, Third Rock Ventures (TRV) and Greylock Partners. Warp Drive Bio is an innovative biotechnology company, focusing on proprietary genomic technology to discover drugs of natural origin. Sanofi and TRV / Greylock have invested in Warp Drive Bio at parity. Total program funding over the first five years could amount to up to $125 million, including an equity investment of up to $75 million.

•: The principal acquisitions during 2010 are described below:

In February 2010, ~~sanofi-aventis~~Sanofi acquired the U.S.-based company Chattem, Inc. (Chattem) by successfully completing a cash tender ~~offer.~~offer leading to the acquisition of 100% of the share capital. Chattem is a major consumer health player in the United States, producing and distributing branded consumer health products, toiletries and dietary ~~supplementes accross~~supplements across various market segments. Chattem ~~will manage~~manages the ~~Allegra~~^®Allegra® brand, and ~~act~~acts as the platform for ~~sanofi-aventis~~Sanofi over-the-counter and consumer ~~health~~healthcare products in the United States. ~~As of December 31, 2010, sanofi-aventis held 100% of Chattem’s share capital.~~ See Note ~~D.1.~~D.1.4. to our consolidated financial statements included at Item 18 of this annual report.

In April 2010, ~~sanofi-aventis~~Sanofi acquired a controlling interest in the capital of Bioton Vostok, a Russian insulin manufacturer. Under the terms of the agreement, put options were granted to non-controlling interests. See Note D.18. to our consolidated financial statements included at Item 18 of this annual report.

In May 2010, ~~sanofi-aventis~~Sanofi formed a new joint venture with Nichi-Iko Pharmaceuticals Co., ~~Ltd.~~Ltd (Nichi-Iko), a leading generics company in Japan, to expand generics activities in the country. In addition to forming this joint venture, ~~sanofi-aventis~~Sanofi took a 4.66% equity interest in the capital of Nichi-Iko.

In June 2010, ~~sanofi-aventis~~Sanofi acquired 100% of the share capital of Canderm Pharma Inc. (Canderm), a privately-held leading Canadian skincare company distributing cosmeceuticals and dermatological products. Canderm generated net sales of 24 million Canadian dollars in 2009.

In July 2010, ~~sanofi-aventis~~Sanofi acquired 100% of the share capital of TargeGen, Inc. (TargeGen), a U.S. biopharmaceutical company developing small molecule kinase inhibitors for the treatment of certain forms of leukemia, lymphoma and other hematological malignancies and blood disorders. An upfront payment of $75 million was made on completion of the transaction. Future milestone payments may be made at various stages in the development of TG 101348, ~~TargeGen’s~~TargeGen's principal product candidate. The total amount of payments (including the upfront payment) could reach $560 million. See Note ~~D.1.~~D.1.4. and Note D.18. to our consolidated financial statements included at Item 18 of this annual report.

In August 2010, ~~sanofi-aventis~~Sanofi acquired 100% of the share capital of Nepentes S.A. (Nepentes), a Polish manufacturer of pharmaceuticals and dermocosmetics, for a consideration of PLN 425 million (€106 million).

In October 2010, ~~sanofi pasteur~~Sanofi Pasteur acquired 100% of the share capital of VaxDesign Corporation (VaxDesign), a privately-held U.S. biotechnology company which has developed a technology reproducing in vitro models of the human immune system, that can be used to select the best candidate vaccines at the pre-clinical stage. Under the terms of the agreement, an upfront payment of $55 million was made upon closing of the transaction, and a further $5 million will be payable upon completion of a specified development milestone.

In October 2010, ~~sanofi-aventis~~Sanofi acquired a 60% equity interest in the Chinese consumer healthcare company Hangzhou Sanofi Minsheng Consumer Healthcare Co. Ltd, in partnership with Minsheng Pharmaceutical Co., Ltd ~~(“Minsheng”~~("Minsheng"). Minsheng was also granted a put option over the remaining shares not held by ~~sanofi-aventis.~~Sanofi. See Note D.18. to our consolidated financial statements included at Item 18 of this annual report.

In October 2010, sanofi-aventis and BMP Sunstone Corporation (BMP Sunstone) signed an agreement pursuant to which sanofi-aventis acquired 100% of the share capital of BMP Sunstone on February 24, 2011 for $521 million.

~~The principal acquisitions during 2009 are described below:~~

On September 17, 2009, and further to the agreement signed on July 29, 2009, sanofi-aventis completed the acquisition of the interest held by Merck & Co., Inc. (Merck) in Merial Limited (Merial) for consideration of $4 billion in cash. Founded in 1997, Merial was previously held jointly (50/50) by Merck and sanofi-aventis, and is now 100% held by sanofi-aventis. Merial is one of the world’s leading animal health companies, with annual sales of $2.6 billion in 2009 and 2010. With effect from September 17, 2009, sanofi-aventis has held 100% of the shares of Merial and has exercised exclusive control over the company. In accordance with IAS 27, Merial is accounted for by the full consolidation method in the consolidated financial statements of sanofi-aventis.

In connection with the agreement signed on July 29, 2009, sanofi-aventis also signed an option contract giving it the possibility, once the Merck/Schering-Plough merger is complete, to combine the Merck-owned Intervet/Schering-Plough Animal Health business with Merial in a joint venture to be held 50/50 by Merck and sanofi-aventis. The terms of the option contract set a value of $8 billion for Merial. The minimum total value received by Merck and its subsidiaries in consideration for the transfer of Intervet/Schering-Plough to the combined entity would be $9.25 billion, comprising a minimum value of $8.5 billion for Intervet/Schering-Plough (subject to potential upward revision after valuations performed by the two parties) and additional consideration of $750 million. An additional balancing payment of $250 million will be made to establish 50/50 parity between Merck and sanofi-aventis in the combined entity.

Because of the high probability of the option being exercised as of year end 2009, Merial was treated as an asset held for sale or exchange pursuant to IFRS 5 as of December 31, 2009. On March 8, 2010, sanofi-aventis did in fact exercise its contractual right to combine the Intervet/Schering-Plough Animal Health business with Merial. In addition to execution of final agreements, formation of the new animal health joint venture remains subject to antitrust review in the United States, Europe and other countries, and other customary closing conditions. Due to the probable formation of the joint venture with Merck in 2011, Merial was still treated as an asset held for sale or exchange pursuant to IFRS 5 as of December 31, 2010. Detailed information about the impact of Merial on the consolidated financial statements of sanofi-aventis is provided in Note D.1. and Note D.8.1. to our consolidated financial statements included at Item 18 of this annual report.

On March 11, 2009, sanofi-aventis successfully closed its offer for Zentiva N.V. (Zentiva). As of December 31, 2009, sanofi-aventis held about 99.1% of Zentiva’s share capital. Following the buyout of the remaining non-controlling interests, sanofi-aventis held 100% of Zentiva’s share capital as of December 31, 2010. The purchase price was €1,200 million, including acquisition-related costs. See Note D.1. to our consolidated financial statements included at Item 18 of this annual report.

~~On March 31, 2009, sanofi-aventis acquired Laboratorios Kendrick, one of Mexico’s leading manufacturers of generics, with sales of approximately €26 million in 2008.~~

On April 27, 2009, sanofi-aventis acquired a 100% equity interest in Medley, the third largest pharmaceutical company in Brazil and a leading generics company in that country. The purchase price, based on an enterprise value of €500 million, was €348 million inclusive of acquisition-related costs. See Note D.1. to our consolidated financial statements included at Item 18 of this annual report.

On April 27, 2009 sanofi-aventis acquired 100% of BiPar Sciences, Inc. (BiPar), a U.S. biopharmaceutical company developing novel tumor-selective approaches for the treatment of different types of cancers. BiPar is the leading company in the emerging field of DNA (deoxyribonucleic acid) repair using Poly ADP-Ribose Polymerase (PARP) inhibitors. The purchase price was contingent on the achievement (regarded as probable) of milestones related to the development of BSI-201, and could reach $500 million. See Note D.1. and Note D.18. to our consolidated financial statements included at Item 18 of this annual report.

~~In July 2009, sanofi-aventis completed the acquisition of 100% of the share capital of Helvepharm, a Swiss generics company.~~

In August 2009, sanofi-aventis took control of Shantha Biotechnics (Shantha), a vaccines company based in Hyderabad (India). As of December 31, 2010, sanofi-aventis held approximately 96.4% of Shantha. The purchase price allocation led to the recognition of intangible assets (excluding goodwill) worth €374 million. See Note D.1. to our consolidated financial statements included at Item 18 of this annual report.

On October 30, 2009, sanofi-aventis acquired 100% of the share capital of Fovea Pharmaceuticals SA., a privately-held French biopharmaceutical research and development company specializing in ophthalmology. The purchase consideration was contingent on milestone payments of up to €280 million linked to the development of three clinical compounds. See Notes D.1. and D.18. to our consolidated financial statements included at Item 18 of this annual report.

~~On November 30, 2009, sanofi-aventis completed the acquisition of 100% of the share capital of Laboratoire Oenobiol, one of France’s leading players in health and beauty dietary supplements.~~

~~The principal acquisitions during 2008 are described below:~~

On September 1, 2008, sanofi-aventis completed the acquisition of the Australian company Symbion CP Holdings Pty Ltd (Symbion Consumer) for AUD560 million. Symbion Consumer manufactures, markets and distributes nutraceuticals (vitamins and mineral supplements) and over-the-counter brands throughout Australia and New Zealand. Symbion Consumer has a portfolio of brands including Natures Own^®~~, Cenovis~~^®~~, Bio-organics~~^®~~, Golden Glow~~^® ~~and Microgenics~~^®.

On September 25, 2008, sanofi-aventis completed the acquisition of 100% of the share capital of Acambis plc (Acambis) for £285 million. Acambis became Sanofi Pasteur Holding Ltd, a wholly-owned subsidiary of Sanofi Pasteur Holding SA. This company develops novel vaccines that address unmet medical needs or substantially improve current standards of care. Sanofi Pasteur and Acambis had been developing vaccines in a successful partnership of more than a decade: Acambis was conducting major projects under exclusive collaboration agreements with sanofi pasteur, for vaccines against dengue fever and Japanese encephalitis.

Results of Operations

Year Ended December 31, ~~2010~~2012 Compared with Year Ended December 31, ~~2009~~2011

The consolidated income statements for the years ended December 31, ~~2010~~2012 and December 31, ~~2009~~2011 break down as follows:

(under IFRS) *(€ million)*


Net sales	34,947		100.0%		33,389		100.0%
Other revenues	1,010		2.9%		1,669		5.0%
Cost of sales	(11,118	)	(31.8%	)	(10,902	)	(32.7%	)
Gross profit	24,839		71.1%		24,156		72.3%
Research & development expenses	(4,922	)	(14.1%	)	(4,811	)	(14.4%	)
Selling & general expenses	(8,947	)	(25.6%	)	(8,536	)	(25.6%	)
Other operating income	562				319
Other operating expenses	(454	)			(315	)
Amortization of intangible assets	(3,291	)			(3,314	)
Impairment of intangible assets	(117	)			(142	)
Fair value remeasurement of contingent consideration liabilities	(192	)			15
Restructuring costs	(1,141	)			(1,314	)
Other gains and losses, and litigation ⁽¹⁾	—				(327	)
Operating income	6,337		18.1%		5,731		17.2%
Financial expenses	(553	)			(552	)
Financial income	93				140
Income before tax and associates and joint ventures	5,877		16.8%		5,319		15.9%
Income tax expense	(1,134	)			(455	)
Share of profit/(loss) of associates and joint ventures	393				1,070

Net income	5,136		14.7%		5,934		17.8%

Net income attributable to non-controlling interests	169				241

Net income attributable to equity holders of Sanofi	4,967		14.2%		5,693		17.1%

Average number of shares outstanding (million)	1,319.5				1,321.7
Average number of shares outstanding after dilution (million)	1,329.6				1,326.7

Basic earnings per share (in euros)	3.76				4.31
Diluted earnings per share (in euros)	3.74				4.29

⁽¹⁾: See Note B.20.2. to our consolidated financial statements included at Item 18 of this annual report.

Our consolidated income statements include the results of the operations of Genzyme from April 2011. In order to help investors gain a better understanding of our performances, in the narrative discussion of certain income statement line items ("net sales", "research & development expenses", and "selling & general expenses"), we include non-consolidated 2011 first-quarter data for Genzyme in additional analyses.

(under IFRS)
(€ million)
   2010
as % of
net sales
   2009
as % of
net sales

Net sales
   30,384 100.0%    29,306 100.0%
Other revenues    1,651 5.4%    1,443 4.9%
Cost of sales    (8,717 ) (28.7%)       (7,880 ) (26.9%)
Gross profit
   23,318 76.7%    22,869 78.0%
Research & development expenses    (4,401 ) (14.5%)       (4,583 ) (15.6%)
Selling & general expenses    (7,567 ) (24.9%)       (7,325 ) (25.0%)
Other operating income    359    866
Other operating expenses    (276 )    (481 )
Amortization of intangible assets    (3,529 )    (3,528 )
Impairment of intangible assets    (433 )    (372 )
Restructuring costs    (1,372 )    (1,080 )
Gains and losses on disposals, and litigation    (138 )    —
Operating income
   5,961 19.6%    6,366 21.7%
Financial expenses    (467 )    (324 )
Financial income    105    24
Income before tax and associates and joint ventures
   5,599 18.4%    6,066 20.7%
Income tax expense    (1,242 )    (1,364 )
Share of profit/loss of associates and joint ventures    978    814
Net income excluding the held-for-exchange Merial business ⁽¹⁾
   5,335 17.6%    5,516 18.8%
Net income from the held-for-exchange Merial business ⁽¹⁾    386    175
Net income
   5,721 18.8%    5,691 19.4%
Net income attributable to non-controlling interests    254    426
Net income attributable to equity holders of sanofi-aventis
   5,467 18.0%    5,265 18.0%
Average number of shares outstanding (million)    1,305.3    1,305.9
Average number of shares outstanding after dilution (million)    1,308.2    1,307.4
Basic earnings per share (in euros)    4,19    4.03
Diluted earnings per share (in euros)    4.18    4.03

⁽¹⁾

Reported separately in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations). For the other disclosures required under IFRS 5, refer to Note D.8. to our consolidated financial statements included at Item 18 of this annual report.

Net Sales

Net sales for the year ended December 31, ~~2010 were €30,384~~2012 amounted to €34,947 million, up ~~3.7%~~4.7% on ~~2009.~~2011. Exchange rate movements ~~— principally~~had a favorable effect of 4.2 points, mainly reflecting the appreciation of the U.S. dollar ~~and the yen~~ against the euro, ~~— had~~and to a ~~favorable effect~~lesser extent the appreciation of ~~4.5 points.~~the yen and the yuan. At constant exchange rates and after taking account of changes in structure (mainly the consolidation of ~~Zentiva~~Genzyme from ~~the second quarter of 2009, and of Chattem from the first quarter of 2010)~~April 2011), net sales ~~fell~~rose by ~~0.8%~~0.5% year-on-year. ~~On a constant structure basis and at constant exchange rates, organic net sales were down 2.7%.~~

The following table sets forth a reconciliation of our reported net sales for the years ended December 31, ~~2010~~2012 and December 31, ~~2009~~2011 to our net sales at constant exchange ~~rates and net sales on a constant structure basis.~~rates:

*(€ million)*


Net sales	34,947		33,389	+4.7%

Effect of exchange rates	(1,400	)

Net sales at constant exchange rates	33,547		33,389	+0.5%

(€ million)    2010 2009
Change
(%)

Net sales
   30,384 29,306    +3.7%
Effect of exchange rates    (1,319 )
Net sales at constant exchange rates
   29,065 29,306    -0.8%
Effect of changes in structure    561
Net sales on a constant structure basis and at constant exchange rates
   29,065 29,867    -2.7%

Our net sales ~~are~~comprise the net sales generated by our ~~two principal operating segments:~~ Pharmaceuticals, ~~and~~ Human Vaccines (Vaccines)~~. We do not consolidate net sales from our~~ and Animal Health business; instead, Merial’s contribution to net income is reported separately on the line “Net income from the held-for-exchange Merial business”, in accordance with IFRS 5 (see Note D.8. to our consolidated financial statements included at Item 18 of this annual report).segments.

The following table breaks down our ~~2010~~2012 and ~~2009~~2011 net sales by business segment:

(€ million)
2010
Reported

2009
Reported

Change on a
reported basis
(%)

Change at
constant
exchange rates
(%)

Change on a
constant structure
basis and at constant
exchange rates
(%)

Pharmaceuticals    26,576       25,823       +2.9%       -1.6%       -3.6%
Vaccines    3,808       3,483       +9.3%       +4.8%       +3.8%
Total
   30,384       29,306       +3.7%       -0.8%       -2.7%

*(€ million)*


Pharmaceuticals	28,871	27,890	+3.5%	-0.4%
Vaccines	3,897	3,469	+12.3%	+5.7%
Animal Health	2,179	2,030	+7.3%	+3.1%

Total	34,947	33,389	+4.7%	+0.5%

Net Sales by Product — Pharmaceuticals segment

Net sales generated by our Pharmaceuticals segment were ~~€26,576~~€28,871 million in ~~2010,~~2012, up ~~2.9%~~3.5% on a reported basis but down ~~1.6% at constant exchange rates.~~

~~Flagship Products~~

~~Our flagship products (Lantus~~^® ~~and other Diabetes division products, Lovenox~~^®~~, Plavix~~^®~~, Taxotere~~^®~~, Aprovel~~^®~~/CoAprovel~~^®~~, Eloxatine~~^®~~, Multaq~~^® ~~and Jevtana~~^®~~) are discussed below. Sales of Plavix~~^® ~~and Aprovel~~^® ~~are discussed further below under “— Worldwide Presence of Plavix~~^® ~~and Aprovel~~^®”.

~~Net sales for the Diabetes division came to €4,298 million, up 9.2% at constant exchange rates, driven by growth for Lantus~~^®~~, Apidra~~^® ~~and Amaryl~~^®.

~~Lantus~~^®, the world’s leading insulin brand (source: IMS 2010 sales), posted a 9.1% rise in net sales at constant exchange rates in 2010 to €3,510 million. Growth was strong in Emerging Markets (18.2% at constant exchange rates), but slowed in the United States (7.4% at constant exchange rates) due to healthcare reforms, despite higher sales of the SoloSTAR^® ~~injection pen. Lantus~~^® ~~achieved particularly strong growth at constant exchange rates in Japan (32.3%), Russia (25.9%), and Brazil (30.6%).~~

~~Net sales of the rapid-acting insulin analog~~~~Apidra~~^® ~~advanced by 24.1% at constant exchange rates in 2010 to €177 million, buoyed by solid performances in Western Europe (21.8% growth) and Emerging Markets (37.5% growth).~~

~~Lovenox~~^®, the leading anti-thrombotic in the United States, Germany, France, Italy, Spain and the United Kingdom (source: IMS 2010 sales), saw net sales fall by 10.5% at constant exchange rates in 2010 to €2,806 million. In the United States, sales fell by 22.7% to €1,439 million following the introduction of a generic version of enoxaparin at the end of July 2010. As of the date of this document, we are aware of only one U.S. generic approved by the FDA although other ANDAs have been submitted. Excluding the United States, net sales were up 7.8% at constant exchange rates at €1,367 million (representing 48.7% of wordlwide 2010 sales of Lovenox^®~~), with good performances in Western Europe (up 7.3%) and Eastern Europe (up 14.0%).~~

~~Taxotere~~^® ~~reported net sales of €2,122 million, down 6.4%~~0.4% at constant exchange rates. The ~~drop in~~year-on-year change reflects the positive impact of consolidating Genzyme from April 2011 and the performance of growth platforms, but also the negative effects of generic competition (mainly on sales ~~came~~of Lovenox®, Taxotere® and Eloxatine® in the United States, and of Taxotere®, Plavix® and Aprovel® in Western ~~Europe, where~~Europe), the ~~patents expired in November 2010. Generic docetaxel became available throughout Western Europe by November 2010. In the United States, distributors commenced a work down of Taxotere~~^® ~~inventories in late 2010 in anticipation~~ending of the ~~expected arrival~~co-promotion agreement with Teva on Copaxone®, the divestiture of ~~generic docetaxel~~the Dermik business in ~~2011. However, the product saw modest growth in Emerging Markets~~July 2011, and austerity measures in the ~~Other Countries region (1.4% and 2.5% respectively).~~European Union.

~~Net sales of~~~~Eloxatine~~^® fell by 58.8% at constant exchange rates in 2010 to €427 million, hit by competition from generics. Following a court ruling, generics manufacturers have been under order to stop selling their unauthorized Eloxatin^® generics in the U.S. market since June 30, 2010. Sun Pharmaceuticals has appealed this decision (see Note D.22.b) to our consolidated financial statements included at Item 18 of this annual report). The workdown of existing inventories of generics impaired our Eloxatine^® ~~sales performance in the second half of 2010.~~

~~Multaq~~^®, which began to be marketed at the end of 2009, reported net sales of €172 million, mainly in the United States. The product is now available in over 20 countries, and further launches are ongoing.

~~Jevtana~~^®~~, which has been available in the U.S. market since July 2010, registered net sales of €82 million in 2010.~~

~~Our other major products are described below.~~

~~Net sales of the hypnotic~~~~Stilnox~~^®~~/Ambien~~^®~~/Myslee~~^® ~~fell by 10.9% at constant exchange rates to €819 million. In the United States, net sales were €443 million (including €375 million for Ambien~~^® ~~CR), down 21.6% at constant exchange rates, following FDA approval of a generic version of Ambien~~^® ~~CR in October 2010; we responded by launching our own generic version in the United States. In Japan, Myslee~~^®~~, the leading hypnotic on the market (source: IMS 2010 sales), again performed well, with net sales up 14.5% at constant exchange rates at €247 million.~~

~~Allegra~~^® ~~reported a 22.4% drop in net sales (at constant exchange rates) to €607 million, due to the effect of generics of Allegra~~^® ~~D-12, which have been available on the U.S. market since the end of 2009. Sales in Japan were down 2.0% at constant exchange rates, at €356 million.~~

~~Net sales of~~~~Copaxone~~^®~~, generated mainly in Western Europe, grew by 8.4% at constant exchange rates to €513 million.~~

~~The~~~~Consumer Health Care~~business posted year-on-year growth of 45.7% at constant exchange rates to €2,217 million, driven by Emerging Markets where net sales rose by 44.4% at constant exchange rates to €1,050 million. These figures consolidate the consumer health products of Zentiva from April 2009, Oenobiol from December 2009, Chattem from February 2010, and Nepentes from August 2010. On a constant structure basis and at constant exchange rates (which primarily means including the ~~division achieved~~non-consolidated sales ~~growth~~ of ~~6.9%~~Genzyme for the first quarter of 2011 and excluding sales of Copaxone® for the whole of 2011), net sales for the Pharmaceuticals segment fell by 0.6% in 2012.

Our flagship products (Lantus® and Apidra®, Lovenox®, Plavix®, Aprovel®/CoAprovel®, Taxotere®, Eloxatine®, Cerezyme®, Myozyme®/Lumizyme®, Fabrazyme®, Renagel®/Renvela®, Synvisc®/Synvisc-One®, Multaq®, Jevtana®, Aubagio® and Zaltrap®) are discussed below. Sales of Plavix® and Aprovel® are discussed further below under "— Worldwide Presence of Plavix® and Aprovel®".

The following table breaks down our 2012 and 2011 net sales for the Pharmaceuticals segment by product:

*(€ million)* Product	Indication


Lantus®	Diabetes	4,960	3,916	+26.7%	+19.3%
Apidra®	Diabetes	230	190	+21.1%	+16.8%
Amaryl®	Diabetes	421	436	-3.4%	-8.0%
Insuman®	Diabetes	135	132	+2.3%	+3.0%
Other diabetes products	Diabetes	36	10	+260.0%	+250.0%

Total: Diabetes	Diabetes	5,782	4,684	+23.4%	+16.7%

Eloxatin®	Colorectal cancer	956	1,071	-10.7%	-17.3%
Taxotere®	Breast, lung, prostate, stomach, and head & neck cancer	563	922	-38.9%	-41.9%
Jevtana®	Prostate cancer	235	188	+25.0%	+20.2%
Zaltrap®	Colorectal cancer	25	—	—	—
Mozobil® ⁽¹⁾	Hematologic malignancies	96	59	—	—
Other oncology products ⁽¹⁾		519	389	—	—

Total: Oncology		2,394	2,629	-8.9%	-14.3%

Lovenox®	Thrombosis	1,893	2,111	-10.3%	-12.0%
Plavix®	Atherothrombosis	2,066	2,040	+1.3%	-4.6%
Aprovel®/CoAprovel®	Hypertension	1,151	1,291	-10.8%	-13.3%
Allegra®	Allergic rhinitis, urticaria	553	580	-4.7%	-9.5%
Stilnox®/Ambien®/Myslee®	Sleep disorders	497	490	+1.4%	-4.5%
Copaxone®	Multiple sclerosis	24	436	-94.5%	-94.7%
Depakine®	Epilepsy	410	388	+5.7%	+3.1%
Tritace®	Hypertension	345	375	-8.0%	-8.3%
Multaq®	Atrial fibrillation	255	261	-2.3%	-8.0%
Xatral®	Benign prostatic hypertrophy	130	200	-35.0%	-37.0%
Actonel®	Osteoporosis, Paget's disease	134	167	-19.8%	-21.6%
Nasacort®	Allergic rhinitis	71	106	-33.0%	-35.8%
Renagel®/Renvela® ⁽¹⁾	Hyperphosphatemia	653	415	—	—
Synvisc®/Synvisc-One® ⁽¹⁾	Arthritis	363	256	—	—

Aubagio®	Multiple sclerosis	7	—	—	—
Sub-total Multiple sclerosis		7	—	—	—
Cerezyme® ⁽¹⁾	Gaucher disease	633	441	—	—
Myozyme®/Lumizyme® ⁽¹⁾	Pompe disease	462	308	—	—
Fabrazyme® ⁽¹⁾	Fabry disease	292	109	—	—
Other rare disease products ⁽¹⁾		391	264	—	—
Sub-total Rare diseases ⁽¹⁾		1,778	1,122	—	—

Total: New Genzyme ⁽¹⁾		1,785	1,122	—	—

Other prescription products		5,513	5,927	-7.0%	-9.1%
Consumer Health Care		3,008	2,666	+12.8%	+9.9%
Generics		1,844	1,746	+5.6%	+5.0%

Total Pharmaceuticals		28,871	27,890	+3.5%	-0.4%

⁽¹⁾: In 2011, net sales of Genzyme products were recognized from the acquisition date (April 2011).

Diabetes

Net sales for theDiabetes business amounted to €5,782 million, up 16.7% at constant exchange rates, driven by strong growth for Lantus®.

Lantus® posted a 19.3% increase in net sales at constant exchange rates in 2012 to €4,960 million, driven by very strong growth in the United States (up 22.0% at €3,087 million); in Emerging Markets (up 25.4% at €793 million), especially in China (up 35.9%) and Latin America (up 32.3%); and in Japan (up 22.0%). In Western Europe, growth was a more modest 5.3% at constant exchange rates.

Net sales of the rapid-acting insulin analogApidra® advanced by 16.8% (at constant exchange rates) to €230 million in 2012, buoyed by the product's performance in Emerging Markets (up 37.8%).

Amaryl® saw net sales fall by 8.0% at constant exchange rates to €421 million, mainly as a result of competition from generics in Japan (down 31.7%, at €125 million), and in spite of 11.4% growth in Emerging Markets to €263 million.

Oncology

Net sales for theOncology business were €2,394 million, down 14.3% at constant exchange rates.

Net sales ofEloxatine® fell by 17.3% at constant exchange rates to 956 million in 2012, reflecting the loss of exclusivity in the United States on August 9, 2012, which had been expected.

Taxotere® reported a fall in net sales of 41.9% at constant exchange rates, to €563 million. The product is facing competition from generics in Western Europe (down 72.5%) and the United States (down 80.2%). Emerging Markets sales amounted to €270 million, down 11.2% at constant exchange rates.

Jevtana® posted net sales of €235 million in 2012, up 20.2% at constant exchange rates, boosted by product launches in various countries in Western Europe (€91 million, up 104.5% at constant exchange rates) and in Emerging Markets.

~~The~~~~Generics~~~~business reported 2010~~Zaltrap® , launched in the United States and Puerto Rico at the end of August 2012, generated net sales of ~~€1,534~~€25 million for the year.

Mozobil® reported net sales of €96 million, up ~~41.5%~~19.7% on a constant structure basis and at constant exchange ~~rates. Growth was~~rates (i.e., including non-consolidated sales generated by Genzyme in the first quarter of 2011).

Jevtana®, Zaltrap® and Mozobil®, along with Multaq® (see "— Other pharmaceutical products" below), form the "Other Innovative Products" growth platform. This platform generated net sales of €611 million in 2012.

Other pharmaceutical products

Lovenox® recorded a fall in net sales of 12.0% at constant exchange rates to €1,893 million in 2012, as a result of competition from generics in the United States, where sales slipped by 53.1% (at constant exchange rates) to €319 million. Sales generated outside the United States accounted for 83.1% of worldwide net sales and rose by 5.5% at constant exchange rates to €1,574 million, driven by Emerging Markets (up 11.6% at constant exchange rates at €615 million). Sanofi also launched its own generic version of Lovenox® in the United States, sales of which are recognized in the Generics business.

Net sales ofRenagel®/Renvela® rose by 13.0% on a constant structure basis and at constant exchange rates (i.e. including non-consolidated sales generated by Genzyme in the first quarter of 2011) to €653 million, on a fine performance in the United States (up 19.2% on a constant structure basis and at constant exchange rates).

Synvisc®/Synvisc-One® reported sales growth of 4.0% on a constant structure basis and at constant exchange rates (including non-consolidated sales generated by Genzyme in the first quarter of 2011) to €363 million, driven mainly by the Synvisc-One® franchise in the United Sates (€302 million, up 5.7% on a constant structure basis and at constant exchange rates).

Net sales of theAmbien® range fell by 4.5% at constant exchange rates to €497 million, reflecting competition from generics of Ambien® CR in the United States and Western Europe and the introduction of generic versions of Myslee® in Japan during the second half of 2012.

Allegra® reported a decline in net sales as a prescription medicine (down 9.5% at constant exchange rates) to €553 million, reflecting lower prices in Japan (down 15.2% at constant exchange rates, at €423 million). This product is sold over the counter in the United States, and has also been available over the counter in Japan since November 2012. Sales over the counter are recognized in the Consumer Health Care business. In August 2012 three generic versions of Allegra® were approved by the regulatory authorities in Japan; since February 2013, Allegra® as a prescription medicine has been subject to generic competition in this country.

Net sales ofMultaq® fell by 8.0% at constant exchange rates to €255 million, due to the ~~acquisition and consolidation~~effect of ~~Zentiva and Kendrick (from April 2009) and Medley (from May 2009)~~restrictions placed on the product's indication during the second half of 2011.

Net sales ofCopaxone® amounted to €24 million, versus €436 million in 2011, down 94.7% (at constant exchange rates), ~~and by~~reflecting the ~~United States,~~ending of the co-promotion agreement with Teva in all territories in the first quarter of 2012. Since the transfer of Copaxone® to Teva, we no longer recognize net sales of the product. Instead, for the two years following the ~~launch~~transfer we are entitled to receive a payment representing 6% of ~~our generic version~~net sales, which we recognize under the income statement line item "Other revenues".

New Genzyme business

Thenew Genzyme business consists of ~~Ambien~~^®products used to treat rare diseases, and products for the treatment of multiple sclerosis (Aubagio® and the experimental agent Lemtrada™).~~CR.~~

Because Genzyme's net sales have been consolidated from the acquisition date (i.e. the start of April 2011), the 2011 consolidated net sales of the new Genzyme business do not include sales for the first quarter of 2011. On a constant structure basis and at constant exchange rates, i.e. after including non-consolidated net sales for the ~~Generics division advanced by 18.5%, driven by Emerging Markets.~~

~~Net~~first quarter of 2011, the net sales of the ~~other~~new Genzyme business rose by 16.9% in 2012 to €1,785 million.

The following table breaks down our 2012 and 2011 net sales for the new Genzyme business by product:

*(€ million)* Product	Indication


Aubagio®	Multiple sclerosis	7	—	—
Sub-total Multiple sclerosis		7	—	—
Cerezyme® ⁽¹⁾	Gaucher disease	633	441	+6.0%
Myozyme®/Lumizyme® ⁽¹⁾	Pompe disease	462	308	+11.4%
Fabrazyme® ⁽¹⁾	Fabry disease	292	109	+96.4%
Other rare disease products ⁽¹⁾		391	264	+7.5%
Sub-total Rare diseases ⁽¹⁾		1,778	1,122	+16.4%

Total: New Genzyme ⁽¹⁾		1,785	1,122	+16.9%

⁽¹⁾: In 2011, net sales of Genzyme products inwere recognized from the ~~portfolio were flat year-on-year at €6,064 million (up 0.3%~~acquisition date (April 2011).

Cerezyme® recorded net sales growth of 6.0% on a constant structure basis and at constant exchange rates, to €633 million (+0.9% in Western Europe, at €215 million; +6.3% in the United States, at €166 million). Production continued to improve during the year, enabling normal doses to be delivered to patients in the product's principal markets

Net sales ofMyozyme®/Lumizyme® were up 11.4% on a constant structure basis and at constant exchange rates at €462 million (+10,4% in Western Europe, at €257 million; +6.9% in the United States, at €117 million).

Fabrazyme® reported a 96.4% surge in net sales on a constant structure basis and at constant exchange rates, to €292 million. This increase was due mainly to the resumption of production at the new facility at Framingham (United States) in March 2012, enabling full doses to be supplied in all markets where the product is approved for sale.

For more information regarding the manufacturing issues related to Cerezyme® and Fabrazyme® see "Item 4 — Information on the Company — Production and Raw Materials."

In multiple sclerosis,Aubagio® was launched in the United States in October 2012, and recorded fourth-quarter net sales of €7 million.

Consumer Health Care business

Net sales for theConsumer Health Care business rose by 9.9% at constant exchange rates in 2012, to €3,008 million. This figure includes revenues generated from the acquisitions made in 2011 (primarily BMP Sunstone in China, and the nutraceuticals business of Universal Medicare in India).

In Emerging Markets, net sales advanced by 19.9% at constant exchange rates to €1,478 million. In the United States, sales growth was modest (up 2.2% at constant exchange rates, at €606 million) compared with 2011; this reflects the fact that in the early part of 2011, distributors were building up inventories of the over-the-counter (OTC) version of Allegra®, launched in March 2011. Excluding Allegra® OTC, growth in the United States reached 6.2% at constant exchange rates. Allegra® OTC was also launched in Japan in November 2012.

Generics business

TheGenerics business reported net sales of €1,844 million in 2012, a rise of 5.0% at constant exchange rates. The business was boosted by sales growth in the United States (up 42.4% at constant exchange rates, at €272 million), where we launched our own authorized generic versions of Lovenox® and Aprovel®. In Emerging Markets, net sales fell slightly (down 2.7% at constant exchange rates). to €1,045 million, due to the impact of tougher competition and disruptions in the Brazilian market.

Net sales of theother prescription products in the portfolio were down 9.1% at constant exchange rates, to €5,513 million. For a description of our other pharmaceutical products, see ~~“Item~~"Item 4. Information on the Company — B. Business Overview — Pharmaceutical Products.”"

~~The following table breaks down our 2010 and 2009 net sales for the Pharmaceuticals business by product:~~

(€ million)
Product
Indication
2010
Reported

2009
Reported

Change on
a reported
basis (%)

Change at
constant
exchange
rates (%)

Change on a
constant structure
basis and at
constant exchange
rates (%)

Lantus^® Diabetes       3,510       3,080       +14.0%       +9.1%       +9.1%
Apidra^® Diabetes       177       137       +29.2%       +24.1%       +24.1%
Amaryl^® Diabetes       478       416       +14.9%       +7.7%       +7.7%
Insuman^® Diabetes       133       131       +1.5%       +1.5%       +1.5%
Sub-total: Diabetes
   4,298       3,764    �� +14.2%       +9.2%       +9.2%
Lovenox^® Thrombosis       2,806       3,043       -7.8%       -10.5%       -10.5%
Plavix^® Atherothrombosis       2,083       2,623       -20.6%       -24.6%       -24.6%
Taxotere^®

Breast, lung, prostate,
stomach, and head &
neck cancer

      2,122       2,177       -2.5%       -6.4%       -6.4%
Aprovel^®/CoAprovel^® Hypertension       1,327       1,236       +7.4%       +4.2%       +4.2%
Eloxatine^® Colorectal cancer       427       957       -55.4%       -58.8%       -58.8%
Multaq^® Atrial fibrillation       172       25       +588.0%       +560.0%       +560.0%
Jevtana^® Prostate cancer       82       —       —       —       —
Stilnox^®/Ambien^® /Myslee^® Sleep disorders       819       873       -6.2%       -10.9%       -10.8%
Allegra^®
Allergic rhinitis,
urticaria
      607       731       -17.0%       -22.4%       -18.5%
Copaxone^® Multiple sclerosis       513       467       +9.9%       +8.4%       +11.0%
Tritace^® Hypertension       410       429       -4.4%       -7.2%       -5.2%
Dépakine^® Epilepsy       372       329       +13.1%       +7.6%       +7.6%
Xatral^®
Benign prostatic
hypertrophy
      296       296       0.0%       -3.4%       -3.1%
Actonel^®
Osteoporosis, Paget’s
disease
      238       264       -9.8%       -16.3%       -16.3%
Nasacort^® Allergic rhinitis       189       220       -14.1%       -16.8%       -16.8%
Other products
   6,064       5,947       +2.0%       -1.9%       +0.3%
Consumer Health Care
   2,217       1,430       +55.0%       +45.7%       +6.9%
Generics    1,534       1,012       +51.6%       +41.5%       +18.5%
Total pharmaceuticals
   26,576       25,823       +2.9%       -1.6%       -3.6%

The following table breaks down net sales of our Pharmaceutical ~~business~~segment products by geographical region in ~~2010:~~2012:

(€ million)
Product

Western
Europe*

Change at
constant
exchange
rates

United
States

Change at
constant
exchange
rates

Emerging
Markets**

Change at
constant
exchange
rates

Other
countries***

Change at
constant
exchange
rates

Lantus^®    684       +5.3%       2,134 +7.4%       508    +18.2%       184    +25.2%
Apidra^®    68       +21.8%       62 +11.1%       35    +37.5%       12    +150.0%
Amaryl^®    42       -17.6%       6 -33.3%       222    +21.7%       208    +3.3%
Insuman^®    108       -0.9%       —    —       25    +19.0%       —       -100.0%
Sub-total: Diabetes
   902       +4.2%       2,202 +7.4%       790    +20.0%       404    +13.7%
Lovenox^®    782       +7.3%       1,439 -22.7%       499    +6.9%       86    +19.4%
Plavix^®    641       -53.9%       213 ª -4.1%       648    +0.7%       581    +25.4%
Taxotere^®    709       -10.6%       786 -8.0%       394    +1.4%       233    +2.5%
Aprovel^®/CoAprovel^®    825       -5.0%       39 ª +457.1%       358    +8.3%       105    +67.3%
Eloxatine^®    46       -42.9%       172 -76.4%       150    -9.8%       59    +4.0%
Multaq^®    39       —       128 —       2    —       3    —
Jevtana^®    —       —       82 —       —       —       —       —
Stilnox^®/Ambien^® /Myslee^®    55       -8.3%       443 -21.6%       68    +5.0%       253    +13.6%
Allegra^®    16       -5.9%       147 -53.6%       88    +17.4%       356    -3.2%
Copaxone^®    482       +9.1%       —    —       13    -13.3%       18    +7.7%
Tritace^®    189       -4.1%       —    —       191    -2.6%       30    -41.9%
Depakine^®    148       +2.1%       —    —       209    +12.0%       15    +9.1%
Xatral^®    66       -14.3%       155 +2.7%       70    +0.0%       5    -50.0%
Actonel^®    104       -23.5%       —    —       93    -12.4%       41    +3.2%
Nasacort^®    28       -3.4%       130 -20.3%       26    -10.7%       5    -20.0%
Other products
   2,649       -2.3%       652 +3,3%       2,052    +0.4%       711    -10.9%
Consumer Health Care
   630       +1.1%       320 —       1,050    +44.4%       217    +31.3%
Generics    404       +11.1%       102 —       988    +42.8%       40    +61.9%
Total pharmaceuticals
   8,715       -8.5%       7,010 -7,5%       7,689    +11.9%       3,162    +6.9%

*	~~France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.~~

**	~~World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.~~

~~***~~

~~Japan, Canada, Australia and New Zealand.~~

ª	~~Sales of active ingredient to the entity majority-owned by BMS in the United States.~~

*(€ million)* Product


Lantus®	778	+5.3%	3,087		+22.0%	793	+25.4%	302		+20.6%
Apidra®	78	+14.7%	73		+3.1%	51	+37.8%	28		+30.0%
Amaryl®	28	-12.5%	3		-25.0%	263	+11.4%	127		-32.6%
Insuman®	98	-4.9%	1		—	37	+27.6%	(1	)	—
Other diabetes products	30	+190.0%	3		—	—	—	3		—

Total: Diabetes	1,012	+4.3%	3,167		+21.5%	1,144	+22.5%	459		+0.2%

Eloxatine®	13	-65.8%	718		-18.0%	153	-10.5%	72		+3.1%
Taxotere®	53	-72.5%	53		-80.2%	270	-11.2%	187		-10.7%
Jevtana®	91	+104.5%	109		-23.7%	33	+153.8%	2		—
Zaltrap®	—	—	24		—	—	—	1		—
Mozobil® ⁽⁴⁾	30	—	56		—	7	—	3		—
Other oncology products ⁽⁴⁾	104	—	281		—	95	—	39		—

Total: Oncology	291	-23.7%	1,241		-19.8%	558	0.0%	304		-1.7%

Lovenox®	854	+1.9%	319		-53.1%	615	+11.6%	105		+2.1%
Plavix®	307	-25.8%	76	*	-62.2%	799	+5.5%	884		+13.4%
Aprovel®/CoAprovel®	557	-26.4%	45	*	-8.2%	395	+2.5%	154		+17.5%
Allegra®	11	-15.4%	(1	)	-133.3%	120	+21.2%	423		-15.1%
Stilnox®/Ambien®/Myslee®	46	-13.2%	85		-4.9%	70	+7.7%	296		-5.5%
Copaxone®	19	-95.4%	—		—	—	—	5		-81.0%
Depakine®	143	-3.4%	—		—	251	+7.9%	16		-6.3%
Tritace®	150	-11.8%	—		—	180	-1.1%	15		-37.5%
Multaq®	46	-31.8%	200		+0.5%	8	0.0%	1		-25.0%
Xatral®	45	-24.1%	20		-74.7%	62	-6.3%	3		0.0%
Actonel®	33	-38.9%	—		—	66	-16.7%	35		-5.7%
Nasacort®	20	-20.0%	21		-63.0%	26	+8.7%	4		-25.0%
Renagel®/Renvela® ⁽⁴⁾	128	—	451		—	53	—	21		—
Synvisc®/Synvisc-One® ⁽⁴⁾	20	—	302		—	24	—	17		—

Aubagio®	—	—	7		—	—	—	—		—
Sub-total Multiple sclerosis	—	—	7		—	—	—	—		—
Cerezyme® ⁽⁴⁾	215	—	166		—	190	—	62		—
Myozyme®/Lumizyme® ⁽⁴⁾	257	—	117		—	55	—	33		—
Fabrazyme® ⁽⁴⁾	52	—	152		—	41	—	47		—
Other rare disease products ⁽⁴⁾	92	—	122		—	83	—	94		—
Sub-total Rare diseases ⁽⁴⁾	616	—	557		—	369	—	236		—

Total: New Genzyme ⁽⁴⁾	616	—	564		—	369	—	236		—

Other prescription products	2,105	-12.9%	567		-16.7%	2,062	-2.8%	779		-8.4%
Consumer Health Care	666	+2.2%	606		+2.2%	1,478	+19.9%	258		-2.1%
Generics	500	+11.5%	272		+42.4%	1,045	-2.7%	27		-29.4%

Total pharmaceuticals	7,569	-9.9%	7,935		+0.9%	9,325	+7.8%	4,042		-0.3%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.
⁽²⁾: World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.
⁽³⁾: Japan, Canada, Australia and New Zealand.
⁽⁴⁾: In 2011, net sales of Genzyme products were recognized from the acquisition date (April 2011).
*: Sales of active ingredient to the entity majority-owned by BMS in the United States.

Net Sales — Human Vaccines (Vaccines) segment

~~In 2010, the Vaccines segment reported net~~Net sales of €3,808 million, up 4.8% at constant exchange rates and 9.3% on a reported basis. Growth was driven by sales of seasonal influenza vaccines (€845 million, versus €597 million in 2009). Sales of pandemic influenza vaccines (mainly against the A/H1N1 virus) were flat; excluding their impact, growth for the Vaccines segment ~~reached 5.5%~~amounted to €3,897 million in 2012, up 12.3% on a reported basis and 5.7% at constant exchange rates.

~~Although~~The following table presents the 2012 and 2011 sales of our Vaccines segment by range of products:

*(€ million)*


Polio/Pertussis/Hib Vaccines (including Pentacel® and Pentaxim®)	1,184	1,075	+10.1%	+5.0%
Influenza Vaccines (including Vaxigrip® and Fluzone®)	884	826	+7.0%	-0.2%
– of which seasonal influenza vaccines	882	826	+6.8%	-0.6%
– of which pandemic influenza vaccines	2	—	—	—
Meningitis/Pneumonia Vaccines (including Menactra®)	650	510	+27.5%	+18.0%
Adult Booster Vaccines (including Adacel®)	496	465	+6.7%	0.0%
Travel and Other Endemics Vaccines	364	370	-1.6%	-4.9%
Other Vaccines	319	223	+43.0%	+31.8%

Total Vaccines	3,897	3,469	+12.3%	+5.7%

Polio/Pertussis/Hib vaccines saw net sales ~~fall in Western Europe and the United States (by 15.6% and 11.5% at constant exchange rates, respectively), the effect was amply offset~~increase by ~~strong growth in Emerging Markets and in the Other Countries region (of 46.2% and 23.0% at constant exchange rates, respectively).~~

~~Net sales of~~~~influenza~~ ~~vaccines rose by 18.7%~~5.0% at constant exchange rates to ~~€1,297~~€1,184 million. This rise reflects a strong performance in Japan (€239 million, ~~in 2010, boosted by the performance of the Fluzone~~^® ~~seasonal influenza vaccine in the U.S. market. Excluding pandemic influenza vaccines (net sales of €452 million, flat year-on-year), growth reached 33.3% at constant exchange rates.~~

~~Polio/Pertussis/Hib~~~~vaccines net sales fell by 2.9% (at constant exchange rates) to €984 million, reflecting a decline in sales of Pentacel~~^® ~~(down 11.4% at €317 million at constant exchange rates) but also the performance of Pentaxim~~^® ~~(up 43.9% at €190 million at constant exchange rates).~~

~~Meningitis/Pneumonia~~~~vaccines generated net sales of €527 million, down 6.7%~~up 140.9% at constant exchange rates, mainly due to the successful launch of Imovax® in September 2012) and a ~~reduction~~good performance in ~~catch-up vaccination programs with the Menactra~~^® ~~quadrivalent meningococcal meningitis vaccine in the United States.~~

~~Net sales of~~~~Adult booster~~~~vaccines reached €449~~Emerging Markets (€495 million, ~~(up 4.7%~~up 5.7% at constant exchange rates), ~~driven by Adacel~~^® ~~(€301 million, up 6.1%~~but also a drop in net sales in the United States (down 25.1% at constant exchange ~~rates).~~rates, at €374 million) due to order restrictions on Pentacel® following a temporary shutdown in production at Sanofi Pasteur.

Net sales of~~Travel and other endemics~~ ~~Vaccines rose~~influenza vaccines were flat (down 0.2% at constant exchange rates), at €884 million. In the United States, net sales fell by ~~15.7%~~5.5% at constant exchange rates, to ~~€382 million, mainly due~~€466 million; in Emerging Markets, net sales rose by 5.1% at constant exchange rates, to ~~growth in anti-rabies vaccines.~~€317 million.

Meningitis/Pneumonia vaccines posted net sales of €650 million, up 18.0% at constant exchange rates, driven by a strong performance from Menactra® (€564 million, up 21.8% at constant exchange rates). Growth was especially strong in Emerging Markets (up 52.9% at constant exchange rates, at €165 million) and in the United States (up 10.5% at constant exchange rates, at €473 million).

Net sales ofadult booster vaccines were unchanged year-on-year (at constant exchange rates), at €496 million.

Net sales oftravel and other endemics vaccines fell by 4.9% (at constant exchange rates) to €364 million, hit by a temporary shutdown in production of the Theracys®/Immucyst® and BCG vaccines.

The following table presents the ~~2010~~2012 sales of our Vaccines ~~activity by range of products:~~

(€ million)
2010
Reported

2009
Reported

Change on
a reported
basis (%)

Change at
constant
exchange
rates (%)

Influenza Vaccines (including Vaxigrip^® and Fluzone^®)    1,297       1,062       +22.1 %       +18.7 %
— of which seasonal influenza vaccines
   845       597       +41.5 %       +33.3 %
— of which pandemic influenza vaccines
   452       465       -2.8 %       +0.0 %
Polio/Pertussis/Hib Vaccines (including Pentacel^® and Pentaxim^®)    984       968       +1.7 %       -2.9 %
Meningitis/Pneumonia Vaccines (including Menactra^®)    527       538       -2.0 %       -6.7 %
Adult Booster Vaccines (including Adacel^®)    449       406       +10.6 %       +4.7 %
Travel and Other Endemics Vaccines    382       313       +22.0 %       +15.7 %
Other Vaccines    169       196       +13.8 %       -18.4 %
Total Vaccines
   3,808       3,483       +9.3 %       +4.8 %

~~The following table presents the 2010 sales of our Vaccines business~~segment by range of products and by region:

*(€ million)*


Polio/Pertussis/Hib Vaccines (inc. Pentacel® and Pentaxim®)	55	+52.8%	374	-25.1%	495	+5.7%	260	+105.0%
Influenza Vaccines ⁽⁴⁾ (inc. Vaxigrip® and Fluzone®)	79	+2.6%	466	-5.1%	317	+5.1%	22	+16.7%
Meningitis/Pneumonia Vaccines (inc. Menactra®)	4	+33.3%	473	+10.5%	165	+52.9%	8	-38.5%
Adult Booster Vaccines (inc. Adacel®)	59	-22.4%	372	+0.9%	45	+50.0%	20	-5.0%
Travel and Other Endemics Vaccines	21	-12.5%	96	-1.1%	201	-4.8%	46	-8.5%
Other Vaccines	9	-46.7%	277	+46.6%	18	0.0%	15	-25.0%

Total Vaccines	227	-2.2%	2,058	-0.7%	1,241	+9.1%	371	+48.9%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark. Net sales in Europe generated by Sanofi Pasteur MSD (the joint venture between Sanofi and Merck & Co., Inc.) are not consolidated.
⁽²⁾: World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.
⁽³⁾: Japan, Canada, Australia and New Zealand.
⁽⁴⁾: Seasonal and pandemic influenza vaccines.

(€ million)
Western
Europe*
Reported

Change at
constant
exchange
rates

United
States
Reported

Change at
constant
exchange
rates

Emerging
Markets**
Reported

Change at
constant
exchange
rates

Other
countries***
Reported

Change at
constant
exchange
rates

Influenza Vaccinesª
(inc. Vaxigrip^® and Fluzone^®)
128 -7.9 %    528    -20.2%    618 +116.4%    23 +5.6%
Polio/Pertussis.Hib Vaccines
(inc.Pentacel^® and Pentaxim^®)
61 -16.2 %    470    -14.6%    384 +11.4%    69 +56.4%
Meningitis/Pneumonia Vaccines
(inc. Menactra^®)
5 -54.5 %    407    -11.4%    101 +25.6%    14 +0.0%
Adult Booster Vaccines
(inc. Adacel^®)
54 -3.6 %    345    +5.2%    33 +32.0%    17 -20.0%
Travel and Other Endemics Vaccines 18 +20.0 %    80    +11.6%    235 +15.8%    49 +21.2%
Other Vaccines 16 -63.2 %    128    -10.4%    15 +0.0%    10 +22.2%
Total Vaccines
282 -15.6 %    1,958    -11.5%    1,386 +46.2%    182 +23.0%

In Western Europe and the United States, net sales fell slightly (by 2.2% and 0.7% at constant exchange rates, respectively). In Emerging Markets, most of the rise in sales (9.1% at constant exchange rates) was generated in Latin America and China. The Other Countries region reported strong growth (48.9% at constant exchange rates), due mainly to the performance of Imovax® in Japan.

^*	~~France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.~~

^**	~~World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.~~

^***	~~Japan, Canada, Australia and New Zealand.~~

^ª	~~Seasonal and pandemic influenza vaccines.~~

In addition to the Vaccines activity reflected in our consolidated net sales, sales atof Sanofi Pasteur MSD, our joint venture with Merck & Co., Inc. in ~~Western~~ Europe, amounted to ~~€918~~€845 million ~~down 18.9%~~in 2012, up 6.8% on a reported basis. ~~Sales of Gardasil~~^®, a vaccine that prevents papillomavirus infections (a cause of cervical cancer), totaled €263 million in 2010, compared with €395 million in 2009. This fall of 33.5% was mainly due to a reduction in catch-up vaccination programs.

Sales generated by Sanofi Pasteur MSD are not included in our consolidated net sales. The main growth drivers were the performance of Gardasil® (up 13.6% on a reported basis, at €206 million) and sales of the travel and endemics vaccines franchise.

Net Sales — Animal Health segment

The Animal Health business is conducted through Merial, which has been a wholly-owned subsidiary of sanofi-aventis since September 18, 2009. In March 2010, we exercised our option to combine Merial and Intervet/Schering-Plough in a new 50/50 joint venture with Merck in 2011. Consequently, Merial’s profit contribution is reported on the line “Net income from the held-for-exchange Merial business”, in accordance with IFRS 5 (see Note D.8. to our consolidated financial statements included at Item 18 of this annual report), and Merial’s net sales are not consolidated by sanofi-aventis.

~~Merial generated~~segment achieved net sales of ~~$2,635~~€2,179 million in ~~2010,~~2012, up ~~2.6%~~3.1% at constant exchange rates ~~and 3.2%~~(7.3% on a reported ~~basis.~~basis), driven by the performance in Emerging Markets and the first-time consolidation of the net sales of Newport Laboratories ("Newport").

The following table presents the 2012 and 2011 sales of our Animal Health segment by range of products:

*(€ million)*


Frontline® and other fipronil-based products	775	764	+1.4%	-3.4%
Vaccines	730	662	+10.3%	+7.6%
Avermectin	423	372	+13.7%	+7.8%
Other products	251	232	+8.2%	+3.9%

Total Animal Health	2,179	2,030	+7.3%	+3.1%

Net sales for thecompanion animals franchise ~~increased~~rose by ~~1.4%~~1.8% at constant exchange rates ~~(1.7% on a reported basis)~~ to ~~$1,707 million, as growth for~~€1,372 million. Erosion in sales of the ~~Frontline~~^®Frontline®/fipronil range of products was limited to 3.4% at constant exchange rates

(€775 million) despite competitive pressure in the United States ~~more than offset the impact of generics of Frontline~~^® ~~in Europe. The production animals franchise performed well, growing by 5.0%~~(down 7.8% at constant exchange rates, ~~(6.1% on a reported basis)~~at €411 million), thanks to ~~$928~~good performances in Emerging Markets (up 10.5%, at €93 million).

Net sales for theproduction animals franchise were 5.1% higher at constant exchange rates, at €807 million. These figures include the contribution from Newport from April 2012 onwards.

The following table breaks down net sales of our Animal Health segment by product and by geographical region in 2012:

($ million)
2010
Reported

2009
Reported

Change at constant
exchange rates

Frontline^® and other fipronil-based products    1,027       996       +2.4%
Vaccines    837       794       +5.5%
Avermectin    473       475       -2.8%
Other    298       289       +4.8%
Total
   2,635       2,554       +2.6%

*(€ million)* Product


Frontline® and other fipronil-based products	208	-0.5%	411	-7.8%	93	+10.5%	63	-3.3%
Vaccines	181	-7.7%	152	+11.1%	375	+14.2%	22	+31.3%
Avermectin	62	-4.7%	223	+15.8%	65	+10.0%	73	-2.8%
Other products	88	-2.2%	94	+1.1%	46	+27.8%	23	0.0%

Total Animal Health	539	-3.8%	880	+1.4%	579	+14.0%	181	+0.6%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.
⁽²⁾: World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.
⁽³⁾: Japan, Canada, Australia and New Zealand.

Net Sales by ~~Geographic~~Geographical Region

We divide our sales geographically into four regions: Western Europe, the United States, Emerging Markets and other countries. The following table breaks down our ~~2010~~2012 and ~~2009~~2011 net sales by region:

(€ million)
2010
Reported

2009
Reported

Change on a
Reported basis

Change at constant
exchange rates

Western Europe*    8,997       9,793       -8.1%       -8.8%
United States    8,968       9,426       -4.9%       -8.4%
Emerging Markets**    9,075       7,356       +23.4%       +16.3%
Of which Eastern Europe and Turkey
   2,612       2,266       +15.3%       +10.0%
Of which Asia (excl. Pacific region***)
   1,983       1,610       +23.2%       +14.2%
Of which Latin America
   2,735       1,913       +43.0%       +32.4%
Of which Africa
   846       775       +9.2%       +4.0%
Of which Middle East
   789       647       +21.9%       +19.6%
Other Countries****    3,344       2,731       +22.4%       +7.7%
Of which Japan
   2,225       1,844       +20.7%       +9.1%
Total
   30,384       29,306       +3.7%       -0.8%

*(€ million)*


Western Europe ⁽¹⁾	8,335	9,130	-8.7%	-9.3%
United States	10,873	9,957	+9.2%	+0.7%
Emerging Markets ⁽²⁾	11,145	10,133	+10.0%	+8.3%
Of which Eastern Europe and Turkey	2,721	2,666	+2.1%	+2.1%
Of which Asia (excl. Pacific region ⁽³⁾)	2,841	2,416	+17.6%	+10.1%
Of which Latin America	3,435	3,111	+10.4%	+11.3%
Of which Africa	1,018	949	+7.3%	+8.3%
Of which Middle East	1,001	872	+14.8%	+12.2%
Other Countries ⁽⁴⁾	4,594	4,169	+10.2%	+2.5%
Of which Japan	3,274	2,865	+14.3%	+6.6%

Total	34,947	33,389	+4.7%	+0.5%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.
⁽²⁾: *

~~France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.~~

**	World excluding United States, Canada, ~~Western Europe, Japan, Australia and New Zealand.~~

~~***~~

~~Japan, Australia and New Zealand.~~

~~****~~

~~Japan, Canada, Australia and New Zealand.~~

Western Europe, ~~saw net~~Japan, Australia and New Zealand.

⁽³⁾

Japan, Australia and New Zealand.

⁽⁴⁾

Japan, Canada, Australia and New Zealand.

Net sales ~~fall~~in Western Europe fell by ~~8.8%~~9.3% at constant exchange rates ~~in 2010~~ to ~~€8,997~~€8,335 million, ~~hit~~hampered by the transfer of the Copaxone® business to Teva; by competition from generics of ~~Plavix~~^®Taxotere® (down 72.5% at constant exchange rates), Aprovel® (down 26.4% at constant exchange rates) and ~~Taxotere~~^®,Plavix® (down 25.8% at constant exchange

rates); and by ~~price pressure from~~ the ~~healthcare authorities.~~impact of austerity measures implemented by European governments. After including Genzyme for the first quarter of 2011 and excluding Copaxone®, net sales fell by 7.5% at constant exchange rates.

In the United States, net sales were ~~8.4% lower~~up 0.7% at constant exchange rates ~~at €8,968 million (11.1% lower on a constant structure basis~~(but fell by 2.8% after including Genzyme in the first quarter of 2011) to €10,873 million. The year-on-year change reflected strong performances from Lantus® and ~~at constant exchange rates)~~from the new Genzyme and Generics businesses (including our own generic version of Lovenox®), ~~reflecting~~but also the ~~arrival~~impact of ~~generic competition for Lovenox~~^®generics of Taxotere®, Lovenox® and ~~Ambien~~^® ~~CR, plus the workdown of inventories of generic versions of Eloxatine~~^® ~~during the second half of 2010 and the effects of healthcare reform. These figures include net sales generated by Chattem from February 2010.~~Eloxatine®.

In Emerging Markets, net sales ~~were €9,075~~reached €11,145 million, representing robust growth of 16.3% at constant exchange rates. This performance reflected solid organic growth (13.2% on a constant structure basis and at constant exchange rates), and the impact of acquisitions (primarily Zentiva in Eastern Europe and Medley in Brazil). Emerging Markets accounted for 29.9% of total consolidated net sales in 2010. The main growth drivers were Latin America, Russia and China, which achieved growthup 8.3% at constant exchange rates (or 7.2% after including Genzyme for the first quarter of ~~32.4% (to €2,735 million), 19.9% (to €654 million)~~2011). In China, net sales were €1,249 million, up 15,0% at constant exchange rates, on a strong performance from Plavix® and ~~23.6% (to €667 million), respectively.~~Lantus®. In ~~Latin America (primarily~~ Brazil, net sales increased by 7.7% at constant exchange rates to €1,530 million, boosted by the Consumer Health Care business and ~~Mexico),~~the contribution from Genzyme, although growth was ~~fueled~~hampered by a slowdown in sales of ~~influenza vaccines, which virtually trebled (189% growth)~~generics. The Africa and Middle East zones topped the billion-euro mark for the first time (€1,018 million and €1,001 million, respectively). Sales in Russia reached €851 million, up 13.6% at constant exchange rates, driven by the Consumer Health Care and Generics businesses and also by Lantus®, Plavix® and Lovenox®.

In the Other Countries region, net sales ~~rose by 7.7%~~totaled €4,594 million, up 2.5% at constant exchange rates ~~to €3,344 million. Net~~(or 0.8% after including Genzyme sales infor the first quarter of 2011). In Japan, ~~reached €2,225~~net sales were €3,274 million ~~up 9.1%~~(up 6.6% at constant exchange rates, ~~thanks largely to~~or 4.7% after including Genzyme sales for the ~~success~~first quarter of ~~Plavix~~^®2011); positive factors included strong performances from Plavix® (up 16.0% at constant exchange rates, at €837 million) and from the Polio/Pertussis/Hib vaccines franchise (up 140.9% at constant exchange rates at €239 million, driven by the successful launch of Imovax®), while negative factors included erosion in sales of Allegra® (down 15.2% at constant exchange rates, at €423 million) and the ~~performance~~impact of ~~the Vaccines business.~~

bi-annual price cuts.

Worldwide Presence of ~~Plavix~~^®Plavix® and ~~Aprovel~~^®Aprovel®

Two of our leading products — ~~Plavix~~^®Plavix® and ~~Aprovel~~^®Aprovel® — were discovered by ~~sanofi-aventis~~Sanofi and jointly developed with Bristol-Myers Squibb ~~(“BMS”~~("BMS") under an alliance agreement. In all territories except Japan, these products are sold either by ~~sanofi-aventis~~Sanofi or by BMS in accordance with the terms of this alliance agreement ~~which is described~~applicable in “—2012 and 2011 (see "— Financial Presentation of Alliances — Alliance arrangements with Bristol-Myers ~~Squibb” above.~~Squibb" above).

Worldwide sales of these two products are an important indicator because they facilitate a financial statement ~~user’s~~user's understanding and analysis of our consolidated income statement, particularly in terms of

understanding our overall profitability in relation to consolidated revenues, and also facilitate a ~~user’s~~user's ability to understand and assess the effectiveness of our research and development efforts.

Also, disclosing sales made by BMS of these two products enables the users to have a clearer understanding of trends in different lines of our income statement, in particular the lines ~~“Other revenues”~~"Other revenues", where we record royalties received on those sales (see “—"— Other ~~Revenues”~~Revenues"); ~~“Share~~"Share of profit/loss of associates and joint ~~ventures”~~ventures" (see “—"— Share of Profit/Loss of Associates and Joint ~~Ventures”~~Ventures"), where we record our share of the profit/loss of entities included in the BMS Alliance and under BMS operational management; and ~~“Net~~"Net income attributable to non-controlling ~~interests”~~interests" (see “—"— Net Income Attributable to Non-Controlling ~~Interests”~~Interests"), where we record the BMS share of the profit/loss of entities included in the BMS Alliance and under our operational management.

On October 3, 2012, Sanofi and BMS announced the restructuring of their alliance with effect from January 1, 2013 (see "— Financial Presentation of Alliances — Alliance arrangements with Bristol-Myers Squibb" above).

The table below sets forth the worldwide sales of ~~Plavix~~^®Plavix® and ~~Aprovel~~^®Aprovel® in ~~2010~~2012 and ~~2009,~~2011, by geographic region:

*(€ million)*	2012						2011


	Sanofi ⁽²⁾		BMS ⁽³⁾		Total		Sanofi ⁽²⁾		BMS ⁽³⁾		Total

Plavix®/Iscover® ⁽¹⁾
Europe		424		29		453		530		44		574	-21.1%	-21.2%
United States		—		1,829		1,829		—		4,759		4,759	-61.6%	-63.7%
Other countries		1,613		89		1,702		1,370		286		1,656	+2.8%	-4.6%

Total		2,037		1,947		3,984		1,900		5,089		6,989	-43.0%	-46.2%

Aprovel®/Avapro® /Karvea®/Avalide® ⁽⁴⁾
Europe		527		99		626		694		130		824	-24.0%	-24.3%
United States		24		110		134		—		374		374	-64.2%	-66.5%
Other countries		521		91		612		451		156		607	+0.8%	-5.1%

Total		1,072		300		1,372		1,145		660		1,805	-24.0%	-26.6%

⁽¹⁾: Plavix® is marketed under the trademarks Plavix® and Iscover®.
⁽²⁾: Net sales of Plavix® consolidated by Sanofi, excluding sales to BMS (€86 million in 2012 and €208 million in 2011). Net sales of Aprovel® consolidated by Sanofi, excluding sales to BMS (€111 million in 2012 and €150 million in 2011).
⁽³⁾: Translated into euros by Sanofi using the method described in Note B.2. "Foreign currency translation" to our consolidated financial statements included at Item 18 in this annual report.
⁽⁴⁾: Aprovel® is marketed under the trademarks Aprovel®, Avapro®, Karvea® and Avalide®.

(€ million)    2010    2009
Change on
a reported
basis

Change at
constant
exchange
rates


sanofi-
aventis⁽²⁾
   BMS⁽³⁾    Total
sanofi-
aventis⁽²⁾
   BMS⁽³⁾    Total
Plavix^®/Iscover^®⁽¹⁾

Europe    724    98    822       1,443    161    1,604       -48.8%       -49.2%
United States    —       4,626    4,626       —       4,026    4,026       +14.9%       +10.8%
Other countries    1,165    282    1,447       897    255    1,152       +25.6%       +13.7%
Total
   1,889    5,006    6,895       2,340    4,442    6,782       +1.7%       -2.9%
Aprovel^®/Avapro^®
/Karvea^®/Avalide^®⁽⁴⁾

Europe    789    158    947       810    172    982       -3.6%       -4.4%
United States    —       482    482       —       524    524       -8.0%       -10.4%
Other countries    411    216    627       314    192    506       +23.9%       +13.5%
Total
   1,200    856    2,056       1,124    888    2,012       +2.2%       -1.5%

⁽¹⁾

~~Plavix~~^® ~~is marketed under the trademarks Plavix~~^® ~~and Iscover~~^®.

⁽²⁾

~~Net sales of Plavix~~^® ~~consolidated by sanofi-aventis, excluding sales to BMS (€273 million in 2010 and €311 million in 2009).~~

⁽³⁾

~~Translated into euros by sanofi-aventis using the method described in Note B.2. “Foreign currency translation” to our consolidated financial statements included at Item 18 in this annual report.~~

⁽⁴⁾

~~Aprovel~~^® ~~is marketed under the trademarks Aprovel~~^®~~, Avapro~~^®~~, Karvea~~^® ~~and Avalide~~^®.

⁽⁵⁾

~~Net sales of Aprovel~~^® ~~consolidated by sanofi-aventis, excluding sales to BMS (€129 million in 2010 and €113 million in 2009).~~

Worldwide sales of Plavix®/Iscover® fell by 46.2% at constant exchange rates in 2012 to €3,984 million, under the impact of competition from generics in the United States and Europe. In the United ~~States,~~Sates, where the product lost exclusivity on May 17, 2012, sales ~~of Plavix~~^®~~/Iscover~~^® (consolidated by BMS) ~~grew~~were down 63.7% at constant exchange rates, at €1,829 million. In Europe, net sales of Plavix® fell by ~~a robust 10.8% in 2010~~21.2% at constant exchange rates, to ~~€4,626~~€453 million. ~~Plavix~~^® ~~continued~~In the Other Countries region, net sales were down 4.6% at constant exchange rates; this reflected the entry of generics into the Canadian market (where sales, consolidated by BMS, dipped by 76.1% at constant exchange rates to ~~perform well~~€50 million), but also the continuing success of the product in Japan and China where net sales ~~grew respectively~~(consolidated by ~~37.1% (to €520 million) and by 36.6% (to €216 million) at constant exchange rates. These performances to some extent cushioned the effect of the decline in European sales of Plavix~~^® ~~(down 49.2%~~Sanofi) reached €837 million (up 16.0% at constant exchange rates) ~~caused by competition from generics.~~and €371 million (up 20.6% at constant exchange rates), respectively.

Worldwide sales of ~~Aprovel~~^®Aprovel®/~~Avapro~~^®Avapro®/~~Karvea~~^®Karvea®/~~Avalide~~^® ~~were €2,056~~Avalide® in 2012 amounted to €1,372 million, ~~in 2010, down 1.5%~~a decline of 26.6% at constant exchange ~~rates. The performance in the Other Countries region, lifted by sales~~rates, reflecting loss of ~~active ingredient to our alliance partners in Japan, partially offset the drop in sales~~exclusivity in the United States on March 30, 2012 and ~~Europe, where~~competition from generics in most Western European countries. In Japan and China, net sales ~~fell~~(consolidated by ~~10.4% and 4.4% respectively~~Sanofi) came to €101 million (up 47.0% at constant exchange ~~rates. At the end of 2010, sales were impacted by a voluntary recall of certain lots of Avalide~~^® ~~(irbesartan-hydrochlorothiazide) by Bristol-Myers Squibb~~rates) and ~~sanofi-aventis from the U.S.~~€138 million (up 17.3% at constant exchange rates), ~~Puerto Rican, Canadian, Mexican and Argentinean markets.~~

respectively.

Other Revenues

Other revenues, which mainly comprise royalty income under licensing agreements contracted in connection with ongoing operations, ~~totaled €1,651~~fell by 39.5% to €1,010 million (versus €1,669 million in ~~2010, 14.4% higher than the 2009 figure of €1,443 million.~~

2011).

~~This increase~~ The decrease was mainly due to ~~license revenues~~lower licensing revenue under the worldwide alliance with BMS on ~~Plavix~~^®Plavix® and ~~Aprovel~~^®Aprovel®, which totaled ~~€1,303~~€532 million in ~~2010~~2012 versus ~~€1,155~~€1,275 million in ~~2009 (a 12.8% rise~~2011 (down 58.1% on a reported basis)~~. These revenues were boosted by stronger sales~~, due largely to the loss of ~~Plavix~~^®exclusivity in the United States ~~(up 10.8% at constant exchange rates),~~for Aprovel® (on March 30, 2012) and ~~by favorable trends in~~Plavix® (on May 17, 2012). However, the ~~exchange rate~~appreciation of the U.S. dollar against the ~~euro.~~euro had a favorable impact on other revenues, as did the recognition in 2012 of a €45 million payment from BMS relating to the Avalide® supply disruption in the United States during 2011.

This line also includes royalty income of €171 million from Amgen relating to a worldwide license contracted on the product Enbrel®. Royalties received on U.S. sales represented a significant portion of this income in 2012 and will contractually end in February 2013.

Gross Profit

Gross profit ~~for the year ended December 31, 2010 came~~amounted to ~~€23,318~~€24,839 million ~~(76.7%~~in 2012 (71.1% of net sales), ~~2.0% up on the 2009 figure of €22,869~~versus €24,156 million ~~(78.0%~~in 2011 (72.3% of net sales). This represents an increase of 2.8% in gross profit, but a fall of 1.2 points in the gross margin ratio.

The gross margin ratio offor the Pharmaceuticals segment ~~fell~~slipped by ~~1.6~~2.9 points to 72.9%, reflecting ~~the net effect~~a lower level of ~~increased~~ royalty income ~~(+0.6 of~~(-2.6 points) and a ~~point) and erosion~~deterioration in the ratio of cost of sales to net sales ~~(-2.2 points). This erosion~~(-0.3 of a point); this latter trend was mainly ~~due~~attributable to ~~genericization (primarily Plavix~~^® ~~in Europe and Lovenox~~^®the adverse impact of generics (mainly of Taxotere® in the United States), partially offset by productivity gains and ~~higher~~lower raw ~~material~~materials prices for heparins.

~~Nevertheless, the 2010~~The gross margin ratio for the ~~Pharmaceuticals~~Vaccines segment ~~remained healthy at 78.6%~~fell by 1.0 point to 59.2%.

The gross margin ratio for the Animal Health segment improved by 0.4 of ~~the Vaccines segment rose by 1.9 points~~a point to ~~64.7%, driven~~69.3%.

In addition, consolidated gross profit for 2012 was adversely affected by a ~~2.1-point improvement in the ratio of cost of sales to net sales, thanks mainly to cost efficiencies in the production of pandemic influenza vaccines.~~

~~Consolidated gross profit was also dented by a €30~~€23 million ~~charge~~expense (0.1 of a point) arising from the workdown ~~during 2010~~ of acquired inventories remeasured at fair value in connection with ~~acquisitions (principally Chattem).~~

the acquisition of Genzyme. In 2011, this expense was €476 million (1.4 points), out of which €473 million were related to the acquisition of Genzyme.

Research and Development Expenses

Research and development (R&D) expenses ~~amounted to €4,401~~totaled €4,922 million (versus €4,811 million in ~~2010 (14.5%~~2011), representing 14.1% of net ~~sales), compared with €4,583~~sales (versus 14.4% in 2011). Overall, R&D expenses rose by €111 million, ~~in 2009 (15.6% of net sales). This represents a year-on-year reduction of 4.0%~~or 2.3% on a reported ~~basis and 6.2% at constant exchange rates.~~basis. After including Genzyme's costs for the first quarter of 2011, R&D expenses fell by 0.4% year-on-year. In addition, the amount of R&D expenses reported for 2012 was adversely affected by the appreciation of the U.S. dollar against the euro.

~~The~~R&D expenses for the Pharmaceuticals segment ~~generated savings~~increased by €118 million, up 2.9% on a reported basis. After including Genzyme's costs for the first quarter of ~~7.1% at constant exchange rates as a result~~2011, R&D expenses fell by €15 million (or 0.4%) year-on-year, reflecting our ongoing transformation initiatives and the rationalization of the ~~reorganization initiated in 2009, which has helped reorient some in-house resources towards third-party collaborations. These savings also reflect a rationalization of~~project portfolio.

R&D ~~projects following a full, objective review of the portfolio.~~

~~Research and development~~ expenses infor the Vaccines segment fell by €25 million to €539 million (down 4.4% on a reported basis), due mainly to trends in the cost of clinical trials on the dengue fever vaccine and various influenza-related projects.

In the Animal Health segment, R&D expenses rose by ~~€26~~€18 million ~~year-on-year, an increase of 1.8% at constant exchange rates.~~

(up 12.3% on a reported basis) versus 2011.

Selling and General Expenses

Selling and general expenses amounted to ~~€7,567~~€8,947 million, ~~(24.9% of net sales),~~compared with €8,536 million in 2011, an increase of ~~3.3%~~€411 million or 4.8% on ~~the prior-year figure~~a reported basis. The ratio of ~~€7,325 million (25.0% of net sales). At constant exchange rates,~~ selling and general expenses to net sales was unchanged year-on-year at 25.6%. After including Genzyme's costs for the first quarter of 2011, selling and general expenses were up 1.8% year-on-year. In addition, the amount reported for 2012 was adversely affected by the appreciation of the U.S. dollar against the euro.

In the Pharmaceuticals segment, selling and general expenses increased by €290 million, or 3.9% on a reported basis. After including Genzyme's costs for the first quarter of 2011, selling and general expenses for the segment fell by ~~1.2%, despite the first-time consolidation of companies acquired~~€37 million (or 0.5%) year-on-year. This trend reflects tight cost control (especially in ~~2010 (primarily Chattem)~~mature regions) and the ~~impact~~effect of synergies unlocked by the ~~Jevtana~~^® ~~and Multaq~~^® ~~launches. This reduction reflects the transformation program initiated in 2009,~~integration of Genzyme, and was ~~mainly driven~~achieved in spite of ongoing investment in our growth platforms and the launch costs incurred on Zaltrap® and Aubagio®.

Selling and general expenses for the Vaccines segment rose by ~~savings in marketing costs~~€69 million (up 12.7% on a reported basis), due partly to adverse trends in the ~~United States~~U.S. dollar/euro exchange rate and ~~Europe, and in general expenses.~~partly to increased promotional investments.

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In the Animal Health segment, selling and general expenses increased by €52 million (up 8.4% on a reported basis), reflecting adverse trends in the U.S. dollar/euro exchange rate and higher promotional costs on the companion animals franchise.

Other Operating Income and Expenses

~~Other~~In 2012, other operating income amounted to ~~€359~~€562 million (versus €319 million in ~~2010 (2009: €866 million)~~2011), and other operating expenses ~~totaled €276~~to €454 million ~~(2009: €481 million)~~(versus €315 million in 2011).

Overall, other operating income and expenses represented net income of ~~€83~~€108 million in ~~2010,~~2012, compared with ~~€385~~€4 million in ~~2009. The year-on-year fall of €302 million~~2011. This increase was mainly due to the ~~discontinuation~~favorable outcome of ~~royalty payments from Teva on North American sales of Copaxone~~^® ~~from the second quarter of 2010.~~

litigation relating to a license.

~~In addition, sanofi-aventis recorded~~ This line item also includes a net operational foreign exchange loss of ~~€141~~€41 million, ~~due to highly volatile currency markets; this compares with a net gain of €40~~against €5 million in ~~2009.~~

2011.

Amortization of Intangible Assets

Amortization charged against intangible assets ~~in the year ended December 31, 2010~~ amounted to ~~€3,529 million, compared with €3,528~~€3,291 million in ~~the previous year. An increase~~2012, versus €3,314 million in 2011. The year-on-year reduction of €23 million was mainly due to:

–: Reductions: a fall in amortization ~~expense~~charged against intangible assets recognized on the acquisition of Aventis (€1,489 million in ~~North America, related to trends~~2012, versus €1,788 million in ~~the U.S. dollar/euro exchange rate and the Chattem acquisition, was offset by a reduction in Europe~~2011), as some ~~intangible assets~~products reached the end of their ~~useful lives.~~life cycles in the face of competition from generics;
–: Increases: amortization charges generated by intangible assets recognized on the acquisition of Genzyme in the second quarter of 2011 (€981 million over 12 months in 2012, versus €709 million over 9 months in 2011).

Impairment of Intangible Assets

This line ~~item mainly comprises amortization charged~~showed impairment losses of €117 million against intangible assets ~~remeasured at fair value on the acquisitions of Aventis (€3,070~~in 2012, compared with €142 million in ~~2010, versus €3,175 million in 2009) and of Zentiva (€130 million in 2010, versus €98 million in 2009).~~

~~Impairment of Intangibles Assets~~

~~This line recorded~~2011. The impairment losses recognized in 2012 relate mainly to the discontinuation of ~~€433 million~~R&D projects in ~~2010, compared with €372 million~~the Pharmaceuticals segment, in ~~2009. The~~particular some development programs in oncology.

In 2011, the impairment losses ~~booked in 2010~~ related mainly to (i) ~~Actonel~~^®the discontinuation of a Genzyme research project; (ii) certain Zentiva generics, following a downward revision of sales projections; and (iii) the discontinuation of a joint project with Metabolex in diabetes. This line also included a reversal of impairment losses on Actonel®, ~~due to contemplated amendments to~~recognized following confirmation of the terms of the collaboration agreement with Warner ~~Chilcott; (ii) the pentavalent vaccine Shan5~~^®~~, for which sales projections were revised~~Chilcott (see Note C.3. to ~~take account~~our consolidated financial statements included at Item 18 of the need to file a new application for WHO pre-qualification following a flocculation problem in some batches; (iii) the BSI-201 project, for which the development plan was revised following the announcementthis annual report).

Fair Value Remeasurement of the initial results from a Phase III trial in triple-negative metastatic breast cancer; and (iv) some of Zentiva’s generics and consumer health products, whose sales projections in Eastern Europe were adjusted downwards.Contingent Consideration Liabilities

~~The~~Fair value remeasurements of contingent consideration liabilities recognized on acquisitions in accordance with the revised IFRS 3 represented an expense of €192 million in 2012, compared with a net ~~impairment loss~~gain of ~~€372~~€15 million ~~recognized~~ in ~~2009 related~~2011. This item mainly relates to ~~Actonel~~^®~~, Benzaclin~~^®the contingent value rights (CVRs) issued in connection with the Genzyme acquisition, and ~~Nasacort~~^®~~, and reflected~~to contingent consideration payable to Bayer as a result of an acquisition made by Genzyme prior to the ~~changing competitive environment and the approval dates~~latter's acquisition by Sanofi (see Note D.18. to our consolidated financial statements included at Item 18 of ~~generics.~~

this annual report).

Restructuring Costs

Restructuring costs amounted to ~~€1,372~~€1,141 million in ~~2010, compared with €1,080~~2012, versus €1,314 million in ~~2009.~~2011, and relate primarily to measures announced in connection with the major transformation program that we initiated in 2009 to adapt our structures to the challenges of the future.

In ~~2010,~~2012, these costs mainly related ~~mainly~~ to measures taken to adapt our ~~industrial operations~~resources in France, transform our industrial facilities in Europe and make adjustments to our sales forces worldwide, along with the integration of Genzyme and ~~R&D functions~~impairment losses against property, plant and equipment in ~~the United States and some European countries.~~France.

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In ~~2009, restructuring~~2011, these costs ~~related mainly to measures aimed at transforming~~reflected the transformation and reorganization of our R&D operations, to encourage innovation, and adapting central support functions to streamline the organizational structure. They mainly comprised employee-related expenses, in the form of early retirement benefits and termination benefits under voluntary redundancy plans. To a lesser extent, they reflected ongoing measures taken to adapt our industrial facilities in Europe, ~~and adjust~~adjustments to our sales ~~forces.~~

forces in the United States and Europe, the implementation of multi-country organizations in Europe, and the integration of Genzyme entities worldwide.

Other Gains and Losses, ~~on Disposals,~~ and Litigation

Nothing was recognized on this line in 2012.

In ~~2010,~~2011, this line item ~~reported an~~included a net expense of ~~€138~~€327 million, ~~relating~~mainly comprising (i) a €519 million backlog of depreciation and amortization expense that was not charged against the property, plant and equipment and intangible assets of Merial from September 18, 2009 through December 31, 2010 because these assets were classified as held for sale or exchange during that period in accordance with IFRS 5 (see Note D.8.2. to ~~an adjustment to vendor’s guarantee provisions~~the consolidated financial statements included at Item 18 of this annual report), (ii) a gain of €210 million arising from damages received in connection with ~~past divestments.~~

~~We made no material divestments in 2010 or 2009.~~

a Plavix® patent; and (iii) the impact of the divestiture of the Dermik dermatology business (see Note D.28. to our consolidated financial statements).

Operating Income

Operating income ~~for 2010 was €5,961 million, versus €6,366~~totaled €6,337 million for ~~2009, a drop~~2012, versus €5,731 million for 2011, an increase of ~~6.4%~~10.6%.

Financial Income and Expenses

Net financial ~~expenses were €362~~expense for 2012 was €460 million, ~~in 2010,~~ compared with ~~€300~~€412 million ~~in 2009,~~for 2011, an increase of ~~20.7%.~~

€48 million.

Financial expenses directly related to our debt, net ~~debt (defined as short-term and long-term debt, plus related interest rate and currency derivatives, minus~~of cash and cash ~~equivalents)~~equivalents (see definition at "— Liquidity and Capital Resources" below) were ~~€397~~€349 million in ~~2010, versus €230~~2012 compared to €325 million in ~~2009.~~2011. This ~~year-on-year rise reflected the following factors:~~

an increase ~~in the average interest rate (due~~was due to ~~a longer average maturity), charged on a higher level of average consolidated debt;~~

a reduction in ~~interest~~financial income ~~reflecting~~resulting from a lower average rate of ~~return;~~return on cash.

Because the average level of debt and

the ~~€34 million~~average rate of interest on debt were relatively stable year-on-year, financial expenses ~~incurred~~were virtually unchanged in 2012.

Impairment losses on ~~the acquisition credit facilities contracted~~investments and financial assets amounted to €30 million in ~~October 2010~~2012 (versus €58 million in ~~connection with the launch of the public tender offer for Genzyme (see “Item 8.B. Significant changes”)~~2011). In 2012, these losses related primarily to available-for-sale financial assets; in 2011, they related mainly to Greek government bonds (€49 million, versus €6 million in 2012).

Gains on disposals of non-current financial assets amounted to ~~€61~~€37 million ~~mainly on~~in 2012, compared with €25 million in 2011. The 2011 figure included the ~~sale~~effect of the ~~equity interest~~change in ~~Novexel.~~consolidation method for the investment in the Société Financière des Laboratoires de Cosmétologie Yves Rocher following loss of significant influence (see Note D.6. to our consolidated financial statements). In August 2012, Sanofi sold this investment.

~~Net~~The effect of the unwinding of discount on provisions was €87 million in 2012 (versus €83 million in 2011), and the net financial foreign exchange ~~losses on financial items totaled €20~~loss was €17 million in ~~2010 (2009: €67 million)~~2012 (versus a net gain of €10 million in 2011).

Income before Tax and Associates and Joint Ventures

Income before tax and associates and joint ventures for 2012 was ~~€5,599~~€5,877 million in ~~2010,~~2011, versus ~~€6,066~~€5,319 million in ~~2009, a fall~~2011, an increase of ~~7.7%~~10.5%.

Income Tax Expense

Income tax expense ~~totaled €1,242~~amounted to €1,134 million in ~~2010, compared with €1,364~~2012, versus €455 million in ~~2009.~~2011 and €1,430 million in 2010.

The fall in income tax expense in 2011 relative to 2010 was mainly attributable to a reduction in the deferred tax liability relating to the remeasurement of the intangible assets of Merial in response to changes in tax rates and

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legislation (primarily in the United Kingdom) and the effect of the Franco-American Advance Pricing Agreement (APA) for the period from 2006 through 2011 (see Note D.30. to our consolidated financial statements).

These effects did not impact income tax expense for 2012. However, the rise in income tax expense during the year was limited by the favorable effects of differential income tax rates applicable to our foreign subsidiaries (including the impact of an Advance Pricing Agreement (APA) with the Japanese authorities covering the period from 2012 through 2014), and also by the settlement of tax inspections and the effects of time-barring.

This item includes tax gains arising from (i) the amortization of intangible assets, totaling €1,159 million in 2012 (versus €1,178 million in 2011, including the impact of the Merial backlog, see "— Other Gains and Losses, and Litigation" above) and (ii) restructuring costs (€370 million in 2012, versus €399 million in 2011).

The effective tax rate is calculated on the basis of business operating income minus net financial expenses and before the share of profit/loss of associates and joint ventures ~~net income from the held-for-exchange Merial business,~~ and net income attributable to non-controlling interests. The effective tax rate was ~~27.8%~~25.5% in ~~2010,~~2012, versus ~~28.0%~~27.0% in ~~2009.~~2011. The difference relative to the standard corporate income tax rate applicable in France ~~(34%~~(34.4%) was mainly due to royalty income being taxed at a reduced rate in ~~France.~~

~~This line item also includes~~France, and to the differential in tax ~~effects~~rates applied to profits of ~~amortization of intangible assets (€1,181 million in 2010, €1,126 million in 2009) and of restructuring costs (€462 million in 2010, €360 million in 2009).~~

our foreign subsidiaries.

Share of Profit/Loss of Associates and Joint Ventures

~~Our~~The share of ~~profits and losses from~~profit/loss of associates and joint ventures in 2012 was ~~€978~~€393 million, versus €1,070 million in ~~2010, compared with €814 million in 2009.~~2011. This line mainly includes our share of after-tax profits from territories managed by BMS under the ~~Plavix~~^®Plavix® and ~~Avapro~~^®Avapro® alliance, which ~~rose~~fell by ~~24.8% from €785~~60.7% to €420 million (versus €1,070 million in ~~2009 to €980 million~~2011). The decline in ~~2010. This year-on-year increase~~our share was mainly ~~related~~attributable to ~~stronger~~a 61.6% drop in sales of ~~Plavix~~^®Plavix® in the United States ~~(up 10.8% at constant exchange rates) and~~due to the ~~appreciation~~loss of ~~the U.S. dollar against the euro (positive impact of 3.7%).~~

exclusivity and competition from generics.

~~Net Income from the Held-for-Exchange Merial Business~~

With effect from September 18, 2009, the date on which we obtained exclusive control over Merial, the operations of this company have been accounted for using the full consolidation method. In accordance with IFRS 5, the results of Merial’s operations are reported separately in the line item “Net income from the held-for-exchange Merial business” (see Note D.8.1. to our consolidated financial statements included at Item 18 of this annual report).

Net income from the held-for-exchange Merial business amounted to €386 million, compared with €175 million in 2009. The increase mainly reflects the fact that since September 18, 2009, this line has included 100% of Merial’s net income, against 50% previously. The figure reported also includes the impact of the workdown of inventories remeasured at fair value in September 2009.

Net Income

Net income ~~for the year was €5,721~~amounted to €5,136 million in ~~2010,~~2012, compared with ~~€5,691~~€5,934 million in ~~2009.~~2011.

Net Income Attributable to Non-Controlling Interests

Net income attributable to non-controlling interests ~~amounted to €254~~totaled €169 million in ~~2010, compared with €426~~2012, against €241 million in ~~2009.~~2011. This line mainly comprises the share of pre-tax profits paid to BMS from territories managed by ~~sanofi-aventis~~Sanofi (€~~238~~149 million, versus ~~€405~~€225 million in ~~2009). The decrease in Net income attributable to non-controlling interests in 2010~~2011); this year-on-year fall was directly related to increased competition from generics of clopidogrel ~~(Plavix~~^®(Plavix®) in Europe.

Net Income Attributable to Equity Holders of ~~Sanofi-Aventis~~Sanofi

Net income attributable to equity holders of ~~sanofi-aventis totaled €5,467~~Sanofi was €4,967 million in ~~2010, against €5,265~~2012, versus €5,693 million in ~~2009.~~2011.

Basic earnings per share for ~~2010~~2012 was ~~€4.19, 4.0% higher~~€3.76, 12.8% lower than the ~~2009~~2011 figure of ~~€4.03,~~€4.31, based on an average number of shares outstanding of ~~1,305.3~~1,319.5 million in ~~2010 and 1,305.9~~2012 (1,321.7 million in ~~2009.~~2011). Diluted earnings per share for 2012 was ~~€4.18 in 2010~~€3.74, compared ~~with €4.03 in 2009,~~to €4.29 for 2011, based on an average number of shares outstanding after dilution of ~~1,308.2~~1,329.6 million in ~~2010~~2012 and ~~1,307.4~~1,326.7 million in ~~2009.~~

2011.

Business Operating Income

Sanofi reports segment results on the basis of "Business Operating Income". This indicator, adopted in compliance with IFRS 8, is used internally to measure operational performance and to allocate resources. See "Item 5. Operating and Financial Review and Prospects — Segment information" above for the definition of business operating income and reconciliation to our Income before tax and associates and joint ventures.

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Business operating income for ~~2010~~2012 was ~~€12,660~~€11,353 million, compared to ~~€12,028~~€12,144 million in ~~2009.~~2011 (down 6.5%). The table below shows trends in business operating income by business segment for ~~2010~~2012 and ~~2009:~~2011:

(€ million)    2010    2009
Pharmaceuticals    10,965       10,608
Vaccines    1,379       1,173
Other    316       247
Business operating income
   12,660       12,028

*(€ million)*


Pharmaceuticals	9,519	10,496	-9.3%
Vaccines	1,148	985	+16,5%
Animal Health	673	627	+7.3%
Other	13	36	-63.9%

Business operating income	11,353	12,144	-6.5%

Business Net Income

Business net income is a non-GAAP financial measure that we use to evaluate our ~~Group’s performance (see “Item~~Group's performance. See "Item 5. Operating and Financial Review and Prospects — Business Net ~~Income” above).~~Income" above for the definition of business net income and reconciliation to our Net income attributable to equity holders of Sanofi.

Business net income ~~for 2010 was €9,215~~totaled €8,179 million ~~an improvement of 6.8% on the 2009 figure of €8,629~~in 2012 versus €8,795 million in 2011 (down 7.0%), and represented ~~30.3%~~23.4% of net sales compared with ~~29.4%~~26.3% in ~~2009. The increase was mainly due to our good operating performance, reflected in the increase in gross profit (€23,318 million in 2010 versus €22,869 million in 2009).~~

(€ million)    2010 2009
Business net income
   9,215 8,629
(i)             Amortization of intangible assets    (3,529 ) (3,528 )
(ii)            Impairment of intangible assets    (433 ) (372 )
(iii)           Expenses arising from the impact of acquisitions on inventories ⁽¹⁾    (30 ) (27 )
(iv)           Restructuring costs    (1,372 ) (1,080 )
(iii)/(iv)    Other items ⁽²⁾    (138 ) —
(v)            Tax effects of:    1,841 1,629
                 – amortization of intangible assets    1,181 1,126
                 – impairment of intangible assets    143 136
                 – expenses arising from the impact of acquisitions on inventories    9 7
                 – restructuring costs    462 360
                 – other items    46 —
(iii)/(vi)    Other tax items ⁽³⁾    —    106
(vii)          Share of items listed above attributable to non-controlling interests    3 1
(iii)           Expenses arising from the impact of the Merial acquisition ⁽⁴⁾    (32 ) (66 )
(iii)/(iv)    Restructuring costs of associates and joint ventures, and expenses arising from
                 the impact of acquisitions on associates and joint ventures ⁽⁵⁾    (58 ) (27 )
Net income attributable to equity holders of sanofi-aventis
   5,467 5,265

⁽¹⁾   This line comprises the workdown of inventories remeasured at fair value at the acquisition date.

⁽²⁾   Other items comprise:

      – reversals of/charges to provisions for risks
   (138 )
⁽³⁾   Other tax items comprise:

      – reversal of deferred taxes following ratification of the Franco-American Treaty
   106
⁽⁴⁾   This line item comprises: until September 17, 2009, amortization and impairment charged against the intangible assets of Merial; and from September 18, 2009, (i) the impact of discontinuation of depreciation of the property, plant and equipment of Merial in accordance with IFRS 5 (see Note B.7. to the consolidated financial statements) and (ii) the expense arising from the workdown of inventories remeasured at fair value at the acquisition date.
⁽⁵⁾   This line shows the portion of major restructuring costs incurred by associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (workdown of acquired inventories, amortization and impairment of intangible assets, and impairment of goodwill).

2011.

Business Earnings Per Share

We also report business earnings per share, a non-GAAP financial measure which we define as business net income divided by the weighted average number of shares outstanding (see “—"— Business Net ~~Income”~~Income" above).

Business earnings per share for ~~2010~~2012 were ~~€7.06, up~~€6.20 versus €6.65 in 2011, down 6.8%, based on ~~the 2009 business earnings per share figure of €6.61. The weighted~~an average number of shares outstanding ~~was 1,305.3~~of 1,319.5 million in ~~2010 and 1,305.9~~2012 (1,321.7 million in ~~2009.~~2011). Diluted business earnings per share for ~~2010~~2012 were ~~€7.04, up 6.7%~~€6.15 versus €6.63 in 2011, down 7.2%, based on ~~the 2009 diluted business earnings per share figure of €6.60. On a diluted basis, the weighted~~an average number of shares outstanding ~~was 1,308.2~~of 1,329.6 million in ~~2010~~2012 and ~~1,307.4~~1,326.7 million in ~~2009.~~2011.

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Year Ended December 31, ~~2009~~2011 Compared with Year Ended December 31, ~~2008~~2010

~~The~~Our consolidated income statements for the years ended December 31, ~~2009~~2011 and December 31, ~~2008~~2010 break down as follows:

(under IFRS) *(€ million)*


Net sales	33,389		100.0%	32,367		100.0%
Other revenues	1,669		5.0%	1,669		5.2%
Cost of sales	(10,902	)	(32.7%)	(9,398	)	(29.0%)
Gross profit	24,156		72.3%	24,638		76.1%
Research & development expenses	(4,811	)	(14.4%)	(4,547	)	(14.0%)
Selling & general expenses	(8,536	)	(25.6%)	(8,149	)	(25.2%)
Other operating income	319			369
Other operating expenses	(315	)		(292	)
Amortization of intangible assets	(3,314	)		(3,529	)
Impairment of intangible assets	(142	)		(433	)
Fair value remeasurement of contingent consideration liabilities	15			—
Restructuring costs	(1,314	)		(1,384	)
Other gains and losses, and litigation ⁽¹⁾	(327	)		(138	)
Operating income	5,731		17.2%	6,535		20.2%
Financial expenses	(552	)		(468	)
Financial income	140			106
Income before tax and associates and joint ventures	5,319		15.9%	6,173		19.1%
Income tax expense	(455	)		(1,430	)
Share of profit/(loss) of associates and joint ventures	1,070			978

Net income	5,934		17.8%	5,721		17.7%

Net income attributable to non-controlling interests	241			254

Net income attributable to equity holders of Sanofi	5,693		17.1%	5,467		16.9%

Average number of shares outstanding (million)	1,321.7			1,305.3
Average number of shares outstanding after dilution (million)	1,326.7			1,308.2

Basic earnings per share (in euros)	4.31			4.19
Diluted earnings per share (in euros)	4.29			4.18

⁽¹⁾: See Note B.20.2. to our consolidated financial statements included at Item 18 of this annual report.

(under IFRS)
(€ million)
   2009
as % of
net sales
   2008
as % of
net sales

Net sales
   29,306 100.0%    27,568 100.0%
Other revenues    1,443 4.9%    1,249 4.5%
Cost of sales    (7,880 ) (26.9%)       (7,337 ) (26.6%)
Gross profit
   22,869 78.0%    21,480 77.9%
Research & development expenses    (4,583 ) (15.6%)       (4,575 ) (16.6%)
Selling & general expenses    (7,325 ) (25.0%)       (7,168 ) (26.0%)
Other operating income    866    556
Other operating expenses    (481 )    (353 )
Amortization of intangible assets    (3,528 )    (3,483 )
Impairment of intangible assets    (372 )    (1,554 )
Restructuring costs    (1,080 )    (585 )
Gains and losses on disposals, and litigation    —       76
Operating income
   6,366 21.7%    4,394 15.9%
Financial expenses    (324 )    (335 )
Financial income    24    103
Income before tax and associates and joint ventures
   6,066 20.7%    4,162 15.1%
Income tax expense    (1,364 )    (682 )
Share of profit/loss of associates and joint ventures    814    692
Net income excluding the held-for-exchange Merial business ⁽¹⁾
   5,516 18.8%    4,172 15.1%
Net income from the held-for-exchange Merial business ⁽¹⁾    175    120
Net income
   5,691 19.4%    4,292 15.6%
Net income attributable to non-controlling interests    426    441
Net income attributable to equity holders of sanofi-aventis
   5,265 18.0%    3,851 14.0%
Average number of shares outstanding (million)    1,305.9    1,309.3
Average number of shares outstanding after dilution (million)    1,307.4    1,310.9
Basic earnings per share (in euros)    4.03    2.94
Diluted earnings per share (in euros)    4.03    2.94

⁽¹⁾

Our consolidated income statements include the results of the operations of Genzyme from April 2011. In order to help investors gain a better understanding of our performance, in the narrative discussion of certain income statement line items ("research & development expenses", and "selling & general expenses") we exclude 2011 data for Genzyme in the analyses. In the narrative discussion of Genzyme's products net sales, we used non-consolidated 2010 net sales in additional analyses.

Net Sales

Net sales for the year ended December 31, ~~2009 amounted to €29,306~~2011 totaled €33,389 million, ~~an increase of 6.3% versus 2008.~~up 3.2% on 2010. Exchange rate ~~movements~~fluctuations had ~~a favorable~~an unfavorable effect of ~~1.0 point, mainly reflecting~~2.1 points, primarily as a result of the ~~appreciation in~~depreciation of the U.S. dollar against the euro. At constant exchange rates, and after taking account of changes in structure (mainly the consolidation of ~~Zentiva and Medley~~Genzyme from ~~the second quarter of 2009, and the reversion of Copaxone~~^® ~~to Teva in North America effective~~ April ~~1, 2008)~~2011), net sales ~~rose by~~were up 5.3%. year-on-year.

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Excluding ~~changes~~Genzyme, net sales were down 2.6% in ~~structure and~~2011 at constant exchange rates, ~~organic~~reflecting the loss in sales associated with competition from generics and the impacts of austerity measures in the European Union. Excluding Genzyme and sales of A/H1N1 vaccines, net sales ~~growth was 4.0%.~~

were down 1.2% at constant exchange rates.

The following table sets forth a reconciliation of our reported net sales for the years ended December 31, ~~2009~~2011 and December 31, ~~2008~~2010 to our net sales at constant exchange ~~rates and net sales on a constant structure basis.~~rates:

*(€ million)*


Net sales	33,389	32,367	+3.2%

Effect of exchange rates	704

Net sales at constant exchange rates	34,093	32,367	+5.3%

(€ million)    2009 2008
Change
(%)

Reported net sales
   29,306 27,568    +6.3%
Effect of exchange rates    (274 )
Net sales at constant exchange rates
   29,032 27,568    +5.3%
Effect of changes in structure    339
Net sales on a constant structure basis and at constant exchange rates
   29,032 27,907    +4.0%

Our net sales comprise the net sales generated by our Pharmaceuticals, Human Vaccines (Vaccines) and Animal Health segments.

The following table breaks down our 2011 and 2010 net sales by business ~~and net~~segment:

*(€ million)*


Pharmaceuticals	27,890	26,576	+4.9%	+6.7%
Vaccines	3,469	3,808	-8.9%	-5.5%
Animal Health	2,030	1,983	+2.4%	+4.3%

Total	33,389	32,367	+3.2%	+5.3%

Net Sales by Product — Pharmaceuticals segment

Net sales generated by our Pharmaceuticals segment were €27,890 million in 2011, up 4.9% on a reported basis and 6.7% at constant exchange rates. This change reflects the positive impact of the first-time consolidation of Genzyme; the negative impacts of competition from generics on sales of Lovenox®, Ambien® CR and Taxotere® in the United States and Plavix® and Taxotere® in the European Union; and the effects of healthcare reform in the United States and austerity measures in Europe. Excluding Genzyme, our Pharmaceuticals segment posted net sales of €25,495 million, down 4.1% on a reported basis and 2.7% at constant exchange rates.

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The following table breaks down our 2011 and 2010 net sales for the Pharmaceuticals segment by product:

*(€ million)* Product	Indication


Lantus®	Diabetes	3,916	3,510	+11.6%	+15.0%
Apidra®	Diabetes	190	177	+7.3%	+9.6%
Insuman®	Diabetes	132	133	-0.8%	-0.8%
Amaryl®	Diabetes	436	478	-8.8%	-7.9%
Other diabetes products	Diabetes	10	—	—	—

Total: Diabetes	Diabetes	4,684	4,298	+9.0%	+12.0%

Taxotere®	Breast, lung, prostate, stomach, and head & neck cancer	922	2,122	-56.6%	-57.0%
Eloxatine®	Colorectal cancer	1,071	427	+150.8%	+160.9%
Jevtana®	Prostate cancer	188	82	+129.3%	+135.4%
Mozobil®	Hematologic malignancies	59	—	—	—
Other oncology products ⁽¹⁾		389	59	+559.3%	—

Total: Oncology		2,629	2,690	-2.3%	—

Lovenox®	Thrombosis	2,111	2,806	-24.8%	-23.4%
Plavix®	Atherothrombosis	2,040	2,083	-2.1%	-2.9%
Aprovel®/CoAprovel®	Hypertension	1,291	1,327	-2.7%	-2.4%
Allegra®	Allergic rhinitis, urticaria	580	607	-4.4%	-8.6%
Stilnox®/Ambien®/Myslee®	Sleep disorders	490	819	-40.2%	-41.4%
Copaxone®	Multiple sclerosis	436	513	-15.0%	-15.4%
Tritace®	Hypertension	375	410	-8.5%	-6.3%
Depakine®	Epilepsy	388	372	+4.3%	+5.4%
Multaq®	Atrial fibrillation	261	172	+51.7%	+56.4%
Xatral®	Benign prostatic hypertrophy	200	296	-32.4%	-30.7%
Actonel®	Osteoporosis, Paget's disease	167	238	-29.8%	-29.8%
Nasacort®	Allergic rhinitis	106	189	-43.9%	-41.8%
Renagel®/Renvela® ⁽¹⁾	Hyperphosphatemia	415	—	—	—
Synvisc®/Synvisc-One® ⁽¹⁾	Arthritis	256	—	—	—

Cerezyme® ⁽¹⁾	Gaucher disease	441	—	—	—
Myozyme®/Lumizyme® ⁽¹⁾	Pompe disease	308	—	—	—
Fabrazyme® ⁽¹⁾	Fabry disease	109	—	—	—
Other rare disease products ⁽¹⁾		264	—	—	—

Total: New Genzyme ⁽¹⁾		1,122	—	—	—

Other prescription products		5,927	6,005	-1.3%	-0.9%
Consumer Health Care		2,666	2,217	+20.3%	+22.8%
Generics		1,746	1,534	+13.8%	+16.2%

Total pharmaceuticals		27,890	26,576	+4.9%	+6.7%

⁽¹⁾: In 2011, net sales of Genzyme products were recognized from the acquisition date (April 2011).

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Diabetes

Net sales for the Diabetes business were €4,684 million, up 12.0% at constant exchange rates, driven by Lantus®.

Lantus® posted a 15.0% increase in net sales at constant exchange rates in 2011 to €3,916 million. This change reflected sharp growth in Emerging Markets (26.0% at constant exchange rates), especially in China (61.7%) and Brazil (29%), as well as solid performances in the United States (14.6%) and Japan (19.5%). In Western Europe, growth was more moderate (6.4%), reflecting pricing pressures (especially in Germany).

Net sales of the rapid-acting insulin analogApidra® advanced by 9.6% at constant exchange rates in 2011 to €190 million, led by solid performances in Japan (87.9% growth) and the United States (11.3% growth). At year-end, sales were impacted negatively by a temporary shortage of Apidra® 3ml cartridges.

Amaryl® saw net sales decrease by 7.9% at constant exchange rates in 2011 to €436 million, due principally to competition from generics in Japan, and despite an 8.6% increase (at constant exchange rates) in Emerging Markets.

Oncology

Taxotere® reported net sales of €922 million, down 57.0% at constant exchange rates. This product faced competition from generics in Western Europe (down 73.6%) and the United States (down 69.2%), although the decline was much less pronounced in Emerging Markets (down 24.6%).

Eloxatine® net sales rebounded sharply in 2011 by 160.9% at constant exchange rates to €1,071 million, as sales recovered in the United States (€806 million in 2011, versus €172 million in 2010) following a court ruling barring manufacturers of generics in the United States from selling their unapproved generic versions of oxaliplatin from June 30, 2010.

Jevtana®, which has been available in the U.S. market since July 2010 and has become gradually available throughout most of the countries of Western Europe since April 2011, registered net sales of €188 million in 2011, €131 million of which were generated in the United Sates.

Other oncology products (net sales of €448 million in 2011) are essentially new products acquired with Genzyme; net sales for these Genzyme products have been consolidated since the acquisition date (April 2011).

Other pharmaceutical products

Lovenox® saw net sales decrease by 23.4% at constant exchange rates in 2011 to €2,111 million, as a result of competition from generics in the United States where net sales declined by 54.3% to €633 million. Outside the United States, net sales were up 9.0% at constant exchange rates at €1,478 million (representing 70.0% of worldwide 2011 sales of Lovenox®), with good performances in Western Europe (up 6.4%) and Emerging Markets (up 14.0%).

Net sales of the hypnoticStilnox®/Ambien®/Myslee® fell by 41.4% at constant exchange rates to €490 million, reflecting competition from Ambien® CR generics in the United States. In Japan, Myslee® continued to post a solid performance with net sales up 9.2% at constant exchange rates at €284 million.

Allegra® prescription sales were down 8.6% (at constant exchange rates) at €580 million. In Japan, which represents 80.2% of worldwide sales of Allegra®, net sales totaled €465 million (up 22.1% at constant exchange rates) due to a sharp increase in seasonal allergies. The slump in prescription sales in the United States (down 98.6% at constant exchange rates) was mainly due to the approval of Allegra® as an over-the-counter (OTC) product in the U.S. market effective March 2011. Since this approval, U.S. sales of Allegra® have been recognized in our Consumer Health Care business.

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Copaxone® net sales, generated primarily in Western Europe, fell by 15.4% at constant exchange rates to €436 million. This reflected the ending of the co-promotion agreement with Teva in certain countries, in particular the United Kingdom (from the end of 2010) and Germany (from the end of 2010).

Multaq® posted 56.4% growth in net sales to €261 million at constant exchange rates, primarily in the United States (€184 million) and Western Europe (€66 million).

Renagel®/Renvela® posted net sales of €415 million, up 10.2% on a constant structure basis and at constant exchange rates, due to increased market share in the United States. Net sales for this product are recognized as from the Genzyme acquisition date (April 2011) and comparisons are with the net sales reported by Genzyme in 2010 for the same period.

Net sales ofSynvisc® totaled €256 million (up 14.7% on a constant structure basis and at constant exchange rates), supported by the solid performance ofSynvisc-One® in the U.S. and Japan. Net sales for this product are recognized as from the Genzyme acquisition date and comparisons are with the net sales reported by Genzyme in 2010 for the same period.

New Genzyme

The "new Genzyme" business consists of products used to treat rare diseases and products for the treatment of multiple sclerosis. The latter did not generate any sales in 2011 and 2010, since Aubagio® was only launched in 2012 and Copaxone® is not included in the new Genzyme business. Net sales of Genzyme's rare diseases products are recognized as from the Genzyme acquisition date and comparisons are with the net sales reported by Genzyme in 2010 for the same period.

Net sales ofCerezyme® were up 11.1% (on a constant structure basis and at constant exchange rates) at €441 million, reflecting higher production volumes in 2011 following a reduction in availability of the product in 2010 due to manufacturing issues.Myozyme®/Lumizyme® posted strong growth (27.4% on a constant structure basis and at constant exchange rates, to €308 million), driven mainly by the performance of Lumizyme® in the United States and volume growth worldwide. Growth inFabrazyme® sales (9.4% on a constant structure basis and at constant exchange rates, to €109 million) was sparked by the increase in the product's availability following partial resolution of manufacturing issues. For more information regarding the manufacturing issues related to Cerezyme® and Fabrazyme® see "Item 4 — Information on the Company — Production and Raw Materials."

Consumer Health Care

TheConsumer Health Care business posted year-on-year growth of 22.8% at constant exchange rates to €2,666 million, supported by the successful launch of Allegra® as an over-the-counter product in the U.S. in the first quarter of 2011 (which generated €211 million in net sales for the year out of a worldwide total of €245 million), and by the performance of Emerging Markets where net sales increased by 20.8% at constant exchange rates to €1,225 million. These figures include the effect of the first-time consolidation of the consumer health products of Chattem in the United States from February 2010, and of BMP Sunstone in China from February 2011.

Generics

TheGenerics business reported net sales of €1,746 million in 2011, up 16.2% at constant exchange rates. This growth was underpinned by sales in Emerging Markets (€1,092 million, up 14.0% at constant exchange rates), especially in Latin America (up 21.4% at constant exchange rates), and in the United States (up 79.4% at constant exchange rates) where Sanofi launched its own approved generics of Ambien® CR, Taxotere® and Lovenox®.

Other prescription products

Net sales of the other prescription products in the portfolio were down 0.9% at constant exchange rates, at €5,928 million. For a description of our other pharmaceutical products, see "Item 4. Information on the Company — B. Business Overview — Pharmaceutical Products."

Sales of Plavix® and Aprovel® are discussed further below under "— Worldwide Presence of Plavix® and Aprovel®".

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The following table breaks down net sales of our Pharmaceuticals segment by product and by geographical region in 2011:

*(€ million)* Product


Lantus®	730	+6.4%	2,336		+14.6%	617	+26.0%	233	+22.3%
Apidra®	68	0.0%	65		+11.3%	37	+8.6%	20	+58.3%
Insuman®	103	-4.6%	—		—	29	+20.0%	—	—
Amaryl®	32	-23.8%	4		-33.3%	228	+8.6%	172	-21.6%
Other diabetes products	10	—	—		—	—	—	—	—

Total: Diabetes	943	+4.3%	2,405		+14.4%	911	+20.1%	425	+0.5%

Taxotere®	189	-73.6%	243		-69.2%	294	-24.6%	196	-20.2%
Eloxatine®	38	-19.6%	806		+393.0%	162	+9.3%	65	+10.2%
Jevtana®	44	—	131		+65.9%	13	—	—	—
Other oncology products ⁽⁴⁾	108	—	245		—	69	—	26	—

Total: Oncology	379	��	1,425		—	538	—	287	—

Lovenox®	833	+6.4%	633		-54.3%	551	+14.0%	94	+3.5%
Plavix®	414	-35.6%	196	*	-8.0%	706	+11.9%	724	+18.6%
Aprovel®/CoAprovel®	753	-9.1%	49	*	+25.6%	363	+6.7%	126	+8.6%
Allegra®	13	-18.8%	3		-98.6%	99	+19.3%	465	+22.2%
Stilnox®/Ambien®/Myslee®	53	-3.6%	82		-80.6%	65	-1.5%	290	+8.3%
Copaxone®	415	-14.1%	—		—	—	-100.0%	21	+11.1%
Tritace®	170	-10.1%	—		—	181	0.0%	24	-23.3%
Depakine®	145	-2.0%	—		—	227	+11.5%	16	-6.7%
Multaq®	66	+66.7%	184		+50.8%	7	+250.0%	4	+33.3%
Xatral®	58	-12.1%	75		-49.7%	63	-7.1%	4	-20.0%
Actonel®	54	-48.1%	—		—	78	-12.9%	35	-22.0%
Nasacort®	25	-10.7%	54		-57.7%	23	0.0%	4	-20.0%
Renagel®/Renvela® ⁽⁴⁾	98	—	266		—	30	—	21	—
Synvisc®/Synvisc-One® ⁽⁴⁾	15	—	211		—	12	—	17	—

Cerezyme® ⁽⁴⁾	155	—	108		—	135	—	43	—
Myozyme®/Lumizyme® ⁽⁴⁾	175	—	79		—	33	—	21	—
Fabrazyme® ⁽⁴⁾	24	—	48		—	14	—	23	—
Other rare disease products ⁽⁴⁾	59	—	93		—	53	—	59	—

Total: New Genzyme ⁽⁴⁾	413	—	328		—	235	—	146	—

Other prescription products	2,404	-8.7%	627		+7.1%	2,107	+7.6%	790	+7.1%
Consumer Health Care	651	+3.2%	549		+80.0%	1,225	+20.8%	241	+5.1%
Generics	443	+9.4%	177		+79.4%	1,092	+14.0%	34	-20.0%
Total pharmaceuticals	8,345	-3.9%	7,264		+8.5%	8,513	+15.0%	3,768	+14.0%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.
⁽²⁾: World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.
⁽³⁾: Japan, Canada, Australia and New Zealand.
⁽⁴⁾: In 2011, net sales of Genzyme products were recognized from the acquisition date (April 2011).
*: Sales of active ingredient to the entity majority-owned by BMS in the United States.

Net Sales — Human Vaccines (Vaccines) ~~business.~~segment

In 2011, the Vaccines segment reported net sales of €3,469 million, down 8.9% on a reported basis, and 5.5% at constant exchange rates. The business suffered in 2011 from the absence of sales of A/H1N1 pandemic influenza vaccines (€452 million in 2010). If we exclude these sales, growth for the Vaccines business reached 7.2% at constant exchange rates, driven primarily by Emerging Markets (up 10.7%).

The following table presents the 2011 and 2010 sales of our Vaccines segment by range of products:

*(€ million)*


Polio/Pertussis/Hib Vaccines (including Pentacel® and Pentaxim®)	1,075	984	+9.3%	+12.0%
Influenza Vaccines (including Vaxigrip® and Fluzone®)	826	1,297	-36.3%	-33.2%
-of which seasonal influenza vaccines	826	845	-2.2%	+2.5%
-of which pandemic influenza vaccines	—	452	-100.0%	-100.0%
Meningitis/Pneumonia Vaccines (including Menactra®)	510	527	-3.2%	+2.3%
Adult Booster Vaccines (including Adacel®)	465	449	+3.6%	+7.3%
Travel and Other Endemics Vaccines	370	382	-3.1%	-1.6%
Other Vaccines	223	169	+32.0%	+37.8%

Total Vaccines	3,469	3,808	-8.9%	-5.5%

The drop in vaccines sales in 2011 in Western Europe (down 18.4% at constant exchange rates) and in Emerging Markets (down 18.1% at constant exchange rates) was primarily due to the lack of sales of pandemic influenza vaccines. Strong growth in the Other Countries region (up 24.2% at constant exchange rates) was driven by sales of Polio/Pertussis/Hib Vaccines in Japan.

Polio/Pertussis/Hib vaccines net sales were up 12.0% (at constant exchange rates) to €1,075 million, based on the solid performance of Pentaxim® (up 30.2% at constant exchange rates, at €238 million) related to product launches in Russia, India and China, and ofHaemophilus influenzae type b (Hib) vaccines (up 20.7% at €178 million) primarily in Emerging Markets and Japan.

Net sales ~~from~~ofinfluenza vaccines in 2011 were down 33.2% at constant exchange rates at €826 million, reflecting the non-recurrence in 2011 of the pandemic influenza vaccine sales generated in 2010, primarily in Latin America and Western Europe. Sales of seasonal influenza vaccines were up 2.5% at constant exchange rates, driven by the performance of Latin America.

Meningitis/Pneumonia vaccines generated net sales of €510 million, up 2.3% at constant exchange rates. Growth was limited by the temporary reduction in catch-up immunization programs for the Menactra® quadrivalent vaccine against meningococcal meningitis in the United States during the first half of 2011, but booster vaccinations at the end of the year had a positive impact.

Net sales ofadult booster vaccines reached €465 million (up 7.3% at constant exchange rates), driven by Adacel® (€314 million, up 9.2% at constant exchange rates).

Net sales oftravel and other endemics vaccines fell by 1.6% at constant exchange rates to €370 million.

The following table presents the 2011 sales of our Vaccines segment by range of products and by region:

*(€ million)*


Polio/Pertussis/Hib Vaccines (inc. Pentacel® and Pentaxim®)	36	-41.0%	463	+2.8%	457	+21.9%	119	+66.7%
Influenza Vaccines ⁽⁴⁾ (inc. Vaxigrip® and Fluzone®)	77	-39.8%	435	-11.2%	296	-51.1%	18	-21.7%
Meningitis/Pneumonia Vaccines (inc. Menactra®)	3	-40.0%	390	+2.7%	104	+4.0%	13	-6.6%
Adult Booster Vaccines (inc. Adacel®)	76	+40.7%	339	+3.5%	30	-9.1%	20	+11.8%
Travel and Other Endemics Vaccines	24	+33.3%	89	+17.5%	210	-9.4%	47	-8.2%
Other Vaccines	15	-12.5%	176	+45.3%	16	+13.3%	16	+58.7%

Total Vaccines	231	-18.4%	1,892	+2.5%	1,113	-18.1%	233	+24.2%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark. Net sales in Europe generated by Sanofi Pasteur MSD (the joint venture between Sanofi and Merck & Co., Inc.) are not consolidated.
⁽²⁾: World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.
⁽³⁾: Japan, Canada, Australia and New Zealand.
⁽⁴⁾: Seasonal and pandemic influenza vaccines.

Sales generated by Sanofi Pasteur MSD, our joint venture with Merck & Co., Inc. in Europe (not included in our consolidated net sales), amounted to €791 million in 2011, down 13.8% on a reported basis. The decrease in 2011 reflects lower sales of Gardasil® (down 31.1% on a reported basis, to €181 million), and a decline in sales of influenza vaccines (down 23.7% on a reported basis, to €129 million), primarily of seasonal influenza vaccines.

Net Sales — Animal Health segment

The Animal Health business is carried on by Merial, which has been a wholly-owned subsidiary of Sanofi since September 18, 2009. On March 22, 2011 Merck and Sanofi announced that they had mutually terminated their agreement to form a new animal health ~~business are not~~joint venture and had decided to maintain Merial and Intervet/Schering-Plough as two separate entities, operating independently. This decision was mainly due to the increasing complexity of implementing the proposed transaction. Since January 1, 2011 Merial has no longer been presented separately in our consolidated ~~the profit contribution~~balance sheet and income statement, and net income from Merial ~~being reported on the line “Net~~has been reclassified and included in income from continuing operations for all periods reported. Detailed information about the ~~held-for-exchange~~impact of Merial ~~business”~~on our consolidated financial statements as of December 31, 2011 is provided in ~~accordance with IFRS 5 (see~~ Note ~~D.8.~~D.2. and Note D.8.2. to our consolidated financial statements included at Item 18 of this annual ~~report). The following table breaks down our 2009 and 2008~~report.

Merial generated net sales ~~by business segment:~~

(€ million)
2009
Reported

2008
Reported

Change on a
reported basis
(%)

Change at
constant
exchange rates
(%)

Change on a
constant structure
basis and at constant
exchange rates (%)

Pharmaceuticals    25,823       24,707       +4.5%       +3.7%       +2.3%
Vaccines    3,483       2,861       +21.7%       +19.2%       +18.9%
Total
   29,306       27,568       +6.3%       +5.3%       +4.0%

~~Net Sales by Product — Pharmaceuticals~~

~~Net sales generated by our Pharmaceuticals business~~of €2,030 million in ~~2009 were €25,823 million, an increase of 3.7%~~2011, up 4.3% at constant exchange rates and ~~of 4.5%~~2.4% on a reported ~~basis.~~basis, led by the performance in Emerging Markets.

~~Net~~The following table presents the 2011 and 2010 sales of our ~~flagship products (see table below)~~Animal Health segment by range of products:

*(€ million)*


Frontline® and other fipronil-based products	764	774	-1.3%	+0.9%
Vaccines	662	627	+5.6%	+7.2%
Avermectin	372	355	+4.8%	+6.5%
Other products	232	227	+2.2%	+4.4%

Total Animal Health	2,030	1,983	+2.4%	+4.3%

Net sales for the companion animals franchise were ~~adversely affected~~marked by ~~competition~~moderate growth in sales of the Frontline® product range (up 0.9% at constant exchange rates, to €764 million), reflecting the temporary impact from ~~generics of Eloxatine~~^®generic Frontline® Plus competitors in the United States and ~~Europe; without this effect, growth in Pharmaceuticals net sales would have been 2.2 points higher in 2009 (at constant exchange rates).~~

~~Net sales~~the arrival of ~~the other~~competitor products in our portfolio fell by 6.0% at constant exchange rates to €6,078 million, compared with €6,484 million in 2008. At constant exchange rates, net sales of these products were down 9.7% in Europe, at €3,283 million; up 1.2% in the United States ~~at €610 million;~~ and ~~down 1.5% in the Other Countries region, at €2,185 million.~~

~~For a description~~Western Europe. Sales of ~~our other pharmaceutical products, see “Item 4. Information on the Company — B. Business Overview — Pharmaceutical Products.”~~

~~Our Consumer Health Care business achieved net sales~~vaccines showed sustained growth ~~of 26.8% in 2009~~(7.2% at constant exchange ~~rates, to €1,430 million. This includes~~rates), especially in Emerging Markets (up 14.2%) with the ~~consolidation~~success of Symbion Consumer (now sanofi-aventis Healthcare Holdings Pty Limited), with effect from September 1, 2008; of Zentiva’s consumer health care products, with effect from April 1, 2009; and of Oenobiol, with effect from December 1, 2009. On a constant structure basis and at constant exchange rates, the ~~growth rate was 8.1%.~~Vaxxitex® vaccine.

In 2009, net sales for our Generics business increased almost threefold (by 198% at constant exchange rates) to €1,012 million, boosted by the consolidation of Zentiva and Kendrick (each from April 1) and Medley (from May 1). On a constant structure basis and at constant exchange rates, the growth rate was 8.7%.

The following table ~~breaks down our 2009 and 2008 net sales for the Pharmaceuticals business by product:~~

(€ million)
Product
   Indication
2009
Reported

2008
Reported

Change on
a reported
basis (%)

Change at
constant
exchange
rates (%)
   Change on a
constant structure
basis and at
constant exchange
rates (%)
Lantus^®    Diabetes       3,080       2,450       +25.7%       +22.5%       +22.5%
Apidra^®    Diabetes       137       98       +39.8%       +38.8%       +38.8%
Amaryl^®    Diabetes       416       379       +9.8%       +4.2%       +4.2%
Insuman^®    Diabetes       131       143       -8.4%       -7.0%       -7.0%
Sub-total: Diabetes
      3,764       3,070       +22.6%       +19.4%       +19.4%
Lovenox^®    Thrombosis       3,043       2,738       +11.1%       +8.8%       +8.8%
Taxotere^®

Breast, lung, prostate,
stomach, and head &
neck cancer

      2,177       2,033       +7.1%       +6.1%       +6.1%
Plavix^®    Atherothrombosis       2,623       2,609       +0.5%       +0.2%       +0.2%
Aprovel^®/CoAprovel^®    Hypertension       1,236       1,202       +2.8%       +4.7%       +4.7%
Eloxatine^®    Colorectal cancer       957       1,345       -28.8%       -34.7%       -34.7%
Multaq^®    Atrial fibrillation       25       —       —       —       —
Stilnox^®/Ambien^® /Myslee^®    Sleep disorders       873       822       +6.2%       -1.3%       -1.3%
Allegra^®
Allergic rhinitis,
urticaria
      731       666       +9.8%       -2.6%       -2.6%
Copaxone^®    Multiple sclerosis       467       622       -24.9%       -23.8%       +20.6%
Tritace^®    Hypertension       429       491       -12.6%       -9.2%       -9.2%
Dépakine^®    Epilepsy       329       322       +2.2%       +7.1%       +7.1%
Xatral^®
Benign prostatic
hypertrophy
      296       319       -7.2%       -8.5%       -8.5%
Actonel^®
Osteoporosis, Paget’s
disease
      264       330       -20.0%       -17.6%       -7.5%
Nasacort^®    Allergic rhinitis       220       240       -8.3%       -11.7%       -11.7%
Other products
      5,947       6,341       -6.2%       -5.9%       -2.4%
Consumer Health Care
      1,430       1,203       +18.9%       +26.8%       +8.1%
Generics
      1,012       354       +185.9%       +198.0%       +8.7%
Total pharmaceuticals
      25,823       24,707       +4.5%       +3.7%       +2.3%

~~The table below~~ breaks down net sales of our ~~Pharmaceuticals business products~~Animal Health segment by product and by geographical region in ~~2009:~~2011:

(€ million)
Product

Western
Europe*

Change at
constant
exchange
rates

United
States

Change at
constant
exchange
rates

Emerging
Markets**

Change at
constant
exchange
rates

Other
countries***

Change at
constant
exchange
rates

Lantus^®    643    +10.2%       1,909    +23.6%       401    +34.1%       127    +48.1%
Apidra^®    55    +34.1%       54    +27.5%       24    +68.8%       4    +200.0%
Amaryl^®    51    -15.0%       9    +33.3%       175    +7.7%       181    +6.9%
Insuman^®    109    -9.1%       —       —          21    +4.3%       1    —
Sub-total: Diabetes
   858    +6.7%       1,972       +23.8%       621    +25.4%       313    +22.7%
Lovenox^®    725    +11.4%       1,822    +5.3%       434    +17.4%       62    +21.2%
Taxotere^®    786    +6.5%       827    +5.3%       364    +6.1%       200    +7.1%
Plavix^®    1,383    -11.6%       222ª       +28.5%       608    +4.9%       410    +44.4%
Aprovel^®/CoAprovel^®    861    +2.5%       7ª       —          313    +11.4%       55    -8.2%
Eloxatine^®    77    -55.0%       677    -37.2%       153    -12.4%       50    +4.2%
Multaq^®    —       —          25    —          —       —          —       —
Stilnox^®/Ambien^® /Myslee^®    60    -4.8%       555    -4.8%       60    -6.1%       198    +15.1%
Allegra^®    17    -15.0%       306    -15.9%       69    +4.3%       339    +14.8%
Copaxone^®    439    +21.6%       —       —          15    -5.6%       13    -55.2%
Tritace^®    197    -12.4%       —       —          189    -6.0%       43    -8.3%
Depakine^®    143    +2.1%       —       —          175    +12.1%       11    +0.0%
Xatral^®    77    -32.2%       147    +16.0%       66    -6.7%       6    -40.0%
Actonel^®    136    -26.7%       —       —          97    -8.0%       31    +3.3%
Nasacort^®    29    -9.1%       158    -15.4%       28    +7.1%       5    +0.0%
Other products
   2,696    -11.1%       610    +1.2%       1,927    +0.4%       714    -7.6%
Consumer Health Care
   622    +5.6%       —       —          674    +38.1%       134    +129.5%
Generics    360    +23.2%       —       —          631    —          21    +0.0%
Total pharmaceuticals
   9,466    -3.6%       7,328    -1.2%       6,424    +19.4%       2,605    +11.5%

*(€ million)* Product


Frontline® and other fipronil-based products	206	+4.5%	411	-2.1%	86	+8.8%	61	0.0%
Vaccines	195	+2.6%	126	+2.3%	325	+14.2%	16	-21.1%
Avermectin	64	+8.5%	177	+2.8%	60	+8.9%	71	+13.6%
Other products	89	-6.4%	87	+24.3%	36	+11.8%	20	-24.0%

Total Animal Health	554	+2.4%	801	+2.1%	507	+12.4%	168	-1.2%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.
⁽²⁾: *

~~France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.~~

**	World excluding ~~United States, Canada, Western Europe, Japan, Australia and New Zealand.~~

~~***~~

~~Japan, Canada, Australia and New Zealand.~~

ª	~~Sales of active ingredient to the entity majority-owned by BMS in the United States.~~

~~Flagship Products~~ ⁽¹⁾

~~Net sales of~~~~Lantus~~^®~~, the world’s leading insulin brand (source: IMS 2009 sales), rose by 22.5% (at constant exchange rates) to €3,080 million in 2009, driven largely by the SoloSTAR~~^® ~~injection pen. Growth was strong across all three geographic regions at 23.6% in the~~ United States, ~~12.2% in Europe and 42.8% in the Other Countries region (all at constant exchange rates). In the Other Countries region, the performance of Lantus~~^® ~~is particularly high in China, Japan and Mexico, with respective growth rates at constant exchange rates of 113.7%, 81.6% and 48.2%.~~

~~Net sales of the rapid-acting analog of human insulin~~~~Apidra~~^®~~were €137 million, up 38.8% (at constant exchange rates), boosted by the launch of Apidra~~^® ~~SoloSTAR~~^® ~~in the United States.~~

⁽¹⁾	~~Sales of Plavix~~^® ~~and Aprovel~~^® ~~are discussed below under “— Worldwide Presence of Plavix~~^® ~~and Aprovel~~^®”.

~~Lovenox~~^®, the leader in anti-thrombotics in the United States, Germany, France, Italy, Spain, and the United Kingdom (source: IMS 2009 sales), achieved net sales growth of 8.8% in 2009 (at constant exchange rates) to €3,043 million, driven by double-digit growth in Europe (up 13.7% at constant exchange rates, at €890 million) and in the Other Countries region (up 14.8% at constant exchange rates, at €331 million). In the United States, net sales increased by 5.3% to €1,822 million.

~~Taxotere~~^® posted growth of 6.1% in 2009 at constant exchange rates to €2,177 million, driven by its use in adjuvant breast cancer treatment and in prostate cancer. Growth was good across all three geographic regions at 7.1% in Europe, 5.3% in the United States and 5.1% in the Other Countries region (all at constant exchange rates). In Japan, the product made further advances, with net sales rising by 9.5% to €129 million, in particular due to the prostate cancer indication approved in the second half of 2008.

~~Eloxatine~~^® saw net sales fall by 34.7% at constant exchange rates in 2009 to €957 million, due to ongoing genericization in Europe and competition from a number of generics in the United States during the second half of the year.

~~Net sales of the hypnotic~~~~Stilnox~~^®~~/Ambien~~^®~~/Myslee~~^® ~~fell by 1.3% at constant exchange rates. In the United States, Ambien~~^® ~~CR reported growth of 0.9% at constant exchange rates, to €497 million. In Japan, net sales of Myslee~~^®~~, the leading hypnotic on the market (source: IMS 2009 sales), totaled €194 million, an increase of 15.2% at constant exchange rates.~~

~~Allegra~~^® ~~saw net sales fall by 2.6% at constant exchange rates in 2009 to €731 million, reflecting the arrival of Allegra~~^® D 12 generics in the United States in the fourth quarter of 2009 (which follows the settlement of the U.S. patent infringement suit related to Barr’s proposed generic version) and ongoing genericization in Europe. In 2009, sales decreased respectively by 15.9% and 20% (at constant exchange rates) in the United States and Europe. The product recorded further growth in Japan, with sales up 15.2% at constant exchange rates, at €334 million.

~~The end of commercialization of~~~~Copaxone~~^®~~by sanofi-aventis in North America effective April 1, 2008 resulted in a 23.8% drop in consolidated net sales of this product in 2009 (at constant exchange rates), to €467 million.~~

~~Multaq~~^® ~~was launched in the United States during the third quarter of 2009. Sales of the product in 2009 amounted to €25 million.~~

~~Net Sales — Human Vaccines (Vaccines)~~

~~In 2009, our Vaccines business generated consolidated net sales of €3,483 million, up 19.2% at constant exchange rates and 21.7% on a reported basis. The main growth drivers were Pentacel~~^® and A(H1N1) influenza vaccines. Growth at constant exchange rates was robust across all three geographic regions, at 19.1% in the United States (to €2,098 million), 15.9% in Europe (to €448 million) and 20.8% in the Other Countries region (to €937 million). Excluding the impact of sales of pandemic influenza vaccines (A(H1N1) and H5N1), net sales growth was 7.1% (at constant exchange rates).

~~Polio/Pertussis/Hib vaccines achieved growth of 22.8% at constant exchange rates to €968 million, reflecting the success of~~~~Pentacel~~^®~~(the first 5-in-1 pediatric combination vaccine against diphtheria, tetanus, pertussis, polio and~~~~haemophilus influenzae~~ ~~type b licensed in the United States in June 2008), which posted net sales of €343 million in 2009 versus €84 million in 2008.~~

~~Net sales of~~~~influenza vaccines~~ rose by 46.7% at constant exchange rates to €1,062 million, mainly due to the shipment during 2009 of batches of vaccines against the A(H1N1) influenza virus for a total amount of €440 million, including €301 million in the United States.

Meningitis/pneumonia vaccines achieved net sales of €538 million, up 6.1% at constant exchange rates, largely as a result of good growth in sales of vaccines against pneumococcal infections. Net sales of~~Menactra~~^®~~(quadrivalent meningococcal meningitis vaccine) increased by 1.1% at constant exchange rates to €445 million.~~

~~Net sales of adult booster vaccines fell by 3.0% at constant exchange rates to €406 million. Net sales of~~~~Adacel~~^®~~(adult and adolescent tetanus/diphtheria/pertussis booster vaccine) were €267 million, down 1.2% at constant exchange rates.~~

~~Shantha, consolidated from September 1, 2009, contributed net sales of €17 million in 2009.~~

~~The following table presents the 2009 sales of our Vaccines activity by range of products:~~

(€ million)
2009
Reported

2008
Reported

Change on
a reported
basis (%)

Change at
constant
exchange
rates (%)

Influenza Vaccines (including Vaxigrip^® and Fluzone^®)    1,062       736       +44.3%       +46.6%
— of which seasonal influenza vaccines
   597       610       -2.1%       -1.7%
— of which pandemic influenza vaccines
   465       126       —         —
Polio/Pertussis/Hib Vaccines (including Pentacel^® and Pentaxim^®)    968       768       +26.0%       +22.8%
Meningitis/Pneumonia Vaccines (including Menactra^®)    538       472       +14.0%       +6.1%
Adult Booster Vaccines (including Adacel^®)    406       399       +1.8%       -3.0%
Travel and Other Endemics Vaccines    313       309       +1.3%       0.0%
Other Vaccines    196       177       +10.7%       +6.8%
Total Vaccines
   3,483       2,861       +21.7%       +19.2%

~~The following table presents the 2009 sales of our Vaccines business by range of products and by region:~~

(€ million)
Western
Europe*
Reported

Change at
constant
exchange
rates

United
States
Reported

Change at
constant
exchange
rates

Emerging
Markets**
Reported

Change at
constant
exchange
rates

Other
countries***
Reported

Change at
constant
exchange
rates

Influenza Vaccinesª
(inc. Vaxigrip^® and Fluzone^®)
   139    +113.8%       618       +36.2%       287    +53.6%       18    0.0%
Polio/Pertussis.Hib Vaccines
(inc. Pentacel^® and Pentaxim^®)
   68    +7.7%       529       +56.8%       332    -5.4%       39    +29.0%
Meningitis/Pneumonia Vaccines
(inc. Menactra^®)
   11    +120.0%       437       0.0%       78    +32.2%       12    +50.0%
Adult Booster Vaccines
(inc. Adacel^®)
   56    +9.8%       310       -8.5%       25    +47.1%       15    +14.3%
Travel and Other Endemics Vaccines    15    -16.7%       69       -15.8%       196    +9.5%       33    -5.6%
Other Vaccines    38    -9.3%       135       +13.2%       14    +16.7%       9    0.0%
Total Vaccines
   327    +33.6%       2,098       +19.1%       932    +16.0%       126    +11.1%

*	~~France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.~~

**	~~World excluding United States,~~ Canada, ~~Western Europe, Japan, Australia and New Zealand.~~

~~***~~

~~Japan, Canada, Australia and New Zealand.~~

ª	~~Seasonal and pandemic influenza vaccines.~~

~~In addition to the Vaccines activity reflected in our consolidated net sales, sales at Sanofi Pasteur MSD, our joint venture with Merck & Co. in~~ Western Europe, ~~reached €1,132 million, a fall of 11.0% on a reported basis.~~

Japan, Australia and New Zealand.

~~Full-year net sales of Gardasil~~⁽³⁾

^®Japan, Canada, Australia and New Zealand., a vaccine that prevents papillomavirus infections (a cause of cervical cancer), amounted to €395 million, compared with €584 million in 2008. This 32.4% decrease reflects extensive catch-up vaccination campaigns in 2008.

~~Sales generated by Sanofi Pasteur MSD are not included in our consolidated net sales.~~

Net Sales by ~~Geographic~~Geographical Region

We divide our sales geographically into four regions: Western Europe, the United States, Emerging Markets and ~~Other Countries.~~other countries. The following table breaks down our ~~2009~~2011 and ~~2008~~2010 net sales by region:

*(€ million)*


Western Europe ⁽¹⁾	9,130	9,539	-4.3%	-4.0%
United States	9,957	9,790	+1.7%	+6.8%
Emerging Markets ⁽²⁾	10,133	9,533	+6.3%	+10.1%
Of which Eastern Europe and Turkey	2,666	2,659	+0.3%	+3.7%
Of which Asia (excl. Pacific region) ⁽³⁾	2,416	2,095	+15.3%	+16.5%
Of which Latin America	3,111	2,963	+5.0%	+11.8%
Of which Africa	949	880	+7.8%	+9.7%
Of which Middle East	872	825	+5.7%	+8.6%
Other Countries ⁽⁴⁾	4,169	3,505	+18.9%	+13.8%
Of which Japan	2,865	2,275	+25.9%	+20.2%

Total	33,389	32,367	+3.2%	+5.3%

⁽¹⁾: France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.
⁽²⁾: World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.
⁽³⁾: Japan, Australia and New Zealand.
⁽⁴⁾: Japan, Canada, Australia and New Zealand.

(€ million)
2009
Reported

2008
Reported
   Change on
a reported
basis    Change at
constant
exchange rates
Western Europe*    9,793       10,189       -3.9%       -2.7%
United States    9,426       8,609       +9.5%       +2.8%
Emerging Markets**    7,356       6,540       +12.5%       +19.0%
Of which Eastern Europe and Turkey
   2,266       1,907       +18.8%       +34.9%
Of which Asia (excl. Pacific region***)
   1,610       1,486       +8.3%       +9.0%
Of which Latin America
   1,913       1,739       +10.0%       +15.7%
Of which Africa
   775       725       +6.8%       +8.6%
Of which Middle East
   647       556       +16.2%       +16.4%
Other Countries****    2,731       2,230       +22.5%       +11.5%
Of which Japan    1,844       1,408       +30.9%       +10.7%
Total
   29,306       27,568       +6.3%       +5.3%

*	~~France, Germany, United Kingdom, Italy, Spain, Greece, Cyprus, Malta, Belgium, Luxembourg, Portugal, Netherlands, Austria, Switzerland, Sweden, Ireland, Finland, Norway, Iceland, Denmark.~~

**	~~World excluding United States, Canada, Western Europe, Japan, Australia and New Zealand.~~

~~***~~

~~Japan, Australia and New Zealand.~~

~~****~~

~~Japan, Canada, Australia and New Zealand.~~

~~In 2009,~~Western Europe posted a 4% decrease in net sales ~~in Western Europe decreased by 2.7%~~ at constant exchange rates ~~reflecting the effect~~to €9,130 million, hit by competition from generics of ~~the ongoing genericization of Eloxatine~~^® ~~and Plavix~~^®.

~~In the United States, the end of commercialization of Copaxone~~^® ~~by sanofi-aventis effective April 1, 2008 and the genericization of Eloxatine~~^® ~~during the second half of 2009 slowed the pace of net sales growth to 2.8% (at constant exchange rates). Lantus~~^® ~~and Lovenox~~^®~~, with net sales growth of 23.6% and 5.3% respectively (at~~Taxotere® (down 73.6% at constant exchange rates) ~~were~~and Plavix® (down 35.6% at constant exchange rates), by the ~~principal growth drivers~~transfer of the Copaxone® business to Teva in ~~Pharmaceuticals. Growth for~~certain countries, and by the ~~Vaccines business~~impact of austerity measures. Excluding A/H1N1 vaccines and Genzyme, the decline was ~~boosted by sales of pandemic influenza vaccines (A(H1N1) and H5N1).~~10.5% at constant exchange rates.

The United States posted a 6.8% increase in net sales at constant exchange rates to €9,957 million, but a 5.7% decline after excluding A/H1N1 vaccines and Genzyme. Sales were affected by competition from generic versions of Lovenox®, Taxotere® and Ambien® CR, though the impact was partially offset by the performance of Lantus® and Eloxatine® and by the successful launch of Allegra® as an over-the-counter product.

In Emerging Markets, net sales ~~were €7,356~~totaled €10,133 million, ~~an increase~~up 10.1% at constant exchange rates. Excluding sales of ~~19.0%~~A/H1N1 vaccines reported in 2010 (€361 million, primarily in Latin America) and Genzyme, growth at constant exchange rates ~~due largely to strong growth in~~reached 10.4%. In Brazil, net sales hit €1,522 million, up 4.9% at constant exchange rates (21.9% after excluding A/H1N1 vaccines), reflecting the solid performance of generics and the contribution made by Genzyme. In China, net sales totaled €981 million (up 40.4% at constant exchange rates), supported by the performance of Plavix® and Lantus®. In Eastern Europe ~~(34.9%~~and Turkey, growth (3.7% at constant exchange rates) ~~where Zentiva’s~~suffered from lower prices and competition from Taxotere® generics in Turkey; Russia posted sales ~~were consolidated from April 1, 2009,~~of €732 million, up 11.2% at constant exchange rates.

In the Other Countries region, net sales totaled €4,169 million, up 13.8% at constant exchange rates. Excluding A/H1N1 vaccines and ~~to the dynamism~~Genzyme, net sales increased by 6.2%. Japan recorded net sales of ~~Latin America~~€2,865 million (up ~~15.7%~~20.2% at constant exchange rates), ~~the Middle East~~buoyed by solid performances from Plavix® (up ~~16.4% at constant exchange rates)~~22.9% to €671 million), ~~China~~Allegra® (up ~~28.8% at constant exchange rates)~~22.2% to 465 million) and ~~Russia (up 59.8% at constant exchange rates). Net sales in Latin America (€1,913 million) were underpinned by good organic growth and~~Hib vaccines, as well as by the ~~acquisition of Medley in the second quarter of 2009.~~contribution from Genzyme.

~~Net sales in Japan reached €1,844 million (up 10.7% at constant exchange rates), driven by the performances of Plavix~~^®~~, Myslee~~^® ~~and Allegra~~^®.

Worldwide Presence of ~~Plavix~~^®Plavix® and ~~Aprovel~~^®Aprovel®

Two of our leading products — Plavix® and Aprovel® — were discovered by Sanofi and jointly developed with Bristol-Myers Squibb ("BMS") under an alliance agreement. In all territories except Japan, these products are sold either by Sanofi or by BMS in accordance with the terms of this alliance agreement applicable in 2010 and 2011 (see "— Financial Presentation of Alliances — Alliance arrangements with Bristol-Myers Squibb" above).

Worldwide sales of these two products are an important indicator because they facilitate a financial statement user's understanding and analysis of our consolidated income statement, particularly in terms of understanding our overall profitability in relation to consolidated revenues, and also facilitate a user's ability to understand and assess the effectiveness of our research and development efforts.

Also, disclosing sales made by BMS of these two products enables the users to have a clearer understanding of trends in different lines of our income statement, in particular the line items "Other revenues", where we record royalties received on those sales (see "— Other Revenues"); "Share of profit/loss of associates and joint ventures" (see "— Share of Profit/Loss of Associates and Joint Ventures"), where we record our share of profit/loss of entities included in the BMS Alliance and under BMS operational management; and "Net income attributable to non-controlling interests" (see "— Net Income Attributable to Non-Controlling Interests"), where we record the BMS share of profit/loss of entities included in the BMS Alliance and under our operational management.

The table below sets forth the worldwide sales of ~~Plavix~~^®Plavix® and ~~Aprovel~~^®Aprovel® in ~~2009~~2011 and ~~2008,~~2010, by geographic region:

	2011						2010						Change on a reported basis		Change at constant exchange rates

*(€ million)*	Sanofi ⁽²⁾		BMS ⁽³⁾		Total		Sanofi ⁽²⁾		BMS ⁽³⁾		Total		Change on a reported basis		Change at constant exchange rates

Plavix®/Iscover® ⁽¹⁾
Europe		530		44		574		724		98		822		-30.2%		-29.8%
United States		—		4,759		4,759		—		4,626		4,626		+2.9%		+7.8%
Other countries		1,370		286		1,656		1,165		282		1,447		+14.4%		+13.8%

Total		1,900		5,089		6,989		1,889		5,006		6,895		+1.4%		+4.5%

Aprovel®/Avapro®/ Karvea®/Avalide® ⁽⁴⁾
Europe		694		130		824		789		158		947		-13.0%		-13.0%
United States		—		374		374		—		482		482		-22.4%		-18.8%
Other countries		451		156		607		411		216		627		-3.2%		-2.1%

Total		1,145		660		1,805		1,200		856		2,056		-12.2%		-11.0%

⁽¹⁾

(€ million)    2009    2008
Change on
a reported
basis
   Change at
constant
exchange
rates

sanofi-
aventis⁽²⁾
   BMS⁽³⁾    Total
sanofi-
aventis⁽²⁾
   BMS⁽³⁾    Total
Plavix^®/Iscover^®⁽¹⁾
Europe    1,443       161       1,604       1,622       211       1,833       -12.5%       -10.3%
United States    —       4,026       4,026       —       3,351       3,351       +20.1%       +12.8%
Other countries    897       255       1,152       711       248       959       +20.1%       +14.4%
Total
   2,340       4,442       6,782       2,333       3,810       6,143       +10.4%       +6.2%

(€ million)    2009    2008    Change on
a reported
basis    Change at
constant
exchange
rates

sanofi-
aventis⁽⁵⁾
   BMS⁽³⁾    Total
sanofi-
aventis⁽⁵⁾
   BMS⁽³⁾    Total
Aprovel^®/Avapro^®
/Karvea^®/Avalide^®⁽⁴⁾

Europe    810       172       982       816       176       992       -1.0%       +0.8%
United States    —       524       524       —       499       499       +5.0%       -1.6%
Other countries    314       192       506       291       184       475       +6.5%       +7.2%
Total
   1,124       888       2,012       1,107       859       1,966       +2.3%       +1.7%
⁽¹⁾
~~Plavix~~^® ~~is marketed under the trademarks Plavix~~^® ~~and Iscover~~^®.
⁽²⁾
Plavix® is marketed under the trademarks Plavix® and Iscover®.
⁽²⁾
Net ~~sales of Plavix~~^® ~~consolidated by sanofi-aventis, excluding sales to BMS (€311 million in 2009 and €282 million in 2008).~~
⁽³⁾
~~Translated into euros by sanofi-aventis using the method described in Note B.2. “Foreign currency translation” to our consolidated financial statements included at Item 18 in this annual report.~~
⁽⁴⁾
~~Aprovel~~^® ~~is marketed under the trademarks Aprovel~~^®~~, Avapro~~^®~~, Karvea~~^® ~~and Avalide~~^®.
⁽⁵⁾
~~Net sales of Aprovel~~^® ~~consolidated by sanofi-aventis, excluding sales to BMS (€113 million in 2009 and €94 million in 2008).~~
~~In the United States,~~ sales of ~~Plavix~~Plavix® consolidated by Sanofi, excluding sales to BMS (€208 million in 2011 and €273 million in 2010). Net sales of Aprovel® consolidated by Sanofi, excluding sales to BMS (€150 million in 2011 and €129 million in 2010).: Plavix® is marketed under the trademarks Plavix® and Iscover®.
⁽²⁾: Net ~~sales of Plavix~~^® ~~consolidated by sanofi-aventis, excluding sales to BMS (€311 million in 2009 and €282 million in 2008).~~
^®(3): Translated into euros by Sanofi using the method described in Note B.2. "Foreign currency translation" to our consolidated financial statements included at Item 18 in this annual report.
⁽⁴⁾: Aprovel® is marketed under the trademarks Aprovel®, Avapro®, Karvea® and Avalide®.

Worldwide sales of Plavix®/~~Iscover~~^®Iscover® totaled €6,989 million in 2011, up 4.5% at constant exchange rates. Sales in the U.S. (consolidated by BMS) ~~reported strong growth of 12.8%~~rose by a robust 7.8% at constant exchange rates, ~~in 2009, reaching €4,026~~to €4,759 million. In ~~Europe, net~~Japan and China, Plavix® continued their success with sales of ~~Plavix~~^® ~~were down 10.3%~~€671 million (+22.9% at constant exchange rates) and €277 million (+27.7% at constant exchange rates), respectively. These results more than offset the decline in sales of Plavix® in Europe caused by competition from generics (down 29.8% at constant exchange rates, at ~~€1,604~~€574 million).

Worldwide sales of Aprovel®/Avapro®/Karvea®/Avalide® totaled €1,805 million ~~due to the marketing of generics using alternative salts of clopidogrel, especially~~ in ~~the United Kingdom, Germany and France (where we launched our own generic version, Clopidogrel Winthrop~~^®~~, in the fourth quarter of 2009). In Japan, Plavix~~^® ~~continued its success, with sales up 58.9%~~2011, down 11.0% at constant exchange rates, ~~to €339 million.~~

~~In a competitive environment, 2009 worldwide sales~~reflecting the impact of ~~Aprovel~~^®~~/Avapro~~^®~~/Karvea~~^®~~/Avalide~~^® ~~were €2,012 million, an increase~~increasing penetration of ~~1.7% at constant exchange rates. In Europe,~~generic losartan on the ~~product faced competition from generics in the monotherapy segment in Spain and Portugal, and recorded sales growth of 0.8% at constant exchange rates.~~market for anti-hypertensives.

Other Revenues

Other revenues, ~~which mainly comprise~~made up primarily of royalty income under licensing agreements contracted in connection with ongoing operations, ~~amounted to €1,443~~remained stable at €1,669 million in ~~2009 compared with €1,249 million in 2008.~~2011 and 2010.

~~Licensing revenues~~Revenues from licensing under the worldwide alliance with BMS on ~~Plavix~~^®Plavix® and ~~Aprovel~~^® ~~totaled €1,155~~Aprovel® represented €1,275 million in ~~2009, compared with €985~~2011 versus €1,303 million in ~~2008 (up 17.3%~~2010 (down 2.1% on a reported basis)~~, boosted~~. These licensing revenues were adversely affected by ~~strong growth in sales of Plavix~~^® in the ~~United States and the favorable impact of trends in the exchange rate~~depreciation of the U.S. dollar against the ~~euro.~~euro, despite an increase in sales of Plavix® in the United States (up 7.8% at constant exchange rates).

Gross Profit

Gross profit for ~~2009 was €22,869~~the year ended December 31, 2011 came to €24,156 million ~~(78.0%~~(72.3% of net sales), versus ~~€21,480~~€24,638 million ~~in 2008 (77.9%~~(76.1% of net sales).

in 2012. This represents a year-on-year fall of 2.0% in gross profit, and a deterioration of 3.8 points in the gross margin ratio.

The gross margin ratio ~~for~~of the Pharmaceuticals segment ~~improved by 0.5 of~~was down 2.8 points at 75.8%, reflecting both a ~~point, reflecting the rise~~decrease in royalty income ~~(impact: +0.6~~(-0.3 of a point) and an ~~unfavorable~~adverse trend in the ratio of cost of sales to net sales ~~(impact: -0.1~~(-2.5 points). The latter was primarily due to the unfavorable impact of ~~a point). This trend was~~new generics (especially Lovenox®, Ambien® CR and Taxotere® in the ~~net result of:~~United States, and Plavix® and Taxotere® in Europe).

—

the favorable effect on net sales and other revenues of movements in the exchange rates of various currencies against the euro (mainly the rise in the U.S. dollar), which largely feeds through into gross profit because our cost of sales is largely incurred in the euro zone;

—

~~the favorable effect of the end of commercialization of Copaxone~~^® ~~by sanofi-aventis in North America, effective April 1, 2008;~~

—

~~a less favorable product mix due to the impact of acquisitions of companies that generate lower gross margins than we do (primarily on generics).~~

The gross margin ratio ~~for~~of the Vaccines segment was ~~unchanged, with the effect of lower royalty income (impact: -0.5 of a point) offset by an improvement in the ratio of cost of sales to net sales (impact: +0.5 of a point) that~~down 4.5 points at 60.2%. This change was ~~largely~~principally due to the ~~appreciation~~absence in 2011 of ~~various currencies against~~ the ~~euro.~~margin on pandemic influenza vaccines, which had a favorable impact in 2010.

The gross margin ratio of the Animal Health segment was down 1.0 point at 68.9%.

~~Consolidated~~ Our consolidated gross profit was also impacted in 2011 by ~~the~~an expense of €476 million (or 1.4 points) arising from the workdown ~~during 2009~~ of inventories remeasured at fair value ~~on completion of~~in connection with acquisitions, ~~(mainly Zentiva, impact €27~~principally Genzyme (€473 million). In 2010, this expense represented €142 million ~~or 0.1~~(0.4 of a point). and related mainly to the workdown of Merial inventories.

Research and Development Expenses

Research and development (R&D) expenses ~~were €4,583 million (versus €4,575~~totaled €4,811 million in ~~2008), representing 15.6%~~2011 (14.4% of net ~~sales (versus 16.6% in 2008); they were down 1.4% year-on-year at constant exchange rates, but~~sales), up ~~0.2%~~5.8% on ~~a reported basis.~~the 2010 figure of €4,547 million (14.0% of net sales).

~~Cost savings were achieved in~~In the Pharmaceuticals segment, ~~due to tight cost control~~R&D expenses rose by €217 million (up 5.6%). Excluding Genzyme, R&D expenses showed a single-digit decrease as a result of reorganizations initiated in 2009, and ~~a reduction in clinical trial costs, reflecting~~of the ~~discontinuation~~streamlining of ~~some projects following~~ the ~~portfolio review.~~project portfolio.

In the Vaccines segment, ~~research and development~~R&D expenses ~~increased~~rose by ~~€66~~€47 million ~~up 15.5%~~year-on-year to €564 million (up 9.1%), ~~in particular~~ due ~~to the consolidation of Acambis from October 1, 2008 and~~mainly to clinical trials ~~related to influenza~~on vaccines inagainst dengue fever and Clostridium difficile.

In the ~~light of the pandemic.~~Animal Health segment, R&D expenses fell by €9 million (5.8%) year-on-year.

Selling and General Expenses

Selling and general expenses ~~totaled €7,325~~amounted to €8,536 million ~~compared with €7,168 million in the previous year,~~(25.6% of net sales), an increase of ~~2.2% (or 1.1% at constant exchange rates)~~4.7% on the prior-year figure of €8,149 million (25.2% of net sales).

The ~~ratio~~Pharmaceuticals segment generated a €414 million increase (+5.9%), due primarily to the first-time consolidation of Genzyme. Excluding Genzyme, selling and general expenses ~~to net sales improved from 26.0%~~showed a single-digit decrease, reflecting lower costs for genericized products in ~~2008 to 25.0%, mainly because of savings in marketing expenses (in particular, due to~~Europe and the ~~transfer of commercialization of Copaxone~~^® ~~to Teva in North America in April 2008)~~United States and ~~cost savings in Europe. The 2009 figure includes~~tight control over general expenses.

In the ~~expenses of companies consolidated for the first time during the year.~~

~~Selling~~Vaccines segment, selling and general expenses were down €61 million or 10.1% due to lower selling expenses for pandemic influenza vaccines.

In the ~~Vaccines~~Animal Health segment, ~~rose by 7.9%. This~~selling and general expenses were up €13 million (+2.2%), in line with the increase ~~was due primarily to the influenza pandemic, and to the consolidation of Acambis with effect from October 1, 2008.~~in net sales.

Other Operating Income and Expenses

Other operating income ~~for 2009 came to €866 million (versus €556~~totaled €319 million in ~~2008)~~2011 (versus €369 million in 2010), and other operating expenses amounted to ~~€481~~€315 million ~~(versus €353~~(compared with €292 million in ~~2008)~~2010).

~~The balance of other~~Other operating income and expenses represented a net ~~income~~profit of ~~€385~~€4 million ~~for 2009,~~in 2011, compared with ~~net income~~€77 million in 2010. The year-on-year decrease of ~~€203~~€73 million ~~for 2008. The €182 million increase~~ was ~~mainly~~essentially due to the ~~transfer~~discontinuation of ~~commercialization of Copaxone~~^® toroyalty payments from Teva ~~in North America effective April 1, 2008. We were entitled to receive a 25% royalty of~~on North American sales of ~~Copaxone~~^® ~~over a two-year period~~Copaxone® from ~~that date, and recognized this royalty income~~the second quarter of 2010.

This line item also includes expenses incurred in ~~“Other operating income” in 2008 and 2009.~~

~~We also recognized gains on disposals relating to our ordinary operations~~connection with the 2011 acquisition of ~~€56 million (compared with €24 million in 2008)~~Genzyme (€65 million), ~~and~~as well as a net ~~operating foreign exchange gain of €40 million (compared with a net~~operational foreign exchange loss of ~~€94~~€5 million (versus €138 million in ~~2008)~~2010, a year of high volatility in the foreign exchange markets).

Amortization of Intangible Assets

Amortization charged against intangible assets in ~~2009~~the year ended December 31, 2011 amounted to ~~€3,528~~€3,314 million, ~~versus €3,483~~compared with €3,529 million in the previous year. The ~~increase~~reduction of €215 million was mainly due ~~mainly~~ to ~~trends~~a decrease in ~~the exchange rate of the U.S. dollar~~amortization charged against ~~the euro and~~intangible assets recognized on the acquisition of ~~Zentiva.~~

~~These~~Aventis (€1,788 million in 2011, versus €3,070 million in 2010, as some products reached the end of their life cycles in the face of competition from generics). This positive impact was partially offset by new amortization charges ~~mainly relate to the amortization of~~in 2011 generated by intangible assets ~~remeasured at fair value at~~recognized on the ~~time~~acquisition of Genzyme in the ~~Aventis acquisition~~second quarter of 2011 and on the first-time consolidation of Merial in the first quarter of 2011 (€~~3,175~~709 million ~~in 2009, versus €3,298~~and €353 million, ~~in 2008)~~respectively).

Impairment of Intangible Assets

~~Net~~This line recorded net impairment losses ~~charged~~ against intangible assets ~~amounted to €372~~of €142 million in ~~2009,~~2011, compared with €433 million in 2010. Impairment losses booked in 2011 were mainly associated with (i) discontinuing a Genzyme research project; (ii) certain Zentiva generics for which the sales outlook was adjusted downward; and (iii) discontinuing a joint development project with Metabolex in the field of diabetes. It also included an impairment reversal in connection with Actonel®, pursuant to confirmation of the terms of the collaboration agreement with Warner Chilcott (see Note C.3. to our consolidated financial statements included at Item 18 of this annual report).

In 2010, impairment losses related primarily to (i) Actonel®, due to proposed changes to the terms of the collaboration agreement with Warner Chilcott; (ii) the pentavalent vaccine Shan5®, for which sales projections were revised to factor in the need for another WHO pre-qualification following a flocculation problem encountered in some batches; (iii) the BSI-201 project, following a revision to the development plan in response to the announcement of the initial Phase III trial results in metastatic triple negative breast cancer; and (iv) certain generics and Zentiva consumer health products for which sales projections in Eastern Europe were revised downwards.

Fair Value Remeasurement of Contingent Consideration Liabilities

This line item records fair value remeasurements of liabilities related to business combinations accounted for in accordance with the revised IFRS 3. These remeasurements generated a new gain of €15 million in 2011, mainly related to contingent purchase consideration on the acquisition of TargeGen, to the contingent value rights (CVRs) issued as part of the Genzyme acquisition, and to contingent consideration payable to Bayer on certain Genzyme products (see Note D.18. to the consolidated financial statements included at Item 18 of this annual report).

Restructuring Costs

Restructuring costs amounted to €1,314 million in 2011, compared with €1,384 million in 2010.

In 2011, these were mainly employee-related expenses incurred under plans to adjust headcount in support functions and sales forces in Europe and in R&D in Europe and the United States, and measures to adapt our manufacturing facilities in Europe.

In 2010, these costs related mainly to measures taken to adapt our industrial operations in France, and our sales and R&D functions in the United States and some European countries.

Other Gains and Losses, and Litigation

This line item showed a net expense of €327 million, mainly comprising (i) the €519 million backlog of depreciation and amortization expense against the tangible and intangible assets of Merial, which was not recognized from September 18, 2009 through December 31, 2010 because these assets were classified as held for sale or exchange during that period in accordance with IFRS 5 (see Note D.8.2. to our consolidated financial statements included at Item 18 of this annual report), (ii) proceeds of €210 million in damages with regard to a Plavix® patent and (iii) the impact of ~~changes in~~ the ~~competitive environment and~~divestiture of ~~generic approval dates on~~the Dermik dermatology business (see Note D.28. to our ~~products Benzaclin~~^®~~, Nasacort~~^® ~~and Actonel~~^®consolidated financial statements). ~~This item also includes impairment losses of €28 million arising from the decision to discontinue the development of TroVax~~^®~~, and from the withdrawal of our product Di-Antalvic~~^® ~~from the market in response to a decision by the European Medicines Agency (EMA). With the exception of Trovax~~^®~~, all of these products were recognized as assets in 2004 upon the acquisition of Aventis.~~

In ~~2008,~~2010, this line item showed ~~impairment losses~~a net expense of ~~€1,554~~€138 million charged against intangible assets due to the discontinuation of some research projects and to the genericization of some products marketed by the Group, originating mainly from Aventis. The main discontinued research projects were those relating to larotaxel and cabazitaxel (new taxane derivatives developed in breast cancer, €1,175 million) and the antihypertensive ilepatril (€57 million), both of which were recognized as assets on the acquisition of Aventis; and the oral anti-cancer agent S-1, following termination of the agreement with Taiho Pharmaceutical for the development and commercialization of this product. In addition, an impairment loss of €114 million was charged in respect of Nasacort^® ~~(also recognized as an asset on the acquisition of Aventis in 2004) following the settlement agreement with Barr in the United States.~~

~~Restructuring Costs~~

Restructuring costs amounted to €1,080 million in 2009, compared with €585 million in 2008. In 2009, our restructuring costs related primarily to measures taken to improve innovation by transforming our Research & Development operations, and to streamline our organizational structures by adapting central support functions. These costs consist mainly of employee-related charges, arising from ~~early retirement benefits and termination benefits under the announced voluntary redundancy plans. The 2009 charge also reflects, though~~an adjustment to ~~a lesser extent, ongoing measures to adapt our industrial facilities~~vendor's guarantee provisions in ~~Europe and to adjust our sales forces.~~connection with past business divestitures.

The restructuring costs recognized in 2008 related primarily to the adaptation of industrial facilities in France and to measures taken in response to the changing economic environment in various European countries, principally France and Spain.

~~Gains and Losses on Disposals, and Litigation~~

~~Sanofi-aventis did not make any major disposals in either 2009 or 2008.~~

~~In 2008, this item included €76 million of reversal of litigation provisions.~~

Operating Income

Operating income totaled €5,731 million for ~~2009 was €6,366~~2011, versus €6,535 million ~~44.9% higher than~~for 2010 (down 12.3%); the ~~2008 figure~~year-on-year fall mainly reflected the competition from generics and the absence of ~~€4,394 million.~~A/H1N1 pandemic influenza vaccine sales in 2011.

Financial Income and Expenses

Net financial ~~expense for 2009 was €300 million, compared~~expenses came to ~~€232~~€412 million in ~~2008,~~2011 versus €362 million in 2010, an increase of ~~€68~~€50 million.

~~Interest expense~~ Financial expenses directly related to our ~~net debt (short-term and long-term~~ debt, net of cash and cash ~~equivalents) amounted to €222 million, versus €183~~equivalents (see definition at "— Liquidity and Capital Resources" below) were €325 million in ~~2008. Although~~2011, virtually unchanged from the 2010 figure of €324 million, as a result of contrasting factors:

•: a fall in the average interest rate on debt due to the significantly lower rate charged on the debt contracted to fund the acquisition of Genzyme in the first quarter of 2011, which meant that interest expense increased only slightly despite the sharp rise in average debt;
•: a rise in financial income, due to an increase in the average level of ~~net debt was lower~~cash held during the year and a higher average rate of return.

Provisions against investments and financial assets totaled €58 million in ~~2009 than~~2011 (versus €6 million in ~~2008, sanofi-aventis was adversely affected by lower interest rates on its cash deposits (which averaged €5.0 billion~~2010); in ~~2009, compared with €2.4 billion in 2008).~~

~~In 2008, we tendered our shares in Millennium Pharmaceuticals, Inc (Millennium)~~2011, these provisions were primarily related to the ~~public tender offer~~impairment of Greek government bonds.

Gains on disposals of non-current financial assets came to €25 million versus €61 million in 2010. In 2011, the main item was the impact of the change in the consolidation method for ~~Millennium by Takeda Pharmaceuticals Company Ltd.~~the investment in Société Financière des Laboratoires de Cosmétologie Yves Rocher following loss of significant influence (see Note D.6. to our consolidated financial statements); in 2010, the main item was the disposal of the equity interest in Novexel.

This ~~transaction generated a €38 million gain.~~

~~Net~~item also included net financial foreign exchange ~~losses for the year were €67 million, compared with €74~~gains of €10 million in ~~2008.~~2011 (versus a net loss of €20 million in 2010).

Income before Tax and Associates and Joint Ventures

~~Net income~~Income before tax and associates and joint ventures ~~for 2009~~ was ~~€6,066~~€5,319 million ~~45.7% higher than the 2008 figure~~in 2011, versus €6,173 million in 2010, a decrease of ~~€4,162 million.~~13.9%.

Income Tax Expense

Income tax expense totaled €455 million in 2011, compared with €1,430 million in 2010. The decrease was mainly due to a reduction in deferred tax liabilities as a result of changes in tax rates and tax legislation (mainly in the United Kingdom), and to the effect of the Franco-American Advance Pricing Agreement (APA) for the period from 2006 through 2011 (see Note D.30. to our consolidated financial statements).

This line item also includes the tax effects of the amortization of intangible assets (€1,178 million in 2011 versus €1,183 million in 2010) and of restructuring costs (€399 million in 2011 versus €466 million in 2010).

The effective tax rate is calculated on the basis of business operating income minus net financial expenses, and before (i) the share of profit/loss of associates and joint ventures ~~net income from the held-for-exchange Merial business,~~ and (ii) net income attributable to non-controlling ~~interests~~

interests. The effective tax rate was ~~28.0%~~27.0% in ~~2009, compared to 29.0%~~2011, versus 27.8% in 2008, the reduction resulting directly from the entry into force in 2009 of a protocol to the tax treaty between France and the United States that abolished withholding tax between the two countries subject to certain conditions. During 2009, this protocol resulted in the reversal through the consolidated income statement of €106 million in deferred tax liabilities relating to the tax cost of distributions made out of the reserves of Group subsidiaries as of January 1, 2009.2010. The difference ~~between the effective tax rate and~~relative to the standard corporate income tax rate applicable in France ~~for 2009 (34%~~(34.4%) was mainly due to ~~the impact of the reduced rate of income tax~~lower taxes on patent royalties in France.

~~In 2008, this line item included a gain through the consolidated income statement of €221 million on reversals of tax provisions related to the settlement of tax audits.~~

Share of Profit/Loss of Associates and Joint Ventures

~~Our~~The share of ~~the profits~~profit/loss of associates and joint ventures ~~was €814~~totaled €1,070 million in ~~2009, versus €692~~2011, compared with €978 million in ~~2008.~~2010. This ~~item~~line mainly ~~comprises~~includes our share of after-tax profits ~~from the~~generated in territories managed by BMS under the ~~Plavix~~^®Plavix® and ~~Avapro~~^®Avapro® alliance, which ~~increased~~advanced by ~~26.0% year-on-year from €623~~9.2% to €1,070 million compared with €980 million in ~~2008~~2010. The increase in this share in 2011 was partly related to ~~€785 million in 2009. This increase was a direct result of the~~ growth in Plavix® sales ~~of Plavix~~^® in the United States (up ~~12.8% at constant exchange rates) and of the appreciation of the U.S. dollar against the euro (up 7.0%~~2.9%).

~~Net Income from the Held-for-Exchange Merial Business~~

With effect from September 18, 2009, the date on which sanofi-aventis obtained exclusive control over Merial, the operations of this company have been accounted for using the full consolidation method. As of December 31, 2009, the results of Merial’s operations were reported in the line item “Net income from the held-for-exchange Merial business”, in accordance with IFRS 5 (refer to Note D.8. to our consolidated financial statements). The net income of the Merial business for the year ended December 31, 2009 was €175 million, compared with €120 million in the previous year.

This growth was attributable to a strong operating performance by Merial and to the appreciation of the U.S. dollar against the euro. The figures cited above include 100% of the net income of Merial with effect from September 18, 2009, compared with 50% prior to that date. The 2009 figure also includes a net expense of €46 million relating to the workdown of inventories remeasured at fair value, as part of the provisional purchase price allocation on the acquisition of the 50% interest in Merial acquired in 2009.

Net Income

Net income ~~(before non-controlling interests) totaled €5,691~~for the year was €5,934 million in ~~2009,~~2011, compared with ~~€4,292~~€5,721 million in ~~2008.~~2010.

Net Income Attributable to Non-Controlling Interests

Net income attributable to non-controlling interests ~~for the year ended December 31, 2009 was €426~~amounted to €241 million ~~against €441~~in 2011, compared with €254 million ~~for the previous year.~~in 2010. This ~~item~~line mainly includes the share of pre-tax ~~income~~profits paid ~~over~~ to BMS ~~from~~generated in territories managed by ~~sanofi-aventis~~Sanofi (€~~405~~225 million, versus €238 million in ~~2009, versus €422 million~~2010); the year-on-year fall is directly related to increased competition from clopidogrel (Plavix®) generics in ~~2008).~~Europe.

Net Income Attributable to Equity Holders of ~~Sanofi-Aventis~~Sanofi

Net income attributable to equity holders of ~~sanofi-aventis amounted to €5,265~~Sanofi totaled €5,693 million in ~~2009, versus €3,851~~2011, against €5,467 million in ~~2008.~~2010.

Basic earnings per share ~~(EPS)~~ for ~~2009 were €4.03, up 37.1% on~~2011 was €4.31, 2.9% higher than the ~~2008~~2010 figure of ~~€2.94,~~€4.19, based on an average number of shares outstanding of ~~1,305.9~~1,321.7 million in ~~2009~~2011 and ~~1,309.3~~1,305.3 million in ~~2008.~~

2010. Diluted earnings per share ~~for 2009 were €4.03, up 37.1% on the 2008 figure of €2.94,~~was €4.29 in 2011, versus €4.18 in 2010, based on an average number of shares outstanding after dilution of ~~1,307.4~~1,326.7 million in ~~2009~~2011 and ~~1,310.9~~1,308.2 million in ~~2008.~~2010.

Business Operating Income

Sanofi reports segment results on the basis of "Business Operating Income". This indicator, adopted in compliance with IFRS 8, is used internally to measure operational performance and to allocate resources. See "Item 5. Operating and Financial Review and Prospects — Segment information" above for the definition of business operating income and reconciliation to Income before tax and associates and joint ventures.

Business operating income for ~~2009~~2011 was ~~€12,028~~€12,144 million, compared to ~~€10,391~~€12,863 million in ~~2008.~~2010. The table below shows trends in business operating income by business segment for ~~2009~~2011 and ~~2008:~~2010:

(€ million)    2009    2008
Pharmaceuticals    10,608       9,399
Vaccines    1,173       882
Other    247       110
Business operating income
   12,028       10,391

*(€ million)*


Pharmaceuticals	10,496	10,965
Vaccines	985	1,379
Animal Health	627	621
Other	36	(102	)

Business operating income	12,144	12,863

Business Net Income

Business net income is a non-GAAP financial measure that we use to evaluate our ~~Group’s~~ performance (see “—"Item 5. Operating and Financial Review and Prospects — Business Net ~~Income” above).~~Income" above for the definition of business net income and reconciliation to Net Income attributable to equity holders of Sanofi.

Business net income ~~for 2009 was €8,629 million, versus €7,314~~totaled €8,795 million in ~~2008, representing growth~~2011 versus €9,215 million in 2010, a drop of ~~18.0%~~4.6%.

(€ million)    2009 2008
Business net income
   8,629 7,314
(i)                 Amortization of intangible assets
   (3,528 ) (3,483 )
(ii)                Impairment of intangible assets
   (372 ) (1,554 )
(iii)              Expenses arising from the impact of acquisitions on inventories ⁽¹⁾
   (27 ) (2 )
(iv)               Restructuring costs
   (1,080 ) (585 )
(iii)/(iv)      Other items ⁽²⁾
   —    114
(v)                Tax effects of:
   1,629 1,904
                     - amortization of intangible assets
   1,126 1,189
                     - impairment of intangible assets
   136 537
                     - expenses arising from the impact of acquisitions on inventories
   7 1
                     - restructuring costs
   360 196
                     - other items
   —    (19 )
(iii)/(vi)      Other tax items ⁽³⁾
   106 221
(vii)             Share of items listed above attributable to non-controlling interests
   1 —
(iii)              Expenses arising from the impact of the Merial acquisition ⁽⁴⁾
   (66 ) (50 )
(iii)/(iv)      Restructuring costs of associates and joint ventures, and expenses arising from
                      the impact of acquisitions on associates and joint ventures ⁽⁵⁾
   (27 ) (28 )
Net income attributable to equity holders of sanofi-aventis
   5,265 3,851
⁽¹⁾     This line comprises the workdown of inventories remeasured at fair value at the acquisition date.

⁽²⁾     Other items comprise :

        - gain on sale of investment in Millennium
   38
        - reversals of/charges to provisions for risks
   76
⁽³⁾     Other tax items comprise :

        - provisions for/settlements of tax disputes
   221
        - reversal of deferred taxes following ratification of the Franco-American Treaty
   106
⁽⁴⁾     This line comprises: until September 17, 2009, amortization and impairment charged against the intangible assets of Merial; and from September 18, 2009, (i) the impact of the discontinuation of depreciation of the property, plant and equipment of Merial in accordance with IFRS 5 (see Note B.7. to our consolidated financial statements) and (ii) the expense arising from the workdown of inventories remeasured at fair value at acquisition date.

⁽⁵⁾     This line shows the portion of major restructuring costs incurred by associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (workdown of acquired inventories, amortization and impairment of intangible assets, and impairment of goodwill).

~~Business net income for 2009 was €8,629 million, an increase of 18.0% on the 2008 figure of €7,314 million, and~~ It represented ~~29.4%~~26.3% of net sales compared with ~~26.5%~~28.5% in ~~2008. The increase was mainly due to our good operating performance, reflected in the increase in gross profit (€22,869 million in 2009 versus €21,480 million in 2008).~~

2010.

Business Earnings Per Share

Business earnings per share for ~~2009~~2011 were ~~€6.61, up 18.2% on~~€6.65, 5.8% lower than the ~~2008 business earnings per share~~2010 figure of ~~€5.59. The~~€7.06, based on a weighted average number of shares outstanding ~~was 1,305.9~~of 1,321.7 million in ~~2009~~2011 and ~~1,309.3~~1,305.3 million in ~~2008.~~2010. Diluted business earnings per share for ~~2009~~2011 were ~~€6.60, up 18.3% on~~€6.63, 5.8% lower than the ~~2008 diluted business earnings per share~~2010 figure of ~~€5.58. On~~€7.04, based on a ~~diluted basis, the~~ weighted average number of shares outstanding ~~was 1,307.4~~of 1,326.7 million in ~~2009~~2011 and ~~1,310.9~~1,308.2 million in ~~2008.~~2010.

Liquidity and Capital Resources

Our operations generate significant positive cash flows. We fund our day-to-day investments (with the exception of significant acquisitions) primarily with operating cash flow, and pay regular dividends on our shares. In ~~2010,~~addition, we ~~also~~ reduced our net ~~debt.~~debt during 2012, whereas in 2011 our debt increased significantly to finance the acquisition of Genzyme.

We define "debt, net of cash and cash equivalents" as (i) the sum total of short-term debt, long-term debt and interest rate and currency derivatives used to hedge debt, minus (ii) the sum total of cash and cash equivalents and interest rate and currency derivatives used to hedge cash and cash equivalents. As of December 31, ~~2010,~~2012, our debt, net of cash and cash equivalents stood at ~~€1,577~~€7,719 million ~~(3.0% of our net equity)~~ versus ~~€4,128~~€10,859 million as of December 31, ~~2009 (8.5% of our net equity)~~2011 and ~~€1,802~~€1,577 million as of December 31, ~~2008.~~2010. See Note D.17. to our consolidated financial statements included at Item 18 of this annual report. ~~We expect~~

In order to ~~significantly increase~~assess the Company's financing risk, we also use the "gearing ratio", a non-GAAP financial measure. The gearing ratio is defined as the ratio of debt, net of cash and cash equivalents, to total equity. As of December 31, 2012, our gearing ratio stood at 13.4% of our net ~~debt in~~equity versus 19.3% as of December 31, 2011 ~~in connection with our proposed acquisition~~and 3.0% as of ~~Genzyme.~~December 31, 2010.

Consolidated Statement of Cash Flows

The table below shows our summarized cash flows for the years ended December 31, ~~2010, 2009~~2012, 2011 and ~~2008:~~2010:

*(€ million)*


Net cash provided by / (used in) operating activities	8,171		9,319		9,859
Net cash provided by / (used in) investing activities	(1,587	)	(14,701	)	(3,475	)
Net cash provided by / (used in) financing activities	(4,351	)	2,893		(4,646	)
Impact of exchange rates on cash and cash equivalents	24		1		55
Impact of the cash and cash equivalents of Merial ⁽¹⁾	—		147		—

Net change in cash and cash equivalents — (decrease) / increase	2,257		(2,341	)	1,793

⁽¹⁾: See Note D.8.1. to our consolidated financial statements included at Item 18 of this annual report.

(€ million)    2010 2009 2008
Net cash provided by / (used in) operating activities    9,759 8,515 8,523
Net cash provided by / (used in) investing activities    (3,383 ) (7,287 ) (2,154 )
Net cash provided by / (used in) financing activities    (4,647 ) (787 ) (3,809 )
Impact of exchange rates on cash and cash equivalents    44 25 (45 )
Net change in cash and cash equivalents — (decrease) / increase
   1,773 466 2,515

Generally, factors that affect our earnings — for example, pricing, volume, costs and exchange rates — flow through to cash from operations. The most significant source of cash from operations is sales of our branded pharmaceutical products and human vaccines. Receipts of royalty payments also contribute to cash from operations.

Year Ended December 31, ~~2010~~2012 Compared with Year Ended December 31, ~~2009~~2011

Net cash provided by operating activities amounted to ~~€9,759~~€8,171 million in ~~2010,~~2012, compared with ~~€8,515~~€9,319 million in ~~2009.~~2011. Operating cash flow before changes in working capital was ~~€10,036~~€8,503 million, versus ~~€9,362~~€9,834 million in ~~2009, reflecting our operating performance.~~2011. This decrease was largely attributable to erosion in revenues from the territories managed by BMS under the alliance on Plavix® and Avapro®, due to competition from generics in the United States. This revenue erosion was reflected in a reduced share of after-tax profits from these territories (€420 million, versus €1,070 million in 2011) and lower license revenue from the worldwide alliance with BMS on Plavix® and Aprovel®/Avapro® (€532 million in 2012, versus €1,275 million in 2011).

Our operating cash flow before changes in working capital is generally affected by the same factors that affect ~~“Operating income”~~"Operating income", which is discussed in detail above under ~~“Results~~"Results of Operations — Year Ended December 31, ~~2010~~2012 Compared with Year Ended December 31, ~~2009” and “Results of Operations — Year Ended December 31, 2009 Compared with Year Ended December 31, 2008”~~2011". The principal difference is that operating cash flow before changes in working capital reflects our share of the profits and losses of associates and joint ventures, net of dividend and similar income received.

Working capital requirements rose by ~~€277~~€332 million in ~~2010, compared with~~2012, after an ~~€847~~increase of €515 million in 2011. The increase during 2012 was mainly attributable to an increase in ~~2009. The main factor in 2010 was a €378~~inventories (€445 million, ~~rise in~~including €315 million for reconstituting inventories ~~partly offset by~~at the ~~discontinuation of royalty payments from Teva on North American sales of Copaxone~~^® ~~(impact: €126 million)~~Genzyme business).

Net cash used in investing activities ~~totaled €3,383~~ amounted to €1,587 million in ~~2010,~~2012, versus ~~€7,287~~€14,701 million in ~~2009.~~2011.

Acquisitions of property, plant and equipment and intangible assets totaled €1,612 million (2011: €1,782 million). The main items were investments in industrial and research facilities (€1,324 million, versus €1,394 million in 2011) and contractual payments for intangible rights under license and collaboration agreements (€293 million, versus €245 million in 2011).

Acquisitions of investments in the period amounted to €328 million, net of cash acquired and after including assumed liabilities and commitments. The main items were a payment of contingent consideration to Bayer arising from the acquisition of Genzyme, the repurchase of some of the CVRs issued in connection with that acquisition, the acquisitions of Pluromed and Newport, and the purchase of an equity interest in Merrimack. In 2011, acquisitions of investments amounted to €13,616 million; after including assumed liabilities and commitments, they totaled €14,079 million, and mainly comprised the acquisitions of Genzyme (€13,602 million) and BMP Sunstone (€374 million).

After-tax proceeds from disposals (€358 million) related to divestitures of financial assets (in particular, our equity interests in Société Financière des Laboratoires de Cosmétologie Yves Rocher and Handok), and to disposals of various items of property, plant and equipment and intangible assets. In 2011, proceeds from disposals came to €359 million, mainly generated by the divestiture of the Dermik dermatology business (€321 million).

Financing activities generated a net cash outflow of €4,351 million in 2012, compared with a net cash inflow of €2,893 million in 2011. The 2012 figure includes €615 million of debt repayments (net change in short-term and long-term debt), as compared with net external debt raised of €5,283 million in 2011; it also includes the Sanofi dividend payout of €3,487 million (versus €1,372 million in 2011).

After the impact of exchange rates and of the cash and cash equivalents of Merial, the net change in cash and cash equivalents in 2012 was an increase of €2,257 million, compared with a decrease of €2,341 million in 2011.

Year Ended December 31, 2011 Compared with Year Ended December 31, 2010

Net cash provided by operating activities totaled €9,319 million in 2011, compared with €9,859 million in 2010. In 2011, operating cash flow before changes in working capital was €9,834 million, versus €10,024 million in 2010.

Our operating cash flow before changes in working capital is generally affected by the same factors that affect "Operating income", which is discussed in detail above under "Results of Operations — Year Ended December 31, 2011 Compared with Year Ended December 31, 2010". The principal difference is that operating cash flow before changes in working capital reflects our share of the profits and losses of associates and joint ventures, net of dividend and similar income received.

Working capital requirements rose by €515 million in 2011, compared with a €165 million increase in 2010. The 2011 increase was related to increased inventories (€232 million) and trade receivables (€257 million), following the first-time consolidation of Genzyme and Merial.

Net cash used in investing activities totaled €14,701 million in 2011, versus €3,475 million in 2010.

Acquisitions of property, plant and equipment and intangible assets amounted to ~~€1,573~~€1,782 million ~~(2009: €1,785 million), comprising €1,261~~(compared with €1,662 million ofin 2010) and included Genzyme investments from April 2011. The main items were investments in industrial and research facilities ~~and €312~~(€1,394 million, ofcompared with €1,261 million in 2010) and contractual payments for intangible rights under ~~license agreements.~~licensing or collaboration agreements (€182 million, versus €312 million in 2010).

Acquisitions of investments ~~during~~for 2011 totaled €13,616 million, net of cash from acquired companies. After including assumed liabilities and commitments, they amounted to €14,079 million. The main items were the acquisitions of Genzyme (€13,602 million) and BMP Sunstone (€374 million). In 2010, ~~totaled~~financial investments were €1,733 million, net of acquired cash; after including assumed liabilities and commitments, ~~these acquisitions were valued at~~they amounted to €2,130 ~~million. Our main investments during 2010 were~~million, and mainly comprised the acquisition of equity interests in Chattem (€1,640 million) and Nepentes (€104 million). In 2009, acquisitions of investments were €5,568 million, net of acquired cash; after including assumed liabilities and commitments, these acquisitions were valued at €6,334 million. Our main investments in 2009 were the equity interests in Merial (€2,829 million), Zentiva (€1,752 million), Shantha, Medley, and BiPar.

After-tax proceeds from disposals amounted to ~~€131~~€359 million, ~~arising~~ mainly onfrom the divestiture of the Dermik dermatology business (€321 million). In 2010, after-tax proceeds from disposals were €136 million, mainly from the divestment of the equity interest in Novexel (€48 million) and on the disposal of various items of property, plant and equipment (€55 million). ~~In 2009, after-tax proceeds from disposals were €85 million, mainly on disposals~~

Financing activities generated a net cash inflow of ~~intangible assets, some of which were required as conditions for clearance of our acquisition of Zentiva.~~

~~Net cash used in financing activities~~ ~~amounted to €4,647~~€2,893 million in ~~2010,~~2011, versus ~~€787~~a net cash outflow of €4,646 million in ~~2009.~~

~~The 2010 figure includes our dividend payout~~2010. In 2011, financing cash inflows included €5,283 million of ~~€3,131 million (2009: €2,872 million), plus net repayments of debt~~external funding raised (net change in short-term and long-term debt), as opposed to 2010 which saw net debt repayments of ~~€1,166~~€1,165 million. Cash outflows included the dividend payout of €1,372 million to Sanofi shareholders (versus ~~a net €1,923~~€3,131 million ~~of new debt contracted~~ in ~~2009). It also includes~~2010), and the acquisition of ~~5.9~~21.7 million of our own shares for ~~€321~~€1,074 million.

After the impact of exchange rates and of the cash and cash equivalents of Merial, the net change in cash and cash equivalents during ~~2010~~2011 was ~~an increase~~a decline of ~~€1,773~~€2,341 million, ~~compared with an increase of €466~~versus a €1,793 million ~~in 2009.~~

~~Year Ended December 31, 2009 Compared with Year Ended December 31, 2008~~

~~Net cash provided by operating activities~~ totaled €8,515 million in 2009, compared with €8,523 million in 2008. Operating cash flow before changes in working capital was €9,362 million (versus €8,524 million in 2008), reflecting our good operating performance.

Our working capital requirements increased by €847 million in 2009, having been stable in 2008. This increase was due to the growth in our operations during 2009, reflected in higher levels of inventories (up €489 million) and trade receivables (up €429 million).

~~Net cash used in investing activities~~ ~~was €7,287 million in 2009, versus €2,154 million in 2008.~~

Acquisitions of property, plant and equipment and intangible assets totaled €1,785 million (compared with €1,606 million in 2008), and mainly comprised investments in industrial facilities and research sites, plus contractual payments for intangible rights (€325 million in 2009, mainly related to licensing agreements).

Acquisitions of investments during 2009 totaled €5,568 million, net of cash acquired. These investments, valued at a total of €6,334 million inclusive of assumed liabilities and commitments, mainly comprised acquisitions of shares in Merial (€2,829 million), Zentiva (€1,752 million), Shantha, Medley and BiPar. In 2008, acquisitions of investments net of cash acquired totaled €667 million, mainly comprising the acquisitions of the entire share capital of the U.K. company Acambis Plc (€332 million) and of the Australian company Symbion CP Holdings Pty Ltd, now sanofi-aventis Healthcare Holdings Pty Limited (€329 million).

After-tax proceeds from disposals (€85 million in 2009) related mainly to disposals of intangible assets, some of which were required as conditions for clearance of our acquisition of Zentiva. In 2008, after-tax proceeds from disposals were €123 million, mostly arising from the May 2008 disposal of our shares in Millennium.

~~Net cash used in financing activities~~ amounted to €787 million, against €3,809 million in 2008. The 2009 figure includes a dividend payout of €2,872 million (versus €2,702 million in 2008), and additional external financing (net increase in short-term and long-term debt) of €1,923 million (versus €69 million in 2008). During 2009, we placed five bond issues for a total amount of €4.7 billion. In 2008, we acquired 23.9 million of our own shares at a cost of €1,227 million under our share repurchase programs.2010.

~~After the impact of exchange rates, the net change in cash and equivalents during 2009 was an increase of €466 million, compared with an increase of €2,515 million in 2008.~~

Consolidated Balance Sheet and Debt

Total assets stood at ~~€85,264~~€100,407 million as of December 31, ~~2010, compared with €80,251~~2012, versus €100,668 million as of December 31, ~~2009, an increase~~2011, a decrease of ~~€5,013~~€261 million. Total assets as of December 31, 2009 have been adjusted to reflect adjustments to the values of certain identifiable assets and liabilities of Merial (see Note D.1. to our consolidated financial statements included at Item 18 of this annual report).

~~Our~~~~debt,~~ Debt, net of cash and cash equivalents ~~was €1,577~~ (see definition above) amounted to €7,719 million as of December 31, ~~2010, versus €4,128~~2012, compared with €10,859 million as of December 31, ~~2009. We define “debt, net of cash and cash equivalents” as short-term and long-term debt, plus related interest rate and currency derivatives, minus cash and cash equivalents.~~

2011. The table below shows our financial position for the years ended December 31, ~~2010, 2009~~2012, 2011 and ~~2008:~~2010:

*(€ million)*


Long-term debt	10,719		12,499		6,695
Short-term debt and current portion of long-term debt	3,812		2,940		1,565
Cash and cash equivalents	(6,381	)	(4,124	)	(6,465	)
Related interest rate and currency derivatives	(431	)	(456	)	(218	)

Debt, net of cash and cash equivalents	7,719		10,859		1,577

(€ million)    2010 2009 2008
Long-term debt    6,695    5,961    4,173
Short-term debt and current portion of long-term debt    1,565    2,866    1,833
Related interest rate and currency derivatives    (218 ) (7 ) 22
Cash and cash equivalents    (6,465 ) (4,692 ) (4,226 )
Debt, net of cash and cash equivalents
   1,577 4,128 1,802

~~The~~Our gearing ratio (debt, net of cash and cash equivalents as a proportion of total equity) fell from ~~8.5%~~19.3% in 2011 to ~~3.0%. For an analysis~~13.4% in 2012. Analyses of ~~our~~ debt as of December 31, 2012 and December 31, 2011, by type, maturity, interest rate and currency, ~~as of December 31, 2010 and December 31, 2009, refer to~~are provided in Note D.17. to our consolidated financial statements.

The financing arrangements in place as of December 31, ~~2010~~2012 at ~~the sanofi-aventis~~Sanofi parent company level are not subject to covenants regarding financial ratios and do not contain any clauses linking credit spreads or fees to our credit rating. ~~Under the Bridge Facility, the margin above LIBOR and mandatory costs may vary under Facility B as a function of our credit rating (see Item 10.C. hereof for further information.).~~

Other key movements in balance sheet items are described below.

Total equity stood at ~~€53,288~~€57,472 million as of December 31, ~~2010, compared with €48,580~~2012, versus €56,373 million ~~a year earlier.~~as of December 31, 2011. The ~~main factors underlying this~~ net year-on-year increase ~~were as follows:~~in equity was attributable primarily to:

•: increases: our net income for the year ended December 31, ~~2010~~2012 (€~~5,721~~4,967 million); and
•: reductions: the dividend payout to our shareholders in respect of the 2011 financial year (€3,487 million), and the net change in ~~cumulative~~currency translation differences ~~due to the depreciation of the euro against other currencies~~ (€~~2,655~~532 million, mainly onrelating to the U.S. dollar)~~; and~~

~~reductions: the dividend payout of €3,131 million made to our shareholders in 2010.~~

As of December 31, ~~2010, sanofi-aventis~~2012, we held ~~6.1~~3.1 million of ~~its~~our own shares, ~~representing 0.5% of the share capital and~~ recorded as a deduction from ~~equity.~~equity and representing 0.2% of the share capital.

Goodwill and other intangible assets (€~~44,411 million) increased~~58,265 million in total) decreased by ~~€931~~€3,956 million, ~~compared to a year earlier, mainly~~largely as a result of ~~the following factors:~~

~~increases: acquisitions of companies (€1,017 million of goodwill, and €1,557 million of other intangible assets) plus acquisitions of intangible assets (€388 million);~~

~~reductions:~~ amortization and impairment losses ~~charged during~~recognized in the ~~year~~period (€~~4,011~~ 3,516��million); and

a decline in the ~~translation into~~equivalent value in euros of assets denominated in other currencies ~~(positive impact of €1,979~~(€611 million, mainly onrelating to the U.S. dollar).

Provisions and other non-current liabilities (€~~9,326~~11,036 million) ~~were €1,090~~rose by €690 million, ~~higher than at the previous year-end,~~ due ~~largely~~mainly to a ~~sharp~~net increase in provisions for pensions and other benefits of ~~€731~~€874 million, ~~in restructuring provisions.~~primarily as a result of actuarial losses on defined-benefit plans.

Net deferred tax liabilities (€~~757~~1,555 million) ~~were €1,264~~fell by €1,342 million ~~lower~~ year-on-year, ~~mainly as a result of reversals~~primarily due to the reversal of deferred tax liabilities relating to ~~amortization and impairment~~the remeasurement of acquired intangible assets ~~(impact: €1,324~~(€5,641 million in 2012 versus €6,815 million in 2011, a difference of €1,174 million).

~~Liabilities~~Current and non-current liabilities related to business combinations and to non-controlling interests ~~(current and non-current) rose by €335~~(€1,450 million) were €106 million ~~to €486 million, due mainly to~~lower. The main factors were the reversal of the contingent consideration relating to ~~acquisitions (primarily~~the Fovea acquisition, payments to Bayer (relating to contingent consideration arising from our acquisition of Genzyme), and ~~TargeGen) and to put options granted to non-controlling interests~~the repurchase (for $70 million) of some of the contingent value rights (CVRs) issued in connection with the Genzyme acquisition. These factors were partly offset by the effect of fair value remeasurements (see Note D.18. to our consolidated financial statements).

Assets held for sale or exchange, net of related liabilities rose by €321 million to €5,364 million during the year, and mainly comprise the net assets of Merial which are reported separately in accordance with IFRS 5 (see Note D.8. to our consolidated financial statements).

Liquidity

We expect that our existing cash resources and cash from operations will be sufficient to finance our foreseeable working capital requirements. At ~~year end 2010,~~year-end 2012, we held cash and cash equivalents amounting to ~~€6,465~~€6,381 million, substantially all of which ~~was~~were held in euros (see Note D.13. to our consolidated financial statements). As at December 31, ~~2010, €436~~2012, €507 million of our cash and cash equivalents ~~was~~were held by our captive insurance and reinsurance companies in accordance with insurance regulations.

~~At year end~~Since 2010, ~~we had~~some countries in Southern Europe have faced severe financial difficulties. Deteriorating credit and economic conditions and other factors in these countries have resulted in, and may continue to result in an increase in the average length of time taken to collect our accounts receivable in these countries and may require us to re-evaluate the collectability of these receivables in future periods. We carefully monitor sovereign debt issues and economic conditions and evaluate accounts receivable in these countries for potential collection risks. We are conducting an active recovery policy, adapted to each country and including intense communication with customers, negotiations of payments plans, charging of interest for late payments, and legal action. See "Item 3.D. Risk Factors — Risks Relating to Our Business — We are subject to the risk of non-payment by our customers" and "— Impairment charges or write downs in our books and changes in accounting standards could have a ~~firm commitment of approximately $18.5 billion towards the shareholders of Genzyme Corporation (Genzyme), based~~significant adverse effect on the Group's results of operations and financial results". During 2012, the amount of our trade receivables in Europe decreased, primarily as a result of a reduction in the sums owed to us by public-sector customers in Spain due to payments received. The total consolidated amount of trade receivables overdue by more than 12 months — which primarily consists of amounts due from public-sector customers — fell from €276 million as of December 31, 2011 to €161 million as of December 31, 2012 due to payments received (see Note D.10. to our consolidated financial statements included at Item 18 of this annual report).

In November 2011, Sanofi obtained the necessary corporate authorizations to purchase any or all of the outstanding Contingent Value Rights ("CVR") and subsequently purchased CVRs in 2011. In 2012 following a tender offer ~~made on October 4, 2010 for all outstanding shares of common stock at $69.00 per share, net to the seller~~initiated in cash, without interest and less any required withholding taxes. On February 16, 2011, sanofi-aventis and Genzyme announced they had entered into a merger agreement providing for the acquisition of Genzyme by sanofi-aventis. The agreement is described at “Item 10.C. Material Contracts” and any acquisition remains subject to fulfillment of a number of conditions including acceptance by holders of a majority of shares of Genzyme common stock on a diluted basis. The cash consideration (excluding any future payments on the contingent value rights that we propose to issue in connection with the acquisition) of the agreed offer represents a commitment of approximately $20.1 billionSeptember 2012 on the basis of the same corporate authorization, Sanofi purchased an ~~estimated 272.5 million~~additional 40,025,805 CVRs (for a total consideration of approximately $70 million). As of December 31, 2012, 249,196,371 CVRs were outstanding out of 291,313,510 issued at the time of the Genzyme ~~shares on a diluted basis.~~acquisition.

At year end 2010, we had a firm commitment of $1 billion towards Merck & Co., Inc. relating to the future combination of Merial with the Intervet/Schering-Plough business to form a new joint venture equally owned by Merck and sanofi-aventis, as well as a firm commitment of $521 million towards the shareholders of BMP Suntone Corporation (BMP Sunstone). See “— Acquisitions” above for further details.

~~At year end 2010, other than the preceeding commitments relating to Genzyme, Merial and BMP Sunstone,~~year-end 2012, we had no commitments for capital expenditures that we consider to be material to our consolidated financial position.

Undrawn confirmed credit facilities amounted to a total of ~~€12.2~~€10.0 billion at December 31, 2010. Moreover, in connection with the Genzyme acquisition, we signed two acquisition facilities in October 2010 for a total value of €11.2 billion ($15 billion) that can be drawn until December 31, 2011 (see “Item 10. Additional Information — C. Material Contracts”). In order to have sufficient cash on hand to pay for the contemplated acquisition of 100% of the shares of Genzyme common stock, we intend to either draw on these facilities in whole or in part and/or issue new debt upon closing of the acquisition, depending on market conditions.2012. For a discussion of our treasury policies, see ~~“Item~~"Item 11. Quantitative and Qualitative Disclosures about Market Risk.”"

We expect that cash from ~~the combined~~our operations ~~of sanofi-aventis and Genzyme would~~will be sufficient to repay our ~~debt, including the new debt that we expect to contract in 2011 (including refinancing of any drawings under the Acquisition Facility) in order to finance the contemplated Genzyme acquisition.~~debt. For a discussion of our liquidity risks, see ~~“Item~~"Item 11. Quantitative and Qualitative Disclosures about Market Risk.”

Off-Balance Sheet Arrangements / Contractual Obligations and Other Commercial Commitments

We have various contractual obligations and other commercial commitments arising from our operations. Our contractual obligations and our other commercial commitments as of December 31, ~~2010~~2012 are shown in Notes D.3., D.17., D.18. and D.21. to our consolidated financial statements included at Item 18 of this annual report. Note D.21. to our consolidated financial statements included at Item 18 discloses details of commitments under our principal research and development collaboration ~~agreements, as well as the financial commitments related to Merial, Genzyme and BMP Sunstone.~~agreements. For a description of the principal contingencies arising from certain business divestitures, refer to Note D.22.e) to our ~~2010~~2012 consolidated financial statements.

The ~~Group’s~~Group's contractual obligations and other commercial commitments ~~(excluding those of Merial, see Note D.8.1. to our consolidated financial statements)~~ are set forth in the table below:

December 31, 2012	Payments due by period


*(€ million)*	Total			Under 1 year			From 1 to 3 years			From 3 to 5 years			Over 5 years

• Future contractual cash-flows relating to debt and debt hedging instruments ⁽¹⁾		15,283			3,959			4,165			4,106			3,053
• Operating lease obligations		1,296			250			367			220			459
• Finance lease obligations ⁽²⁾		100			20			36			31			13
• Irrevocable purchase commitments ⁽³⁾
- given		2,913			1,513			651			368			381
- received		(209	)		(106	)		(67	)		(14	)		(22	)
• Research & development license agreements
- Future service commitments ⁽⁴⁾		767			181			286			276			24
- Potential milestone payments ⁽⁵⁾		2,201			149			267			295			1,490
• Obligations relating to business combinations ⁽⁶⁾		4,993			341			1,135			560			2,957
• Firm commitment related to the BMS agreement ⁽⁷⁾		82			—			—			—			82
• Estimated benefit payments on unfunded pensions and post employment benefits ⁽⁸⁾		1,741			60			115			133			1,433

Total contractual obligations and other commitments		29,167			6,367			6,955			5,975			9,870

Undrawn general-purpose credit facilities		10,021			3,020			225			6,775			1

⁽¹⁾: See Note D.17. to our consolidated financial statements included at Item 18 of this annual report.
⁽²⁾: See Note D.3. to our consolidated financial statements included at Item 18 of this annual report.
⁽³⁾: These comprise irrevocable commitments to suppliers of (i) property, plant and equipment, net of down payments (see Note D.3. to our consolidated financial statements included at Item 18 of this annual report) and (ii) goods and services.
⁽⁴⁾: Future service commitments relating to research & development license agreements mainly comprise research financing commitments, but also include consideration for access to technologies.
⁽⁵⁾: This line includes all potential milestone payments on projects regarded as reasonably possible, i.e., on projects in the development phase.
⁽⁶⁾: See Note D.18. to our consolidated financial statements included at Item 18 of this annual report.
⁽⁷⁾: See Note C.1. to our consolidated financial statements included at Item 18 of this annual report.
⁽⁸⁾: See Note D.19.1. to our consolidated financial statements included at Item 18 of this annual report. The table above does not include the ongoing annual employer's contributions to plan assets, estimated at €268 million in 2013.

December 31, 2010    Payments due by period
(€ million)    Total
Under 1
year
From 1 to
3 years
From 3 to
5 years
Over 5
years
•    Future contractual cash-flows relating to debt and debt hedging instruments⁽¹⁾    9,125    1,694 3,161    1,736 2,534
•    Operating lease obligations    1,291    260 337    217 477
•    Finance lease obligations⁽²⁾    28    7 13    6 2
•    Irrevocable purchase commitments⁽³⁾
–  given
   2,658    1,566 498    207 387
–  received
   (176 ) (74 ) (35 ) (16 ) (51 )
•    Research & development license agreements
-  Future service commitments⁽⁴⁾
   1,073    199 312    252 310
-  Potential milestone payments⁽⁵⁾
   2,015    101 378    238 1,298
•    Obligations relating to business combinations⁽⁶⁾    739    87 79    438 135
Total contractual obligations and other commitments    16,753    3,840    4,743    3,078    5,092
Undrawn general-purpose credit facilities    12,238    245    5,755    6,238    —
Genzyme acquisition facilities    11,226    11,226    —    —    —
Total undrawn credit facilities    23,464    11,471    5,755    6,238    —

⁽¹⁾

~~See Note D.17. to our consolidated financial statements included at Item 18 of this annual report.~~

⁽²⁾

~~See Note D.3. to our consolidated financial statements included at Item 18 of this annual report.~~

⁽³⁾

These comprise irrevocable commitments to suppliers of (i) property, plant and equipment, net of down payments (see Note D.3. to our consolidated financial statements included at Item 18 of this annual report) and (ii) goods and services.

⁽⁴⁾

~~Future service commitments relating to research & development license agreements mainly comprise research financing commitments, but also include consideration for access to technologies.~~

⁽⁵⁾

This line includes all potential milestone payments on projects regarded as reasonably possible, i.e., on projects in the development phase. Payments contingent upon the attainment of sales targets once a product is on the market are excluded.

⁽⁶⁾

~~See Note D.18. to our consolidated financial statements included at Item 18 of this annual report.~~

We may have payments due to our current or former research and development partners under collaborative agreements. These agreements typically cover multiple products, and give us the option to participate in development on a product-by-product basis. When we exercise our option with respect to a product, we pay our collaboration partner a fee and receive intellectual property rights to the product in exchange. We are also ~~are~~ generally required to fund some or all of the development costs for the products that we select, and to make payments to our partners when those products reach development milestones.

We have entered into collaboration agreements under which we have rights to acquire products or technology from third parties through the acquisition of shares, loans, license agreements, joint development, co-marketing and other contractual arrangements. In addition to upfront payments on signature of the agreement, our contracts frequently require us to make payments contingent upon the completion of development milestones by our alliance partner or upon the granting of approvals or licenses.

Because of the uncertain nature of development work, it is impossible to predict (i) whether ~~sanofi-aventis~~Sanofi will exercise further options for products, or (ii) whether the expected milestones will be achieved, or (iii) the number of compounds that will reach the relevant milestones. It is therefore impossible to estimate the maximum aggregate amount that ~~sanofi-aventis~~Sanofi will actually pay in the future under existing collaboration agreements.

Given the nature of its business, it is highly unlikely that ~~sanofi-aventis~~Sanofi will exercise all options for all products or that all milestones will be achieved.

The main collaboration agreements relating to development projects in the Pharmaceuticals segment are described below. ~~Potential milestone~~Milestone payments relating to development projects under these agreements amounted to ~~€1.4~~€2.0 billion in ~~2010.~~

~~In June 2010, sanofi-aventis~~2012. These exclude projects in the research phase (€5.0 billion in 2012, €4.2 billion in 2011) and ~~Metabolex~~payments contingent upon the attainment of sales targets once a product is on the market (€4.7 billion in 2012, €4.4 billion in 2011).

•: Since acquiring Genzyme in April 2011, the Group has a commitment to Isis Pharmaceuticals Inc. under a collaboration agreement signed in January 2008. This agreement granted an exclusive license to develop and commercialize Mipomersen, a ~~global license agreement for MBX-2982,~~treatment in an ~~oral agent~~advanced development phase for the treatment of ~~type 2 diabetes.~~

severe familial hypercholesterolemia.

•

In May ~~2010, sanofi-aventis~~2011, Sanofi signed a license agreement with Glenmark Pharmaceuticals S.A. (Glenmark), a wholly-owned subsidiary of Glenmark Pharmaceuticals Limited ~~India.~~

India, to develop and commercialize GBR500, a novel monoclonal antibody for the treatment of Crohn's disease and other chronic auto-immune diseases.

•

In June 2010, Sanofi signed an exclusive global collaboration and license agreement with Ascenta Therapeutics, a U.S. biopharmaceutical company, on a number of molecules that could restore apoptosis (cell death) in tumor cells.

•

At the end of April 2010, Sanofi signed a license agreement with Glenmark for the development and commercialization of novel agents to treat chronic pain. Those agents are vanilloid receptor (TRPV3) antagonist molecules, including a first-in-class clinical compound, GRC 15300, which is currently in Phase I clinical development.

•

In April 2010, ~~sanofi-aventis~~Sanofi signed a global license agreement with CureDM Group Holdings, LLC for Pancreate™, a novel human peptide which could restore a ~~patient’s~~patient's ability to produce insulin and other pancreatic hormones in both type 1 and 2 diabetes.

•

In December 2009, ~~sanofi-aventis~~Sanofi and the U.S. biotechnology company Alopexx Pharmaceuticals LLC simultaneously signed (i) a collaboration agreement, and (ii) an option for a license on an antibody for the prevention and treatment of infections originating in the bacterium that causes plague and other serious infections.

•

At end September 2009, ~~sanofi-aventis~~Sanofi and Merrimack Pharmaceuticals Inc. signed an exclusive global licensing and collaboration agreement covering the MM-121 molecule for the management of solid malignancies.

•

In May 2009, ~~sanofi-aventis~~Sanofi signed a global license agreement in oncology with the biotechnology company Exelixis, Inc. for XL147 and ~~XL765, and simultaneously~~XL765. Simultaneously Sanofi signed an exclusive research collaboration agreement for the discovery of inhibitors of Phosphoinositide-3 Kinase (PI3K) for the management of malignant ~~tumors.~~

tumors, that was terminated on December 22, 2011.

•

May 2009: collaboration and licensing agreement with Kyowa Hakko Kirin Co., Ltd, under which Sanofi obtained the worldwide rights to the anti-LIGHT fully human monoclonal antibody. This anti-LIGHT antibody is presently at preclinical development stage, and is expected to be first-in-class in the treatment of ulcerative colitis and Crohn's disease.

•

In September 2003, ~~sanofi-aventis~~Sanofi signed a collaboration agreement in oncology with Regeneron Pharmaceuticals Inc. (Regeneron) to develop the Vascular Endothelial Growth Factor (VEGF) Trap program. Under the terms of the agreement, ~~sanofi-aventis~~Sanofi will pay 100% of the development costs of the VEGF Trap. Once a VEGF Trap product starts to be marketed, Regeneron will repay 50% of the development costs (originally paid by ~~sanofi-aventis)~~Sanofi) in accordance with a formula based on ~~Regeneron’s~~Regeneron's share of the profits.

•

In November 2007, ~~sanofi-aventis~~Sanofi signed another collaboration agreement with Regeneron to discover, develop and commercialize fully-human therapeutic antibodies. This agreement was broadened, and its term ~~extended;~~extended, on November 10, 2009. Under the terms of the development agreement, ~~sanofi-aventis~~Sanofi committed to fund 100% of the development costs of ~~Regeneron’s~~Regeneron's antibody research program until 2017. Once a product begins to be marketed, Regeneron will repay out of its profits (provided they are sufficient) half of the development costs borne by ~~sanofi-aventis.~~

Sanofi.

~~Sanofi-aventis~~Sanofi has also entered into the following major agreements, which are currently in a less advanced research phase:

•: November 2012: collaboration agreement with Selecta Biosciences to identify and develop treatments against alimentary allergies using a nanoparticle-based technology.
•: June 2011: exclusive worldwide research collaboration agreement and license option with Rib-X Pharmaceuticals, Inc. (Rib-X) for novel classes of antibiotics resulting from Rib-X's RX-04 program for the treatment of resistant Gram-positive and resistant Gram-negative pathogens.
•: December 2010: a global licensing and patent transfer agreement with Ascendis Pharma (Ascendis) on the proprietary Transcon Linker and Hydrogel Carrier technology developed by Ascendis for precise, time-controlled release of therapeutic active ingredients into the body. The agreement will enable ~~sanofi-aventis~~Sanofi to develop, manufacture and commercialize products combining this technology with active molecules for the treatment of diabetes and related disorders.

•

December 2010: alliance with Avila Therapeutics Inc. (Avila) to discover target covalent drugs for the treatment of cancers, directed towards six signaling proteins that are critical in tumor cells. Under the terms of the agreement, Sanofi will have access to Avila's proprietary Avilomics^TM platform offering "protein silencing" for these pathogenic proteins.

•

~~December 2010: alliance with Avila Therapeutics~~ Inc. (Avila) to discover target covalent drugs for the treatment of cancers, directed towards six signaling proteins that are critical in tumor cells. Under the terms of the agreement, sanofi-aventis will have access to Avila’s proprietary Avilomics^TM ~~platform offering “protein silencing” for these pathogenic proteins.~~

December 2010: an exclusive global licensing option with Oxford BioTherapeutics for three existing antibodies, plus a research and collaboration agreement to discover and validate new targets in oncology.

•

September 2010: alliance with the Belfer Institute of Applied Cancer Science at the Dana-Farber Cancer Institute (DFCI) to identify novel targets in oncology for the development of new therapeutic agents directed towards these targets and their associated biomarkers. Under the terms of the agreement, ~~sanofi-aventis~~Sanofi will have access to the Belfer ~~Institute’s~~Institute's anticancer target identification and validation platform and to its translational medicine resources. ~~Sanofi-aventis~~Sanofi also has an option over an exclusive license to develop, manufacture and commercialize novel molecules directed towards the targets identified and validated under this research collaboration.

•

June 2010: alliance with Regulus Therapeutics Inc. to discover, develop and commercialize novel micro-RNA therapeutics, initially in fibrosis. ~~Sanofi-aventis~~Sanofi also received an option, which if exercised, would provide access to the technology to develop and commercialize other micro-RNA based therapeutics, beyond the first four targets.

~~June 2010: exclusive global collaboration and license~~

•

October 2009: agreement with ~~Ascenta Therapeutics,~~Micromet, Inc. to develop a ~~U.S. biopharmaceutical company, on~~BiTE® antibody against a ~~number~~tumor antigen present at the surface of ~~molecules that could restore apoptosis (cell death) in tumor~~carcinoma cells.

In June 2012, Sanofi decided to stop the BiTE® project and terminated the collaboration with Micromet.

•

~~October 2009: agreement with Micromet, Inc. to develop a BiTE~~^® ~~antibody against a tumor antigen present at the surface of carcinoma cells.~~

May 2009: collaboration and licensing agreement with Kyowa Hakko Kirin Co., Ltd., under which sanofi-aventis obtained the worldwide rights to the anti-LIGHT fully human monoclonal antibody. This anti-LIGHT antibody is presently at preclinical development stage, and is expected to be first-in-class in the treatment of ulcerative colitis and Crohn’s disease.

In the Vaccines segment, ~~sanofi pasteur~~Sanofi Pasteur has entered into a number of collaboration agreements. Milestone payments relating to development projects under those agreements amounted to ~~€0.3~~€0.2 billion in ~~2010.~~2012.

In December 2009, ~~sanofi pasteur~~Sanofi Pasteur signed a donation letter to the World Health Organization (WHO). The terms of the agreement committed ~~sanofi pasteur~~Sanofi Pasteur to donate 10% of its future output of vaccines against A(H1N1), A(H5N1) or any other influenza strain with pandemic potential, up to a maximum of 100 million doses. Since this agreement was put in place, ~~sanofi pasteur~~Sanofi Pasteur has already donated to the WHO some of the doses covered by the commitment.

Critical accounting and reporting policies

Our consolidated financial statements are affected by the accounting and reporting policies that we use. Certain of our accounting and reporting policies are critical to an understanding of our results of operations and financial condition, and in some cases the application of these critical policies can be significantly affected by the estimates, judgments and assumptions made by management during the preparation of our consolidated financial

statements. The accounting and reporting policies that we have identified as fundamental to a full understanding of our results of operations and financial condition are the following:

•: Revenue recognition. Our policies with respect to revenue recognition are discussed in Note B.14. to our consolidated financial statements included at Item 18 of this annual report. Revenue arising from the sale of goods is presented in the income statement under ~~“Net sales”~~"Net sales". Net sales comprise revenue from sales of pharmaceutical products, vaccines, and active ingredients, net of sales returns, of customer incentives and discounts, and of certain sales-based payments paid or payable to the healthcare authorities. Revenue is recognized when all of the following conditions have been met: the risks and rewards of ownership have been transferred to the customer; the Group no longer has effective control over the goods sold; the amount of revenue and costs associated with the transaction can be measured reliably; and it is probable that the economic benefits associated with the transaction will flow to the Group.

We offer various types of price reductions on our products. In particular, products sold in the United States are covered by various programs (such as Medicare and Medicaid) under which products are sold at a discount. Rebates are granted to healthcare authorities, and under contractual arrangements with certain customers. Some wholesalers are entitled to chargeback incentives based on the selling price to the end customer, under specific contractual arrangements. Cash discounts may also be granted for prompt payment. The discounts, incentives and rebates described above are estimated on the basis of specific contractual arrangements with our customers or of specific terms of the relevant regulations and/or agreements applicable for transactions with healthcare authorities, and of assumptions ofabout the attainment of sales targets. They are recognized in the period in which the underlying sales are recognized, as a reduction of sales revenue. We also estimate the amount of product returns, on the basis of contractual sales terms and reliable historical data; the same recognition principles apply to sales returns. For additional details regarding the financial impact of discounts, rebates and sales returns, see Note D.23. to our consolidated financial statements included at Item 18 of this annual report.

Non-product revenues, mainly comprising royalty income from license arrangements that constitute ongoing operations of the Group, are presented in ~~“Other revenues”~~"Other revenues".

•: Business combinations. As discussed in Note B.3. ~~“Business~~"Business combinations and transactions with non-controlling ~~interests”~~interests" to our consolidated financial statements included at Item 18 of this annual report, business combinations are accounted for by the acquisition method. The ~~acquiree’s~~acquiree's identifiable assets, liabilities and contingent liabilities that satisfy the recognition criteria of IFRS 3 ~~“Business combinations”~~"Business combinations" are measured initially at their fair values as at the acquisition date, except for non-current assets classified as held for sale, which are measured at fair value less costs to sell. Business combinations completed on or after January 1, 2010 are accounted for in accordance with the revised IFRS 3 and the revised IAS 27, ~~“Consolidated~~"Consolidated and individual financial ~~statements”~~statements". In particular, contingent consideration to former owners agreed in a business combination, e.g. in the form of ~~milestone~~ payments upon the achievement of certain R&D milestones, is recognized as a liability at fair value as of the acquisition date. Any subsequent changes in amounts recorded as a liability are recognized in the consolidated income ~~statement.~~statement (see Note D.18. "Liabilities related to business combinations and non-controlling interests" to our consolidated financial statements included at Item 18 of this annual report).

•

Goodwill impairment and intangible assets. As discussed in Note B.6. ~~“Impairment~~"Impairment of property, plant and equipment, intangible assets, and investments in associates and joint ~~ventures”~~ventures" and in Note D.5. ~~“Impairment~~"Impairment of intangible assets and property, plant and ~~equipment”~~equipment" to our consolidated financial statements included at Item 18 of this annual report, we test our intangible assets periodically for impairment. ~~The most significant intangible assets that we test for impairment are those resulting from the business combination of Sanofi-Synthélabo and Aventis in 2004.~~ We test for impairment on the basis of the same objective criteria that were used for the initial valuation. Our initial valuation and ongoing tests are based on the relationship of the value of our projected future cash flows associated with the asset to either the purchase price of the asset (for its initial valuation) or the carrying amount of the asset (for ongoing tests). The determination of the underlying assumptions relating to the recoverability of intangible assets is subjective and requires the exercise of considerable judgment. Key assumptions relating to goodwill impairment and intangible assets are the perpetual growth rate and the post-tax discount rate. Any changes in key assumptions could result in an impairment charge. A sensitivity analysis to the key assumptions is ~~performed and~~ disclosed in Note D.5. ~~“Impairment~~ "Impairment

of intangible assets and property, plant and ~~equipment”~~equipment" to our consolidated financial statements included at Item 18 of this annual report.

•: Pensions and post-retirement benefits. As described in Note B.23. ~~“Employee~~"Employee benefit ~~obligations”~~obligations" to our consolidated financial statements included at Item 18 of this annual report, we recognize our pension and retirement benefit commitments as liabilities on the basis of an actuarial estimate of the potential rights vested in employees and retirees as of the balance sheet date, net of the valuation of funds to meet these obligations. We prepare this estimate at least on an annual basis, taking into account actuarial assumptions, including life expectancy, staff turnover, salary growth, long-term return on plan assets, retirement and discounting of amounts payable. ~~Pensions~~The key assumptions for pensions and post-retirement benefits ~~key assumptions~~ are the discount rate and the expected long term rate of return on plan assets.

Depending on the discount rate used, the pension and post-retirement benefit expense could vary within a range of outcomes and have a material effect on equity because in applying IAS 19 (Employee Benefits), we have elected to recognize all actuarial gains and losses (including the impact of a change in discount rate) immediately through equity. A sensitivity analysis to discount rate is ~~performed~~set forth in Note D.19.1. ~~“Provisions~~"Provisions for pensions and other ~~benefits”~~benefits" to our consolidated financial statements included at Item 18 of this annual report.

Depending on the expected long term rate of return on plan assets used, the pension and post-retirement benefit expense could vary within a range of outcomes and have a material effect on reported earnings. A sensitivity analysis to expected long term rate of return is ~~performed~~set forth in Note D.19.1. ~~“Provisions~~"Provisions for pensions and other ~~benefits”~~benefits" to our consolidated financial statements included at Item 18 of this annual report. As indicated in Note B.28.1. to our consolidated financial statements, the amended IAS 19 issued by the IASB in June 2011 will be applicable as from January 1, 2013 to our consolidated financial statements. The comparative periods presented in the 2013 financial statements will require retrospective application of the new standard. The application of this change would have reduced business net income by €47 million in 2011 and by €78 million in 2012. The impact of this change on shareholders' equity would have been negligible.

•

•Deferred taxes. As discussed in Note B.22. ~~“Income~~"Income tax ~~expense”~~expense" to our consolidated financial statements included at Item 18 of this annual report, we account for deferred taxes using the liability method, whereby deferred income taxes are recognized on tax loss carry-forwards, and on the difference between the tax base and carrying amount of assets and liabilities. We calculate our deferred tax assets and liabilities using enacted tax rates applicable for the years during which we estimate that the temporary differences are expected to reverse. We do not recognize deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. The estimates of recognized deferred tax assets are based on our assumptions regarding future profits and the timing of reversal of temporary differences. These assumptions are regularly reviewed; however, final deferred income tax could differ from those estimates.

and liabilities using enacted tax rates applicable for the years during which we estimate that the temporary differences are expected to reverse. We do not recognize deferred tax assets when it is more likely than not that the deferred tax assets will not be realized. The estimates of recognized deferred tax assets are based on our assumptions regarding future profits and the timing of reversal of temporary differences. These assumptions are regularly reviewed; however, final deferred income tax could differ from those estimates.

•

Provisions for risks. ~~Sanofi-aventis~~ Sanofi and its subsidiaries and affiliates may be involved in litigation, arbitration or other legal proceedings. These proceedings typically are related to product liability claims, intellectual property rights, compliance and trade practices, commercial claims, employment and wrongful discharge claims, tax assessment claims, waste disposal and pollution claims, and claims under warranties or indemnification arrangements relating to business divestitures. As discussed in Note B.12. ~~“Provisions~~"Provisions for ~~risks”~~risks" at Item 18 of this annual report, we record a provision where we have a present obligation, whether legal or constructive, as a result of a past event; when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and when a reliable estimate can be made of the amount of the outflow of resources. For additional details regarding the financial impact of provisions for risks see Notes D.19.3. ~~“Other provisions”~~"Other provisions" and D.22. ~~“Legal~~"Legal and Arbitral ~~Proceedings”~~Proceedings" to our consolidated financial statements included at Item 18 of this annual report.



~~1998-2008~~ 1988-2008		Various positions at the GSK group, including President Pharmaceutical Operations for North America
2004-2008		Member of the Cardinal Club (United States)

~~Past directorships held since 2006~~

~~Director of GlaxoSmithkline plc until November 2008 (United Kingdom)~~

~~Member of the Board of Triangle United Way (United States, 2003-2008), of Cardinal Club (United States, 2004-2008) and GlaxoSmithKline NC Foundation (United States, 2003-2008)~~

~~Vice Chairman of Portfolio Management Board of GSK plc (United Kingdom, 2007-2008)~~

~~Member of Advisory Council of Center for Healthcare Transformation (United States, until 2010)~~


Laurent Attal	Date of birth:	February 11, 1958
500 shares	Nationality:	French
	First elected:	May 2012
	Term expires:	2016

Directorships and appointments of Laurent Attal


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• ~~Uwe Bicker~~Director of Sanofi* ~~Independent Director~~– Member of the Strategy Committee of Sanofi		• Director ofFondation d'Entreprise L'Oréal
In foreign companies
None		None
Past directorships held since 2008
In French Companies
None		None

Table of Contents

In foreign companies

None

•

President and Chief Executive Officer of L'Oréal USA (United States, until 2009)

Education and business experience

•: Doctor in medicine, dermatologist
•: MBA from INSEAD (Institut Européen d'Administration des Affaires)


Since 1986		Various positions within the L'Oréal* Group notably within the active cosmetics division
Since 2002		Member of L'Oréal* Executive Committee
Since 2010		Executive Vice-President Research and Innovation at L'Oréal*


Uwe Bicker	Date of ~~birth~~birth:	June 14, 1945
600 shares	Nationality:	German
	First elected:	May 2008
	Last reappointment:	May 2012
	Term expires:	2016

Directorships and appointments of Uwe Bicker


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• ~~Nationality~~Independent director of Sanofi* ~~First elected~~– ~~Term expires~~Member of the Strategy Committee of Sanofi		~~June 14, 1945~~ None
In foreign companies
None		• Trustee of the Aventis Foundation ⁽¹⁾ (not-for-profit, Germany) • ~~German~~Member of the Supervisory Board of Future Capital AG (Germany) • ~~May 2008~~Chairman of the Board of Marburg University (Germany) • ~~2012~~Member of the Advisory Board of Morgan Stanley (Germany)
Past directorships since 2008
In French companies
None		None
In foreign companies
None		• Member of the Board of Trustees of Bertelsmann Stiftung (Bertelsmann Foundation, Germany, until 2011) • Chairman of the Supervisory Board of Siemens Healthcare Diagnostics Holding GmbH (Germany, until 2012) • Vice-Chairman of the Supervisory Board of Epigenomics AG (Germany) and of Definiens AG (Germany, until 2012)

~~600 shares~~

~~Other current directorships and~~⁽¹⁾

No compensation is paid for this office. The appointments

~~Member of the Strategy Committee of sanofi-aventis~~

~~Chairman of the Supervisory Board of Siemens Healthcare Diagnostics Holding GmbH (Germany)~~

~~Vice Chairman of the Supervisory Board of Epigenomics AG (Germany)~~

~~Member of the Supervisory Board of Future Capital AG (Germany) and Definiens AG (Germany)~~

~~Director of Fondation Aventis (Foundation, Germany)~~

~~Chairman of the Board of Marburg University (Germany)~~

~~Member of~~ to the Board of Trustees of ~~Bertelsmann Stiftung (Bertelsmann~~the Foundation ~~Germany)~~are performed independently from Sanofi.

~~Member~~

Table of ~~the Advisory Board of Morgan Stanley (Germany)~~

Contents

Education and business experience

•: Doctorate in chemistry and in medicine

•

Honorary Doctorate, Klausenburg University

•

Honorary Senator, Heidelberg University


~~1975-1994~~ ~~1994-2004~~ Since 1983		Professor at the Medical Faculty of Heidelberg (Germany)
Since 2011		Dean at the Medical Faculty, Heidelberg University (Germany) Managing Director at the University Clinic of Mannheim (Germany)
1975-1994		Various positions at Boehringer Mannheim GmbH (later Roche AG) (Germany)
1994-2004		Various positions at Hoechst group ~~Professor at~~ (Germany)
1997-2007		Chairman of the ~~Medical Faculty~~Supervisory Board of ~~Heidelberg~~ Dade Behring GmbH (Germany)

~~Past directorships held since 2006~~

~~N/A~~


Robert Castaigne	Date of ~~birth~~birth:	April 27, 1946
1,000 shares	Nationality:	French
	First elected:	February 2000
	Last reappointment:	May 2010
	Term expires:	2014

Directorships and appointments of Robert Castaigne


Within the Sanofi Group	~~April 27, 1946~~Outside the Sanofi Group
Current directorships and appointments
In French companies
~~Director~~ • Independent director of Sanofi* – Member of the Audit Committee of Sanofi	~~Nationality~~ • Société Générale: – Director – Member of the Audit, Internal control and Risk Committee • Vinci: – Director – Member of the Audit Committee – Member of the Remuneration Committee
In foreign companies
None	None
Past directorships since 2008
In French companies
None	• ~~French~~Member of the Remuneration Committee of Vinci* (until 2009)
In foreign companies
~~First elected~~None	~~February 2000~~ •
	~~Last reappointment~~	~~May 2008~~
	~~Term expires~~	~~2014~~Director and member of the Audit Committee of Compagnie Nationale à Portefeuille (Belgium, until 2011)

~~500 shares~~

~~Other current directorships and appointments~~

~~Member of the Audit Committee of sanofi-aventis~~

~~Director of Vinci, Société Générale and Compagnie Nationale à Portefeuille (Belgium)~~

~~Member of the Audit Committee of Compagnie Nationale à Portefeuille (Belgium)~~

~~Member of the Audit, Internal control and Risk Committee of Société Générale~~

~~Member of the Financial Statements Committee of Vinci~~

Education and business experience

•

~~Degree from the~~~~Ecole Centrale de Lille~~ ~~and the~~~~Ecole Nationale Supérieure du Pétrole et des Moteurs~~

•: Degree fromEcole Centrale de Lille andEcole Nationale Supérieure du Pétrole et des Moteurs
•: Doctorate in ~~economic sciences~~economics



1972-2008		Various positions at the ~~Total Group,~~Total* group, including Chief Financial Officer and member of the Executive Committee ~~(June 1994 — May 2008)~~

(1994-2008)

~~Past directorships held since 2006~~

~~• Chairman and Chief Executive Officer of Total Chimie (1996-2008) and of Total Nucléaire (1992-2008)~~
• 1995-2008

Director of ~~Elf Aquitaine (2000-2008), of~~ Hutchinson ~~(1995-2008), of Total Gestion Filiales (1994-2008),~~

1996-2008

Director of Omnium Insurance & Reinsurance Company Ltd ~~(Bermuda, 1996-2008), of Petrofina (Belgium, 1999-~~
~~2008), of Total Upstream UK Ltd (United-Kingdom, 2005-2008), Total Gabon (2003-2008), of Arkema~~
~~(2000-2006) and of Alphega (Bermuda, 2000-2006)~~

(Bermuda)

Table of Contents


Thierry Desmarest	Date of birth:	December 18, 1945
1,017 shares	Nationality:	French
	First elected:	February 2000
	Last reappointment:	May 2011
	Term expires:	2015

Directorships and appointments of Thierry Desmarest


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• ~~Thierry Desmarest~~Director of Sanofi* ~~Director~~– Member of the Compensation Committee of Sanofi – Member of the Appointments and Governance Committee of Sanofi – Member of the Strategy Committee of Sanofi		~~Date~~ • Total SA: – Director and Honorary President – Chairman of ~~birth~~the Nominating and Governance Committee ~~Nationality~~– ~~First elected~~Member of the Compensation Committee ~~Last reappointment~~– ~~Term expires~~Member of the Strategy Committee – Chairman ofFondation Total • L'Air Liquide: – Director – Member of the Appointments and Governance Committee – Member of the Compensation Committee
		• Renault group: – Director of Renault SA* – Director of Renault SAS – Chairman of the International Strategy Committee of Renault SA – Member of the Remuneration Committee of Renault SA – Member of the Industrial Strategy Committee of Renault SA • Member of the Board of Directors of l'Ecole Polytechnique and Chairman ofFondation de l'Ecole Polytechnique • Director ofMusée du Louvre
In foreign companies
None		• ~~December 18, 1945~~Bombardier Inc. (Canada): – ~~French~~Director – ~~February 2000~~Member of the Appointments and Governance Committee ~~May 2008~~– ~~2011~~Member of the Human Resources and Compensation Committee
Past directorships since 2008
In French companies
None		• Chairman of the Board of Directors of Total SA* (until 2010) • Member of the Supervisory Board of Areva* (until 2010)
In foreign companies
None		None

~~500 shares~~

~~Other current directorships and appointments~~

~~Member~~Table of ~~the Compensation Committee, the Appointments and Governance Committee and the Strategy Committee of sanofi-aventis~~

~~Director and Honorary President of Total SA~~

~~Director of L’Air Liquide, Renault SA, Renault SAS~~

~~Chairman of the Nominating and Governance Committee of Total S.A.~~

~~Member of the Compensation Committee of Total S.A.~~

~~Chairman of Fondation Total and l’Ecole Polytechnique (Foundations)~~

~~Member of the Appointments and Governance Committee and the Compensation Committee of L’Air Liquide~~

~~Chairman of the International Strategy Committee, member of the Remuneration Committee and member of the Industrial Strategy Committee of Renault SA~~

~~Director, member of the Appointments and Governance Committee, member of the Human Resources and Compensation Committee of Bombardier Inc. (Canada)~~

~~Member of the Board of Directors of l’Ecole Polytechnique~~

~~Director of Musée du Louvre~~

Contents

Education and business experience

•: Degree fromEcole Polytechnique andEcole Nationale Supérieure des Mines de Paris

•

~~Degree from L’~~~~Ecole Polytechnique~~ ~~and L’~~~~Ecole Nationale Supérieure des Mines de Paris~~


2000-2007		CEO and Chairman of the Board of Elf Aquitaine
Since 1981		Various positions at the ~~Total~~Total* group including Chairman and Chief Executive Officer (1995-2007)~~. Chairman of the Board of Directors (February 2007-May 2010); since May 21, 2010. Honorary President of Total SA and Member of the Board of Directors as well as the Chairman of the Total foundation.~~

~~Past directorships held since 2006~~

~~Chairman and Chief Executive Officer of Elf Aquitaine (2000-2007)~~

~~Chairman and Chief Executive Officer of Total S.A. (1995-2007)~~

~~Chairman of the Board of Directors of Total (2007-2010)~~

~~Member of the Supervisory Board of Areva (2001-2010)~~

Lord Douro
~~Independent Director~~

Date of ~~birth~~
~~Nationality~~
~~First elected~~
~~Last reappointment~~
~~Term expires~~
birth:
August 19, 1945
2,000 shares Nationality: British
First elected: May 2002
Last reappointment: May ~~2006~~
2010
Term expires: 2014

~~1,000 shares~~Directorships and appointments of Lord Douro


Within the Sanofi Group		Outside the Sanofi Group
~~Other current~~Current directorships and appointments
In French companies
• Independent Director of Sanofi* • – Member of the Appointments and Governance Committee ~~and~~of Sanofi – Member of the Strategy Committee of ~~sanofi-aventis~~Sanofi		None
In foreign companies
None		• • Chairman of Richemont Holdings UK Ltd (United Kingdom) and Kings College London (United Kingdom) • ~~Director of Pernod Ricard,~~ Compagnie Financière Richemont AGAG* (Switzerland)~~, Abengoa Bioenergy (Spain) and GAM Worldwide (United Kingdom)~~: ~~• Advisor of Crédit Agricole (United Kingdom)~~– • Director – Member of the Appointments Committee and of the Compensation Committee ~~of Compagnie Financière Richemont AG (Switzerland)~~ • Director of ~~RIT Capital~~GAM Worldwide (United Kingdom) • Member of the International Advisory Board of Abengoa SA* (Spain) • RIT Capital* (United Kingdom): – Director – Chairman of the Remuneration Committee and the Conflicts Committee ~~of RIT Capital (United Kingdom)~~ • – Member of the Nominations Committee ~~of RIT Capital (United Kingdom)~~
Past directorships since 2008
In French companies
None		• ~~Education~~Pernod Ricard*: – Director (until 2011) – Member of the Compensation Committee and ~~business experience~~of the Appointments Committee (until 2010)
In foreign companies
None		• Director of Abengoa Bioenergy (Spain, until 2011) • ~~• Degree from Oxford University~~Advisor to Crédit Agricole CIB (United Kingdom, until 2012)

Table of Contents

Education and business experience

•: Master of Arts from Oxford University


1979-1989		Member of the European Parliament
1995-2000		Chairman of Sun Life & Provincial Holdings ~~Plc~~Plc* (United Kingdom)
1993-2005		Chairman of Framlington Ltd (United Kingdom)
2003-2007		Commissioner of English Heritage (United Kingdom)

~~Past directorships held since 2006~~

~~• Member of the Compensation Committee and the Appointments Committee of Pernod Ricard~~


Jean-René Fourtou ~~Independent Director~~	Date of ~~birth~~ ~~Nationality~~ ~~First elected~~ ~~Last reappointment~~ ~~Term expires~~ birth:	June 20, 1939
4,457 shares	Nationality:	French
	First elected:	August 2004
	Last reappointment:	May ~~2008~~ 2012
	Term expires:	2016

Directorships and appointments of Jean-René Fourtou


~~4,457 shares~~ Within the Sanofi Group		Outside the Sanofi Group
~~Other current~~Current directorships and appointments
In French companies
• Independent director of Sanofi* • – Member of the Compensation Committee of Sanofi – Member of the Appointments and Governance Committee ~~and~~of Sanofi – Member of the Strategy Committee of ~~sanofi-aventis~~Sanofi		• • Chairman of the Supervisory Board of ~~Vivendi and of Groupe Canal +~~Vivendi*
In foreign companies
None		• • Member of the Supervisory Board of Maroc ~~Telecom (Morocco)~~Telecom* (Vivendi Group, Morocco)
Past directorships since 2008
In French companies
None		• Chairman of the Supervisory Board of Group Canal+* (until 2011) • Axa: – Vice President, then member of the Supervisory Board (until 2009) – Member of the Ethics and Governance Committee (until 2009) – Director of ~~Axa~~AXA Millésimes SAS ~~and Nestlé (Switzerland)~~(until 2011) • Director of Cap Gemini SA (until 2009)

In foreign companies

~~Education~~None

•

Director of NBC Universal Inc. (United States, until 2010)

•

Director and ~~business experience~~

~~• Degree from~~member of the~~Ecole Polytechnique~~ Compensation Committee of Nestlé* (Switzerland, until 2012)

Table of Contents

Education and business experience

•: Degree fromÉcole Polytechnique


1963-1986		Various positions at the Bossard group, including Chairman and Chief Executive Officer (1977-1986)
1986-1999 ~~1999-2004~~		Chairman and Chief Executive Officer of Rhô~~ne-Poulenc~~ ne-Poulenc*
1999-2004		Vice Chairman of the Management Board, then Vice Chairman of the Supervisory Board and member of the Strategy Committee of ~~Aventis~~ Aventis*
2002-2005		Chairman and Chief Executive Officer of ~~Vivendi~~

Vivendi*
~~Past directorships held since 2006~~
•  2002-2008
Vice ~~President~~Chairman, Chairman then ~~member~~Honorary Chairman of the ~~Supervisory Board~~International Chamber of ~~AXA (1990-2009)~~
~~•  Director of Cap Gemini (2005-2009)~~
~~•  Director of NBC Universal Inc. (United States, 2004-2010)~~
Commerce


Claudie Haigneré ~~Independent Director~~	Date of ~~birth~~ ~~Nationality~~ ~~First elected~~ ~~Term expires~~ birth:	May 13, 1957
500 shares	Nationality:	French
	First elected:	May 2008
	Last reappointment:	May 2012
	Term expires:	2016

Directorships and appointments of Claudie Haigneré


~~500 shares~~ Within the Sanofi Group		Outside the Sanofi Group
~~Other current~~Current directorships and appointments
In French companies
• Independent director of Sanofi* • – Member of ~~the Compensation Committee and~~ the Appointments and Governance Committee of ~~sanofi-aventis~~Sanofi – Member of the Compensation Committee of Sanofi		• France Telecom: – Director – Member of the Strategy Committee • Chairman of the Board of Directors ofLa Géode • Chairman of Universcience ~~(Cité~~(Cité des Sciences et de l'IndustrieandPalais de la Dé~~couverte)~~couverte) • Director ofFondation de France • Director ofFondation CGénial • Director ofFondation d'Entreprise L'Oréal • Director ofFondation Lacoste • Member ofAcadémie des Technologies, ofAcadémie des Sports, ofAcadémie Nationale de l'Air et de l'Espace • Director ofEcole Normale Supérieure (ENS), Campus Condorcet,* and PRES HESAM(Pôle de Recherche et d'Enseignement Supérieur Hautes-Etudes-Sorbonne-Arts-et-Métiers)
In foreign companies
None		None
Past directorships since 2008
In French companies
None		• Counselor at the European Space Agency (until 2009) • Director and Chairman of theCité des Sciences et de l'Industrie (until 2009) • Chairman ofPalais de la Découverte (until 2009) • Director of the Aéro Club de France (until 2011) • Vice President of the IAA (International Academy of ~~Astronautics)~~ ~~• Director of France Telecom, of Aéro-Club de France, of Fondation de France, of Fondation CGénial and of Fondation d’Entreprise L’Oréal (Foundations)~~ ~~• Member of Académie des Technologies, Académie des Sports and Académie Nationale de l’Air et de l’Espace~~ ~~• Member of the Strategy Committee of France Telecom~~Astronautics, until 2011)
In foreign companies
None		None

Table of Contents

Education and business experience

•: Rheumatologist, doctorate in sciences majoring in neurosciences

•

Selected in 1985 by the CNES (French National Space Center) as aan astronaut candidate ~~astronaut~~


1984-1992		Rheumatologist, Cochin Hospital (Paris)
1996		Scientific space mission to the MIR space station (Cassiopée, Franco-Russian mission)
2001		~~Technical~~Scientific and ~~scientific~~technical space mission to the International Space Station (Andromède mission)
2002-2004		Deputy Minister for Research and New Technologies in French government
2004-2005		Deputy Minister for European Affairs
2005-2009		Counselor to at the European Space Agency (ESA)

~~Past directorships held since 2006~~

~~Chairman of the Cité des Sciences and Palais de la Découverte until 2009~~


Igor Landau	Date of birth:	July 13, 1944
500 shares	Nationality:	French
	First elected:	August 2004
	Last reappointment:	May 2011
	Term expires:	2015

Directorships and appointments of Igor Landau


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• Director of Sanofi*		~~Date~~ • Director of ~~birth~~INSEAD (Institut Européen d'Administration des Affaires)
In foreign companies
~~Nationality~~ ~~First elected~~ ~~Last reappointment~~ ~~Term expires~~None		• ~~July 13, 1944~~Chairman of the Supervisory Board of Adidas* (Germany) • ~~French~~Allianz AG* (Germany): – ~~August 2004~~Member of the Supervisory Board – ~~May~~Member of the Audit Committee
Past directorships since 2008
In French companies
None		• Director of HSBC France (until 2012)
In foreign companies
None		• Allianz AG* (Germany, until 2012): – ~~2011~~Member of the Steering Committee – Member of the General Committee – Member of the Mediation Committee – Member of the Nomination Committee

~~12,116 shares~~

~~Other current directorships and appointments~~

~~Chairman of the Supervisory Board of Adidas-Salomon (Germany)~~

~~Director of HSBC France and INSEAD~~

~~Member of the Supervisory Board of Allianz AG (Germany)~~

Education and business experience

•: Degree from HEC (Ecole des Hautes Etudes Commerciales)
•: MBA from INSEAD (Institut Européen d'Aministration des Affaires)

•

~~Degree from the~~~~Ecole des Hautes Etudes Commerciales~~~~(HEC) and from INSEAD (Master of Business Administration)~~


1968-1970		Chief Executive Officer of the German subsidiary of La Compagnie du Roneo ~~(Frankfurt)~~(Germany)
1971-1975		Management consultant at McKinsey ~~(Paris)~~(France)
1975-2004		Various positions at the Rhône-Poulenc group, including member of the Management Board of Aventis (1999-2002) and Chairman of the Management Board of Aventis (2002-2004)
2001-2005		Director of ~~Essilor~~Essilor*
2002-2005		Director of ~~Thomson (now called Technicolor)~~Thomson* (later Technicolor*)
2003-2006		Member of the Supervisory Board of Dresdner Bank (Germany)

~~Past directorships held since 2006~~Table of Contents

~~Member of the Supervisory Board of Dresdner Bank (Germany, 2003-2006)~~


Suet-Fern Lee	Date of birth:	May 16, 1958
500 shares	Nationality:	Singaporean
	First elected:	May 2011
	Term expires:	2015

Directorships and appointments of Suet-Fern Lee


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• ~~Christian Mulliez~~Independent director of Sanofi* ~~Director~~		~~Date~~ • Axa*: – Director – Member of ~~birth~~the Finance Committee
In foreign companies
~~Nationality~~ ~~First elected~~ ~~Last reappointment~~ ~~Term expires~~None		~~November 10, 1960~~ • ~~French~~Director of Macquarie International Infrastructure Fund Ltd* (Bermuda) • ~~June 2004~~Director of National Heritage Board (Singapore) • ~~May 2010~~Director of Rickmers Trust Management Pte Ltd* (Singapore) • ~~2014~~Director of Stamford Coporate Services Pte Ltd (Singapore) • Chairman of the Board of directors of the Asian Civilizations Museum (Singapore)
Past directorships since 2008
In French companies
None		None
In foreign companies
None		• Director of Richina Pacific Limited* (Bermuda, until 2009) • Director of Transcu Group Limited* (Singapore, until 2010) • Director of Sembcorp Industries Ltd* (Singapore, until 2011)

~~1,324 shares~~

~~Other current directorships and appointments~~

~~Vice President, General Manager Administration and Finance of L’Oréal~~

~~Chairman of the Board of Directors of Regefi~~

~~Director of DG 17 Invest, L’Oréal USA Inc., The Body Shop International (United Kingdom) and Galderma Pharma (Switzerland)~~

Education and business experience

•: Law degree from Cambridge University (1980)
•: Admitted to London (1981) and Singapore (1982) Bars
•: Senior Partner of Stamford Law Corporation (Singapore)

•

~~Degree from the~~~~Ecole Supérieure des Sciences Economiques et Commerciales (ESSEC)~~


Since 2006		Member of the Board of Trustees of Nanyang Technological University (Singapore) Member of the Accounting Advisory Board of National University of Singapore Business School (Singapore)
Since 2007		Member of the Advisory Committee of the Singapore Management University School of Law (Singapore)
2000-2007		Director of ECS Holdings Limited* (Singapore)
2004-2007		Director of International Capital Investment Limited (Singapore) Director of Media Asia Entertainment Group Limited (Hong Kong) Director of Transpac Industrial Holdings Limited* (Singapore)
2005-2008		Director of China Aviation Oil* (Singapore)
2006-2008		Director of Sincere Watch* (Hong Kong)
2010-2011		President of the Inter-Pacific Bar Association

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Christian Mulliez	Date of birth:	November 10, 1960
1,423 shares	Nationality:	French
	First elected:	June 2004
	Last reappointment:	May 2010
	Term expires:	2014

Directorships and appointments of Christian Mulliez


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• Director of Sanofi* – Member of the Audit Committee of Sanofi – Member of the Compensation Committee of Sanofi		• Vice President, General Manager Administration and Finance of L'Oréal* • Chairman of the Board of Directors of Regefi • Director of DG 17 Invest
In foreign companies
None		• Director of L'Oréal USA Inc. (United States) • Director of Galderma Pharma (Switzerland) • Director of The Body Shop International (United Kingdom)
Past directorships since 2008
In French companies
None		None
In foreign companies
None		None

Education and business experience

•: Degree from ESSEC (Ecole Supérieure des Sciences Economiques et Commerciales)


Since 2003		Executive Vice President Administration and Finance at L'Oréal*
1984-2002		Various positions at Synthélabo and then at Sanofi-Synthélabo, including Vice President Finance
~~Since 2003~~		~~Executive Vice President Administration and Finance L’Oréal~~

~~Past directorships held since 2006~~

~~N/A~~


Carole Piwnica	Date of birth:	February 12, 1958
500 shares	Nationality:	Belgian
	First elected:	December 2010
	Last reappointment:	May 2012
	Term expires:	2016

Directorships and appointments of Carole Piwnica


Within the Sanofi Group		Outside the Sanofi Group
Current directorships and appointments
In French companies
• ~~Lindsay Owen-Jones~~Independent director of Sanofi* ~~Director~~– Member of the Audit Committee of Sanofi		~~Date~~ • Eutelsat Communications*: – Director – Chairman of ~~birth~~the Committee of Governance, Compensation and Appointment

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In foreign companies
~~Nationality~~ ~~First elected~~ ~~Last reappointment~~ ~~Term expires~~None		• ~~March 17, 1946~~Director of Naxos UK Ltd (United Kingdom) – ~~British~~Director of Big Red (United States) – ~~May 1999~~Director of Elevance (United States) • ~~May 2008~~Director of Amyris Inc.* (United States) • ~~2012~~Director of Louis Delhaize* (Belgium)
Past directorships since 2008
In French companies
None		None
In foreign companies
None		• Director of Toepfer GmbH (Germany, until 2010) • Director of Dairy Crest Plc.* (United Kingdom, until 2010) • Member of the Ethical Committee of Monsanto* (United States, until 2009) • Aviva Plc.* (United Kingdom, until 2011): – Director – Chairman of the Corporate Responsibility Committee – Member of the Compensation Committee

~~15,000 shares~~

~~Other current directorships and appointments~~

~~Member of the Compensation Committee, of the Appointments and Governance Committee and of the Strategy Committee of sanofi-aventis~~

~~Chairman of the Board of Directors of L’Oréal~~

~~Chairman of the Strategy and Implementation Committee of L’Oréal~~

~~Chairman of the Board of Directors of Fondation d’Entreprise L’Oréal (Foundation)~~

~~Chairman of Alba Plus, L’Oréal UK Ltd (United Kingdom) and L’Oréal USA Inc. (United States)~~

~~Director of Ferrari S.p.A. (Italy)~~

Education and business experience

~~Bachelor of Arts (Hons) from Oxford University and degree from INSEAD~~


~~Since 1969~~		~~Various positions at the L’Oréal group, including Chairman and Chief Executive Officer (1988-2006) and Chairman of the Board of Directors since April 25, 2006~~
~~1989-2005~~		~~Director of BNP Paribas~~

•

~~Past directorships held since 2006~~

~~Chief Executive of L’Oréal (1988-2006)~~

~~Vice-President and member of the Supervisory Board of L’Air Liquide (2001-2006)~~

~~Vice-Chairman of the Board of Directors of L’Air Liquide (2006-2009)~~

~~Director of Galderma Pharma until 2006~~

~~Carole Piwnica~~⁽¹⁾

~~Independent Director~~

~~Date of birth~~

~~Nationality~~

~~First elected (Co-optation)~~

~~Term expires~~

~~February 12, 1958~~

~~Belgian~~

~~December 2010~~

~~2012~~

~~Other current directorships and appointments~~

~~Chief executive officer of Naxos UK Ltd (United Kingdom)~~

~~Director and Chairman of the Committee of Governance, Compensation and Appointment of Eutelsat Communications~~

~~Director of Louis Delhaize (Belgium) and Amyris Inc. (United States)~~

~~Director, Chairman of the Corporate Responsibility Committee and member of the Compensation Committee of Aviva Plc (United Kingdom)~~

~~Education and business experience~~

Degree in law,Université Libre de Bruxelles

•

Masters in law, New York University

•

Admitted to Paris and New York Bars


1985-1991		Attorney at Proskauer, Rose ~~(NY)~~(New York) and Shearman & Sterling (Paris) with practice in mergers and acquisitions
1991-1994		General Counsel of Gardini & Associés
1994-2000		Chief Executive Officer of Amylum France, then Chairman of Amylum Group
1998-2004		Director of Spadel (Belgium)
1996-2006		Director of Tate & Lyle Plc. (United Kingdom)
2000-2006		Director and Vice-Chairman of Tate & Lyle Plc. for Governmental Affairs (United Kingdom)
1996-2006		Chairman of the Liaison Committee and director of theConfédération Européenne des Industries Agro-Alimentaires (CIAA)
2000-2006		Chairman of the Export Commission and director of theAssociation Nationale des Industries Alimentaires (ANIA)

~~Past directorships held since 2006~~Table of Contents

~~Director of Dairy Crest Plc (United Kingdom, 2007-2010)~~

~~Vice-Chairman and Director of Tate & Lyle Plc (United Kingdom, 1996-2006) and Vice-Chairman for Governmental Affairs (2000-2006)~~

~~Director of the CIAA (Confederation of the Food and Drink Industries of the European Union) (1996-2006)~~

~~Director of Toepfel GmbH (Germany, 1996-2010) and of Spadel (Belgium, 1998-2004)~~

~~Member of the Ethical Committee of Monsanto (United States, 2006-2009)~~


Klaus Pohle ~~Independent Director~~	Date of ~~birth~~ ~~Nationality~~ ~~First elected~~ ~~Last reappointment~~ ~~Term expires~~ Birth:	November 3, 1937
2,500 shares	Nationality:	German
	First appointment:	August 2004
	Last reappointment:	May ~~2008~~ 2012
	Term expires:	2016

Directorships and appointments of Klaus Pohle


Within the Sanofi Group		Outside the Sanofi Group
~~2,500 shares~~ ~~Other current~~Current directorships and appointments
In French companies
• Independent director of Sanofi* • – Chairman of the Audit Committee of ~~sanofi-aventis~~Sanofi		None
In foreign companies
None		• ~~• Director~~Trustee of ~~Labelux Group~~Aventis Foundation⁽²⁾ (not-for-profit, Germany)
Past directorships since 2008
In French companies
None		None
In foreign companies
None		• DWS Investment GmbH, ~~(Switzerland)~~Frankfurt (Germany, until 2009): ~~• Director and~~ – Member of the Supervisory Board – Chairman of the Audit Committee • Director of Labelux Group GmbH* (Switzerland, until 2011) • Coty Inc.,* New York (United ~~States)~~States, until 2011): ~~• Professor of business administration at Berlin Institute of Technology (Germany)~~– Director – ⁽¹⁾ ~~In accordance with~~Chairman of the ~~Articles of Association, Carole Piwnica will buy 500 shares.~~Audit Committee

Education and business experience

•: Doctorate in economics from Berlin University (Germany)
•: Doctorate in law from Frankfurt University (Germany)
•: LLM from Harvard University (United States)
•: Professor of Business Administration at the Berlin Institute of Technology (Germany)

~~Education and business experience~~
~~• Doctorate in law from Frankfurt University (Germany)~~
~~• Doctorate in economics from Berlin University (Germany)~~
~~• Masters in law from Harvard University~~
~~• Professor of Business Administration at the Berlin Institute of Technology~~


1966-1980		Various positions at the BASF group (Germany)
1981-2003		Deputy Chief Executive Officer and Chief Financial Officer of Schering AG (Germany)
2003-2005		Chairman of the German Accounting Standards Board

(Germany)

~~Past directorships held since 2006~~

~~• President~~2004-2008

Various positions at Hypo Real Estate Holding AG*, Munich, including Chairman of the Supervisory Board ~~(in 2008) and Vice-President of the Supervisory Board of Hypo Real Estate Holding AG, Munich~~ (Germany)

~~• Member of the Supervisory Board of DWs investment GmbH (Germany, prior to 2005-2009)~~

⁽²⁾: No compensation is paid for this office. The appointments to the Board of Trustees of the Foundation are performed independently from Sanofi.

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Gérard Van Kemmel ~~Independent Director~~	Date of ~~birth~~ ~~Nationality~~ ~~First elected~~ ~~Last reappointment~~ ~~Term expires~~ birth:	August 8, 1939
1,005 shares	Nationality:	French
	First elected:	May 2003
	Last reappointment:	May ~~2007~~ 2011
	Term expires:	2015

Directorships and appointments of Gérard Van Kemmel


~~500 shares~~ Within the Sanofi Group		Outside the Sanofi Group
~~Other current~~Current directorships and appointments
In French companies
• Independent director of Sanofi* • – Chairman of the Compensation Committee of Sanofi – Member of the Audit Committee ~~and~~of Sanofi – Member of the Appointments and Governance Committee of ~~sanofi-aventis~~Sanofi		• ~~• Director of Europacorp~~Europacorp*: • – Director – Member of the Audit Committee ~~of Europacorp~~

In foreign companies
None		None
Past directorships since 2008
In French companies
~~Education and business experience~~None		• ~~• Graduate~~Director of ~~the~~~~Ecole des Hautes Etudes Commerciales (HEC)~~Groupe Eurotunnel* (until 2010)
In foreign companies
None		• ~~MBA degree from the Stanford Business School~~ Director of Eurotunnel NRS Holders Company Limited (United Kingdom, until 2010)

Education and business experience

•: Graduate of HEC (Ecole des Hautes Etudes Commerciales)
•: MBA from the Stanford Business School


1966-1995		Various positions including President of Arthur Andersen and Andersen Consulting in France (1976-1995) and Chairman of the Board of Arthur Andersen Worldwide (1989-1994)
1996-1997		~~Advisor,~~Senior advisor to French Finance Minister
1997-2006		Various positions at Cambridge Technology Partners ~~(Chief~~including Chief Operating ~~Officer) and at Novell (Chairman EMEA)~~

Officer

~~Past directorships held since 2006~~

•2004-2006

Various positions at Novell* including President EMEA then Europe Chairman ~~of Novell (United States, 2004-2006)~~

~~• Director of Groupe Eurotunnel~~

~~• Director of Eurotunnel NRS Holders Company Limited (United Kingdom, until 2010)~~

During 2010 the Board of Directors met nine times, with an overall attendance rate among Board members of more than 90.17%. This attendance rate is particularly high, given that several meetings were called at short notice, largely as a result of the project to acquire Genzyme. Notwithstanding, participation in Board meetings by conference call remained limited to extraordinary meetings, and applied to only a limited number of directors.

~~Several changes in the~~The composition of the Board of Directors ~~occurred~~changed in ~~2010. Jean-Marc Bruel did not seek reappointment upon expiration~~2012. The term of ~~his term~~office of Lindsay Owen-Jones expired at the close of the Shareholders' General Meeting held on May ~~17, 2010. On the same day, following the Shareholder’s General Meeting Jean-François Dehecq resigned as a Director. On July 1, 2010, Patrick de La Chevardière~~

~~announced his resignation~~4, 2012. Laurent Attal was appointed as a Director ~~and on December 15, 2010, Carole Piwnica was co-opted by the Board~~ of ~~Directors to serve for his remaining term of office, subject to shareholder ratification~~our Company at the ~~upcoming~~Shareholders' General Meeting ~~scheduled for~~held on May ~~6, 2011.~~4, 2012.

Executive Committee

The Executive Committee is chaired by the Chief Executive Officer.

The Committee meets ~~twice~~once a month, and has the following permanent members:

•: Christopher Viehbacher,, Chief Executive Officer;

•

Olivier Charmeil,Senior Vice President Vaccines;

•

Jérôme Contamine,, Executive Vice President Chief Financial Officer;

•

David-Alexandre Gros, Senior Vice President Chief Strategy Officer;

•

Karen Linehan,, Senior Vice President Legal Affairs and General Counsel;

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•: Philippe Luscan,, Senior Vice President Industrial Affairs;

•

Roberto Pucci,, Senior Vice President Human Resources;

•

Hanspeter Spek,, President Global Operations; and

•

Elias Zerhouni,, President, Global Research and ~~Development~~Development.

The name, business address, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the executive officers of ~~Sanofi-Aventis~~Sanofi are set forth below. The business address and phone number of each such executive officer is c/o ~~Sanofi-Aventis, 174, avenue de France, 75013~~Sanofi, 54 rue La Boétie, 75008 Paris, France, +33 1 53 77 40 00. Unless otherwise indicated, each executive officer is a citizen of France.

Christopher Viehbacher

Chief Executive Officer

Chairman of the Executive Committee

Date of ~~birth :~~birth: March 26, 1960

Christopher Viehbacher was appointed as Chief Executive Officer inon December 1, 2008, and is also a member of the Strategy Committee.

For additional information regarding his professional education and business experience see ~~“Composition~~"Composition of the Board of Directors as of December 31, ~~2010”~~2012" in ~~“A.~~"A. Directors and Senior ~~Management”~~Management" on this Item 6.

Christopher Viehbacher is a citizen of Germany and Canada.

Olivier Charmeil

Senior Vice President Vaccines
~~since January 1, 2011~~

Date of ~~birth :~~birth: February 19, 1963

Olivier Charmeil is a graduate of HEC (Ecole des Hautes Etudes Commerciales) and of theInstitut ~~d’Etudes~~d'Etudes Politiques in Paris. From 1989 to 1994, he worked in the Mergers & Acquisitions department of Banque de ~~l’Union europé~~l'Union Européenne. He joined Sanofi Pharma in 1994 as head of Business Development. Subsequently, he held various posts within the Group, including Chief Financial Officer (Asia) for Sanofi-Synthélabo in 1999 andAttaché to the Chairman, Jean-François Dehecq, in 2000, before being appointed as Vice President, Development within the Sanofi-Synthélabo International Operations Directorate, where he was responsible for China and support functions. In 2003, Olivier Charmeil was appointed Chairman and Chief Executive Officer of Sanofi-Synthélabo France, before taking the post of Senior Vice President, Business Management and Support within the Pharmaceutical Operations Directorate. In this role, he piloted the operational integration of Sanofi-Synthélabo and Aventis. He was appointed Senior Vice President ~~Pharma~~Asia/Pacific, Pharmaceutical Operations ~~Asia Pacific~~ in February 2006 and ~~subsequently also had responsibility for~~since January 1, 2008, Operations Japan have reported to him as well as Asia/Pacific and Japan Vaccines since February ~~2009 Asia/Pacific & Japan Vaccines.~~2009. Since January 1, 2011, Olivier Charmeil has ~~been~~served as Senior Vice President Vaccines and a member of the Executive Committee.

Jérôme Contamine

Executive Vice President Chief Financial Officer

Date of ~~birth :~~birth: November 23, 1957

Jérôme Contamine is a Graduate ofÉcole Polytechnique(X),ENSAE, and~~ENSAE, the national statistics and economics engineering school, affiliated with the Ministry of Finance (1982). He also graduated from the~~ENA(Ecole Nationale ~~d’Administration~~d'Administration). After 4four years at the“"Cour des ~~Comptes”~~Comptes", as a Senior State General Auditor, he joined Elf Aquitaine in 1988, as advisor to the Chief Financial Officer, and became Group Finance and Treasury Director ~~& Treasurer~~ in 1991. He became the General Manager of Elf Petroleum Norway in 1995, after being named Deputy Vice President of Elf Upstream Division for Europe and the U.S. In 1999, he was appointed as a member of the taskforce for integration with Total, in charge of the reorganization of the merged entity, TotalFinaElf, and in 2000 became Vice President Europe and Central Asia, Upstream Division of Total. The same year, he joined Veolia Environnement as CFO and Deputy General Manager. In 2003, he was appointed Vice-President Senior Executive, Deputy Chief

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Executive Officer, Financial Director of Veolia Environnement. Jérôme Contamine ~~was appointed~~joined Sanofi as Executive Vice President, Chief Financial Officer (CFO) of ~~sanofi-aventis~~Sanofi in March 2009.

David-Alexandre Gros
Chief Strategy Officer
Date of birth: July 23, 1972

David-Alexandre Gros has a B.A. from Darmouth College (1995), an M.D. from Johns Hopkins University School of Medicine (1999), and an M.B.A. from Harvard Business School (2002). He began his career in clinical research at the Department of Urology of the Johns Hopkins Hospital, from 1996 to 1999, and acquiring clinical experience as a Resident Physician at the University of Pennsylvania Health System from 1999 to 2000. He started his advisory career in 2002 at McKinsey & Company as an Associate, was promoted to Engagement Manager in 2004 and to Associate Principal in 2006. In late 2006, he was appointed Vice President at Merrill Lynch, serving healthcare clients on a wide range of strategic, corporate finance and merger & acquisition issues. In 2009, he joined Centerview Partners, in San Franciso, California, as an advisor to healthcare companies as a Principal and founding member of the Healthcare Investment Banking practice. David-Alexandre Gros joined Sanofi as Chief Strategy Officer in September 2011.

Karen Linehan

Senior Vice President Legal Affairs and General Counsel

Date of ~~birth :~~birth: January 21, 1959~~1959~~

Karen Linehan graduated from Georgetown University with Bachelor of Arts and Juris Doctorate degrees. Prior to practicing law, Ms. Linehan served on the congressional staff of the Speaker of the U.S. House of Representatives from September 1977 to August 1986. Until December 1990, she was an Associate in a mid-size law firm in New York. In January 1991, she joined Sanofi as Assistant General Counsel of its U.S. subsidiary. In July 1996, Ms. Linehan moved to Paris to work on international matters within the Group and she has held a number of positions within the Legal Department, most recently as Vice President — Deputy Head of Legal Operations. She was appointed to her current position in March 2007.

Karen Linehan is a citizen of the United States of America and Ireland.

Philippe Luscan

Senior Vice President Industrial Affairs

Date of ~~birth :~~birth: April 3, 1962~~1962~~

Philippe Luscan is a graduate of theÉcole Polytechnique and theÉcole des Minesin Biotechnology in Paris. He began his career in 1987 as a Production Manager at Danone. In 1990, he joined the Group as Director of the Sanofi Chimie plant at Sisteron, France, and subsequently served as Industrial Director of Sanofi in the United States, as Vice President Supply Chain and as Vice President Chemistry in September 2006. He was appointed to his present position ~~effective~~in September 2008.

Roberto Pucci

Senior Vice President Human Resources

Date of ~~birth :~~birth: December 19, 1963~~1963~~

Roberto Pucci has a ~~Law~~law degree from the University of Lausanne, Switzerland. He started his career in 1985 at Coopers & Lybrand in Geneva, Switzerland as an external auditor. He then joined Hewlett-Packard (HP) in 1987, where he held various positions in Human Resources in Switzerland and Italy including HR Manager for the European Headquarters and Human Resources Director in Italy. In 1999, he became Director, Compensation & Benefits for Agilent Technologies, a spin off from HP, and was appointed Vice President Human Resources Europe in 2003. In 2005 he moved to the United States to join Case New Holland, a subsidiary of the Fiat Group, as Senior Vice President, Human Resources, and was appointed, in 2007, Executive Vice President, Human Resources for the Fiat Group in Torino, Italy. ~~He was appointed to his present position~~Roberto Pucci joined Sanofi as Senior Vice President Human Resources in October 2009.

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Roberto Pucci is a citizen of Italy and Switzerland.

Hanspeter Spek

President Global Operations

Date of ~~birth :~~birth: November 5, 1949~~1949~~

Hanspeter Spek graduated from business school in Germany. In 1974, he completed a management training program at Pfizer International, and then joined Pfizer RFA as a junior product manager. He served in various positions at Pfizer RFA, including as manager of the marketing division. Mr. Spek joined Sanofi Pharma GmbH, a German subsidiary of Sanofi, in 1985 as Marketing Director, and served in various positions in Germany and then at Sanofi in France, before being named Senior Vice President Europe following the merger with Synthélabo in 1999. He served as Executive Vice President, International Operations from October 2000, ~~until~~to January 2003, when he was named in charge of worldwide operations of Sanofi-Synthélabo. He was appointed Executive Vice President, Pharmaceutical Operations in August ~~2004 and then~~2004. Since November 2009, he has been President, Global ~~Operations in November 2009.~~Operations.

Hanspeter Spek has announced his intention to retire by mid-2013.

Hanspeter Spek is a citizen of Germany.

Elias Zerhouni

President, Global Research and Development
~~since January 2011~~

Date of ~~birth :~~birth: April 12, 1951

~~After completing~~Born in Algeria where he completed his initial medical training, ~~in Algeria,~~ Dr. Zerhouni continued his academic career at the Johns Hopkins University and Hospital (United States) in 1975 where he ~~is currently~~rose to the rank of professor of Radiology and Biomedical ~~engineering and senior adviser for Johns Hopkins Medicine.~~engineering. He served as Chair of the Russell H. Morgan Department of Radiology and Radiological Sciences, Vice Dean for Research and Executive Vice Dean of the School of Medicine from 1996 to 2002 before his appointment as Director of the National Institutes of Health of the United States of America from 2002 to 2008. Dr. Zerhouni was received as member of the USU.S. National Academy of ~~Sciences’~~Sciences' Institute of Medicine in 2000. He was ~~recently~~ appointed as Chair of Innovation at the College de France, ~~and~~ elected member of the French Academy of Medicine in ~~2010.~~2010 and received the Transatlantic Innovation Leadership award in December 2011. He is the author of over 200 scientific publications and 8 patents. In February 2009, ~~Sanofi-Aventis~~Sanofi named Dr. Zerhouni Scientific Advisor to the Chief Executive Officer and to the Senior Vice-President Research & Development. ~~Since January 1, 2011, Dr. Zerhouni is~~He was appointed President Global Research & Development and ~~serves~~has served on the Executive Committee of ~~Sanofi-Aventis.~~Sanofi, since January 2011. He has just been received as member of the U.S. National Academy of Engineering.

Dr. Zerhouni is a citizen of the United States of America.

As of December 31, ~~2010,~~2012, none of the members of the Executive Committee had ~~any~~their principal business activities outside of ~~sanofi-aventis.~~Sanofi.

The Executive Committee is assisted by ~~a broadly based Management Committee representing~~the Global Leadership Team, which represents the principal ~~services~~functions of the Group. The ~~Management Committee~~Global Leadership Team is made up of the members of the Executive Committee and 1338 additional senior managers. ~~Of the 21 members of the Management Committee, 4 are women, representing approximately 19% of the total.~~

B. Compensation

Compensation and pension arrangements for corporate officers

Christopher Viehbacher has held the office of Chief Executive Officer of Sanofi since December 1, 2008. He was an outside appointment and has never had an employment contract with Sanofi distinct from his current office. The compensation of the Chief Executive Officer is determined by the Board of Directors upon the recommendation of the Compensation Committee with reference to compensation paid to the chief executive officers of ~~leading~~major global pharmaceutical companies and ~~leading~~of major companies in the CAC 40 stock market index. The Chief Executive Officer receives fixed compensation, benefits in kind, and variable compensation. In addition, he may be granted stock options and performance shares. ~~The overall compensation package is set by the Board of Directors on the recommendation of the Compensation Committee. In~~Since 2009, in accordance with the AFEP-MEDEF

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corporate governance code, stock options and, when applicable, performance shares granted to the Chief Executive Officer ~~are~~have been subject to performance conditions (for a more detailed description of the performance conditions see below under “— Christopher Viehbacher” for the compensation payable, stock options granted and performance shares awarded to Christopher Viehbacher).conditions.

~~Jean-François Dehecq~~Serge Weinberg has held the office of ~~non-executive~~ Chairman of the Board of Directors ~~from January 1, 2010 until~~since May 17, ~~2010 when Serge Weinberg took~~2010. He was an outside appointment and has never had an employment contract with Sanofi distinct from his current office. The Chairman of the Board also chairs the Strategy Committee and the Appointments and Governance Committee. In accordance with ~~the Internal Rules of the~~our Board Charter and in close collaboration with the Senior Management, he represents the Company in high-level dealings with governmental bodies and with the ~~Group’s~~Group's key partners, both nationally and ~~internationally; he plays a role~~internationally, and participates in the defining of the major strategic choices of the Group especially as regards mergers, acquisitions and alliances. ~~He maintains regular contact with~~The Chairman and the Chief Executive Officer ~~so that~~keep each ~~is kept~~other fully informed of their actions. The compensation of the ~~other’s actions.~~

~~Serge Weinberg received attendance fees for the period prior to his appointment as~~ Chairman of the Board of Directors ~~on May 17, 2010, and since then has received~~consists solely of fixed compensation and ~~certain benefits in kind but no variable compensation, stock options, performance shares or attendance fees. Jean-François Dehecq received fixed compensation, certain~~ benefits in kind and excludes any variable ~~compensation.~~compensation, any awards of stock options and performance shares and any directors' attendance fees.

The ~~overall~~ compensation ~~package of~~policy for the ~~Chairman~~corporate officers is ~~set~~established by the Board of Directors onupon the recommendation of the Compensation Committee.

The ~~Chairman of the Board and the Chief Executive Officer~~corporate officers do not receive directors' attendance fees in ~~connection with~~ their ~~role~~capacity as ~~directors or members of Board committees of sanofi-aventis. Likewise, the Chairman of the Board~~directors. Consequently, Christopher Viehbacher does not receive directors' attendance fees in ~~connection with~~ his ~~chairmanship~~capacity as a member of the Strategy Committee. Similarly, Serge Weinberg does not receive directors' attendance fees in his capacity as chairman of the Appointments and Governance Committee or as chairman of the Strategy Committee.

The AFEP-MEDEF corporate governance code (hereafter referred to as the "AFEP-MEDEF Code") and the recommendations of theAutorité des marchés financiers (the French market regulator, hereafter referred to as "AMF"), require precise disclosures about the implementation of the recommendations and, if applicable, explanations of the reasons why any of them may not have been implemented. Currently, as reported "— C. Board practices —", there is no divergence from the AFEP-MEDEF Code related to compensation.

Serge Weinberg

Compensation awarded to Serge Weinberg

(in euros)    2010    2009
Compensation payable for the year (details provided in the table below)    480,158       6,215
Value of stock subscription options awarded during the year    N/A       N/A
Value of performance shares awarded during the year    N/A       N/A
Total
   480,158       6,215

*(in euros)*


Compensation payable for the year (details provided in the table below)	708,115	709,463	480,158
Value of stock subscription options awarded during the year	N/A	N/A	N/A
Value of performance shares awarded during the year	N/A	N/A	N/A

Total	708,115	709,463	480,158

Compensation payable and paid to Serge Weinberg

      2010    2009
(in euros)    Payable    Paid    Payable    Paid
Fixed compensation⁽¹⁾    439,748       439,748       0       0
Variable compensation    N/A       N/A       N/A       N/A
Exceptional compensation    N/A       N/A       N/A       N/A
Attendance fees    35,625       6,215       6,215       0
Benefits in kind    4,785       4,785       0       0
Total
   480,158       450,748       6,215       0

	2012				2011				2010


*(in euros)*	Payable		Paid		Payable		Paid		Payable		Paid

Fixed compensation ⁽¹⁾		700,000		700,000		700,000		700,000		439,748		439,748
Variable compensation		N/A		N/A		N/A		N/A		N/A		N/A
Exceptional compensation		N/A		N/A		N/A		N/A		N/A		N/A
Attendance fees ⁽²⁾		N/A		N/A		N/A		35,625		35,625		6,125
Benefits in kind		8,115		8,115		9,463		9,463		4,785		4,785

Total		708,115		708,115		709,463		745,088		480,158		450,748

The amounts reported are gross amounts before taxes.

⁽¹⁾

~~Fixed compensation payable in respect of a given year is paid during that year.~~

⁽¹⁾: Fixed compensation payable in respect of a given year is paid during that year.
⁽²⁾: Attendance fees paid to Serge Weinberg were owed to him from December 15, 2009 until May 17, 2010, i.e. until he became Chairman of the Board. Pursuant to the compensation policy applicable to corporate officers, he has not received directors' attendance fees since his appointment as Chairman of the Board of our Company.

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Serge Weinberg took office as Chairman of the Board of Directors on May 17, 2010.

On March 5, 2012, upon the recommendation of the Compensation Committee, the Board of Directors set the terms of the compensation of Serge Weinberg.

For ~~2010,~~2012, his fixed compensation was ~~set~~maintained at an annual rate of €700,000. ~~Serge Weinberg does~~

He did not receive any variable compensation, stock options, or performance shares. ~~For 2010, the fixed compensation of Serge Weinberg as non-executive Chairman was paid on a~~~~pro rata~~ ~~basis.~~He did not receive attendance fees.

Attendance fees relate to the period starting December 15, 2009 and ending May 17, 2010 prior to Serge Weinberg becoming Chairman. Consequently, in line with the Company’s compensation policy applicable to the Chairman and the Chief Executive Officer, Serge Weinberg no longer receives any attendance fees as a Director since his appointment as Chairman of the Board.

The amount reported for benefits in kind relates principally to a company car.

Serge Weinberg does not benefit from the ~~sanofi-aventis~~Sanofi top-up pension ~~plan which covers Christopher Viehbacher.~~plan.

On March 5, 2013, upon the recommendation of the Compensation Committee, the Board of Directors set the terms of the compensation of Serge Weinberg. For 2013, his fixed compensation is maintained at an annual rate of €700,000. He will not receive any variable compensation, stock options, or performance shares. He will not receive attendance fees.

Christopher Viehbacher

Christopher Viehbacher took office as Chief Executive Officer on December 1, 2008.

Compensation, options and shares awarded to Christopher Viehbacher

(in euros)    2010    2009
Compensation payable for the year (details provided in the table below)    3,605,729       3,669,973
Value of stock subscription options awarded during the year⁽¹⁾    2,499,750       1,237,500
Value of performance shares awarded during the year⁽²⁾    887       2,221,700
Total
   6,106,366       7,129,173

⁽¹⁾

~~Valued at date of grant using the Black & Scholes method.~~

⁽²⁾

Valued at date of grant. The value is the difference between the quoted market price of the share on the award date and the dividends to be paid over the next three years. Christopher Viehbacher waived the 2010 allocation.

*(in euros)*


Compensation payable for the year (details provided in the table below)	3,522,051	3,488,287	3,605,729
Value of stock subscription options awarded during the year ⁽¹⁾	2,020,800	2,364,000	2,499,750
Value of performance shares awarded during the year ⁽²⁾	1,938,300	1,282,500	887

Total	7,481,151	7,134,787	6,106,366

⁽¹⁾: Valued at date of grant using the Black & Scholes method assuming fulfillment of the performance conditions.
⁽²⁾: Valued at date of grant assuming fulfillment of the performance conditions. The value is the difference between the quoted market price of the share on the date of grant and the dividends to be paid over the next three years. Christopher Viehbacher waived the 2010 allocation.

Compensation payable and paid to Christopher Viehbacher

	2012				2011				2010


*(in euros)*	Payable		Paid		Payable		Paid		Payable		Paid

Fixed compensation ⁽¹⁾		1,250,000		1,250,000		1,200,000		1,200,000		1,200,000		1,200,000
Variable compensation ⁽²⁾		2,268,000		2,280,000		2,280,000		2,400,000		2,400,000		2,400,000
Exceptional compensation ⁽³⁾		0		0		0		0		0		0
Attendance fees		0		0		0		0		0		0
Benefits in kind		4,051		4,051		8,287		8,287		5,729		5,729

Total		3,522,051		3,534,051		3,488,287		3,608,287		3,605,729		3,605,729

The amounts reported are gross amounts before taxes.

⁽¹⁾: Fixed compensation payable in respect of a given year is paid during that year.
⁽²⁾: Variable compensation in respect of a given year is determined and paid at the start of the following year
⁽³⁾: Exceptional compensation corresponds to a benefit payable upon his starting to hold office.

      2010    2009
(in euros)    Payable    Paid    Payable    Paid
Fixed compensation⁽¹⁾    1,200,000       1,200,000       1,200,000       1,200,000
Variable compensation⁽²⁾    2,400,000       2,400,000       2,400,000       0
Exceptional compensation⁽³⁾    0       0       0       2,200,000
Attendance fees    0       0       0       0
Benefits in kind    5,729       5,729       69,973       69,973
Total
   3,605,729       3,605,729       3,669,973       3,469,973

~~The~~

~~amounts reported are gross amounts before taxes.~~

⁽¹⁾

~~Fixed compensation payable in respect of a given year is paid during that year.~~

⁽²⁾

~~Variable compensation in respect of a given year is determined and paid at the start~~At its meeting on March 5, 2012, upon the recommendation of the Compensation Committee, the Board of Directors established the terms of the ~~following year~~

⁽³⁾

~~Exceptional compensation corresponds to a benefit payable upon his starting to hold office.~~

~~The fixed~~ compensation ofpackage for Christopher Viehbacher for ~~2009 and 2010~~the financial year 2012. His fixed annual compensation was ~~€1,200,000.~~set at €1,260,000 as from March 5, 2012 i.e. the total fixed compensation

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for 2012 amounted to €1,250,000. This represents an increase of 5% compared to the level of fixed compensation set by the Board in 2008 at the time Christopher Viehbacher was recruited.

~~In 2009 and 2010, the~~The variable compensation of Christopher Viehbacher could have represented between 0% and 200% of his fixed ~~compensation and was based half on quantitative criteria and half on qualitative criteria.~~compensation. In the event of exceptional performance, it could have exceeded 200% of ~~the~~his fixed compensation.

His variable compensation with respect to 2012 has been established on the basis of quantitative and qualitative criteria. Such criteria include:

•: achievement of financial targets compared to our budget;
•: research and development results;
•: development of the Group strategic plan for 2015-2020;
•: organizational structure of the Group and succession planning for key posts in the Group;
•: workforce motivation and Group image.

The variable compensation structure acts as an incentive for the attainment of financial targets, while also taking into account sustainable growth centered on continuing operations and increasingly on developing countries, and at the same time fostering human capital and encouraging a specific focus on employment policies.

~~The quantitative~~ In general, the performance criteria ~~included trends in our net sales relative~~apply not only to variable compensation but also to the ~~objectives~~vesting of stock options and performance shares in compliance with our targets, which are ambitious.

For reasons of confidentiality, the precise targets set ~~by us~~for the quantitative and ~~by our competitors (factor 2), trends~~qualitative criteria, even though they have been properly established in ~~our current operating income (operating income before restructuring, impairment of property, plant and equipment and intangibles, gains/losses on disposals, and litigation) relative to~~a precise manner, cannot be publicly disclosed. In evaluating these criteria, the objectives set by us and by our competitors (factor 3), and trends in our adjusted earnings per share excluding selected items (which was a non-GAAP financial measure used until the end of 2009) (factor 5).

~~These criteria were assessed by reference to the performances~~performance of the ~~leading~~major global pharmaceutical ~~companies.~~companies was taken into account.

The ~~qualitative criteria related~~Board of Directors, pursuant to leadership and strategic choices, adaptation of our structures to the industry’s environment, reconfiguration of our research efforts, commitment in terms of organic and external growth, and the quality of investor communications.

~~Taking into account~~ the above mentioned criteria and taking into account the performance of the Company and the contribution of Christopher Viehbacher during ~~2010, the Board of Directors~~2012, fixed his variable compensation for ~~2010~~2012 at ~~€2,400,000,~~2,268,000 euros, i.e., ~~200%~~180% of the fixed portion of his compensation. ~~His 2010~~Christopher Viehbacher's 2012 variable compensation is to be paid in ~~2011.~~2013.

The amount reported for benefits in kind relates to a company car.

At its meeting on March 5, 2013, upon the recommendation of the Compensation Committee, the Board of Directors established the terms of the compensation package for Christopher Viehbacher for 2013. His fixed compensation for 2013 is maintained at €1,260,000.

His variable compensation with respect to 2013 has been established on the basis of quantitative and qualitative criteria. These criteria include:

•: achievement of financial targets relative to our budget;
•: improved performance in research and development;
•: organizational structure of the Group and succession planning for key posts in the Group;
•: corporate social responsibility.

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Stock options awarded to Christopher Viehbacher in ~~2010~~2012

Origin		Nature of options		Number of options awarded in 2012


Sanofi	03/05/2012	Subscription options	2,020,800	240,000	56,44	03/06/2016 03/05/2022

Origin    Date of
Board
grant    Nature of the
options
Value
(in €)
   Number
of options
awarded in
2010
Exercise
price
(in €)
   Exercise
period
Sanofi -aventis    03/01/10
Subscription
options
      2,499,750       275,000       54.12
03/03/2014
02/28/2020

On March ~~1, 2010, the Board of Directors granted 275,000 stock~~5, 2012, 240,000 share subscription options were awarded to Christopher Viehbacher. ~~All of his stock options are subject~~In compliance with the AFEP-MEDEF Code, the entire award is contingent upon both internal criteria based upon Business Net Income and Return on Assets ("ROA"), and external criteria based on Total Shareholder Return ("TSR") in comparison to a ~~performance condition.~~ reference set of pharmaceutical companies. These criteria were selected because they align medium-term equity-based compensation on the strategy adopted by the Company.

This award is broken down as follows:

-: The performance criterion based on Business Net Income covers 40% of the award and refers to the ratio, at constant exchange rates, between actual Business Net Income and the Business Net Income specified in the budget. The targets have been revised upwards. If the ratio is less than 95%, the corresponding options will lapse.
-: The ROA-based criterion covers 40% of the award. The schedule includes a target ROA, below which the performance will be penalized by the lapsing of some or all of the options.
-: The TSR-based criterion covers 20% of the award. The overall return to shareholders is evaluated both on the value of Sanofi shares (the increase in the share price) and the value distributed to shareholders (dividends), i.e. the two sources of a return on investment in Sanofi shares. Our TSR is compared with a reference set comprised of 12 companies, i.e. Sanofi, Abbott, Astra Zeneca, BMS, Eli Lilly, GSK, Johnson & Johnson, Merck, Novartis, Pfizer, Roche, and Bayer. The number of options exercisable depends upon our position in comparison to the TSR for the other companies of this panel.
-: In addition to the three conditions set forth above, an implicit condition ~~must be fulfilled each financial year preceding~~exists in the form of the exercise ~~period (2010, 2011, 2012~~price, as well as the condition of continuing employment.
-: In order to reinforce the medium-term aspects of equity-based compensation, performance will henceforth be measured over three financial years.

Although for reasons of confidentiality the quantitative measures for the internal criteria cannot be publicly disclosed, even though they have been properly established in a precise manner, the targets and ~~2013), and requires~~ the ~~ratio~~level of ~~business net income (which was a non-GAAP financial measure used until~~achievement for the internal criteria will be publicly disclosed at the end of ~~2009) to net sales to be at~~

~~least 18% (see “Item 5. Operating and Financial Review and Prospects — Sources of Revenues and Expenses — Business Net Income”). The Board of Directors, upon~~ the ~~advice of the Compensation Committee, determined that these~~ performance ~~criteria were met for 2009 and 2010.~~measurement period.

Using the Black & Scholes method, each option ~~in the~~awarded on March ~~1, 2010 grant~~5, 2012 was valued at ~~€9.09,~~€8.42, valuing the total benefit at ~~€2,499,750.~~€2,020,800.

The Board of Directors has decided to limit the number of options that could be awarded to Christopher Viehbacher to 10% of the total limit approved by the Shareholders' General Meeting held on May 6, 2011 (1% of our share capital). The number of options awarded to Christopher Viehbacher in 2012 represents 1.81% of the total limit approved by the Shareholders' General Meeting held on May 6, 2011 (1% of our share capital) and 29.48% of the total award to all beneficiaries on March 5, 2012.

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Stock options held by Christopher Viehbacher

Origin		Nature of options		Number of options awarded	Exercise price (in €)


sanofi-aventis	03/02/09	Subscription options	1,237,500	250,000	45.09	03/04/2013 03/01/2019
sanofi-aventis	03/01/10	Subscription options	2,499,750	275,000	54.12	03/03/2014 02/28/2020
sanofi-aventis	03/09/11	Subscription options	2,364,000	300,000	50.48	03/10/2015 03/09/2021
Sanofi	03/05/12	Subscription options	2,020,800	240,000	56.44	03/06/2016 03/05/2022

In 2011, as part of its commitment to transparency, Sanofi undertook to publish in its annual report the level of attainment determined by the Board of Directors for performance conditions applicable to future equity-based compensation plans awarded to Christopher Viehbacher and the other members of the Executive Committee. The Board considers that disclosing the level of attainment allows our shareholders to better understand the demanding nature of the performance conditions. The 2011 stock option plan and the 2011 performance share plan are the first plans for which the Board of Directors determined the level of fulfillment of the performance conditions.

Origin    Date of
Board
grant    Nature of the
options    Value
(in €)    Number
of options
awarded    Exercise
price
(in €)    Exercise
period
Sanofi -aventis    03/02/09
Subscription
options
      1,237,500       250,000       45.09
03/04/2013
03/01/2019

Sanofi -aventis    03/01/10
Subscription
options
      2,499,750       275,000       54.12

03/03/2014
02/28/2020

On March 2, 2009, ~~250,000 stock subscription options were granted to Christopher Viehbacher: 200,000~~ in accordance with what had been ~~contemplated~~intended on the announcement of his ~~appointment in September 2008, and 50,000 more as part of~~joining the ~~2009 stock option plan.~~Group, 250,000 subscription options were awarded to Christopher Viehbacher. All of ~~his stock~~these options ~~are~~were subject to a performance condition. The performance condition, ~~must~~which had to be fulfilled ~~for~~ each financial year preceding the ~~exercise period (2009,~~vesting of the shares (i.e. 2009, 2010, 2011 and 2012), ~~and requires the~~was based on a ratio of adjusted net income excluding selected items (which was a non-GAAP financial measure used until the end of 2009) to net sales ~~to be~~of at least 18%.

On February 6, 2013, the Board of Directors determined that the conditions had been met and that the 250,000 options would be exercisable subject to meeting the condition of continuing employment.

On March 9, 2011, 300,000 subscription options were awarded to Christopher Viehbacher. In compliance with the AFEP-MEDEF Code, the entire award is contingent upon both internal criteria based on Business Net Income and Return on Assets ("ROA"), and external criteria based on Total Shareholder Return ("TSR") in comparison to a reference set of twelve pharmaceutical companies.

For the first period (consisting of fiscal years 2011 and 2012) which related to 50% of the March 9, 2011 grant, the performance was as follows:

-: The performance criterion based on Business Net Income (which covered 40% of the award) was fulfilled, reaching 106% of the target;
-: The ROA-based criterion (which covered 40% of the award) was fulfilled, being 1.7 basis points above the target;
-: The TSR-based criterion (which covered 20% of the award) was fulfilled, Sanofi ranking 5^th among the panel of 12 peers.

The Board of Directors, ~~upon~~in its meeting of February 6, 2013, determined that the ~~advice~~global performance rate for the first period was greater than 100% and therefore, since the performance condition had been fulfilled, 50% of the ~~Compensation Committee, determined that these performance~~stock subscription options granted would be exercisable at the end of the four-year vesting period subject to meeting the condition of continuing employment.

On March 5, 2013, 240,000 share subscription options were awarded to Christopher Viehbacher. In compliance with the AFEP-MEDEF Code, the entire award is contingent upon both internal criteria based on Business Net Income and Return on Assets ("ROA"), and external criteria based on Total Shareholder Return ("TSR") in comparison to a reference set of eleven pharmaceutical companies. These criteria were ~~met~~maintained because they align medium-term equity-based compensation with the strategy adopted by the Company.

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This award is broken down as follows:

-: The performance criterion based on Business Net Income covers 40% of the award and refers to the ratio, at constant exchange rates, between actual Business Net Income and the Business Net Income specified in the budget. If the ratio is less than 95%, the corresponding options will lapse.
-: The ROA-based criterion covers 40% of the award. The schedule includes a target ROA, below which the performance will be penalized by the lapsing of some or all of the options.
-: The TSR-based criterion covers 20% of the award. The overall return to shareholders is evaluated both on the value of Sanofi shares (the increase in the share price) and the value distributed to shareholders (dividends), i.e. the two sources of return on investment in Sanofi shares. Our TSR is compared with a reference set comprised of eleven companies, i.e. Sanofi, Astra Zeneca, BMS, Eli Lilly, GSK, Johnson & Johnson, Merck, Novartis, Pfizer, Roche, and Bayer. The number of options exercisable depends upon our position in comparison to the TSR for ~~2009~~the other companies of this panel.
-: In addition to the three conditions set forth above, an implicit condition exists in the form of the exercise price, as well as the condition of continuing employment.
-: Performance will be measured over three financial years.

The targets and ~~2010.~~the level of achievement for the internal criteria will be disclosed publicly at the end of the performance measurement period.

Christopher Viehbacher did not exercise any stock options in 2012.

~~The~~ As of the date of publication of this document, the total number of unexercised options held by Christopher Viehbacher represented 0.098% of the share capital as at December 31, 2012.

Performance shares awarded to Christopher Viehbacher in 2012

Origin			Number of performance shares awarded in 2012	Acquisition date	Availability date


Sanofi	03/05/12	1,938,300	42,000	03/06/2015	03/06/2017

On March 5, 2012, 42,000 performance shares were awarded to Christopher Viehbacher. In compliance with the ~~Chief Executive Officer~~AFEP-MEDEF Code, the entire award is contingent upon both internal criteria based on Business Net Income and Return on Assets ("ROA"), and external criteria based upon Total Shareholder Return ("TSR") in ~~2010 represent 0.8%~~comparison to a reference set of pharmaceutical companies. These criteria were selected because they align medium-term equity-based compensation with the strategy adopted by the Company. Each performance share awarded on March 5, 2012, was valued at €46.15, valuing the total benefit at € €1,938,300.

This award is broken down as follows:

-: The performance criterion based on Business Net Income covers 40% of the ~~maximum total grant approved~~award and refers to the ratio, at constant exchange rates, between actual Business Net Income and the Business Net Income specified in the budget. The targets have been revised upwards and if the ratio is less than 95%, the corresponding performance shares will lapse.
-: The ROA-based criterion covers 40% of the award. The schedule includes a target ROA, below which the performance will be penalized by the lapsing of part or all of the performance shares.
-: The TSR-based criterion covers 20% of the award. The overall return to shareholders is evaluated both on the value of Sanofi shares (the increase in the share price) and the value distributed to shareholders (dividends), i.e. the two sources of return on investment in Sanofi shares. Our TSR is compared with a reference set comprised of twelve companies, i.e. Sanofi, Abbott, Astra Zeneca, BMS, Eli Lilly, GSK, Johnson & Johnson, Merck, Novartis, Pfizer, Roche, and Bayer. The number of options exercisable depends upon our position in comparison to the TSR for the other companies of this panel.

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-: In order to reinforce the medium-term aspects of the equity-based compensation, performance will henceforth be measured over three financial years.

Although for reasons of confidentiality, the quantitative measures for the internal criteria cannot be publicly disclosed, even though they have been properly established in a precise manner, the targets and the level of achievement for the internal criteria will be publicly disclosed at the ~~Shareholders’ Annual~~end of the performance measurement period.

The number of shares awarded to Christopher Viehbacher in 2012 represents 0.31% of the total limit approved by the Shareholders' General Meeting ofheld on April 17, 2009 ~~(2.5%~~(1% of our share capital) and ~~3.38%~~0.89% of the total ~~grant made~~award to all beneficiaries on March 5, 2012. The Board of Directors has decided to limit the number of performance shares that could be awarded to Christopher Viehbacher to 5% of the total limit approved by Shareholders' General Meeting held on May 4, 2012 (1.2% of our share capital).

Performance shares awarded to Christopher Viehbacher

Origin		Value (in €)	Number of performance shares awarded	Acquisition date	Availability date


sanofi-aventis	03/02/09	2,221,700	65,000	03/03/2011	03/04/2013
sanofi-aventis	03/09/11	1,282,500	30,000	03/10/2013	03/10/2015
Sanofi	03/05/12	1,938,300	42,000	03/06/2015	03/06/2017

On March 9, 2011, 30,000 performance shares were awarded to Christopher Viehbacher. In compliance with the AFEP-MEDEF Code, the entire award is contingent upon both internal criteria based on Business Net Income and Return on Assets ("ROA"), and external criteria based on Total Shareholder Return ("TSR") in comparison to a reference set of twelve pharmaceutical companies.

The performance measure covered fiscal years 2011 and 2012, and the performance was as follows:

-: The performance criterion based on Business Net Income (which covered 40% of the award) was fulfilled, reaching 106% of the target;
-: The ROA-based criterion (which covered 40% of the award) was fulfilled, being 1.7 basis points above the target;
-: The TSR-based criterion (which covered 20% of the award) has been fulfilled, Sanofi ranking 5^th among the panel of 12 peers.

The Board of Directors, in its meeting of February 6, 2013, determined that the global performance rate was greater than 100% and therefore, since the performance condition had been fulfilled, 100% of the performance shares granted would vest subject to meeting the condition of continuing employment.

Taking into account the number of shares acquired at the outset of his mandate as well as the lock-up obligations applicable to shares obtained on exercise of stock options, or disposition of performance shares, the Board of Directors has decided not to require Christopher Viehbacher to acquire any further shares at his own expense.

Under Share 2010, the Group's global restricted share plan benefiting each Group employee with at least three months' service, 20 restricted shares were awarded to Christopher Viehbacher on October 27, 2010. This award is not included in the schedule above as Christopher Viehbacher subsequently renounced this award.

On March 5, 2013, 45,000 performance shares were awarded to Christopher Viehbacher. In compliance with the AFEP-MEDEF Code, the entire award is contingent upon both internal criteria based on Business Net Income and Return on Assets ("ROA"), and external criteria based on Total Shareholder Return ("TSR") in comparison to a reference set of eleven pharmaceutical companies. These criteria were maintained because they align medium-term equity-based compensation with the strategy adopted by the Company.

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This award is broken down as follows:

-: The performance criterion based on Business Net Income covers 40% of the award and refers to the ratio, at constant exchange rates, between actual Business Net Income and the Business Net Income specified in the budget. If the ratio is less than 95%, the corresponding performance shares will lapse.
-: The ROA-based criterion covers 40% of the award. The schedule includes a target ROA, below which the performance will be penalized by the lapsing of part or all of the ~~beneficiaries~~performance shares.
-: The TSR-based criterion covers 20% of the award. The overall return to shareholders is evaluated both on ~~March 1, 2010.~~the value of Sanofi shares (the increase in the share price) and the value distributed to shareholders (dividends), i.e. the two sources of return on investment in Sanofi shares. Our TSR is compared with a reference set comprised of eleven companies, i.e. Sanofi, Astra Zeneca, BMS, Eli Lilly, GSK, Johnson & Johnson, Merck, Novartis, Pfizer, Roche, and Bayer. The number of options exercisable depends upon our position in comparison to the TSR for the other companies of this panel.
-: Performance will be measured over three financial years.

The targets and the level of achievement of the internal criteria will be disclosed publicly at the end of the performance measurement period.

In making the 2013 award, the Board of Directors had to determine whether to make these awards contingent upon future share purchases. Taking into account the number of shares acquired at the outset of his mandate and the lock-up obligations applicable to shares obtained on exercise of stock options or disposition of performance shares as well as share purchases made spontaneously by Christopher Viehbacher, the Board of Directors decided not to require him to acquire any further shares at his own expense.

As of the date of this annual report, the total number of ~~outstanding options held by~~performance shares awarded to Christopher Viehbacher ~~represented 0.04%~~represents 0.009% of ~~the~~our share capital as of December 31, ~~2010.~~2012.

~~Christopher Viehbacher did not exercise any stock options in 2009 or 2010. None of his stock option plans is currently exercisable.~~

~~Performance shares awarded to Christopher Viehbacher in 2010~~

Origin    Date of
Board
award    Number
of performance
shares awarded in
2010    Value
(in €)    Acquisition date    Availability date
Sanofi-aventis    10/27/10       20       887       10/27/2012       10/28/2014

~~Like all Group employees with at least three months’ service, Christopher Viehbacher was awarded 20 shares as part of Share 2010, a global restricted share plan.~~

~~Performance shares awarded to Christopher Viehbacher~~

~~At year end 2010 and as of the date of this annual report, Christopher Viehbacher had been awarded:~~

Origin    Date of
Board
award    Number
of performance
shares awarded    Value
(in €)    Acquisition date    Availability date
Sanofi-aventis    03/01/10       65,000       2,221,700       03/03/2011       03/04/2013

On March 2, 2009, in accordance with what had been contemplated on the announcement of his appointment in September 2008, 65,000 performance shares were awarded to Christopher Viehbacher. All of his performance shares are subject to a performance condition. The performance condition must be fulfilled each financial year preceding the vesting of the shares (2009 and 2010), and requires the ratio of adjusted net income excluding selected items (which was a non-GAAP financial measure used until the end of 2009) to net sales to be at least 18%. The value of each performance share amounts €34.18, valuing the total benefit at €2,221,700.

On February 24, 2011, the Board of Directors, acting on the recommendations of the Compensation Committee, determined that the conditions to the March 2, 2009 grant had been met. As a result the performance conditions have been fulfilled.

~~The March 2, 2009 grant of performance shares will vest on March 3, 2011, and will remain subject to a mandatory lock-up period.~~

The shares awarded to Christopher Viehbacher in 2009 represent 0.49% of the maximum total grant approved at the Shareholders’ Annual General Meeting of April 17, 2009 (1% of our share capital) and 5.44% of the total grant made to all of the beneficiaries on March 2, 2009.

Performance shares awarded to Christopher Viehbacher which became available in ~~2010.~~2012

No performance shares awarded to Christopher Viehbacher became available in ~~2010.~~2012.

~~Performance shares awarded to Christopher Viehbacher~~

~~As of the date of this annual report, the number of performance shares awarded to Christopher Viehbacher represented 0.005% of the share capital as of December 31, 2010.~~

Pension arrangements for Christopher Viehbacher

Christopher Viehbacher is covered by the ~~sanofi-aventis~~Sanofi top-up defined benefit pension ~~plan.~~plan (which has been called the Sanofi plan since the Company changed its name). The ~~sanofi-aventis~~ plan is offered to all ~~executives~~employees of ~~sanofi-aventis~~Sanofi and its French subsidiaries who meet the eligibility criteria specified in the plan ~~rules, extended to corporate officers, including currently Christopher Viehbacher.~~rules. This plan was set up on October 1, 2008 as the final stage in the process of harmonizing the status of personnel across the French subsidiaries.

The rules of this plan were reviewed on January 1, 2012 in order to apply the 2010 French pension reforms and the French Social Security Financing Act for 2012 (whichinter aliareflected the increase in the statutory retirement age for a full pension). This plan also includes the Merial SAS, Genzyme SAS and Gensyme Polyclonals SAS subsidiaries, for which the eligibility criteria and pension rights calculation take into account length of service from January 1, 2012 at the earliest.

This top-up defined-benefit pension plan is offered to executives (within the meaning of the AGIRC regime —Association Générale des Institutions de Retraite des Cadres, a confederation of executive pension funds) of ~~sanofi-aventis~~Sanofi and its French subsidiaries who meet the eligibility criteria specified in the plan rules; the benefit is contingent upon the plan member ending his or her career within the Group. The plan is reserved for executives with at least ten ~~years’~~years' service whose annual base compensation has for ten years exceeded four times the French social security ceiling, and is wholly funded by the Company.

Based on the assumptions used in the actuarial valuation of this plan, approximately ~~460~~550 executives are potentially eligible for this plan, almost all of them active ~~executives.~~employees.

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The top-up pension, which may not exceed 37.50% of final salary, is in the form of a life annuity, and is transferable as a ~~survivor’s~~survivor's pension. The annuity is based on the arithmetical average of the three highest ~~years’~~years' average annual gross compensation (fixed plus variable) paid during the five years (not necessarily consecutive) preceding final cessation of employment. This reference compensation is capped at 60 times the French social security ceiling ~~(“PASS”~~("PASS") applicable in the year in which the rights vest. The annuity varies according to length of service (capped at 25 years) and supplements the compulsory industry schemes, subject to a cap on the total pension from all sources equal to 52% of the final level of compensation.

The admission of Christopher Viehbacher to this plan was approved by the ~~Shareholders’~~Shareholders' General Meeting of April 17, 2009.

~~Jean-François Dehecq~~

~~Compensation, options~~The decision to admit Christopher Viehbacher to the top-up defined benefit pension plan and ~~shares awarded~~ to ~~Jean-François Dehecq~~

(in euros)    2010    2009
Compensation payable for the year (details provided in the table below)    4,710,599       2,279,995
Value of stock subscription options awarded during the year    0       0
Value of performance shares awarded during the year    0       0
Total
   4,710,599       2,279,995

~~Compensation payable and paid to Jean-François Dehecq~~

      2010    2009
(in euros)    Payable    Paid    Payable    Paid
Fixed compensation⁽¹⁾    541,665       541,665       1,300,000       1,300,000
Variable compensation⁽²⁾    368,062       1,343,062       975,000       975,000
Exceptional compensation    3,799,032       3,799,032       0       0
Attendance fees    0       0       0       0
Benefits in kind    1,840       1,840       4,995       4,995
Total
   4,710,599       5,685,599       2,279,995       2,279,995

~~The amounts reported are gross amounts before taxes.~~

⁽¹⁾

~~Fixed compensation payable in respect of a given year is paid during that year.~~

⁽²⁾

~~Generally, variable compensation in respect of a given year is determined and paid~~award him ten years' service at ~~the start of the following year. As an exception, variable compensation for 2010 was determined and paid in 2010, when Jean-François Dehecq left office.~~

~~For 2010,~~ the ~~fixed compensation and~~outset of his mandate, must be seen within the ~~terms and conditions~~historical context. These commitments were part of the ~~variable compensation of Jean-François Dehecq were maintained on a~~~~pro rata~~ ~~basis~~conditions for the ~~remainder~~hiring of ~~his term as Chairman~~Christopher Viehbacher negotiated before he accepted the position of ~~the Board of Directors, i.e. until May 2010.~~

~~For 2010, the variable compensation of Jean-François Dehecq was based 25% on a quantitative criterion and 75% on qualitative criteria.~~

~~The quantitative criterion used was linked to adjusted earnings per share excluding selected items (which was a non-GAAP financial measure used until the end of 2009).~~

~~The qualitative criteria were essentially based on the support provided to the~~ Chief Executive Officer ~~leadership~~ of Sanofi, and hence before there could be any conflict of interest. These commitments were intended to replace the ~~Board of Directors, input on the Group’s global strategy, and representation of the high-level interests of~~pension plan which he had to renounce in order to join the Group.

~~The variable compensation could have represented between 60% and 75% of~~ Having conducted his ~~fixed compensation.~~

Taking into account the abovementioned criteria, the performance of the Company and the input of the Chairman of the Board of Directors during 2010, the Board of Directors set the variable compensation of Jean-François Dehecq for 2010 at €368,062.50, i.e., 75% of the fixed portion of his compensation pro rated through May 17, 2010. His variable compensationcareer in different countries, Christopher Viehbacher was ~~paid in 2010.~~

~~The amount reported for benefits in relates~~unable to ~~a company car.~~

~~No stock options and no shares were granted in 2010. However, under the rules plan, he keeps the benefits of the share subscription options previously awarded.~~

~~Pension arrangements for Jean-François Dehecq~~

Jean-François Dehecq was covered by the Sanofi-Synthélabo top-up defined-benefit pension plan established in 2002 (and amended January 1, 2008) offered to executives of sanofi-aventis and its French

~~subsidiaries who~~ meet the ~~eligibility criteria specified in the plan rules, the benefit~~requirements of ~~which is contingent upon the plan member ending his or her career within the Group. The plan is wholly funded by the Company.~~

~~Based on the assumptions used in the actuarial valuation of this plan, 91 executives are beneficiaries or potentially eligible for this plan.~~

Effective October 1, 2008, this plan was closed to any new eligible executive following the harmonization of the top-up defined-benefit pension plans of the French subsidiaries of the Aventis Group (including the Vaccine Division) and the Sanofi-Synthélabo Group, which merged in 2005. Nevertheless, it was replaced by the substantially similar “sanofi-aventis” plan. It is offered to all executives (within the meaning of the AGIRC regime —~~Association Générale des Institutions de Retraite des Cadres~~~~, a confederation of executive pension funds) of sanofi-aventis and its French subsidiaries, extended to corporate officers, including Christopher Viehbacher (see above).~~

The top-up pension, which may not exceed 37.50% of final salary, is in the form of a life annuity, and is transferable as a survivor’s pension. The annuity is based on the arithmetical average of the three highest years’ average annual gross compensation (fixed plus variable) paid during the five years (not necessarily consecutive) preceding final cessation of employment. This reference compensation is capped at 60 times the French social security ceiling (“PASS”) applicable in the year in which the rights vest. The annuity varies according to length of service (capped at 25 years) and supplements the compulsory industry schemes ~~subject to a cap equal to 52% of final salary on the total pension from all sources.~~

In accordance with the generally applicable rules of the French compulsory pension schemes (social security, ARRCO and AGIRC) and the rules of the Sanofi-Synthélabo top-up defined benefit plan, Jean-François Dehecq requested the liquidation of his pension plans on May 17, 2010, with benefits commencing June 1, 2010. Between June 1 and December 31, 2010, the gross annual pension that ~~he received from the top-up defined benefit plan amounted to €454,387, which would amount on a full year basis to an annual gross pension of €778,944.~~

~~Severance arrangements for Jean-François Dehecq~~

Jean-François Dehecq’s termination benefit was approved at successive Shareholders’ Annual General Meetings, most recently that of May 14, 2008. Payment of the termination benefit, which was equivalent to 20 months of his last total compensation (fixed plus variable), was contingent upon fulfillment of two out of three performance criteria.

~~The first criterion was that the sanofi-aventis share price had outperformed the CAC 40 index since he first took office as Chairman and Chief Executive Officer of the Company on February 15, 1988.~~

~~The two other criteria, fulfillment of which would be assessed over the three financial years preceding his ceasing to hold office, were:~~

the average of the ratios of adjusted net income excluding selected items (which was a non-GAAP financial measure used until the end of 2009) to net sales for each financial year had to be at least 15%.

~~the average of the ratios of operating cash flow before changes~~exist in ~~working capital to net sales for each financial year had to be at least 18%.~~France.

Payment of the termination benefit was not limited to non-voluntary departure linked to a change in control or strategy, but also covered retirement. This commitment was approved before the adoption of the AFEP-MEDEF corporate governance code. Following the liquidation of his pension plans in May 2010, sanofi-aventis executed its contractual obligations in favor of Jean-François Dehecq.

On May 17, 2010, upon the recommendation of the Compensation Committee, and in accordance with the provisions of the general meeting of May 14, 2008, the Board of Directors acknowledged that the conditions for awarding Jean-François Dehecq a termination benefit equivalent to 20 months of his last total compensation (fixed plus variable) had been fulfilled. The Board of Directors authorized termination benefit to be paid in full. This termination benefit, amounting to €3,799,032, was paid in May 2010.

~~These provisions exclude all other termination benefits for any reason whatsoever.~~

Commitments in favor of the Chairman and the Chief Executive Officer in office as of December 31, ~~2010.~~2012


	Executive director		Contract of employment		Top-up pension plan		Compensation or benefits payable or potentially payable on termination of office	Compensation payable under non-competition clause

Serge Weinberg		No	No	No		No
Christopher Viehbacher		No	Yes	Yes		No

In the event of his removal from office as Chief Executive Officer, Christopher Viehbacher would receive a termination benefit equivalent to 24 months of total compensation on the basis of his fixed compensation effective on the date he ceases to hold office and the last variable compensation received prior to that date, subject to the performance criteria described below.

In accordance with article L. 225-42-1 of the French Commercial Code, payment of the termination benefit would be contingent upon fulfillment of two of the three performance criteria, assessed over the three financial years preceding his ceasing to hold ~~office or, if he leaves office prior to the end of the 2011 financial year, the most recently ended financial years.~~office.

The three criteria are:

•: the average of the ratios of adjusted net income excluding selected items (which was a non-GAAP financial measure used until the end of 2009) to net sales for each financial year must be at least 15%;

•

the average of the ratios of operating cash flow before changes in working capital to net sales for each financial year must be at least 18%;

•

the average of the growth rates for the ~~Group’s~~Group's activities, measured for each financial year in terms of net sales on a comparable basis, must be at least equal to the average of the growth rates of the Pharmaceutical and Vaccines activities of the top 12 global pharmaceutical companies, measured for each financial year in terms of net sales adjusted for the principal effects of exchange rates and changes in scope of consolidation.

The terms for the termination benefit entitlement of Christopher Viehbacher were approved by the ~~Shareholders’~~Shareholders' Annual General Meeting of April 17, 2009.

Any activation of this termination benefit will be carried out in compliance with the AFEP-MEDEF ~~corporate governance code,~~Code,i.e. only if the departure is non-voluntary and linked to a change in control or strategy.

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This termination benefit was negotiated at the time of the recruitment of Christopher Viehbacher, and hence at a time when there was no conflict of interest. Moreover, the terms and conditions of this termination benefit comply with the AFEP-MEDEF Code.

Lock-up ~~period~~obligation for shares obtained on exercise of stock options ~~by,~~ or disposition of performance shares by the Chief Executive Officer

Until he ceases to hold office, the Chief Executive Officer will be required to retain, in the form of ~~sanofi-aventis~~Sanofi shares, 50% of any capital gains (net of taxes and social contributions) obtained by the exercise of stock options or upon disposition of performance shares awarded by ~~sanofi-aventis.~~Sanofi. He must hold these shares asin registered ~~shares.~~form.

~~As called for by~~In compliance with the AFEP-MEDEF ~~corporate governance code, the~~Code and our Board Charter, ~~of the sanofi-aventis Board of Directors forbids the Chief Executive Officer~~Christopher Viehbacher has undertaken to refrain from ~~contracting any~~entering into speculative or hedging ~~instruments in respect of his own interests,~~transactions, and, asso far as ~~sanofi-aventis~~Sanofi is aware, no such instruments have been contracted.

Compensation and pension payments for ~~directors~~Directors other than the Chairman and the Chief Executive Officer

Attendance fees

The table below shows amounts paid to each member of the ~~sanofi-aventis~~Sanofi Board of Directors in respect of ~~2009~~2011 and ~~2010,~~2012, including those whose term of office ended during ~~the year.~~

these years.

Attendance fees in respect of ~~2009,~~2011, the amount of which was set by the Board meeting of March ~~1, 2010,~~5, 2012, were paid in ~~2010.~~2012.

Attendance fees in respect of ~~2010,~~2012, the amount of which was set by the Board meeting of ~~February 24, 2011,~~March 5, 2013, will be paid in ~~2011.~~2013.

For ~~2010,~~2012, the basic annual attendance fee was set at €15,000, apportioned on a time basis for ~~directors~~Directors who assumed or left office during the year.

The variable portion of the fee is linked to actual attendance by ~~directors~~Directors in accordance with the principles described below:

~~directors~~

•: Directors resident in France receive €5,000 per Board or Committee meeting attended, except for Audit Committee meetings for which the fee is €7,500 per meeting;

~~directors~~

•

Directors resident outside France receive €7,000 per Board meeting attended, and €7,500 per Committee meeting attended;

•

the chairman of the Compensation Committee receives €7,500 per Committee meeting;

•

the chairman of the Audit Committee, who is resident outside France, receives €10,000 per Committee meeting.

The attendance fee payable to a Director who participates by conference call or by videoconference is equivalent to half of the attendance fee received by a French Director who attends in person.

As an exception, some dual meetings give entitlement to a single attendance ~~fee :~~fee:

•: if on the day of a ~~Shareholders’~~Shareholders' General Meeting, the Board of Directors meets both before and after the Meeting, only one attendance fee is paid for ~~both.~~

Ifboth;

•

if a Director participates in a meeting of the Compensation Committee and in a meeting of the Appointments and Governance Committee the same day, only one attendance fee is paid for both.

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~~If necessary,~~The Shareholders' Annual General Meeting of May 6, 2011 approved a ~~reduction coefficient is applied~~proposal to ~~this scale in order to keep~~increase the maximum amount of annual attendance fees ~~within the total attendance fee entitlement.~~to €1,500,000.

(in euro) 2010 2009
Name Attendance fees
in respect of 2010
to be paid in 2011
Pensions
paid in
2010
Total
theoretical
compensation
⁽⁶⁾ Total
effective
compensation
⁽⁷⁾
Attendance fees
in respect of 2009
to be paid in 2010

Pensions
paid in
2009
Total
theoretical
compensation
⁽⁸⁾ Total
effective
compensation
⁽⁹⁾
   fixed variable          fixed Variable
Uwe Bicker 15,000    98,500    113,500    105,848 15,000    71,000    86,000    85,519
Jean-Marc Bruel⁽¹⁾ 5,625 47,500 141,380    194,505    190,923    15,000    90,000    376,189    481,189    480,601
Robert Castaigne 15,000    107,500 122,500    114,241 15000    107,500    122,500    121,814
Patrick de La Chevardière⁽²⁾ 7,500 15,000 22,500    20,983 15,000    27,500    42,500    42,262
Thierry Desmarest 15,000    92,500 107,500    100,253 15,000    62,500    77,500    77,066
Lord Douro 15,000    116,000    131,000    122,168 15,000    79,000    94,000    93,474
Jean-René Fourtou 15,000    97,500 1,618,818 1,731,318    1,723,733    15,000    62,500    1,602,013    1,679,513    1,679,079
Claudie Haigneré 15,000    65,000 80,000    74,607 15,000    60,000    75,000    74,580
Igor Landau 15,000    42,500 2,216,308 2,273,808    2,269,931    15,000    47,500    2,193,300    2,255,800    2,255,450
Christian Mulliez 15,000    42,500 57,500    53,623 15,000    47,500    62,500    62,150
Lindsay Owen-Jones 15,000    62,500 77,500    72,275 15,000    47,500    62,500    62,150
Klaus Pohle 15,000    143,500 158,500    147,814 15,000    141,000    156,000    155,127
Carole Piwnica⁽³⁾ 0    0    0    0 0    0    0    0
Gunter Thielen⁽⁴⁾ 0    0 0    0 12,500    22,000    34,500    34, 307
Gérard Van Kemmel 15,000    142,500 157,500    146,882 15,000    127,500    142,500    141,702
Serge Weinberg⁽⁵⁾ 5,625 30,000 35,625    33,223 1,250    5,000    6,250    6,215
Total 183,750    1,103,000    3,976,506    5,263,256    5,176,504    208,750    998,000    4,171,502    5,378,252    5,371,496
Total attendance fees (theoretical)
1,286,750    1,206,750
Total attendance fees (effective)
1,199,997 1,199,994

⁽¹⁾

~~Left office May 17, 2010. Compensation from January 1, 2010 to May 17, 2010~~

⁽²⁾

~~Left office July 1, 2010.~~

⁽³⁾

~~Assumed office December 15, 2010.~~

⁽⁴⁾

~~Left office November 24, 2009.~~

⁽⁵⁾

~~Assumed office December 16, 2009. Compensation until May 17, 2010.~~

⁽⁶⁾

~~Before reducing pro rata by 0.93%~~

⁽⁷⁾

~~After reducing pro rata by 0.93%.~~

⁽⁸⁾

~~Before reducing pro rata by 0.56 %.~~

⁽⁹⁾

~~After reducing pro rata by 0.56 %.~~

*(in euro)*	2012								2011


Name	Attendance fees in respect of 2012 to be paid in 2013				Pensions paid in 2012		Total compensation		Attendance fees in respect of 2011 to be paid in 2012				Pensions paid in 2011		Total compensation

	fixed		variable						fixed		variable

Laurent Attal ⁽¹⁾		10,000		40,000				50,000		0		0				0

Uwe Bicker		15,000		89,000				104,000		15,000		71,000				86,000

Robert Castaigne		15,000		90,000				105,000		15,000		103,750				118,750

Thierry Desmarest		15,000		75,000				90,000		15,000		75,000				90,000

Lord Douro		15,000		104,000				119,000		15,000		86,500				101,500

Jean-René Fourtou		15,000		85,000		1,676,787		1,776,787		15,000		75,000		1,640,304		1,730,304

Claudie Haigneré		15,000		65,000				80,000		15,000		65,000				80,000

Igor Landau		15,000		35,000		2,295,672		2,345,672		15,000		37,500		2,245,724		2,298,224

Suet-Fern Lee ⁽²⁾		15,000		64,000				79,000		10,000		35,500				45,500

Christian Mulliez		15,000		77,500				92,500		15,000		55,000				70,000

Lindsay Owen-Jones ⁽³⁾		6,250		20,000				26,250		15,000		42,500				57,500

Carole Piwnica		15,000		93,750				108,750		15,000		55,000				70,000

Klaus Pohle		15,000		131,500				146,500		15,000		135,250				150,250

Gérard Van Kemmel		15,000		125,000				140,000		15,000		138,750				153,750

Total		196,250		1,094,750		3,972,459		5,263,459		190,000		975,750		3,886,028		5,051,778

Total attendance fees		1,291,000								1,165,750

⁽¹⁾: Assumed office May 4, 2012.
⁽²⁾: Assumed office May 6, 2011.
⁽³⁾: Left office May 4, 2012.

Pensions

The amount recognized in ~~2010~~2012 in respect of corporate pension plans for directors with current or past executive responsibilities at ~~sanofi-aventis~~Sanofi (or companies whose obligations have been assumed by ~~sanofi-aventis)~~Sanofi) was ~~€2.4~~€4.3 million.

As retirees, ~~Jean-Marc Bruel,~~ Jean-René Fourtou and Igor Landau are covered by the ~~“GRCD”~~"GRCD" top-up pension plan instituted in 1977 for senior executives of Rhône-Poulenc. This plan was amended in 1994, 1996, 1999 and 2003, and currently applies to ~~2 active executives,~~ 3 early retirees and 2628 retired ~~executives.~~executives (including one survivor's pension). At its meeting of February 11, 2008, the Board of Directors decided to close this plan to new entrants. Christopher Viehbacher does not benefit from this top-up pension plan.

Compensation of ~~senior management~~Senior Management

The compensation of the other Executive Committee members is ~~based on an analysis~~established upon the recommendation of the Compensation Committee taking into consideration the practices of major global pharmaceutical ~~companies and the recommendation of the Compensation Committee.~~companies.

In addition to fixed compensation, ~~these key executives~~they receive variable compensation, ~~the amount of~~ which is determined ~~by the actual performance and growth~~as a function of trends in the business areas for which ~~he or she is~~they are responsible. Variable compensation generally represents 60% to 110% of their fixed compensation.

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~~These~~In addition to cash compensation, ~~packages~~Executive Committee members may be ~~supplemented by the granting of stock~~awarded share subscription or purchase options ~~and~~and/or performance shares (see ~~“Item~~"Item 6. Directors, Senior Management and Employees — E. Share ~~Ownership”~~Ownership" for details of the related plans).

~~In 2010,~~With respect to 2012, the total gross compensation ~~before social charges~~ paid ~~to or~~and accrued ~~for the~~in respect of members of ~~our~~the Executive Committee ~~in office in 2010, including~~(including the Chief Executive ~~Officer,~~Officer) amounted to ~~€12.3 million. Fixed~~€14.9 million, including €6.3 million in fixed compensation.

In 2011, the Board of Directors made significant changes to its equity compensation ~~represented €5.6 million~~policy. In order to limit the dilutive effect on shareholders, the Board of Directors determined to primarily award performance shares, except for a limited group of senior managers who may continue to receive options. The members of the Executive Committee are included in this limited group. Furthermore, whoever the beneficiary is, any award of options or performance shares will henceforth be fully contingent upon the performance targets being achieved over several financial years, as well as a condition of still being an employee when the option is exercised or the performance share is delivered.

On March 5, 2012, 445,500 share subscription options were awarded to members of the Executive Committee (including 240,000 options awarded to Christopher Viehbacher). The entire award was contingent upon the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but excluding the TSR-based criterion. Consequently, the weighting of the two criteria is different, with each representing 50% of the grant.

The quantitative measures of performance are the same as for the award of Christopher Viehbacher. Although for reasons of confidentiality, the quantitative measures for the internal criteria cannot be publicly disclosed, even though they have been properly established in a precise manner, the targets and the level of achievement for the internal criteria will be publicly disclosed at the end of the performance measurement period.

As of December 31, 2012 a total of 2,998,000 options had been awarded to members of the Executive Committee (existing plans or plans ending in 2012). As of the same date, members of the Executive Committee held 2,898,000 unexercised options. These figures include the unexercised options awarded to Christopher Viehbacher, who is also a member of the Executive Committee.

Origin Date of
shareholder
authorization Date of Board
grant Grant to
Executive
Committee
Members Start date
of exercise
period
Expiration
date
⁽²⁾
Purchase
price
(in €) Number
exercised
as of
12/31/2010 Number
canceled
as of
12/31/2010 Number
outstanding
Sanofi-Aventis 05/31/07    12/13/07    520,000    12/14/11    12/13/17    62.33    0    0    520,000
Sanofi-Aventis 05/31/07    03/02/09    650,000    03/04/13    03/01/19    45.09    0    50,000    600,000
Sanofi-Aventis 04/17/09    03/01/10    805,000    03/03/14    02/28/20    54.12    0    50,000    755,000

~~In 2010, 805,000 stock~~The table below summarizes the options ~~were granted~~awarded to the nine members of our Executive Committee (including the 275,000 stock options granted to Christopher Viehbacher). On March 1, 2010, the Board of Directors decided upon the recommendation of the Compensation Committee to subject all the stock options granted to the Chief Executive Officer and half of the stock options granted to the otherindividuals who were members of the Executive Committee ~~to a performance condition. The performance condition must be fulfilled for each financial year preceding~~at the exercise period (2010, 2011, 2012 and 2013), and requires the ratio of business net income (which was a non-GAAP financial measure used until the end of 2009) to net sales to be at least 18% (see “Item 5. Operating and Financial Review and Prospects — Business Net Income”). The Board of Directors, upon the advicetime of the ~~Compensation Committee, determined that these performance criteria were met for 2009 and 2010.~~

~~As of December 31, 2010, 2,671,777 options had been granted to~~award. For more information on the members of our Executive Committee. As of the same date, 2,353,762 options granted to the members of our Executive Committee were outstanding. These figures include the options granted to Christopher Viehbacher, who is a member of our Executive Committee. The exercise date and other basic characteristics of such options ~~are set out in~~see the table “—"— E. Share Ownership — Existing Options Plans as of December 31, ~~2010”~~2012" below.

Origin


sanofi-aventis	05/31/07	12/13/07	520,000	12/14/11	12/13/17	62.33	0	0	520,000
sanofi-aventis	05/31/07	03/02/09	650,000	03/04/13	03/01/19	45.09	0	50,000	600,000
sanofi-aventis	04/17/09	03/01/10	805,000	03/03/14	02/28/20	54.12	0	50,000	755,000
sanofi-aventis	04/17/09	03/09/11	577,500	03/10/15	03/09/21	50.48	0	0	577,500
Sanofi	05/06/11	03/05/12	445,500	03/06/16	03/05/22	56.44	0	0	445,500

⁽¹⁾: Includes the Chief Executive Officer as of the date of grant. The number is subject to performance conditions

During 2012, 70,000 share subscription options were exercised by members of the Executive Committee (Sanofi-Synthélabo subscription option plan of December 10, 2003, i.e. before the creation of the Executive Committee, with an exercise price of €55.74).

~~In 2010, 20 restricted~~ On March 5, 2012, 137,900 performance shares (including 42,000 performance shares awarded to Christopher Viehbacher) were awarded to members of the Executive Committee. The entire award was contingent upon the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but

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excluding the TSR-based criterion. Consequently, the weighting of each criterion is different, with each criterion representing 50% of the grant.

As of December 31, 2012, a total of 287,900 performance shares had been awarded to members of the Executive Committee (existing plans or plans ending in 2012). As of the same date, 223,400 performance shares were in the process of vesting. These figures include the performance shares awarded to Christopher Viehbacher, who is also a member of the Executive Committee.

The table below summarizes the performance shares awarded to individuals who were members of the Executive Committee at the time of the award. For more information on the characteristics of such performance shares see the table "— E. Share Ownership — Existing Restricted Shares Plans as of December 31, 2012" below.

Origin


sanofi-aventis	5/31/07	03/02/09	65,000	03/02/09	03/03/11	03/04/13	65,000	0	0
sanofi-aventis	4/17/09	03/09/11	85,500	03/09/11	03/10/13	03/10/15	0	0	85,500
Sanofi	4/17/09	03/05/12	137,900	03/05/12	03/06/15	03/06/17	0	0	137,900

⁽¹⁾: Includes the Chief Executive Officer as of the date of grant. The number is subject to performance conditions

On March 5, 2013, 402,000 share subscription options and 120,600 performance shares were awarded to ~~any employee with at least three months’ service, including the~~ members of ~~our~~the Executive Committee (including 240,000 options and 45,000 performance shares awarded to Christopher Viehbacher). The entire award is contingent upon the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but excluding the TSR-based criterion. Consequently, the weighting of the two criteria is different, with each representing 50% of the grant.

As part of ~~Share 2010, a global restricted share plan. All~~its commitment to transparency, Sanofi has undertaken to publish in its annual report the level of attainment determined by the Board of Directors for performance conditions applicable to future equity-based compensation plans awarded to Christopher Viehbacher and the other members of the Executive Committee. The Board considers that disclosing the level of attainment allows our shareholders to better understand the demanding nature of the performance conditions. For disclosures about the level of attainment of the various equity-based compensation plans, see "— B. Compensation — Compensation and pension arrangements for corporate officers — Christopher Viehbacher", bearing in mind that the TSR-based criterion only applies to the Chief Executive ~~Committee subsequently renounced delivery~~Officer and that the criteria based on Business Net Income and the ROA each apply to 50% of ~~these restricted shares.~~the grant.

Under French law, ~~directors~~Directors may not receive options solely as compensation for service on our Board, and thus our Company may grant options only to those ~~directors~~Directors who are also our officers.

Because some of our non-executive ~~directors~~Directors were formerly officers or executive officers of our Company or its predecessor companies, some of our non-executive ~~directors~~Directors hold ~~sanofi-aventis~~Sanofi stock options.

We do not have separate profit-sharing plans for key executives. As employees, they are able to participate in our voluntary and statutory profit-sharing schemes on the same terms as our other employees. These plans are described below under “—"— Employees — Profit-sharing schemes.”"

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The total amount accrued ~~and recognized in the income statement for the year ended~~as of December 31, ~~2010~~2012 in respect of corporate pension plans for (i) directors with current or past executive responsibilities at ~~sanofi-aventis~~Sanofi or at companies whose obligations have been assumed by ~~sanofi-aventis~~Sanofi and (ii) members of the Executive Committee was ~~€58.7 million.~~

~~This total amount accrued~~€162.0 million, including €9.1 million recognized in the income statement for the year ended December 31, ~~2009~~2012.

This total amount accrued as of December 31, 2012 included ~~€140.3~~€83.5 million for members of the Executive Committee ~~collectively.~~

collectively of which €6.0 million were recognized in the income statement for the year ended December 31, 2012.

C. Board Practices

Neither we nor our subsidiaries have entered into service contracts with members of our Board of Directors providing for benefits upon termination of employment. With respect to Christopher Viehbacher, see also “—"— B. Compensation — Christopher ~~Viehbacher”~~Viehbacher" above.

~~Sanofi-aventis~~The AFEP-MEDEF Code requires us to specifically report on the application of its recommendations and, if applicable, explain why any of them have not been applied. Sanofi follows the guidelines contained in the AFEP-MEDEF ~~corporate governance code~~Code as amended. Currently our departures from this Code are as follows:

•: The limitations on the powers of the Chief Executive Officer are not contained in our Board Charter but in a decision of our Board dated July 28, 2009 (see "— A. Directors and senior management — Limitations on the powers of the Chief Executive Officer set by the Board"). Because the publication and decision-making processes are the same, this departure is technical and has no practical repercussions.
•: The Committees do not each have their own charter separate from the Board Charter. The Board Charter, which has been adopted by the Board of Directors, gives a global vision of the functioning of the Board and of its committees. Indeed, combining the rules that apply to the Board of Directors and those that apply to its committees creates a single, coherent governing document validated by the entire Board.
•: The Board of Directors does not consider that being a Board member for more than 12 consecutive years is of itself sufficient to disqualify a director from being regarded as independent. This is only one of a number of criteria that must be evaluated on a case by case basis, and not once for all. It is only after reviewing all the factors that a director can be determined as being independent or non-independent. While length of service may in certain circumstances be associated with a loss of independence, in other circumstances it may enhance the capacity of a director to question senior management and give greater independence of mind.
•: The annual assessment of the Board of Directors and of its committees covers their functioning as collective bodies and does not evaluate each director individually. The issue of competency and individual contribution to the activities of the Board and its committees is addressed when a director is up for reappointment as a board or committee member. The Board of Directors does not intend to further formalize this individual assessment, since this could undermine the climate of confidence. Indeed, the rule of collective responsibility is the cornerstone of the French corporate legal system and does not prejudice the rights of our shareholders.

During 2012, the Board of Directors met eight times, with an overall attendance rate among Board members of over 95%. This attendance rate includes participation by conference call, though only a limited number of Directors participated in this way. The individual attendance rates varied between 71% and 100%.

The following persons attended meetings of the Board of Directors in 2012:

•: the Directors;
•: the Secretary to the Board;
•: five employee representatives who attend Board meetings without voting rights, pursuant to the agreement implemented with the European Works Council signed on February 24, 2005;
•: and frequent attendance of: the Executive Vice President Chief Financial Officer, the President Global Operations, and the Chief Strategy Officer.

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        The agenda for each meeting of the Board is prepared by the Secretary after consultation with the Chairman, taking account of the agendas for the meetings of the specialist Committees and the suggestions of the directors.
        Approximately one week prior to each meeting of the Board of Directors, the Directors each receive a file containing the agenda, the minutes for the prior meeting, and documentation relating to the agenda.
        The minutes for each meeting are expressly approved at the next meeting of the Board of Directors.
        In compliance with our Board Charter, certain issues, are examined in advance by the various Committees according to their areas of competence; these issues are then submitted for a decision by the Board of Directors.
        In 2012, the main activities of the Board of Directors related to the following issues:
•
the review of the individual company and consolidated financial statements for the financial year 2011, the review of the individual company and consolidated financial statements for the first half and the consolidated financial statements for the first three quarters of 2012, as well as the review of the draft press releases and presentations to analysts with respect to the publication of such financial statements;

•
an update as to the financing of the acquisition of Genzyme;

•
the examination of documents relating to management forecasts and the financial arrangements adopted with respect to Group subsidiaries over the financial year 2011, the forecasts for the full year 2012 and the budget for 2013;

•
regulated agreements;

•
the delegation of authority to the Chief Executive Officer to issue bonds, and the renewal of the share repurchase program;

•
reviews of the Board of Directors' Management Report, the Chairman's Report and the reports of the statutory auditors;

•
the recording of the amount of the share capital, the reduction in the share capital through the cancellation of treasury shares and the corresponding amendments to the Articles of Association;

•
the determination of the 2011 variable compensation for the Chief Executive Officer, the determination of the 2012 fixed and variable compensation for the Chief Executive Officer, an update of the 2011 and 2012 fixed and variable compensation of the members of the Executive Committee and the determination of the 2012 fixed compensation of the Chairman of the Board. During the presentation of the report of the Compensation Committee on the compensation of corporate officers, the Board of Directors deliberated in their absence: the Board of Directors in the first place discussed the compensation of the Chairman in his absence, and then discussed the compensation of the Chief Executive Officer with the Chairman present but with the Chief Executive Officer still absent;

•
the allocation of Directors' attendance fees for the year 2011;

•
the adoption of equity-based compensation plans, consisting of share subscription option plans and restricted share awards, in respect of 2012;

•
the composition of the Board, the recording of the non-renewal of the mandate of a Director, the proposed renewal of the mandate of Directors at the Shareholders' General Meeting in 2012, the independence of the Directors, the appointment of a new Director, the appointment of a new member of the Audit Committee, the renewal of the chairmanship of the Audit Committee following the renewal of his mandate as a Director, and the review of the composition of the Committees in view of the new composition of the Board;

•
a presentation on Corporate Social Responsibility, on the USA region, on the Consumer Health Care strategy and on industrial affairs;

•
Company policy on equal pay and opportunities;

•
the notice of meeting for the General Meeting of Shareholders and of Holders of Participating Shares (Series issued in 1983, 1984 and 1987 and Series A participating shares issued in 1989), the adoption of

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the draft resolutions, the report of the Board of Directors on the resolutions, and the special reports on the share subscription options and on the restricted shares awarded;
•
the evaluation of the Board and its Committees.
Board Committees
Since 1999, our Board of Directors has been assisted in its deliberations and decisions by specialist committees. Members of these committees are chosen by the Board from among its members, based on their experience.
        The members of these Committees are selected from among the Directors based on their experience and are appointed by the Board of Directors.
        The Committees are responsible for the preparation of certain items on the agenda of the Board of Directors. The decisions of the Committees are adopted by a simple majority with the chairman of the Committee having a casting vote. Minutes are established and approved by the Committee members.
        The chairmen of the Audit Committee, the Compensation Committee and the Appointments and Governance Committee are appointed by the Board of Directors.
        The chairman of each specialist Committee reports to the Board as to the work of the Committee in question, so that the Board is fully informed whenever it adopts a decision.
        The Board of Directors works in close collaboration with the specialist Committees, with a view to ensuring that it carries on its work with maximum transparency and efficiency at all times.
Audit Committee

At December 31, ~~2010,~~2012, this Committee was composed of:
•
Klaus Pohle, Chairman;

•
Robert Castaigne;

•
Christian Mulliez (since May 4, 2012);

•
Carole Piwnica;

•
Gérard Van Kemmel.
        Christian Mulliez was appointed as a member of the Audit Committee ~~comprised:~~by the Board of Directors during its meeting of May 4, 2012, following the Shareholders' General Meeting held on the same day.
        Before this appointment, during its meeting of March 5, 2012, the Audit Committee examined the experience of Christian Mulliez as Vice President, General Manager Administration and Finance of L'Oréal and graduate of theEcole Supérieure des Sciences Economiques et Commerciales (ESSEC). The Audit Committee concluded that Christian Mulliez has the necessary knowledge and experience in finance and accounting, in particular with respect to IFRS standards and internal controls, to be a financial expert. On February 23, 2012 the Appointments and Governance Committee examined the independence of its members and concluded that Christian Mulliez was not an independent Director under the AFEP-MEDEF Code.

~~Klaus Pohle~~~~, Chairman;~~
~~Robert Castaigne~~~~; and~~
~~Gérard Van Kemmel~~.
~~Two of the three~~Four members of the Audit Committee are classified as independent ~~Directors as this term is generally employed~~pursuant to the criteria adopted by the ~~Board. All its members, including~~Board of Directors, i.e. Robert Castaigne, ~~are independent within the terms of the Sarbanes-Oxley Act.~~Carole Piwnica, Klaus Pohle and Gérard Van Kemmel. In addition, all ~~three~~of the members, including Christian Mulliez, fulfill the conditions required to be classified as independent under the Sarbanes-Oxley Act.
        All five members of ~~this committee~~the Committee have financial or accounting expertise as a ~~result~~consequence of their ~~training~~education and ~~work experience~~professional experience. Furthermore, Robert Castaigne, Christian Mulliez, Klaus Pohle and ~~qualify both as~~Gérard Van

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Kemmel are deemed to be financial experts ~~under~~pursuant to the definition in the Sarbanes-Oxley Act and the definition in Article L. 823-19 of the French ~~standards~~Commercial Code. See "Item 16A. Audit Committee Financial Expert".
        The Audit Committee met eight times in 2012, including prior to the meetings of the Board of Directors during which the financial statements were approved. In addition to the statutory auditors, the principal financial officers, the Senior Vice President Audit and Evaluation of Internal Control and other members of senior management of the Group attended meetings of the Audit Committee.
        The meetings of the Audit Committee take place at least two days prior to any meetings of the Board of Directors during which the annual or interim financial statements are to be examined.
        The members of the Audit Committee have a very good attendance record for meetings, with an overall attendance rate among members of 94%. Individual attendance rates varied between 75% and 100%.
        The statutory auditors attended all of the meetings of the Audit Committee; they presented their views as to the annual and half yearly financial ~~experts within~~statements at the ~~terms~~Committee meetings of February 3, and July 23, 2012, respectively.
        In 2012, the main activities of the Audit Committee related to:
•
the preliminary review of the individual company and consolidated financial statements for the financial year 2011, the review of the individual company and consolidated financial statements for the first half and of the consolidated financial statements for the first three quarters of 2012, as well as a review of the press releases and analysts presentations relating to the publication of such financial statements;

•
the financial position of the Group, its indebtedness and liquidity;

•
investigation and evaluation of internal control for 2011, as certified by the statutory auditors pursuant to Section 404 of the Sarbanes-Oxley Act, and ~~French legislation. See “Item 16A. Audit Committee Financial Expert.” The Committee must be composed~~an examination of ~~at least three Directors; neither~~ the ~~Chairman nor~~ 2011 Annual Report on Form 20-F;

•
reporting on guarantees;

•
the ~~Chief Executive Officer may be members. At least two-thirds~~review of the draft resolution to the May 4, 2012 Shareholders' General Meeting on the dividend;

•
the principal risks facing the Company, including audit and evaluation of internal control, financial monitoring of research and development, implementation of shared services in Europe, update on the compliance program, risk management (quality and consent decree), impairment testing of goodwill, pharmacovigilance, update on retirement funds and actuarial assumptions, review of tax litigation and other litigation (meetings of January 25, April 24, May 25, July 23, October 22, and December 13, 2012);

•
the conclusions of Group management as to internal control procedures, the 2011 Board of Directors' Management Report and Chairman's Report, including the description of risk factors contained in the FrenchDocument de Référence;

•
the purchase price allocation and restructuring of Genzyme;

•
reporting on capital expenditures, reporting on internal audit activities, review of business profitability;

•
the budget for audit-related services and non-audit services, the 2012 audit plan, and statutory auditors' fees, the renewal of the mandate of one of the statutory auditors and of its ~~members must be independent,~~deputy;

•
the expertise in financial and accounting matters of Christian Mulliez with a ~~Director belonging~~view to ~~another company the audit committee of which includes a sanofi-aventis Director may not be appointed~~his appointment to the Audit Committee.
~~The roles of the Audit Committee are to review:~~
~~the process for the preparation of financial information;~~
~~the effectiveness of the internal control and risk management systems;~~
~~the audit of the parent company financial statements and consolidated financial statements by the statutory auditors; and~~
~~the independence of the statutory auditors.~~
The role of the Committee is not so much to examine the financial statements in detail as to monitor the process of preparing them and to assess the validity of elective accounting treatments used for significant transactions.
In fulfilling its role, the Committee interviews the statutory auditors and the officers responsible for finance, accounting and treasury management. It is possible for such interviews to take place without the Chief Executive Officer being present if the Committee sees fit.        The Committee ~~may also visit or interview managers of operational entities~~did not have recourse to external consultants in ~~furtherance of its role, having given prior notice to the Chairman of the Board and to the Chief Executive Officer.~~
The Committee interviews the person responsible for internal audit, and gives its opinion on the organization of the internal audit function. The Committee receives the internal audit reports or a periodic summary of these reports.
~~The Committee reviews the scope of consolidation and, as the case may be, the reasons why companies are included in or excluded from such scope.~~
The Committee has authority to consult external experts at the Company’s expense, after first informing the Chairman of the Board or the Board of Directors, and shall report on its use of such authority to the Board of Directors.
The examination of the financial statements by the Audit Committee is accompanied by a presentation by the statutory auditors highlighting key issues not only regarding the financial results but also the elective accounting treatments used, along with a presentation by the Chief Financial Officer describing the Group’s risk exposure and significant off balance sheet commitments.
~~In addition, the Committee:~~
~~directs the selection process for the statutory auditors when their mandates are due for renewal, submits the results of this process to the Board of Directors, and issues a recommendation;~~
~~is informed of the fees paid to the statutory auditors, ensures that the signatory partners are rotated, and oversees compliance with other rules relating to auditor independence;~~
with the statutory auditors, assesses any factors that may compromise the auditors’ independence and any measures taken to mitigate such risk; the Committee ensures in particular that the amount of fees paid by the Company and the Group, or the percentage such fees represent of the auditors’ firms or networks, are not likely to compromise the auditors’ independence;
~~approves in advance any request for the statutory auditors to provide services that are incidental or complementary to the audit of the financial statements, in accordance with applicable law;~~
~~ensures that internal early warning procedures relating to accounting, internal accounting controls and audit are in place and applied; and~~
~~ensures that independent Directors receive no compensation other than attendance fees.~~
~~During 2010, the Audit Committee met seven times.~~
2012.
Compensation Committee

At December 31, ~~2010,~~2012, this Committee was composed of:
•
Gérard Van Kemmel, Chairman;

•
Thierry Desmarest;

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•
Jean-René Fourtou;

•
Claudie Haigneré; ~~and~~

•
Christian Mulliez (since May 4, 2012).

Lindsay Owen-Jones,.
~~The~~ whose mandate as Director expired at the close of the May 4, 2012 Shareholders' General Meeting, also left the Compensation ~~Committee is composed~~Committee. At the end of ~~five~~the Board ~~members, three of whom are independent. A majority of its members must be independent. No executive Directors may be members and a Director belonging to another company~~meeting which followed the ~~compensation committee of which includes a sanofi-aventis Director may not be appointed to~~Shareholders' General Meeting, Christian Mulliez joined the Compensation Committee.

~~The roles~~Of the five members of the Compensation Committee, ~~are:~~three are deemed to be independent.

to make recommendations and proposals to the Board about the compensation, pension and welfare plans, top-up pension plans, benefits in kind and other pecuniary benefits of the executive directors of sanofi-aventis, and about the granting of restricted shares, performance shares and stock options;
~~to define the methods used to set the variable portion of the compensation of the executive directors, and check that these methods are applied;~~
~~to formulate general policy on the granting of restricted shares, performance shares, and stock options, and to determine the frequency of grants for each category of grantee;~~
~~to review the system for allocating attendance fees among Directors; and~~
~~to advise the Chief Executive Officer on the compensation of key senior executives.~~
The Committee also assists in the preparation of the sections of the Company’s French reference document that describe the Company’s policy with respect to the granting of purchase or subscription options, restricted shares or performance shares, and executive compensation.
The Committee has authority to consult external experts at the Company’s expense, after first informing the Chairman of the Board or the Board of Directors, and shall report on its use of such authority to the Board of Directors.
The Committee is informed of the compensation policy applicable to the key senior executives other than the Chairman and the Chief Executive Officer. On such occasions, the Committee meets in the presence of the Chairman and the Chief Executive Officer.
The Compensation Committee met ~~four~~three times in ~~2010.~~2012.
        The members of the Compensation Committee have an excellent attendance record for meetings, with an overall attendance rate among members of 100%.
        In 2012, the main activities of the Compensation Committee related to:
•
the fixed and variable compensation of corporate officers and senior management, and the establishment of the amount of Directors' attendance fees;

•
the governance chapter of the 2011Document de Référence, which contains disclosures about compensation;

•
the policy for equity-based compensation, including both share subscription options and performance shares, which was discussed at several meetings;

•
the review of the draft resolution to be presented to the shareholders in 2012 requesting renewal of the delegation of authority granted to the Board to award performance shares;

•
an update on the 2011 and 2012 fixed and variable compensation of the members of the Executive Committee;

•
the expenses of Directors and corporate officers;

•
presentation on Say on Pay;

•
employee share ownership policy;

•
long-term variable compensation policy;

•
short-term compensation policy for the Chief Executive Officer.
        The Committee did not have recourse to external consultants in 2012.
        When the Committee discusses the compensation policy for members of senior management who are not corporate officers, i.e. the members of the Executive Committee, the Committee invites the members of senior management who are corporate officers to attend.
Appointments and Governance Committee

At December 31, ~~2010,~~2012, this Committee was composed of:
•
Serge Weinberg, Chairman;

•
Thierry Desmarest;

•
Lord Douro;

•
Jean-René Fourtou;

•
Claudie Haigneré;
~~Lindsay Owen-Jones~~~~; and~~

•
Gérard Van Kemmel.

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~~The~~Lindsay Owen-Jones, whose mandate as Director expired at the close of the May 4, 2012 Shareholders' General Meeting, also left the Appointments and Governance ~~Committee is composed of seven Board members, four of whom are independent. A majority of its members must be independent.~~Committee.

~~The roles~~Of the six members of the Appointments and Governance Committee, ~~are:~~four are deemed to be independent.

to recommend suitable candidates to the Board for appointment as Directors or executive officers, taking into account the desired composition of the Board in light of the composition of and changes in the Company’s shareholder base, the experience and skills needed for the Board’s missions, gender balance of the Board;
~~to establish corporate governance rules for the Company, and to oversee the application of those rules;~~
to ensure that there is adequate succession planning for the Company’s executive bodies, in particular through the establishment of a succession plan for the Chairman and the Chief Executive Officer so that replacement solutions may be proposed in the event of an unexpected vacancy;
~~to oversee compliance with ethical standards within the Company and in its dealings with third parties;~~
~~to organize a procedure for the selection of future independent Directors and to carry out studies of potential candidates prior to any contact therewith;~~
to determine whether each Director qualifies as being independent, both on his or her initial appointment and annually prior to publication of the French reference document, and report its conclusions to the Board of Directors; the Committee may set independence criteria based on those set out in the AFEP-MEDEF code;
~~to debate the skills and/or financial expertise of Directors nominated to the Audit Committee and report its conclusions to the Board of Directors;~~
~~to propose methods for evaluating the operating procedures of the Board and its Committees and oversee the application of these methods; and~~
~~to examine the Chairman’s report on corporate governance.~~
The Committee has authority to consult external experts at the Company’s expense, after first informing the Chairman of the Board or the Board of Directors, and shall report on its use of such authority to the Board of Directors.
The Appointments and Governance Committee met ~~four times~~twice in ~~2010.~~2012.
        The members of the Appointments and Governance Committee have an excellent attendance record for meetings, with an overall attendance rate among members of 100%.
        In 2012, the main activities of the Appointments and Governance Committee related to:
•
the review of the Board of Directors Management Report, Chairman's Report, and the chapter of the 2011Document de Référence containing disclosures about governance;

•
the independence of the Directors;

•
proposals about re-election and appointment of Directors;

•
the review of the independence of the proposed new Director, the appointment of a fifth member of the Audit Committee, update on the composition of the Committees after the May 4, 2012 Shareholders' General Meeting;

•
update on the composition of the Board of Directors;

•
the organization of the Group.
        The Committee did not have recourse to external consultants in 2012.
Strategy Committee

At December 31, ~~2010,~~2012, this Committee was composed of:
•
Serge Weinberg, Chairman;

•
Christopher Viehbacher;

•
Laurent Attal (since May 4, 2012);

•
Uwe Bicker;

•
Thierry Desmarest;

•
Lord Douro;

•
Jean-René Fourtou~~; and~~
.

Lindsay Owen-Jones,.
~~The Strategy Committee is composed of seven Board members, three of whom are independent. The Committee is composed~~ whose mandate as Director expired at the close of the ~~Chairman~~May 4, 2012 Shareholders' General Meeting, also left the Strategy Committee. At the end of the Board meeting which followed the ~~Chief Executive Officer and at least three other Directors.~~Shareholders' General Meeting, Laurent Attal joined the Strategy Committee.

~~The~~Of the seven members of the Strategy Committee, ~~is tasked with assessing major strategic options with a view~~three are deemed to ~~the development of the Company’s business.~~be independent.

~~It briefs~~In 2012, the ~~Board of Directors on issues of major strategic interest, such as:~~
~~acquisition, merger and alliance opportunities;~~
~~divestment opportunities;~~
~~development priorities;~~
~~financial and stock market strategies, and compliance with key financial ratios;~~
~~potential diversification opportunities; and~~
~~more generally, any course of action judged essential to the Company’s future.~~
~~The~~ Strategy Committee met six times, four times in ~~2010.~~restrictive sessions and twice in expanded sessions.
        The members of the Strategy Committee have an excellent attendance record for meetings, with an overall attendance rate among members of 100%.
~~The committee worked~~        As in 2011, the work of the Committee covered, in particular, ~~on the business plan, external growth opportunities,~~ research and development and proposed acquisitions. Several meetings also covered the ~~Oncology~~development of a strategic plan for 2015-2020, analysis of the risk from generics, macro trends in the market, and ~~Diabetes divisions.~~the outlook for each of the growth platforms.

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        The Committee did not have recourse to external consultants in 2012.

D. Employees
Number of Employees

~~As of December 31, 2010, sanofi-aventis~~In 2012, Sanofi employed ~~101,575~~111,974 people ~~worldwide.~~worldwide, 1,745 fewer than in 2011. The tables below give a breakdown of employees by geographic area and function as of December 31, ~~2010. Central and Eastern European countries are included in Other Europe.~~
2012.
Employees by geographic area

      As of December 31,
      2010    %    2009    %    2008    %
France    25,896       25.5%       27,694       26.4%       28,223       28.7%
Other Europe    28,919       28.5%       30,202       28.8%       25,292       25.8%
United States    12,954       12.7%       14,517       13.8%       15,228       15.5%
Japan    3,153       3.1%       3,198       3.1%       3,121       3.2%
Other countries    30,653       30.2%       29,256       27.9%       26,349       26.8%
Total
   101,575       100%       104,867       100%       98,213       100%

As of December 31,

2012
%
2011
%
2010
%

Europe
56,265 50.2% 58,339 51.3% 54,815 54.0%
North America
18,994 17.0% 20,233 17.8% 15,106 14.9%
Other countries
36,715 32.8% 35,147 30.9% 31,654 31.1%

Total
111,974 100% 113,719 100% 101,575 100%

Employees by function

      As of December 31,
      2010    %    2009    %    2008    %
Sales    32,686       32.2%       34,292       32.7%       33,507       34.1%
Research and Development    16,983       16.7%       19,132       18.3%       18,976       19.3%
Production    37,504       36.9%       36,849       35.1%       31,903       32.5%
Marketing and Support Functions    14,402       14.2%       14,594       13.9%       13,827       14.1%
Total
   101,575       100%       104,867       100%       98,213       100%

As of December 31,

2012
%
2011
%
2010
%

Sales
32,270 28.8% 32,874 28.9% 32,686 32.2%
Research and Development
17,066 15.2% 18,823 16.6% 16,983 16.7%
Production
45,035 40.2% 44,415 39.0% 37,504 36.9%
Marketing and Support Functions
17,603 15.7% 17,607 15.5% 14,402 14.2%

Total
111,974 100% 113,719 100% 101,575 100%

Industrial Relations
        In all countries where Sanofi operates, we strive to combine economic and social performance — which we believe are inseparable.
~~Industrial~~        Sanofi's social responsibility is based on the basic principles of the Group's Social Charter, which outlines the rights and duties of all Group employees. The Social Charter addresses Sanofi's key commitments towards its workforce: equal opportunity for all people without discrimination, the right to health and safety, respect for privacy, the right to information and professional training, social protection for employees and their families, freedom of association and the right to collective bargaining, and respect for the principles contained in the Global Compact on labor relations ~~within sanofi-aventis~~and ILO treaties governing the physical and emotional well-being and safety of children.
        The Group's social relations are ~~founded~~based on respect and dialogue. In this spirit, the Company's management and employee representatives ~~and management~~ meet ~~frequently~~regularly to exchange views, negotiate, sign agreements and ensure ~~these~~that agreements are being implemented. ~~During 2010,~~

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        Social dialogue takes place in different ways from one country to the ~~forums for dialogue with our employees that exist in most of the countries where we operate were kept regularly informed about the Group’s progress and about the transformation program initiated~~next, as necessitated by ~~management in 2009.~~
At the European level, the sanofi-aventis European Works Council has 40 members and 40 alternates, representing employees from the 27 European Union member states where we operate. During 2010, the European Works Council members received training about the Council’s role and prerogatives in light of changes in the legislative framework.
The Council met in March, April, September and October 2010 to give the employee representatives regular updates about developments in the Group’s various entities (R&D, Industrial Affairs, Commercial Operations, Vaccines, and Support Functions). These developments reflect the adaptations needed for us to remain competitive internationally, to migrate our research and industrial facilities towards biotechnologies, and to adjust our sales forces in response tospecific local ~~regulatory constraints (such as exclusion from reimbursement or price regulation) and to generic competition for some of our flagship products.~~
~~These plenary meetings were supplemented by additional meetings with the officers of the European Works Council, providing a more frequent and specific forum for exchanges with the Council~~circumstances. Depending on the ~~latest developments in the Group.~~
~~We also conducted negotiations throughout the year with employee representatives in each European country affected by the changes. These meetings provided an opportunity for us~~case, social dialogue relating to ~~explain the changes (commercial operations in Germany, Spain, Italy~~information, consultation and France; divestments of sites in England and France; site closures, etc), and to establish employee support measures best suited to local circumstances (internal retraining, outplacement, voluntary redundancy, early retirement, etc). The objective is to inform employee representativesnegotiation processes may take place at the ~~earliest possible stage so that their views and proposals can~~national, regional or company level. It may be ~~taken into account.~~
~~In order to adapt to the changing U.S. market, including the expected loss of patent exclusivity~~organized on a number of major products and increased generic competition, sanofi-aventis made further adjustments to its U.S. workforce in 2010. In October 2010, the Group announced a reorganization of its operational units to rescale and reposition pharmaceutical operations according to the needs of the drug portfolio. Close to one quarter of the workforce was concerned, representing about 1,700 persons mainly in commercial operations. Sanofi-aventis put in place departure conditions for these persons including both financial aspects and outplacement support.
~~In the rest of the world, we continued to implement~~ an ~~action plan in the Philippines, prepared in response to an employee relations survey conducted in 2009, and also initiated similar surveys in other countries, such as Taiwan and Japan.~~
The French Group Works Council, consisting of 25 members and 25 alternates plus trade union representatives, met in February, April, July, October and December 2010. During these meetings, the Council was updated on our activities and financial position, on employment trends within the Group in France, and on the status of our transformation program (reorganization of our R&D, Chemicals, and Commercial Operations in France, site divestment, etc) and other ongoing projects (such as the integration of companies acquired in France).
~~In 2010, five amendments to healthcare and welfare agreements were signed, along with an agreement on a 3% uplift to the minimum guaranteed annual salary.~~
~~A further five amendments to collective compensation agreements were signed in order to extend them to the employees of Oenobiol and Fovea, acquired in 2009.~~
In addition, specific agreements were signed at sites operated by individual Group companies (sanofi-aventis Recherche et Développement, Sanofi Winthrop Industrie, Sanofi Chimie, Sanofi-aventis France, sanofi pasteur and sanofi-aventis groupe), for example on the adoption of chemical industry classification at entity level.
~~In line with our ongoing policies on the employment of seniors and the prevention of psychosocial risks, a number of initiatives were taken in France during 2010:~~
Employment of seniors: the Group action plan is being rolled out at entity level (R&D, Industrial Affairs, Vaccines, etc), including the introduction by Human Resources of a voluntary career development interview with employees aged over 45 (potentially involving some 12,000 people).
~~Prevention of psychosocial risks: the Group-wide agreement signed in December 2009 is being~~interprofessional or sectorial basis, or both. Social dialogue may be informal or it may be implemented through a ~~broad range~~specific formal body, or a combination of ~~initiatives at our 37 sites across France, including training~~both methods. Whatever the situation, Sanofi encourages employees to voice their opinions, help create a stimulating work environment and ~~awareness programs for management, staff,~~take part in decisions aiming to improve the way we work. These efforts reflect one of the principles of the Social Charter whereby the improvement of working conditions and ~~Health and Safety Committees. In addition, we will be setting up a “Stress Observatory” at Group level early in 2011.~~the Group's necessary adaptation to its environment go hand-in-hand.
~~Finally, negotiations were conducted throughout 2010 on issues such as ergonomics, training, strategic workforce planning, and employment; these will continue in 2011.~~
Profit-sharing Schemes, Employee Savings Schemes and Employee Share Ownership
Profit-sharing Schemes

All employees of our French companies belong to voluntary and statutory profit-sharing schemes.
Voluntary Scheme (Intéressement des salariés)

These are collective schemes that are optional for the employer and contingent upon performance. The aim is to give employees an interest in the growth of the business and improvements in its performance.

The amount distributed by our French companies during ~~2010~~2012 in respect of voluntary profit-sharing for the year ended December 31, ~~2009~~2011 represented ~~4.3%~~5.2% of total payroll.

In June ~~2008, sanofi-aventis signed~~2011, Sanofi entered into a three-year Group-wide agreement, effective from the ~~2008~~2011 financial year, and applicable to all French companies more than 50% owned by ~~sanofi-aventis.~~Sanofi. Under the agreement, payments under the Group voluntary profit-sharing scheme ~~are linked~~depend on the most favorable criterion between growth of growth platforms turnover compared to ~~growth in our adjusted~~the previous year's turnover (with constant exchange rate and perimeter) and the level of business net ~~income excluding selected items (which was~~income. For each criterion, a ~~non-GAAP financial measure used until~~schedule allows to determine the ~~end~~percentage of ~~2009). The current agreement will~~total payroll to be ~~renegotiated in 2011.~~
distributed.
Statutory Scheme (Participation des salariés aux résultats de ~~l’entreprise~~l'entreprise)

The scheme is a French legal obligation for companies with more than 50 employees that made a profit in the previous financial year.

The amount distributed by our French companies during ~~2010~~2012 in respect of the statutory scheme for the year ended December 31, ~~2009~~2011 represented ~~6.8%~~5.7% of total payroll.

In November 2007, ~~sanofi-aventis signed~~Sanofi entered into a new Group-wide agreement for an indefinite period, covering all the employees of our French companies.

An amendment to this agreement was signed in April 2009, primarily to ~~bring~~align the agreement ~~into line with~~on a change in French legislation (Law 2008-1258 of December 3, 2008) ~~designed~~in order to protect against erosion in purchasing power, under which each qualifying employee can elect to receive some or all of his or her profit-sharing bonus without regard to the normally applicable mandatory lock-up period.
Distribution Formula

In order to favor lower-paid employees, the voluntary and statutory profit-sharing agreements entered into since 2005 split the benefit between those entitled as follows:
–
60% on the basis of presence during the year; and

–
40% on the basis of annual salary, up to a limit of three times the Social Security ceiling.

- ~~60% on the basis of presence during the year; and~~
- ~~40% on the basis of annual salary, up to a limit of three times the Social Security ceiling.~~
Table of Contents
Employee Savings Schemes and Collective Retirement Savings Plan
The employee savings arrangements operated by ~~sanofi-aventis~~Sanofi are based on a Group savings scheme (Plan Epargne Groupe) and a collective retirement savings plan (Plan Epargne pour la Retraite Collectif). These schemes reinvest the sums derived from the statutory and voluntary profit-sharing schemes (compulsory investments), and voluntary contributions by employees.

~~Since June 1, 2008, all of these arrangements have been open to all the employees of our French companies.~~
In June ~~2010, 78.4%~~2012, 77% of the employees who benefited from the profit-sharing schemes had opted to invest in the collective retirement savings plan.

In ~~2010, €114.7~~2012, €122.9 million and ~~€55.5~~€57.6 million were invested in the Group savings scheme and the collective retirement savings plan respectively through the voluntary and statutory schemes for ~~2009,~~2010, and through top-up contributions.
Employee Share Ownership

At December 31, ~~2010,~~2012, shares held by employees of ~~sanofi-aventis~~Sanofi and of related companies and by former employees under Group employee savings schemes amounted to ~~1.44%~~1.31% of the share capital.

E. Share Ownership
Senior Management

Members of the Executive Committee hold shares of our Company amounting in the aggregate to less than 1% of ~~the Company’s~~our share capital.

At December 31, ~~2010,~~2011, a total of ~~2,671,777~~2,998,000 options had been granted to the members of the Executive Committee (plans existing or closed in ~~2010)~~2012) and ~~2,353,762~~2,898,000 unexercised options to subscribe for or to purchase ~~sanofi-aventis~~Sanofi shares were held by the members of the Executive Committee.
        In 2012, 70,000 options were exercised by members of the Executive Committee (December 10, 2003 Sanofi-Synthélabo subscription option plan, i.e. before the creation of the Executive Committee, with an exercise price of €55.74).
        At December 31, 2012, a total of 287,900 performance shares had been awarded to the members of the Executive Committee (plans existing or closed in 2012) and 223,400 unvested performance shares were held by the members of the Executive Committee.
        These figures include the options granted to Christopher Viehbacher, who is a member of the Executive Committee. The terms of these options and performance shares are summarized in the tables below.
~~In 2010, 710 stock options were exercised by members of the Executive Committee.~~
Existing Option Plans as of December 31, ~~2010~~2012

As of December 31, ~~2010,~~2012, a total of ~~82,270,928~~51,022,011 options were outstanding, including ~~5,847,276~~291,537 options to purchase ~~sanofi-aventis~~Sanofi shares and ~~76,423,652~~50,730,474 options to subscribe for ~~sanofi-aventis~~Sanofi shares. Out of this total, ~~55,663,453~~34,622,756 were immediately exercisable, including ~~5,847,276~~291,537 options to purchase shares and ~~49,816,177~~34,331,219 options to subscribe for shares.

Equity-based compensation, consisting of share subscription option plans and performance share plans, aims to align the employees' objectives on those of the shareholders and to reinforce the link between employees and the Group. Under French law, this falls within the powers of the Board of Directors. Stock options (which may be options to subscribe for shares or options to purchase shares) are granted to employees ~~the Chairman~~ and the Chief Executive Officer by the Board of Directors on the basis of recommendations from the Compensation Committee.

Granting options is a way of recognizing the ~~beneficiary’s~~beneficiary's contribution to the ~~Group’s~~Group's development, and also of securing his or her future commitment to the Group.

Table of Contents

For each plan, the Compensation Committee and the Board of Directors assess whether it should take the form of options to subscribe for shares or options to purchase shares, based on criteria that are primarily financial.

A list of beneficiaries is ~~submitted~~proposed by the Senior Management to the Compensation Committee, which reviews the list and then submits it to the Board of Directors, which grants the options. The Board of Directors also sets the terms for the exercise of the options (including the exercise price) and the lock-up period. The exercise price never incorporates a discount, and must be at least equal to the average of the quoted market prices on the 20 trading days preceding the date of grant by the Board. Stock option plans generally specify a vesting period of four years and a total duration of ten years.

In ~~accordance with~~2011, the ~~AFEP-MEDEF corporate governance code, all grants of options to the Chief Executive Officer are subject to performance conditions. The~~ Board of Directors ~~also applies~~made significant changes to its equity-based compensation policy. In order to limit the dilutive effect on shareholders, the Board of Directors determined to primarily award performance shares, except for a limited group of senior managers who may continue to receive options. Furthermore, whoever the beneficiary is, any award of options or performance shares will henceforth be fully contingent upon the performance targets being met over several financial years.
        On March 5, 2012, 574,050 share subscription options were awarded to 55 beneficiaries (excluding 240,000 options awarded to Christopher Viehbacher). Each option entitles the grantee to the subscription of one share, in the aggregate representing 0.04% of our share capital before dilution.
        The entire award was contingent upon two of the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but excluding the TSR-based criterion. Consequently, the weighting of each criterion is different, each representing 50% of the grant. The quantitative measures of performance are the same as for the award of Christopher Viehbacher.
        The percentage of options awarded to Christopher Viehbacher in 2012 represents 1.81% of the total limit approved by the Shareholders' General Meeting held on May 6, 2011 (1% of our share capital) and 29.48% of the total award to all beneficiaries on March 5, 2012.
        Not all employees are able to benefit from awards of performance shares, but a new agreement on the voluntary scheme (intéressement des salariés) was concluded in June 2011 to ensure that all employees have an interest in the performance of the business.
        In addition, pursuant to the French Law of July 28, 2011, all employees in France of the French subsidiaries of the Group benefited from a profit-sharing bonus amounting to €620 gross in July 2012. In total, Sanofi paid out €18.3 million in this regard (including social contributions).
        On March 5, 2013, the Board of Directors awarded 548,725 share subscription options to 57 beneficiaries (excluding 240,000 options awarded to Christopher Viehbacher). Each option entitles the grantee to the subscription of one share, in the aggregate representing 0.04% of our share capital before dilution.
        The entire award was contingent upon two of the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but excluding the TSR-based criterion. Consequently, the weighting of each criterion is different, each representing 50% of the grant.
        As part of its commitment to transparency, Sanofi has undertaken to publish in its annual report the level of attainment determined by the Board of Directors for the performance conditions applicable to future equity-based compensation plans awarded to Christopher Viehbacher and the other ~~beneficiaries. (see “—~~members of the Executive Committee. The Board considers that disclosing the level of attainment allows our shareholders to better understand the demanding nature of the performance conditions. For disclosures about the level of attainment of the various equity-based compensation plans, see "— B. Compensation — Compensation and pension arrangements for corporate ~~officers”).~~
~~At its meeting of March 1, 2010,~~officers — Christopher Viehbacher", bearing in ~~addition to~~mind that the 275,000 stock options granted to Christopher Viehbacher, the Board of Directors granted 5,727 beneficiaries a total of 7,846,355 options to subscribe for one sanofi-aventis share each (representing 0.6% of our share capital before dilution). Half the stock options granted to the members of the Executive Committee and all the stock options granted to Christopher Viehbacher are subject to a performance condition. The performance condition must be fulfilled for each financial year preceding the exercise period (2010, 2011, 2012 and 2013), and requires the ratio of business net income to net sales to be at least 18% (see “Item 5. Operating and Financial Review and Prospects — Business Net Income”).
~~Options granted~~TSR-based criterion only applies to the Chief Executive Officer ~~in 2010 represented 0.8%~~and that the criteria based on Business Net Income and the ROA each apply to 50% of the ~~maximum total grant approved at the Shareholders’ Annual General Meeting~~grant.

Table of ~~April 17, 2009 (2.5% of our share capital) and 3.38% of the total grant made to all of the beneficiaries on March 1, 2010.~~Contents
Share Purchase Option Plans

Origin Date of
shareholder
authorization Date of Board
grant Number of
options
initially
granted - to
corporate
officers⁽¹⁾ - to the 10
employees
granted
the most
options⁽²⁾ Start date
of exercise
period Expiration
date Purchase
price
(in €) Number
exercised
as of
12/31/2010 Number
canceled
as of
12/31/2010 Number
outstanding
Synthélabo 6/28/1990    12/15/1993    364,000    130,000    104,000    12/15/1998    12/15/2013    6.36    352,600    5,200    6,200
Synthélabo 6/28/1990    10/18/1994    330,200    0    200,200    10/18/1999    10/18/2014    6.01    319,300    0    10,900
Synthélabo 6/28/1990    1/12/1996    208,000    0    52,000    1/12/2001    1/12/2016    8.56    188,730    0    19,270
Synthélabo 6/28/1990    4/05/1996    228,800    0    67,600    4/05/2001    4/05/2016    10.85    194,130    0    34,670
Synthélabo 6/28/1990    10/14/1997    262,080    0    165,360    10/14/2002    10/14/2017    19.73    227,638    5,200    29,242
Synthélabo 6/28/1990    6/25/1998    296,400    148,200    117,000    6/26/2003    6/25/2018    28.38    285,880    0    10,520
Synthélabo 6/23/1998    3/30/1999    716,040    0    176,800    3/31/2004    3/30/2019    38.08    390,135    5,720    320,185
Sanofi-Synthélabo 5/18/1999    5/24/2000    4,292,000    310,000    325,000    5/25/2004    5/24/2010    43.25    4,003,464    288,536    0
Sanofi-Synthélabo 5/18/1999    5/10/2001    2,936,500    145,000    286,000    5/11/2005    5/10/2011    64.50    275,061    125,900    2,535,539
Sanofi-Synthélabo 5/18/1999    5/22/2002    3,111,850    145,000    268,000    5/23/2006    5/22/2012    69.94    61,000    149,600    2,880,750
⁽¹⁾
~~Comprises the Chairman and Chief Executive Officer, the Chief Executive Officer or equivalent officers as of the date of grant.~~
⁽²⁾
~~Employed as of the date of grant.~~
Origin
Date of shareholder authorization
Date of Board grant
Number of options initially granted
- to corporate officers ⁽¹⁾
- to the 10 employees granted the most options ⁽²⁾
Start date of exercise period
Expiration date
Purchase price (in €)
Number exercised as of 12/31/2012
Number canceled as of 12/31/2012
Number outstanding

Synthélabo 6/28/1990 10/18/1994 330,200 0 200,200 10/18/1999 10/18/2014 6.01 325,000 0 5,200
Synthélabo 6/28/1990 1/12/1996 208,000 0 52,000 1/12/2001 1/12/2016 8.56 199,130 0 8,870
Synthélabo 6/28/1990 4/05/1996 228,800 0 67,600 4/05/2001 4/05/2016 10.85 210,300 0 18,500
Synthélabo 6/28/1990 10/14/1997 262,080 0 165,360 10/14/2002 10/14/2017 19.73 233,438 5,200 23,442
Synthélabo 6/28/1990 6/25/1998 296,400 148,200 117,000 6/26/2003 6/25/2018 28.38 292,900 0 3,500
Synthélabo 6/23/1998 3/30/1999 716,040 0 176,800 3/31/2004 3/30/2019 38.08 478,295 5,720 232,025
Sanofi-Synthélabo 5/18/1999 5/22/2002 3,111,850 145,000 268,000 5/23/2006 5/22/2012 69.94 61,000 3,050,850 0

⁽¹⁾
Comprises the Chairman and Chief Executive Officer, the Chief Executive Officer or equivalent officers as of the date of grant.
⁽²⁾
Employed as of the date of grant.
Share Subscription Option Plans
Origin
Date of shareholder authorization
Date of grant
Number of options initially granted
- to corporate officers ⁽¹⁾
- to the 10 employees granted the most options ⁽²⁾
Start date of exercise period
Expiration date
Subscription price (in €)
Number exercised as of 12/31/2012
Number canceled as of 12/31/2012
Number outstanding

Aventis 5/24/2000 3/06/2002 1,173,913 1,173,913 0 3/07/2005 3/06/2012 69.82 0 1,173,913 0
Aventis 5/14/2002 11/12/2002 11,775,414 352,174 741,100 11/13/2005 11/12/2012 51.34 8,844,395 2,931,019 0
Aventis 5/14/2002 12/02/2003 12,012,414 352,174 715,000 12/03/2006 12/02/2013 40.48 8,379,556 1,782,670 1,850,188
Sanofi-Synthélabo 5/18/1999 12/10/2003 4,217,700 240,000 393,000 12/11/2007 12/10/2013 55.74 2,630,340 227,500 1,359,860
sanofi-aventis 5/31/2005 5/31/2005 15,228,505 400,000 550,000 6/01/2009 5/31/2015 70.38 201,864 2,129,105 12,897,536
sanofi-aventis 5/31/2005 12/14/2006 11,772,050 450,000 585,000 12/15/2010 12/14/2016 66.91 1,031,435 1,149,310 9,591,305
sanofi-aventis 5/31/2007 12/13/2007 11,988,975 325,000 625,000 12/14/2011 12/13/2017 62.33 2,318,000 1,038,645 8,632,330
sanofi-aventis 5/31/2007 3/02/2009 7,736,480 250,000 655,000 03/04/2013 3/01/2019 45.09 18,755 574,265 7,143,460
sanofi-aventis 4/17/2009 3/01/2010 7,316,355 0 665,000 3/03/2014 02/28/2020 54.12 440 473,670 6,842,245
sanofi-aventis 4/17/2009 3/01/2010 805,000 275,000 805,000 3/03/2014 02/28/2020 54.12 0 50,000 755,000
sanofi-aventis 4/17/2009 3/09/2011 574,500 0 395,000 3/10/2015 3/09/2021 50.48 0 30,000 544,500
sanofi-aventis 4/17/2009 3/09/2011 300,000 300,000 0 3/10/2015 3/09/2021 50.48 0 0 300,000
Sanofi 5/06/2011 3/05/2012 574,050 0 274,500 3/06/2016 3/05/2022 56,44 0 0 574,050
Sanofi 5/06/2011 3/05/2012 240,000 240,000 0 3/06/2016 3/05/2022 56,44 0 0 240,000

⁽¹⁾
Comprised the Chairman and Chief Executive Officer, the Chief Executive Officer, or equivalent officers as of the date of grant.
⁽²⁾
Employed as of the date of grant.


Origin Date of
shareholder
authorization Date of
grant Number
of options
initially
granted - to
corporate
officers ⁽¹⁾ - to the 10
employees
granted
the most
options ⁽²⁾ Start date
of
exercise
period Expiration
date Subscription
price
(in €) Number
exercised
as of
12/31/2010 Number
canceled
as of
12/31/2010 Number
outstanding
Aventis 5/26/1999    05/11/1999    877,766    0    86,430    05/11/2003    05/11/2010    49.65    586,122    291,644    0
Aventis 5/24/2000    11/14/2000    13,966,871    1,526,087    1,435,000    11/15/2003    11/14/2010    67.93    1,272,007    12,694,864    0
Aventis 5/24/2000    3/29/2001    612,196    0    206,000    3/30/2004    3/29/2011    68.94    28,476    36,964    546,756
Aventis 5/24/2000    11/07/2001    13,374,051    1,068,261    875,200    11/08/2004    11/07/2011    71.39    880,241    2,977,475    9, 516,335
Aventis 5/24/2000    3/06/2002    1,173,913    1,173,913    0    3/07/2005    3/06/2012    69.82    0    7    1,173,906
Aventis 5/14/2002    11/12/2002    11,775,414    352,174    741,100    11/13/2005    11/12/2012    51.34    4,643,971    1,881,231    5,250,212
Aventis 5/14/2002    12/02/2003    12,012,414    352,174    715,000    12/03/2006    12/02/2013    40.48    5,046,091    1,692,290    5,274,033
Sanofi-Synthélabo 5/18/1999    12/10/2003    4,217,700    240,000    393,000    12/11/2007    12/10/2013    55.74    188,780    212,150    3,816,770
Sanofi-aventis 5/31/2005    5/31/2005    15,228,505    400,000    550,000    6/01/2009    5/31/2015    70.38    6,500    1,859,580    13,362,425
Sanofi-aventis 5/31/2005    12/14/2006    11,772,050    450,000    585,000    12/15/2010    12/14/2016    66.91    0    896,310    10,875,740
Sanofi-aventis 5/31/2007    12/13/2007    11,988,975    325,000    625,000    12/14/2011    12/13/2017    62.33    0    749,780    11,239,195
Sanofi-aventis 5/31/2007    03/02/2009    7,736,480    250,000    655,000    03/04/2013    03/01/2019    45.09    620    313,915    7,421,945
Sanofi-aventis 4/17/2009    03/01/2010    7,316,355    0    665,000    03/01/2014    28/02/2020    54.12    0    125,020    7,191,335
Sanofi-aventis 4/17/2009    03/01/2010    805,000    275,000    805,000    03/01/2014    29/02/2020    54.12    0    50,000    755,000
⁽¹⁾
~~Comprises the Chairman and Chief Executive Officer, the Chief Executive Officer, or equivalent officers as of the date of grant.~~
⁽²⁾
~~Employed as of the date of grant.~~
The main characteristics of our stock options are also described in Note D.15.8 to our consolidated financial statements, included in Item 18 of this annual report.
~~Awards of~~Existing Restricted ~~Shares~~Share Plans as of December 31, ~~2010~~2012

Since 2009, the Board of Directors has awarded restricted shares to certain employees in order to give them a direct stake in the ~~Company’s~~Company's future and performances via trends in the share price, as a partial substitute for the granting of stock options.

Restricted shares are awarded to employees on the basis of a list submitted to the Compensation Committee. This Committee ~~which~~ then submits ~~the~~this list to the Board of Directors, which awards the shares. The Board of Directors sets the vesting conditions for the award, and any lock-up conditions for the shares.
In ~~2010,~~2011, the Board of Directors ~~approved both~~made significant changes to its equity-based compensation policy. In order to limit the dilutive effect on shareholders, the Board of Directors determined to primarily award performance shares, except for a ~~targeted plan on~~limited group of senior managers who may continue to receive options. Furthermore, whoever the beneficiary is, any award of options or performance shares will henceforth be fully contingent upon the performance targets being achieved over several financial years.

Table of Contents
        On March ~~1, 2010 along the lines of the 2009 plan and a global plan open to all employees with at least three months’ service on October 27, 2010 (Share 2010, described below).~~
~~At its meeting of March 1, 2010,~~5, 2012, the Board of Directors set up two ~~plans:~~plans in addition to the award made to the Chief Executive Officer:
•
a French plan awarding ~~531,725 restricted~~1,525,100 performance shares to ~~2,262~~2,545 beneficiaries, subject to a vesting period of ~~two~~three years followed by a lock-up period of two years; and

•
an international plan awarding ~~699,524~~3,127,160 restricted shares to ~~3,333~~5,042 beneficiaries, subject to a vesting period of four years.
        The entire award was contingent upon two of the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but excluding the TSR-based criterion. Consequently, the weighting of each criterion is different, each representing 50% of the grant. The quantatitive measures of performance are the same as for the award of Christopher Viehbacher.
No        The 2012 awards represent a dilution of 0.35% of our share capital before dilution as of December 31, 2012.
        Not all employees are able to benefit from awards of performance shares, ~~were awarded~~but a new agreement on the voluntary scheme (intéressement des salariés) was concluded in June 2011 to ensure that all employees have an interest in the performance of the business.
        In addition, pursuant to the ~~members~~French Act of July 28, 2011, all employees in France of the ~~Executive Committee, including Christopher Viehbacher, under~~French subsidiaries of the ~~March 2010 plans.~~Group benefited from a profit-sharing bonus amounting to €620 gross in July 2012. In total, Sanofi paid out €18.3 million in this regard (including social contributions).

~~At its meeting of October 27, 2010, in accordance with French legislation on earnings from employment enacted on December 3, 2008,~~On March 5, 2013, the Board of Directors set up Share 2010, the Group’s first global restricted share plan. This plan awarded 20 restricted shares to each Group employee with at least three months’ service at the date of the meeting, subject to a presence condition. Share 2010 was deployed in 95 countries, in two ~~separate~~ plans:
•
a French plan awarding ~~556,480 restricted~~1,411,910 performance shares to ~~27,824~~2,542 beneficiaries, subject to a vesting period of ~~two~~three years followed by a lock-up period of two ~~years, and.~~
years; and

•
an ~~International~~international plan awarding ~~1,544,860~~2,838,795 restricted shares to ~~77,243~~5,119 beneficiaries, subject to a vesting period of four years.
        The entire award was subject to two of the same internal criteria based on Business Net Income and Return on Assets (ROA) as Christopher Viehbacher, but excluding the TSR-based criterion. Consequently, the weighting of each criterion is different, each representing 50% of the grant.
~~Under~~        As part of its commitment to transparency, Sanofi has undertaken to publish in its annual report the ~~terms~~level of ~~Share 2010,~~attainment determined by the Board of Directors for the performance conditions applicable to future equity-based compensation plans awarded to Christopher Viehbacher and the other members of the Executive ~~Committee (including Christopher Viehbacher) were beneficiaries~~Committee. The Board considers that disclosing the level of attainment allows our shareholders to better understand the demanding nature of the ~~plan, but they subsequently renounced delivery~~performance conditions. For disclosures about the level of attainment of the ~~shares.~~
~~The award of restricted shares~~various equity-based compensation plans, see "— B. Compensation — Compensation and pension arrangements for corporate officers — Christopher Viehbacher", bearing in ~~2010 represents a dilution of about 0.25%~~mind that the TSR-based criterion only applies to the Chief Executive Officer and that the criteria based on Business Net Income and the ROA apply to 50% of the ~~share capital as~~grant each.

Table of ~~December 31, 2010 before dilution.~~Contents
Restricted Share Plans
Origin
Date of shareholder authorization
Date of award
Number of shares initially awarded
- to corporate officers ⁽¹⁾
- to the 10 employees awarded the most shares ⁽²⁾
Date of award ⁽³⁾
Vesting date
Availability date
Number transferred as of 12/31/2012
Number of rights canceled as of 12/31/2012
Number outstanding

sanofi-aventis 5/31/07 3/02/09 590,060 65,000 13,900 3/02/09 3/03/11 3/04/13 585,782 4,278 0
sanofi-aventis 5/31/07 3/02/09 604,004 0 13,200 3/02/09 3/04/13 3/04/13 2,564 59,071 542,369
sanofi-aventis 4/17/09 3/01/10 531,725 0 12,600 3/01/10 3/02/12 3/03/14 523,767 7,958 0
sanofi-aventis 4/17/09 3/01/10 699,524 0 16,530 3/01/10 3/02/14 3/03/14 2,686 65,294 631,544
sanofi-aventis 4/17/09 10/27/10 556,480 20 200 10/27/10 10/27/12 10/28/14 533,200 23,280 0
sanofi-aventis 4/17/09 10/27/10 1,544,860 0 200 10/27/10 10/27/14 10/28/14 1,080 72,800 1,470,980
sanofi-aventis 4/17/09 3/09/11 1,366,040 0 71,000 3/09/11 3/10/13 3/10/15 200 18,050 1,347,790
sanofi-aventis 4/17/09 3/09/11 1,934,610 0 103,300 3/09/11 3/10/15 3/10/15 12,000 116,160 1,806,450
sanofi-aventis 4/17/09 3/09/11 30,000 30,000 0 3/09/11 3/10/13 3/10/15 0 0 30,000
Sanofi 4/17/09 3/05/12 1,525,100 0 126,700 3/05/2012 3/06/15 3/06/17 100 4,980 1,520,020
Sanofi 4/17/09 3/05/12 3,127,160 0 96,300 3/05/2012 3/06/16 3/06/16 0 104,260 3,022,900
Sanofi 4/17/09 3/05/12 42,000 42,000 0 3/05/2012 3/06/15 3/06/17 0 0 42,000

⁽¹⁾
Comprises the Chief Executive Officer as of the date of grant.
⁽²⁾
Employed as of the date of grant.
⁽³⁾
Subject to vesting conditions.


Origin Date of
shareholder
authorization Date of
award Number
of
shares
initially
awarded - to
corporate
officers ⁽¹⁾ - to the 10
employees
awarded
the most
shares ⁽²⁾ Date of
award Vesting
date Availability
date Number
transferred
as of
12/31/2010 Number
of rights
canceled
as of
12/31/2010 Number
outstanding
Sanofi-aventis 5/31/07    03/02/09    590,060    65,000    13,900    03/02/09    03/03/11    03/04/13    0    3,126    586,934
Sanofi-aventis 5/31/07    03/02/09    604,004    0    13,200    03/02/09    03/04/13    03/04/13    0    32,571    571,433
Sanofi-aventis 4/17/09    3/01/10    531,725    0    12 600    3/01/10    03/02/12    03/03/14    0    2,788    528,937
Sanofi-aventis 4/17/09    3/01/10    699,524    0    16 530    3/01/10    03/02/14    03/03/14    0    20,200    679,324
Sanofi-aventis 4/17/09    10/27/10    556,480    20    200    10/27/10    10/27/12    10/28/14    0    540    555,940
Sanofi-aventis 4/17/09    10/27/10    1,544,860    0    200    10/27/10    10/27/14    10/28/14    0    340    1,544,520
⁽¹⁾
~~Comprises the Chief Executive Officer as of the date of grant.~~
⁽²⁾
~~Employed as of the date of grant.~~
As of December 31, ~~2010,~~2012, a total of ~~4,467,088~~10,414,053 restricted shares were outstanding, as the vesting period of ~~each plan~~the plans had not yet expired.
Shares Owned by Members of the Board of Directors

As of December 31, ~~2010,~~2012, members of our Board of Directors held in the aggregate ~~50,497~~113,080 shares, or under 1% of the share capital and of the voting rights, excluding the beneficial ownership of ~~72,186,832 shares held by Total as of such date which may be attributed to Thierry Desmarest (who disclaims beneficial ownership of such shares) and excluding the beneficial ownership of~~ 118,227,307 shares held by ~~L’Oré~~L'Oréal as of such date which may be attributed to ~~Lindsay Owen-Jones~~Laurent Attal or Christian Mulliez (who disclaim beneficial ownership of such shares).
Transactions in Shares by Members of the Board of Directors and comparable persons in ~~2010~~2012
–
On February ~~11, 2010, Serge Weinberg bought 900~~23, 2012, Suet-Fern Lee, Director, acquired 500 shares at a price of ~~€52.51~~€56.42 per ~~share and 600~~share;

–
On March 2, 2012, Lord Douro, Director, acquired 1,000 shares at a price of ~~€52.35.~~
€57.35 per share;

–
On ~~March 2, 2010, Uwe Bicker,~~May 21, 2012, Christian Mulliez, Director, ~~bought 300~~acquired 32 shares at a price of ~~€54.67~~€54.05 per ~~share.~~
share by electing to receive his dividend in shares for the units he holds in the Sanofi Group Employee Savings Plan (FCPE Actions Sanofi);

–
On ~~March 9, 2010,~~May 29, 2012, Serge Weinberg, Chairman of the Board of Directors, acquired 70 shares at a price of €54.65 per share;

–
On June 25, 2012, Laurent Attal, Director, acquired 500 shares at a price of €57.87 per share;

–
On July 27, 2012, Hanspeter Spek, President Global Operations, exercised 63,000 options to subscribe for shares at a price of €55.74 and sold the resulting 63,000 shares at a price of €64.3265;

–
On July 27, 2012, Karen Linehan, Senior ~~Vice President~~Vice-President Legal Affairs and General Counsel, exercised ~~710~~7,000 options to ~~purchase 710~~subscribe for shares at a price of ~~€43.25 per share~~€55.74 and sold ~~710~~the resulting 7,000 shares at a price of ~~€56.25~~€64.16 per ~~share (Plan Sanofi-Synthélabo of May 24, 2000).~~
share; and

–
On ~~March 11, 2010, Lord Douro,~~November 13, 2012, Thierry Desmarest, Director, bought ~~450~~500 shares at a price of ~~£50.80~~€67.42 per share.

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Item 7. Major Shareholders and Related Party Transactions
A. Major Shareholders

~~A. Major Shareholders~~
The table below shows the ownership of our shares as of January 31, ~~2011,~~2013, indicating the beneficial owners of our shares. To the best of our knowledge and on the basis of the notifications received as disclosed below, except ~~as described below~~for L'Oréal, no other shareholder currently holds more than 5% of our share capital or voting rights.

      Total number of issued
shares
Number of actual
voting rights
(excluding own shares) ⁽³⁾
   Theoretical number of
voting rights
(including own shares) ⁽⁴⁾
      Number    %    Number    %    Number    %
L’Oréal
   118,227,307       9.02       236,454,614       15.61       236,454,614       15.55
Total
   67,710,891       5.16       134,719,904       8.89       134,719,904       8.86
Treasury shares⁽¹⁾
   6,072,712       0.46       —       —       6,072,712       0.40
Employees⁽²⁾
   18,682,750       1.43       35,229,250       2.33       35,229,250       2.32
Public    1,100,311,216       83.93       1,108,344,542       73.17       1,108,344,542       72.87
Total
   1,311,004,876       100       1,514,748,310       100       1,520,821,022       100
~~(1)~~ ~~Includes net position of share repurchases under the Group’s liquidity contract which amounted to 15,000 as of December 31, 2010. Amounts held under this contract vary over time~~
~~(2)~~ ~~Shares held via the sanofi-aventis Group Employee Savings Plan.~~
~~(3)~~ ~~Based on the total number of voting rights as of January 31, 2011.~~
~~(4)~~ Based on the total number of voting rights as of January 31, 2011 as published in accordance with article 223-11 and seq. of the General Regulations of the Autorité des Marchés Financiers (i.e., calculated before suspension of the voting rights of treasury shares).

Total number of
issued shares
Number of actual
voting rights
(excluding own shares) ⁽³⁾
Theoretical number
of voting rights
(including own shares) ⁽⁴⁾

Number
%
Number
%
Number
%

L'Oréal 118,227,307 8.91 236,454,614 16.13 236,454,614 16.10
Treasury shares ⁽¹⁾ 3,193,787 0.24 — — 3,193,787 0.22
Employees ⁽²⁾ 17,191,116 1.30 34,062,116 2.32 34,062,116 2.32
Public 1,187,958,233 89.55 1,195,268,262 81.55 1,195,268,262 81.36

Total 1,326,570,443 100 1,465,784,992 100 1,468,978,779 100

⁽¹⁾
Includes net position of share repurchases under the Group's liquidity contract which amounted to 46,000 as of January 31, 2013. Amounts held under this contract vary over time.
⁽²⁾
Shares held via the Sanofi Group Employee Savings Plan.
⁽³⁾
Based on the total number of voting rights as of January 31, 2013.
⁽⁴⁾
Based on the total number of voting rights as of January 31, 2013 as published in accordance with article 223-11 and seq. of the General Regulations of the Autorité des Marchés Financiers (i.e., calculated before suspension of the voting rights of treasury shares).
Ourstatuts~~(Articles~~ (Articles of Association) provide for double voting rights for shares held in registered form for at least two years. All of our shareholders may benefit from double voting rights if these conditions are met, and no shareholder benefits from specific voting rights. For more information relating to our shares, see ~~“Item~~"Item 10. Additional Information — B. Memorandum and Articles of Association.”"

~~L’Oré~~L'Oréal ~~and Total are~~is the only ~~two entities~~entity known to hold more than 5% of the outstanding ~~sanofi-aventis~~Sanofi ordinary shares. ~~These entities~~L'Oréal reduced ~~their holdings~~its holding from 2007 to ~~2010~~2011 after no significant changes in 2006 and 2005. At ~~year end 2006, their respective holdings were 10.52% and 13.13%~~year-end 2007, its holding was 8.66% of our share capital compared to ~~9.02% and 5.51%~~8.91% on December 31, ~~2010.~~2012.

On ~~May 17, 2010, our shareholder~~February 16, 2012, Total declared, following a loss of double voting rights resulting from the conversion of its shares into bearer shares, that it had passed below the legal threshold of ~~10%~~5% of our voting rights.
        Total also declared that, following sales of shares on the stock market and conversion of shares into bearer shares with a view to selling them, it had passed below the thresholds of 3%, 2%, 1% of our share capital (declarations of January 19, 2012, May 10, 2012, and July 30, 2012), and of 5%, 3%, 2% and 1% of our voting rights (declarations of February 16, 2012, June 11, 2012, July 2, 2012, and August 7, 2012) and as ~~a result~~ of its ~~share sales, and~~last declaration held ~~as of the declaration date shares representing 5.88%~~0.56% of our share capital and ~~9.78%~~0.5% of our voting ~~rights.~~
rights (declaration of August 7, 2012). Total subsequently announced that it had sold the remainder of its shareholding in Sanofi during September 2012.
In accordance with ourstatuts, shareholders are required to notify us once they have passed the threshold of 1% of our share capital or our voting rights and each time they cross an incremental 1% threshold (see ~~“Item~~"Item 10. Additional Information — B. Memorandum and Articles of Association — Requirements for Holdings Exceeding Certain ~~Percentages”~~Percentages").

For the year ended December 31, ~~2010,~~2012, we were informed that the following share ownership declaration thresholds had been passed:

Amundi declared that, ~~it had passed successively above and below the thresholds of 3% and 4% of our share capital as a result of holdings~~ through its mutual funds, (~~fonds communs de placement~~~~), and as~~it had passed above the threshold of ~~its last declarations held 2.99%~~3% of ~~our~~the share capital (declaration of ~~November 5, 2010) and 2.88% of our voting rights~~February 8, 2012), then passed successively above (declaration of ~~May 26, 2010).~~
~~BNP Paribas Asset Management declared that it had passed successively above~~July 19, 2012) and below the threshold of 1%3% of our ~~share capital as a result of holdings through its mutual funds (~~~~fonds communs de placement~~),voting rights, and as of its last declaration held ~~0.98%~~3.16% of our share capital and ~~0.84%~~2.98% of our voting rights (declaration of December 21, 2012).

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        BNP Paribas declared that, through its mutual funds, it had successively passed above (declaration of April 27, ~~2010).~~
~~Crédit Agricole S.A declared that the Crédit Agricole group had passed above~~2012) and below (declaration of May 22, 2012) the threshold of 1% of our share capital and as of its last declaration held ~~1.04%~~0.95% of our share capital and ~~0.89%~~0.80% of our voting rights (declaration of May ~~21, 2010)~~22, 2012).

~~Crédit Suisse~~The Caisse des dépôts et consignations declared that it had passed ~~successively above and below the thresholds of 1% and 3% of our share capital, and as of its last declaration held 1.24% of our share capital (declaration of December 16, 2010).~~
Dodge & Cox declared that it had passed above the threshold of 3% of our share capital and as of its last declaration held 3.01% of our share capital and 2.59% of our voting rights (declaration of October 13, 2010).
Franklin Ressources declared that it had passed above the threshold of 2% of our share capital, and as of its last declaration held 2.01% of our share capital and 1.72% of our voting rights (declaration of May 20, 2010).
L’Oréal, as a result of a share cancellation by sanofi-aventis, declared that it had passively passed above the threshold of 9% of our share capital, and as of its last declaration held 9.02% of our share capital (declaration of May 12, 2010).
~~Natixis Asset Management declared that it had passed successively above and~~ below the threshold of 2% of our share capital and as of its last declaration held 1.99% of our share capital and 1.74% of our voting rights (declaration of ~~December 22, 2010)~~January 20, 2012).

~~Total~~Crédit Suisse declared that ~~as a result of share sales it~~the Crédit Suisse Group had passed ~~successively below~~above the ~~thresholds~~threshold of ~~7% and 6%~~1% of our share capital (declaration of ~~April 13, 2010)~~January 5, 2012), then successively above and below the thresholds of ~~12%~~2% and 1% of our share capital and as of its last declaration held 1.34% of our capital (declaration of July 24, 2012).
        Franklin Resources, Inc. declared that it had successively passed below (declaration of January 6, 2012), ~~11%~~above (declaration of April 24, 2012) and ~~10%~~again below (declaration of November 13, 2012) the threshold of 2% of our share capital, then above (declaration of May 9, 2012) and below (declaration of August 24, 2012) the threshold of 2% of our voting rights and as of its last declaration held ~~5.88%~~1.98% of our share capital and ~~9.78%~~1.79% of our voting rights (declaration of ~~May 20, 2010)~~November 13, 2012).

~~Since January 1, 2011 we have been informed that the following share ownership declaration thresholds have been passed:~~
~~Amundi~~L'Oréal declared that, ~~as a result~~due to the reduction of ~~share purchases~~the number of our voting rights, it had passively passed ~~successively~~ above ~~and below~~ the threshold of 3%16% of our ~~share capital~~voting rights and as of its last declaration held ~~2.98%~~16.01% of our ~~share capital~~voting rights (declaration of ~~January 10, 2011)~~July 16, 2012).

~~Crédit Suisse~~Natixis Asset Management declared that on several occasions it had passed ~~successively above and~~ below the threshold of ~~1% or our share capital and as a of its last declaration held 1.02%~~2% of our share capital (declaration of February ~~3, 2011)~~
~~Total declared that it had passed below the threshold of 9% of voting rights as a result of its share sales,~~21, 2012) and as of its last declaration held ~~5.30%~~1.98% of our share capital ~~and 8.97% of our voting rights~~ (declaration of ~~January 18, 2011)~~December 4, 2012).

Individual shareholders (including employees of ~~sanofi-aventis~~Sanofi and its subsidiaries, as well as retired employees holding shares via the sanofi-aventis Group Employee Savings Plan), hold approximately 7%8.7% of our share capital. Institutional shareholders (excluding ~~L’Oréal and Total)~~L'Oréal) hold approximately ~~73%~~78.3% of our share capital. Such shareholders are primarily American ~~(26.1%~~(27.9%), French ~~(18.6%~~(16.3%) and British ~~(10.1%~~(14.1%). German institutions hold ~~3.2%~~3.0% of our share capital, Swiss institutions hold ~~1.9%~~2.2%, institutions from other European countries hold ~~7.6%~~8.5% and Canadian institutions hold ~~1.1%~~1.4% of our share capital. Other international institutional investors (excluding those from Europe and the United States) hold approximately ~~4.3%~~4.9% of our share capital. In France, our home country, we have ~~8,642~~14,887 identified ~~holders~~shareholders of record. In the United States, our host country, we have 4962 identified shareholders of record and ~~12,424~~11,322 identified ADS holders of record.

~~(source:~~(source: a survey conducted by Euroclear France as of December 31, ~~2010,~~2012, and internal information).

~~Shareholders’~~Shareholders' Agreement

We are unaware of any ~~shareholders’~~shareholders' agreement currently in force.

B. Related Party Transactions

In the ordinary course of business, we purchase or provide materials, supplies and services from or to numerous companies throughout the world. Members of our Board of Directors are affiliated with some of these companies. We conduct our transactions with such companies on an ~~arm’s-length~~arm's-length basis and do not consider the amounts involved in such transactions to be material.

On September 17, 2009, ~~sanofi-aventis~~Sanofi acquired the interest held by Merck & Co., Inc. (Merck) in Merial Limited (Merial) and Merial ~~is now~~has been a wholly-owned subsidiary of ~~sanofi-aventis.~~Sanofi since that date. As per the terms of the agreement signed on July 29, 2009, ~~sanofi-aventis~~Sanofi also had an option, following the closing of the Merck/Schering-Plough merger, to combine the Intervet/Schering-Plough Animal Health business with Merial to form an animal health joint venture that would be equally owned by the new Merck and ~~sanofi-aventis.~~Sanofi. On March 8, 2010, ~~sanofi-aventis did in fact exercise~~Sanofi exercised its contractual right to combine the Intervet/Schering-Plough Animal Health business with Merial. ~~In addition~~On March 22, 2011, Merck and Sanofi jointly announced the mutual termination of their agreement to ~~execution of final agreements, formation of the~~form a new animal health joint ~~venture remains subject~~venture. As a result, Merial and Intervet/Schering-Plough continue to ~~approval by~~operate as separate businesses.

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Consequently, the assets and liabilities of Merial, which previously were classified in Sanofi's balance sheet as assets or liabilities held for sale or exchange, have been reclassified to the relevant ~~competition authorities and other closing conditions~~balance sheet line items with no restatement of comparative periods. At the same time, results from the Merial business were included in continuing operations for all the periods reported (for more information on these and other impacts of the termination of the agreement on Sanofi's financial statements, see Notes ~~D.1~~D.2 and ~~D.8.1~~D.8.2 to our consolidated financial statements included at Item 18 of this annual report).

On October 2, 2010, in order to fund a significant part of its proposed acquisition of Genzyme Corporation, ~~sanofi-aventis~~Sanofi executed a Facilities Agreement (the ~~“Facilities Agreement”~~"Facilities Agreement", described at ~~“Item~~"Item 10. Additional Information — C. Material ~~Contracts”~~Contracts" herein) with J.P. Morgan plc, Société Générale Corporate & Investment Banking and BNP Paribas for unsecured term loan facilities of up to US $15,000,000,000.
Because Robert Castaigne serves on the boards of both Société Générale and ~~sanofi-aventis, sanofi-aventis~~Sanofi, Sanofi submitted the Facilities Agreement and certain non-material ancillary agreements, as well as a subsequent amendment, to the prior approval of its Board of Directors with Robert Castaigne abstaining from the vote.
~~Other than~~ In April 2011, $4,000,000,000 were borrowed by Sanofi under the Facilities Agreement to partially fund the acquisition of Genzyme; these ~~agreements,~~amounts were fully reimbursed during ~~2010 and through~~ the ~~date~~course of this annual report, we have not been involved in, and we do not currently anticipate becoming involved in, any transactions with related parties that are material to us or to any of our related parties and that are unusual in their nature or conditions. We have not made any outstanding loans to or for the benefit of:
~~enterprises that, directly or indirectly, control or are controlled by, or are under common control with us;~~
~~enterprises or associates in which we have significant influence or that have significant influence over us;~~
~~shareholders beneficially owning~~2011. The Facilities Agreement expired as a ~~10.0% or greater interest in our voting power;~~
~~any member of our Executive Committee or Board of Directors or close members~~consequence of such ~~individuals’ families; or~~reimbursement.
        On February 21, 2012, Sanofi European Treasury Center (SETC), a 100% subsidiary of the Sanofi Group, was incorporated under the laws of Belgium, with the purpose of providing financing and some financial services to Group subsidiaries. In addition, cash management agreements exist between Sanofi and certain of its subsidiaries.
~~enterprises~~        The Sanofi parent company transferred the Genzyme Corporation shares acquired in ~~which persons described above own, directly or indirectly,~~April 2011 to Aventis, Inc. on June 28, 2012. This transfer consisted of two principal operations:
–
recapitalization by the Sanofi parent company of its subsidiary Genzyme Corporation by incorporation of two loans totaling $16.1 billion into share capital;

–
sale of Genzyme Corporation to a ~~substantial interest in the voting power or over which persons described above are able to exert significant influence.~~
wholly owned subsidiary, Aventis, Inc., for a total price of $19.2 billion. Aventis, Inc. financed this acquisition mainly by using its available cash resources, by increasing its share capital and by long-term intragroup financing ($15.6 billion).

C. Interests of Experts and Counsel

N/A

Table of Contents

Item 8. Financial Information
A. Consolidated Financial Statements and Other Financial Information

Our consolidated financial statements as of and for the years ended December 31, ~~2010, 2009,~~2012, 2011, and ~~2008~~2010 are included ~~at Item 18 of~~in this annual ~~report.~~report at "Item 18. Financial Statements."
Dividends on Ordinary Shares

We paid annual dividends for the years ended December 31, ~~2005, 2006,~~ 2007, 2008, 2009, 2010 and ~~2009~~2011 and our shareholders will be asked to approve the payment of an annual dividend of ~~€2.50~~€2.77 per share for the ~~2010~~2012 fiscal year at our next annual ~~shareholders’~~shareholders' meeting. If approved, this dividend ~~is scheduled to~~will be paid on ~~June 16, 2011.~~May 14, 2013.

We expect that we will continue to pay regular dividends based on our financial condition and results of operations. The proposed ~~2010~~2012 dividend equates to a distribution of ~~35.4%~~45% of our business earnings per share. For information on the non-GAAP financial measure, ~~“business~~"business earnings per ~~share”~~share", see ~~“Item~~"Item 5. Operating and Financial Review and Prospects — Business Net Income.”" The proposed dividend distribution will subject Sanofi to a 3% additional corporate tax charge on the amount distributed.

The following table sets forth information with respect to the dividends paid by our Company in respect of the ~~2006, 2007,~~ 2008, 2009, 2010 and ~~2009~~2011 fiscal years and the dividend that will be proposed for approval by our shareholders in respect of the ~~2010~~2012 fiscal year at our May ~~6, 2011 shareholders’~~3, 2013 shareholders' meeting.

2012 ⁽¹⁾
2011
2010
2009
2008

Net Dividend per Share (in €) 2.77 2.65 2.50 2.40 2.20
Net Dividend per Share (in $) ⁽²⁾ 3.65 3.43 3.34 3.46 3.06

⁽¹⁾
Proposal, subject to shareholder approval.
⁽²⁾
Based on the relevant year-end exchange rate.


      2010⁽¹⁾    2009    2008    2007    2006
Net Dividend per Share (in €)    2.50       2.40       2.20       2.07       1.75
Net Dividend per Share (in $)⁽²⁾    3.34       3.46       3.06       3.02       2.31
⁽¹⁾
~~Proposal, subject to shareholder approval.~~
⁽²⁾
~~Based on the relevant year-end exchange rate.~~
The declaration, amount and payment of any future dividends will be determined by majority vote of the holders of our shares at an ordinary general meeting, following the recommendation of our Board of Directors. Any declaration will depend on our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by our shareholders. Accordingly, we cannot assure you that we will pay dividends in the future on a continuous and regular basis. Under French law, we are required to pay dividends approved by an ordinary general meeting of shareholders within nine months following the meeting at which they are approved.
~~Annual Payments on Participating Share Series A (“PSSA”)~~Disclosure pursuant to Section 219 of the Iran Threat Reduction & Syria Human Rights Act (ITRA)

~~The table below sets forth, for~~Sanofi conducts limited business relating to human and animal health products with Iran contributing well under 1% of the ~~years indicated,~~Group's consolidated net sales in 2012. Although these activities are compliant with applicable law and not financially material to the ~~amount~~Group, the Iran Threat Reduction and Syria Human Rights Act of ~~dividends paid per PSSA (see “Item 9. The Offer~~2012 (the "Act") requires us to include the following disclosures in this report. Sales consisted of bulk and ~~Listing” for further detail). In~~branded pharmaceuticals, vaccines, and animal health supplies. U.S. affiliates, or foreign affiliates controlled by U.S. affiliates, are either not involved in these activities or operate under humanitarian licenses issued by the ~~United States,~~U.S. Treasury Department's Office of Foreign Assets Control, and the ~~PSSAs exist~~Group has not knowingly conducted a transaction or dealing with a person or entity designated in U.S. Executive Orders No. 13224 and 13382. Limited business not exceeding €10.2 million in gross revenues has been conducted by foreign subsidiaries not requiring an OFAC license with entities such as public hospitals or distributors tied to the Ministry of Health or Ministry of Agriculture. It is estimated that this activity contributed no more than €3.7 million to net profits. A representative office in Tehran incurs incidental expenses from state-owned utilities. Otherwise, no business has been transacted with the Government of Iran as defined in the ~~form~~Act. The Group does not believe any of ~~American Depositary Shares issued by The Bank~~its activities to be sanctionable under the Iran Sanctions Act or the Comprehensive Iran Sanctions, Accountability, and Divestment Act of New York Mellon, formerly known as The Bank of New York, as depositary, each representing one-quarter of a PSSA (“PSSA-ADSs”). The PSSAs are generally entitled to receive an annual payment determined according to a specific formula and subject to certain conditions.
~~The annual payments on the PSSAs are equal to the sum of a fixed portion (€1.14 per PPSA) and a variable portion equal to the greater of 704%~~2010. In light of the ~~dividend per ordinary share or 150%~~nature of ~~an amount calculated pursuant~~the products concerned, Sanofi does not currently intend to ~~a formula which takes into account changes~~cease its commercial operations in ~~consolidated sales and consolidated net income.~~Iran.

~~Such amounts have been translated in each case into dollars and adjusted for the one-to-four ratio~~Table of ~~PSSAs to PSSA-ADSs. Annual payments paid to holders of PSSA-ADSs will generally be exempt from French withholding tax.~~Contents
~~In 2010, the annual payment per PSSA in respect of 2009 was equal to €18.0477.~~

      2009    2008    2007    2006    2005
Annual payment per PSSA    € 18.0477       € 16.6390       € 15.7234       € 13.4695       € 12.9929
Annual payment per PSSA-ADS    $ 5.7708       $ 6.0204       $ 5.8550       $ 4.5877       $ 4.1438
Information on Legal or Arbitration Proceedings

~~Our principal legal proceedings are described in~~This Item 8 incorporates by reference the disclosures found at Note D.22 to the consolidated financial statements ~~included~~found at Item 18 of this annual ~~report, which we incorporate herein by reference, and are further updated below to reflect~~report; material ~~developments through~~updates thereto as of the date of this ~~document.~~annual report are found below under the heading "— Updates to Note D.22".

WeSanofi and its affiliates are ~~also~~ involved ~~from time~~in litigation, arbitration and other legal proceedings. These proceedings typically are related to ~~time in a number of legal proceedings incidental to the normal conduct of our business, including proceedings involving~~ product liability claims, intellectual property rights (particularly claims byagainst generic ~~product manufacturers~~companies seeking to limit the patent protection of ~~sanofi-aventis~~Sanofi products), ~~compliance~~competition law and trade practices, commercial claims, employment and wrongful discharge claims, tax assessment claims, waste disposal and pollution claims, and claims under warranties or indemnification arrangements relating to business divestitures. As a result, the Group may become subject to substantial liabilities that may not be covered by insurance and could affect our business and reputation. While we do not currently believe that any of these legal proceedings will have a material adverse effect on our financial position, litigation is inherently unpredictable. As a consequence, we may in the future incur judgments or enter into settlements of claims that could have a material adverse effect on results of operations, cash flows and/or our reputation.

Patents
• ~~Eloxatin~~^® ~~(oxaliplatin)~~Plavix® Patent Litigation
~~(Update to the caption “Eloxatin~~^® ~~(oxaliplatin) Patent Litigation” at Note D.22.b) to our consolidated financial statements included herein at Item 18.)~~        United States.
~~On February 9, 2011, sanofi-aventis~~    Sanofi and ~~Sun Pharmaceuticals filed a stipulation before~~Bristol-Myers Squibb sought damages from Apotex, in reparation of harm caused by that company's "at risk" marketing and sale of an infringing generic version of Plavix® in 2006. In October 2010, the U.S. District Court awarded Sanofi and Bristol-Myers Squibb damages in the amount of ~~New Jersey, whereby Sun Pharmaceuticals agreed not to launch~~U.S.$442,209,362, plus U.S.$107,930,857 in pre-judgment interest, as well as costs and post-judgment interests as set by statute. Apotex secured the amount of the award by cash deposit and filed a ~~generic oxaliplatinbefore February 17, 2011.~~notice of appeal. On ~~February 14,~~October 18, 2011, the U.S. Court of Appeals for the Federal Circuit ~~issued a mandate, in connection with its December 2010 decision, transferring jurisdiction of the case to~~upheld the U.S. District Court ruling regarding the amount of damages but did not uphold the District Court decision regarding the pre-judgment interest. Sanofi's and Bristol-Myers Squibb's petition for rehearing en banc with respect to the Court of Appeals decision concerning pre-judgment interest was denied on January 13, 2012. The order of payment of the damages was issued in February 2012. On February 7, 2012 Sanofi collected its share of the Plavix® patent infringement damage award, post-judgment interest and awarded litigation costs (totaling U.S.$272,828,073.10).
        Canada.    On April 22, 2009, Apotex filed an impeachment action against Sanofi in the Federal Court of Canada alleging the invalidity of Sanofi's Canadian Patent No. 1,336,777 (the '777 Patent) claiming clopidogrel bisulfate. On June 8, 2009, Sanofi filed its defense to the impeachment action and filed a suit against Apotex for infringement of the '777 Patent. The actions were combined and the trial was completed in June 2011. In December 2011, the Federal Court issued a decision that the '777 Patent is invalid, and subsequently generic companies entered the market with generic clopidogrel products. Sanofi filed an appeal with the Federal Court of Appeal in 2012, which is still pending.
• Apotex Settlement Claim
        On November 13, 2008, Apotex filed a complaint before a state court in New Jersey against Sanofi and Bristol-Myers Squibb claiming the payment of a U.S.$60 million break-up fee, pursuant to the terms of the initial settlement agreement of March 2006 relating to the U.S. Plavix® patent litigation. On April 8, 2011, the New Jersey state court granted Sanofi and Bristol-Myers Squibb a motion for summary judgment that was reversed in November 2012.
        In January 2011, Apotex filed a lawsuit in Florida State Court, Broward County, alleging breach of contract relating to the parties' March 2006 proposed settlement agreement. Sanofi was granted a motion for summary judgment in 2012, removing Sanofi from the case. BMS's summary judgment motion was denied. Apotex appealed the summary judgment as to Sanofi in December 2012.

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• Allegra® Patent Litigation
        Japan.    In late 2010, Takata Seiyaku Co. Ltd. ("Takata") and Sawai Pharmaceutical Co. Ltd. ("Sawai") filed patent invalidation actions at the Japan Patent Office ("JPO") against two fexofenadine hydrochloride (the active ingredient in Allegra®) method of treatment patents. In December 2011, the JPO found all claims in both patents invalid and Sanofi appealed. In July 2012, during the appeal process, Sanofi entered into settlement agreements with Takata and Sawai. As a result of the settlement agreements, Takata and Sawai withdrew their legal challenges to the validity of the '954 and '697 patents. This caused the validity of these two patents to be reinstated by the JPO.
        In August 2012, Elmed Eisai Co., Ltd. ("Eisai"), Kobayashi Kako Co., Ltd. ("Kobayashi"), and Taisho Pharm. Ind., Ltd. ("Taisho") obtained approvals to manufacture and market generic fexofenadine hydrochloride products in Japan, despite the existence and validity of the two fexofenadine hydrochloride patents. In August and September 2012, patent invalidation actions against those two patents were filed at the JPO by Eisai, Daiko Pharmaceutical Co. Ltd., Kyorin Rimedio Co. Ltd., Nihon Generic Co., Ltd., Nihon Pharmaceutical Industry Co. Ltd., Nippon Chemiphar Co., Ltd., Nissin Pharmaceutical Co., Ltd., Shiono Chemical Co. Ltd., Teva Pharma Japan Inc., and Yoshindo Inc. The invalidation actions are in preliminary stages.
        In October 2012, Sanofi filed patent infringement lawsuits against Eisai, Taisho and Kobayashi. Those lawsuits are in an early stage. In December 2012, the previously approved generic fexofenadine hydrochloride products of Eisai and Kobayashi were added to Japan's National Health Insurance (NHI) price list. Since February 2013, Allegra® as a prescription medicine has been subject to generic competition in this country.
• Eloxatin® (oxaliplatin) Patent Litigation
        United States.    In February 2011, the U.S. District Court for the District of New ~~Jersey.~~Jersey granted Sanofi's request for a preliminary injunction prohibiting Sun Pharmaceuticals from launching an unauthorized generic product of oxaliplatin. On ~~February~~September 16, 2011, the U.S. District Court for the District of New Jersey ruled in favor of Sanofi, requiring that Sun's unauthorized generic oxaliplatin remain off the U.S. market until August 9, 2012. Sun's appeal of the District Court's ruling was dismissed in September 2012.
• Synvisc-One® Patent Litigation
        In April 2011, Genzyme filed suit in the U.S. District Court for the District of Massachusetts against generic manufacturers Seikagaku Corporation (Seikagaku), Zimmer Holdings, Inc., Zimmer, Inc. and Zimmer U.S., Inc. (collectively, "Zimmer") for the infringement of U.S. Patent No. 5,399,351 (the '351 patent) and U.S. Patent No. 7,931,030 (the '030 patent), upon Seikagaku's and Zimmer's launch of generic versions of Synvisc-One® in the United States.
        On December 30, 2011, the U.S. District Court granted, ~~sanofi-aventis’ request~~in part, Genzyme's Motion for a preliminary injunction, ~~preventing Sun Pharmaceuticals~~enjoining Seikagaku and Zimmer from ~~launching~~selling generic versions of Synvisc-One®, pending a decision in the infringement action, except on limited and specific pricing conditions. In August 2012, a federal jury in Massachusetts found that Seikagaku Corp's recently approved product Gel-One®, distributed in the US by Zimmer, did not infringe the '030 patent. The jury also found that the '030 patent claims were invalid due to obviousness. A motion for judgment as a matter of law and a motion for new trial were filed in September 2012.
• Co-Aprovel® Patent Infringement Actions in Europe
        Sanofi has been involved since early 2012 in a number of legal proceedings involving generic companies that attempted to launch or launched generic versions of Sanofi's Co-Aprovel® in several European countries including, United Kingdom, Belgium, France, Germany, Netherlands, Italy and Norway. Sanofi filed for and was granted preliminary injunctions (PI) against several generic companies based on Sanofi's Supplemental Protection Certificate (SPC) covering Co-Aprovel®. However, Sanofi was not granted PIs against three generic companies, Sandoz, Mylan and Arrow, in France. Sanofi appealed this decision in August 2012. Sanofi followed its PI actions with main infringement suits against some of the generic companies. A few of the generic companies have filed revocation actions seeking to revoke Sanofi's Co-Aprovel® SPC. Some of these revocation actions were denied

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(Italy), others have been suspended (United Kingdom, Belgium), in France, theTribunal de Grande Instance of Paris held the SPC and the patent invalid at the end of February 2013. Sanofi and BMS have appealed that decision.

Regulatory Claims
• Lovenox® Regulatory Litigation
        In July 2010, Sanofi learned that the Food and Drug Administration (FDA) had approved a generic ~~oxaliplatin until~~enoxaparin ANDA filed by Sandoz. Sanofi subsequently filed suit against the ~~District Court resolves all issues pertaining to the settlement agreement, under which Sun Pharmaceuticals was obliged to desist from selling its unauthorized generic oxaliplatin product~~FDA in the U.S. ~~from June 30,~~District Court for the District of Columbia and requested preliminary injunctive relief against the FDA. In August 2010, the U.S. District Court denied this request. As a result of this ruling, the generic version of enoxaparin can continue to ~~August 9, 2012.~~
be marketed in the United States. On February 7, 2012, the Court ruled in favor of the FDA regarding the approval of the Sandoz enoxaparin ANDA.

~~B. Significant Changes~~Government Investigations

~~In addition~~From time to time, subsidiaries of Sanofi are subject to governmental investigations and information requests from regulatory authorities inquiring as to the ~~information included elsewhere~~practices of Sanofi with respect to the sales, marketing, and promotion of its products.
        For example, Sanofi is cooperating with the U.S. Department of Justice in its respective investigations into the promotion of Seprafilm® and Sculptra®, and settled in December 2012 all claims arising out of an investigation into sampling of its former product Hyalgan®. In that respect, Sanofi U.S. paid U.S.$109 million to the settling parties and expects to enter into a Corporate Integrity Agreement with the Office of the Inspector General of the United States Department of Health and Human Services.
        In June 2012, Sanofi U.S. became aware that the U.S. Department of Justice is investigating disclosures to the FDA regarding the variability of response to Plavix®. Sanofi U.S. is cooperating with the U.S. Department of Justice in this ~~annual report, we bring~~matter.
        In France, Sanofi is involved in a claim before the French Antitrust Authority (Autorité de la Concurrence) concerning allegations brought by Teva Santé that Sanofi's communications and promotional practices inhibited the entry on the market of Plavix® generics.
        In Germany, following a criminal complaint filed by Sanofi against one of its distributors, a criminal investigation was initiated against three current and two retired Sanofi employees in connection with the alleged sale in Germany of medications originally destined for humanitarian aid outside of the European Union. The criminal proceedings are ongoing.
        Sanofi has received information that improper payments may have been made in connection with the sale of pharmaceutical products in two small markets within the Emerging Markets region. Sanofi currently is assessing whether these payments were made and, if so, whether they fall within the U.S. Foreign Corrupt Practices Act. In connection with its review, Sanofi has provided information to ~~your attention~~ the ~~following developments since~~U.S. Department of Justice and the ~~end~~U.S. Securities and Exchange Commission and is cooperating with these agencies.

Glossary of ~~2010.~~Terminology
        A number of technical terms which may be used above in Item 8 are defined below for the convenience of the reader.
        ANDA or Abbreviated New Drug Application (United States):    An application by a drug manufacturer to receive authority from the U.S. FDA to market a generic version of another company's approved product, by demonstrating that the purportedly generic version has the same properties (bioequivalence) as the original approved product. As a result of data exclusivity, the ANDA may be filed only several years after the initial market authorization of the original product.
        Summary judgment:    A judgment granted on a claim or defense about which there is no genuine issue of material fact and upon which the movant is entitled to prevail as a matter of law. This procedural device allows the speedy disposition of a controversy without the need for trial.

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Updates to Note D.22
• ~~Genzyme~~Rhodia Retained Liabilities
On February 16, 2011, sanofi-aventis and its wholly owned subsidary, GC Merger Corp., signed an Agreement and Plan of Merger with Genzyme Corporation, pursuant to which, among other things, sanofi-aventis and GC Merger Corp. agreed to amend their initial tender offer dated October 4, 2010 to reflect the terms5, 2013, Rhodia's motion for reconsideration of the ~~Agreement and Plan~~Sao Paolo's Court of ~~Merger and~~Appeal's decision (of September 2011) was rejected by anen banc decision of the same Court. Rhodia may still initiate some recourse against this decision to ~~increase~~ the ~~offered purchase price to (i) $74.00 in cash per share~~Brazilian Supreme Court.

    B. Significant Changes
        N/A

Table of Genzyme common stock, and (ii) one contingent value right per share of Genzyme common stock to be issued by sanofi-aventis. The Agreement and Plan of Merger and the related CVR Agreement are described at “Item 10.C. Material Contracts” herein.
Contents

Item 9.    The Offer and Listing
A.    Offer and Listing Details

We have one class of shares. Each American Depositary Share, or ADS, represents one-half of one share. The ADSs are evidenced by American Depositary Receipts, or ADRs, which are issued by ~~The~~JPMorgan Chase Bank, ~~of New York.~~N.A..

Our shares trade on ~~the Eurolist market~~Compartment A of NYSE Euronext Paris, ~~(Compartment A)~~or Euronext Paris, and our ADSs trade on the New York Stock ~~Exchange. There can be no assurances~~Exchange, or NYSE.
        In April 2011, in connection with our acquisition of Genzyme, we issued contingent value rights ("CVRs") under a CVR agreement entered into by and between us and the American Stock Transfer & Trust Company, LLC, as totrustee (see Item 10.C. Material Contracts — The Contingent Value Rights Agreement). Our CVRs trade on the ~~establishment or continuity of a public market for our shares or ADSs.~~NASDAQ Global Market.
Trading History

The table below sets forth, for the periods indicated, the reported high and low ~~quoted~~market prices of our shares on ~~the Eurolist market of NYSE~~ Euronext Paris and our ADSs on the ~~New York Stock Exchange~~NYSE (source: Bloomberg).

Shares, as traded on Euronext Paris
ADSs, as traded on the NYSE

Calendar period
High
Low
High
Low

(price per share in €)
(price per ADS in $)

Monthly
February 2013
74.20 65.91 49.70 44.50
January 2013
74.29 71.50 49.56 47.43
December 2012
72.38 68.43 47.97 44.82
November 2012
69.95 66.46 45.26 42.20
October 2012
69.86 65.63 45.72 42.52
September 2012
69.46 64.52 44.97 40.52

2012

First quarter
59.56 54.86 39.19 34.92
Second quarter
59.74 53.20 39.33 33.03
Third quarter
69.46 59.45 44.97 36.53
Fourth quarter
72.38 65.63 47.97 42.20
Full Year
72.38 53.20 47.97 33.03

2011

First quarter
52.23 46.04 36.29 31.45
Second quarter
56.50 49.64 40.75 35.34
Third quarter
56.82 42.85 40.58 30.98
Fourth quarter
56.75 47.00 37.66 31.61
Full Year
56.82 42.85 40.75 30.98

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Shares, as traded on Euronext Paris
ADSs, as traded on the NYSE

Calendar period
High
Low
High
Low

(price per share in €)
(price per ADS in $)

2010
Full Year
58.90 44.01 41.59 28.01

2009

Full Year
56.78 38.43 40.80 24.59

2008

Full Year
66.90 36.055 49.04 23.95



      NYSE Euronext          NYSE
Calendar period    High    Low          High    Low
      (price per share in €)          (price per ADS in $)
Monthly

February 2011 (through February 25)
   51.90       48.60          35.48       33.41
January 2011
   52.23       48.11          35.42       31.45
December 2010
   49.84       46.48          33.32       30.64
November 2010
   51.41       46.23          36.31       30.05
October 2010
   50.67       47.51          35.51       32.74
September 2010
   50.90       45.13          34.10       29.55
August 2010
   46.63       44.11          30.77       28.03
2010

First quarter
   58.90       51.68          41.59       34.90
Second quarter
   55.85       45.21          37.72       28.01
Third quarter
   50.90       44.01          34.10       28.03
Fourth quarter
   51.41       46.23          36.31       30.05
Full Year
   58.90       44.01          41.59       28.01
2009

First quarter
   49.93       38.43          32.80       24.59
Second quarter
   48.67       39.32          33.83       25.57
Third quarter
   51.68       40.91          38.00       28.60
Fourth quarter
   56.78       48.35          40.80       35.83
Full Year
   56.78       38.43          40.80       24.59
2008

Full Year
   66.90       36.055          49.04       23.95
2007

Full Year
   71.95       56.20          48.30       37.90
2006

Full Year
   79.85       64.85          50.05       41.65
Fluctuations in the exchange rate between the euro and the U.S. dollar will affect any comparisons of euro share prices and U.S. ADS prices.

B.    Plan of Distribution

N/A

C.    Markets
Shares and ADSs

Our shares are listed on ~~the~~ Euronext Paris ~~Market (Compartment A)~~ under the symbol ~~“SAN”~~"SAN" and our ADSs are listed on the ~~New York Stock Exchange, or~~ NYSE under the symbol ~~“SNY”~~"SNY". At
        As of the date of this annual report, our shares are included in a large number of indices, including the ~~“CAC~~"CAC 40 ~~Index,”~~Index", the principal French index published by Euronext Paris. This index contains 40 stocks selected among the top 100 companies based on free-float capitalization and the most active stocks listed on the Euronext Paris ~~Market.~~market. The CAC 40 Index indicates trends onin the French stock market as a whole and is one of the most widely followed stock price indices in France. Our shares are also included in the S&P Global 100 Index, the Dow Jones EuroSTOXX 50, the Dow Jones STOXX 50, the FTS Eurofirst 100, the FTS Eurofirst 80 and the MSCI Pan-Euro Index, among other indices.
CVRs

~~The Euronext Paris Market~~
~~The Euronext Paris Market is a regulated market operated and managed by Euronext Paris, a market operator (~~~~entreprise de marché~~) responsible for the admission of securities and the supervision of trading in listed securities on Euronext Paris. Euronext Paris publishes a daily official price list that includes price information on listed securities. The Euronext Paris Market is divided into three capitalization compartments: “A” for issuers with a market capitalization over €1 billion, “B” for issuers with a market capitalization between €1 billion and €150 million, and “C” for issuers with a market capitalization under €150 million.
~~Trading~~Our CVRs trade on the ~~Euronext Paris~~NASDAQ Global Market
Securities admitted to trading on the Euronext Paris Market are officially traded through authorized financial institutions that are members of Euronext Paris. Euronext Paris places securities admitted to trading on the Euronext Paris Market in one of two categories (continuous (“~~continu~~~~”) or fixing), depending on whether they belong to certain indices or compartments and/or on their historical and expected trading volume. Our shares trade in the category known as~~~~continu~~~~, which includes the most actively traded securities. Securities belonging to the~~~~continu~~ category are traded on each trading day from 9:00 a.m. to 5:30 p.m. (Paris time), with a pre-opening session from 7:15 a.m. to 9:00 a.m. and a post-closing session from 5:30 p.m. to 5:35 p.m. (during which pre-opening and post-closing sessions trades are recorded but not executed until the opening auction at 9:00 a.m. and the closing auction at 5:35 p.m., respectively). In addition, from 5:35 p.m. to 5:40 p.m., trading can take place at the closing auction price. Trading in a share belonging to the~~continu~~ category after 5:40 p.m. until the beginning of the pre-opening session of the following trading day may take place at a price that must be within a range of plus or minus 1% of the closing auction price.
Euronext Paris may temporarily interrupt trading in a security admitted to trading on the Euronext Paris Market if matching a bid or ask offer recorded in the system would inevitably result in a price beyond a certain threshold, determined on the basis of a percentage fluctuation above or below a set reference price. With respect to equity securities included in the CAC 40 Index and trading in the~~continu~~ category, once trading has commenced, volatility interruptions for a reservation period of 2 minutes (subject to extension by Euronext Paris) are possible if the price fluctuates by more than 3% above or below the relevant reference price. Euronext Paris may also suspend trading of a security admitted to trading on the Euronext Paris Market in certain circumstances including at the request of the issuer or the occurrence of unusual trading activity in a security. In addition, in exceptional cases, including, for example, upon announcement of a takeover bid, the French market regulator (~~Autorité des marchés financiers~~ ~~or “AMF”) may also require Euronext Paris to suspend trading.~~
Trades of securities admitted to trading on the Euronext Paris Market are settled on a cash basis on the third trading day following the trade. For certain liquid securities, market intermediaries which are members of Euronext Paris are also permitted to offer investors the opportunity to place orders through a deferred settlement service (~~Ordres Stipulés à Règlement-Livraison Différés~~ ~~— OSRD). The deferred settlement service is only available for trades in securities that have both a total market capitalization of at least €1 billion and a daily~~
~~average volume of trades of at least €1 million. Investors can elect on or before the determination date (~~~~jour de liquidation~~), which is the fourth trading day before the end of the month, either to settle by the last trading day of the month or to postpone the settlement decision to the determination date of the following month. At the date of this annual report, our shares are currently eligible for the deferred settlement service.
Equity securities traded on a deferred settlement basis are considered to have been transferred only after they have been recorded in the purchaser’s account. Under French securities regulations, if the sale takes place before, but during the month of, a dividend payment date, the purchaser’s account will be credited with an amount equal to the dividend paid.
Prior to any transfer of securities listed on the Euronext Paris Market held in registered form, the securities must be converted into bearer form and accordingly recorded in an account maintained by an accredited intermediary with Euroclear France S.A., a registered central security depositary. Transactions in securities are initiated by the owner giving the instruction (through an agent, if appropriate) to the relevant accredited intermediary. Trades of securities listed on the Euronext Paris Market are cleared through LCH.Clearnet and settled through Euroclear France S.A. using a continuous net settlement system. A fee or commission is payable to the accredited intermediary or other agent involved in the transaction.
~~Participating Shares Series A~~
Further to a public offer to exchange ordinary shares for PSSAs in 1993, a tender offer to purchase for cash all of the outstanding PSSA-ADSs in 1995 and repurchases in private transactions since that date, there are only 3,271 PSSAs outstanding as of December 31, 2010. In view of the small number of PSSAs that remain outstanding, at some time in the future, sanofi-aventis intends to terminate the Deposit Agreement for the PSSA-ADSs and apply to the U.S. Securities and Exchange Commission to terminate registration of the PSSAs and the PSSA-ADSs under the Securities Exchange Act of 1934, as amended.
We are not aware of any non-U.S. trading market for our Participating Shares Series A. In the United States, the PSSAs exist in the form of American Depositary Shares issued by The Bank of New York Mellon, formerly known as the Bank of New York, as depositary, each representing one-quarter of a PSSA. We are not aware of any U.S. trading market for the PSSA-ADSs since their suspension from trading on the NYSE on May 18, 1995, and their subsequent removal from listing on the NYSE on July 31, 1995. Prior to their delisting, the PSSA-ADSs traded on the NYSE under the symbol ~~RP PrA.~~"GCVRZ".
Trading ~~Practices and Trading~~by Sanofi in our own Shares

Under French law, a company may not issue shares to itself, but it may purchase its own shares in the limited cases described at ~~“Item~~"Item 10. Additional Information — B. Memorandum and Articles of Association — Trading in Our Own Shares.”
"

D.    Selling Shareholders

N/A

E.    Dilution

N/A

F.    Expenses of the Issue

N/A

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Item 10. Additional Information
A. Share Capital

N/A

B. Memorandum and Articles of Association
General
Our Company is asociété anonyme, a form of limited liability company, organized under the laws of France.
In this section, we summarize material information concerning our share capital, together with material provisions of applicable French law and ourstatuts, an English translation of which has been filed as an exhibit to this annual report. For a description of certain provisions of ourstatutsrelating to our Board of Directors and statutory auditors, see ~~“Item~~"Item 6. Directors, Senior Management and Employees.”" You may obtain copies of ourstatutsin French from thegreffe(Clerk) of theRegistre du Commerce et des Sociétés de Paris~~(Registry~~ (Registry of Commerce and Companies of Paris, France, registration number: 395 030 844). Please refer to that full document for additional details.
Ourstatutsspecify that our corporate affairs are governed by:
•
applicable laws and regulations (in particular, Title II of the French Commercial Code); and
•
~~the~~~~statuts~~~~themselves.~~

•
thestatuts themselves.
Article 3 of ourstatuts specifies that the ~~Company’s~~Company's corporate ~~objects,~~purpose, in France and abroad, ~~are:~~is:
~~Acquiring~~
•
acquiring interests and holdings, in any form whatsoever, in any company or enterprise, in existence or to be created, connected directly or indirectly with the health and fine chemistry sectors, human and animal therapeutics, nutrition and bio-industry;

in the following ~~areas :~~areas:
~~Purchase~~
•
purchase and sale of all raw materials and products necessary for these activities;
~~Research,~~

•
research, study and development of new products, techniques and processes;
~~Manufacture~~

•
manufacture and sale of all chemical, biological, dietary and ~~hygienic~~hygiene products;
~~Obtaining~~

•
obtaining or acquiring all intellectual property rights related to results obtained and, in particular, filing all patents, trademarks and models, processes or inventions;
~~Operating~~

•
operating directly or indirectly, purchasing, and transferring — for free or for consideration — pledging or securing all intellectual property rights, particularly all patents, trademarks and models, processes or inventions;
~~Obtaining,~~

•
obtaining, operating, holding and granting all licenses; ~~and~~
~~Within~~

•
within the framework of a group-wide policy and subject to compliance with the relevant legislation, participating in treasury management transactions, whether as lead company or otherwise, in the form of centralized currency risk management or intra-group netting, or any other form permitted under the relevant laws and regulations;

~~And,~~and, more generally:
~~All~~
•
all commercial, industrial, real or personal property, financial or other transactions, connected directly or indirectly, totally or partially, with the activities described above and with all similar or related activities or having any other purposes likely to encourage or develop the ~~company’s~~Company's activities.

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Directors
Transactions in Which Directors Are Materially Interested

Under French law, any agreement entered into (directly or through an intermediary) between our Company and any one of the members of the Board of Directors that is not entered into (i) in the ordinary course of our business and (ii) under normal conditions is subject to the prior authorization of the disinterested members of the Board of Directors. The same provision applies to agreements between our Company and another company if one of the members of the Board of Directors is the owner, general partner, manager, director, general manager or member of the executive or supervisory board of the other company, as well as to agreements in which one of the members of the Board of Directors has an indirect interest.
The Board of Directors must also authorize any undertaking taken by our Company for the benefit of our Chairman, Chief Executive Officer (directeur général) or his delegates (directeurs généraux délégués) pursuant to which such persons will or may be granted compensation, benefit or any other advantage as a result of the termination of or a change in their offices or following such termination or change.

In addition, ~~such termination package,~~ except with respect to any non-compete indemnity ~~and~~or certain pension ~~benefits:~~benefits, any such termination package: (i) must be authorized by our shareholders ~~by adopting~~through the adoption of a separate general shareholders meeting resolution for each such beneficiary, which ~~has to~~authorization must be renewed at each renewal of such ~~beneficiary’s~~beneficiary's mandate, and (ii) cannot be paid to such beneficiary unless (a) the Board of Directors decides that such beneficiary has satisfied certain conditions, linked to such ~~beneficiary’s performances~~beneficiary's performance measured by our ~~Company’s performances,~~Company's performance, that must have been defined by the Board of Directors when granting such package, and (b) such decision is publicly disclosed.

~~Directors’~~Directors' Compensation
The aggregate amount of attendance fees (jetons de présence) of the Board of Directors is determined at the ~~Shareholders’~~Shareholders' Ordinary General Meeting. The Board of Directors then divides this aggregate amount up among its members by a simple majority vote. In addition, the Board of Directors may grant exceptional compensation (rémunérations exceptionnelles) to individual directors on a case-by-case basis for special assignments following the procedures described above at “—"— Transactions in Which Directors Are Materially Interested.”" The Board of Directors may also authorize the reimbursement of travel and accommodation expenses, as well as other expenses incurred by Directors in the corporate interest. See also ~~“Item~~"Item 6. Directors, Senior Management and Employees.”"

Board of ~~Directors’~~Directors' Borrowing Powers

All loans or borrowings on behalf of the Company may be decided by the Board of Directors within the limits, if any, imposed by the ~~Shareholders’~~Shareholders' General Meeting.
There are currently no limits imposed on the amounts of loans or borrowings that the Board of Directors may approve.

~~Directors’~~Directors' Age Limits
For a description of the provisions of ourstatutsrelating to age limits applicable to our Directors, see ~~“Item~~"Item 6. Directors, Senior Management and Employees.”"

~~Directors’~~Directors' Share Ownership Requirements

Pursuant to the Board Charter, our Directors are required to hold at least ~~500~~1,000 shares during the term of their appointment.
Share Capital

As of December 31, ~~2010,~~2012, our share capital amounted to ~~€2,621,995,570,~~€2,652,685,918, divided into ~~1,310,997,785~~1,326,342,959 outstanding shares with a par value of €2 per share. All of our outstanding shares are of the same class and are fully paid. Of these shares, we or entities controlled by us held ~~6,070,712~~3,150,287 shares (or ~~0.46%~~0.24% of our outstanding share

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capital), as treasury shares as of such date. As of December 31, ~~2010,~~2012, the carrying amount of such shares was ~~€371~~€207 million.
At an extraordinary general meeting held on ~~April 17, 2009,~~May 6, 2011, our shareholders authorized our Board of Directors to increase our share capital, through the issuance of shares or other securities giving access to the share capital with or without preemptive rights, by an aggregate maximum nominal amount of €1.3 billion. See “—"— Changes in Share Capital — Increases in Share Capital,”" below.

The maximum total ~~amount~~number of authorized but unissued shares as of December 31, ~~2010~~2012 was ~~330.8~~321 million, reflecting the unused part of the ~~April 17, 2009~~May 6, 2011 and May 4, 2012 shareholder ~~authorization,~~authorizations to issue shares without preemptive rights, outstanding options to subscribe for shares, and awards of shares.
Stock Options
Types of Stock Options
We have two types of stock options outstanding: options to subscribe for shares (options de souscription ~~d’actions~~d'actions) and options to purchase shares (options ~~d’achat d’actions~~d'achat d'actions). Upon exercise of an option to subscribe for shares, we issue new shares, whereas upon exercise of an option to purchase shares, the option holder receives existing shares. We purchase our shares on the market prior to the ~~grant~~vesting of the options to purchase in order to provide the option holder with shares upon exercise. ~~Following the merger of Aventis with and into sanofi-aventis, all previously granted options for the shares of Aventis were converted into options for our shares.~~

Because the exercise of options to purchase shares will be satisfied with existing shares repurchased on the market or held in treasury, the exercise of options to purchase shares has no impact on the amount of our ~~equity~~share capital.

Stock Option Plans

Our combined general meeting ~~of April 17, 2009~~held on May 6, 2011 authorized our Board of Directors for a period of 26 months to grant, on one or more occasions, options to subscribe for shares and options to purchase shares in favor of persons to ~~members~~be chosen by the Board of ~~our~~Directors from among the salaried ~~staff and/or corporate officers as well as to members of salaried staff and/or~~employees and corporate officers of our Company or of companies or groupings of economic interest ~~groups related to our Company under~~of the ~~conditions referred to~~Group in accordance with Article L. 225-180 of the French Commercial Code.

The aggregate number of options to subscribe for shares and options to purchase shares that may be granted under this authorization may not give entitlement to a total number of shares exceeding ~~2.5%~~1% of the share capital as of the ~~day~~date of the decision by the Board of Directors to grant ~~options is made by the Board. Under~~ such ~~a resolution, the price payable on~~options.
        The Board of Directors sets the exercise price of options ~~may not~~to subscribe for shares and options to purchase shares. However, the exercise price never incorporates a discount and must be ~~lower than~~at least equal to the average of the ~~first~~ quoted market prices ~~of sanofi-aventis ordinary shares~~ on the ~~Euronext Paris Market during the~~ 20 ~~consecutive~~ trading ~~days~~sessions preceding the date ~~on which the options are granted.~~
~~The authorization entails the express waiver~~of grant by the Board of Directors.
        Stock option plans generally provide for a lock-up period of four years and have a duration of ten years.
        Under such authorization the shareholders expressly waive, in favor of the grantees of options to subscribe for shares, of their preemptive rights in respect of shares that are to be issued as and when options are exercised.

The Board of Directors ~~sets~~is granted full power to implement this authorization and to set the terms and conditions on which options are granted and the arrangements ~~as regards~~with respect to the dividend entitlement of the shares.

See ~~“Item~~"Item 6. Directors, Senior Management and Employees — E. Share ~~Ownership”~~Ownership" for a description of our option plans currently in force.

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Awards of Shares
Our combined general meeting held on ~~April 17, 2009~~May 4, 2012 authorized our Board of Directors for a period of 38 months to allot, on one or more occasions, existing or new restricted shares in favor of persons to ~~some or all~~be chosen by the Board of Directors from among the salaried employees and corporate officers of ~~the~~our Company or of companies or economic interest groupings of the Group in accordance with Articles L. 225-197-1etseq. of the French Commercial Code.

The existing or new shares allotted under this authorization may not represent more than 1%1.2% of the share capital as of the date of the decision by the Board of ~~Directors.~~
Directors to allot such shares.
The authorization provides that allotment of shares to the allottees will become irrevocable either (i) at the end of a minimum vesting period of ~~two~~three years, in which case the allottees ~~being~~will also be required to retain their shares for a minimum period of two years from the irrevocable allotment thereof, or (ii) after a minimum vesting period of four years, in which case allottees may not be subject to any minimum retention period.

In the case of newly issued shares, the authorization entails the express waiver by the shareholders, in favor of the allottees of restricted shares, of their preemptive rights in respect of shares that are to be issued as and when restricted shares ~~are granted.~~vest.

The Board of Directors sets the terms on which restricted shares are granted and the arrangements ~~as regards~~with respect to the dividend entitlement of the shares.

See ~~“Item~~"Item 6. Directors, Senior Management and Employees — E. Share ~~Ownership”~~Ownership" for a description of our restricted shares plans currently in force.
Changes in Share Capital in ~~2010~~2012

See Note D.15.1. to our consolidated financial statements included at Item 18 of this annual report.
Voting Rights
In general, each shareholder is entitled to one vote per share at any ~~shareholders’~~shareholders' general meeting. Ourstatuts do not provide for cumulative voting rights. However, ourstatutsprovide that any fully paid-up shares that have been held in registered form under the name of the same shareholder for at least two years acquire double voting rights. The double voting rights cease automatically for any share converted into bearer form or transferred from one owner to another, subject to certain exceptions permitted by law.
As of December 31, ~~2010,~~2012, there were ~~209,996,274~~142,585,235 shares that were entitled to double voting rights, representing ~~16.02%~~10.75% of our total share capital, approximately ~~27.72%~~9.73% of our voting rights held by holders other than us and our subsidiaries, and ~~27.61%~~9.71% of our total voting rights.

Double voting rights are not taken into account in determining whether a quorum exists.

Under the French Commercial Code, treasury shares ~~of a company~~or shares held ~~in treasury or~~ by entities controlled by that company are not entitled to voting rights and do not count for quorum purposes.
Ourstatuts allow us to obtain from Euroclear France the name, nationality, address and number of shares held by holders of our securities that have, or may in the future have, voting rights. If we have reason to believe that a person on any list provided by Euroclear France holds securities on behalf of another person, ourstatuts allow us to request information regarding beneficial ownership directly from such person. See “—"— B. Memorandum and Articles of Association — Form, Holding and Transfer of Shares,”" below.
Ourstatutsprovide that Board members are elected on a rolling basis for a maximum tenure of four years. ~~Our~~~~statuts~~ ~~do not provide for cumulative voting rights.~~
~~Shareholders’~~Shareholders' Agreement

We are not aware of any ~~shareholder’s~~shareholder's agreement currently in force concerning our shares.

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~~Shareholders’~~Shareholders' Meetings
General

In accordance with the provisions of the French Commercial Code, there are three types of ~~shareholders’~~shareholders' meetings: ordinary, extraordinary and special.

Ordinary general meetings of shareholders are required for matters such as:
•
electing, replacing and removing directors;

•
appointing independent auditors;

•
approving the annual financial statements;
•
~~declaring dividends or authorizing dividends to be paid in shares, provided the~~~~statuts~~~~contain a provision to that effect; and~~

•
declaring dividends or authorizing dividends to be paid in shares, provided thestatuts contain a provision to that effect; and

•
approving share repurchase programs.
Extraordinary general meetings of shareholders are required for approval of matters such as amendments to ourstatuts, including any amendment required in connection with extraordinary corporate actions. Extraordinary corporate actions include:
•
changing our ~~Company’s~~Company's name or corporate ~~objects;~~
purpose;

•
increasing or decreasing our share capital;

•
creating a new class of equity securities;

•
authorizing the issuance of securities giving access to our share capital or giving the right to receive debt instruments;

•
establishing any other rights to equity securities;

•
selling or transferring substantially all of our assets; and

•
the voluntary liquidation of our Company.

Special meetings of shareholders of a certain category of shares or shares with certain specific rights (such as shares with double voting rights) are required for any modification of the rights derived from that category of shares. The resolutions of the ~~shareholders’~~shareholders' general meeting affecting these rights are effective only after approval by the relevant special meeting.

Annual Ordinary Meetings

The French Commercial Code requires the Board of Directors to convene an annual ordinary general shareholders' meeting ~~of shareholders for approval of~~to approve the annual financial statements. This meeting must be held within six months of the end of each fiscal year. This period may be extended by an order of the President of the Commercial Court. The Board of Directors may also convene an ordinary or extraordinary general shareholders' meeting ~~of shareholders~~ upon proper notice at any time during the year. If the Board of Directors fails to convene a ~~shareholders’~~shareholders' meeting, our independent auditors may call the meeting. In case of bankruptcy, the liquidator or court-appointed agent may also call a ~~shareholders’~~shareholders' meeting in some instances. In addition, any of the following may request the court to appoint an agent for the purpose of calling a ~~shareholders’~~shareholders' meeting:
•
one or several shareholders holding at least 5% of our share capital;

•
duly qualified associations of shareholders who have held their shares in registered form for at least two years and who together hold at least 1% of our voting rights;

•
the works council in cases of urgency; or

•
any interested party in cases of urgency.

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Notice of ~~Shareholders’~~Shareholders' Meetings

All prior notice periods provided for below are minimum periods required by French law and cannot be shortened, except in case of a public offer for our shares.
We must announce general meetings at least 35thirty-five days in advance by means of a preliminary notice (avis de réunion), which is published in theBulletin des Annonces Légales Obligatoires, orBALO. The preliminary notice must first be sent to the ~~AMF.~~French Financial markets authority (Autorité des marchés financiers, the "AMF"), with an indication of the date on which it will be published in the BALO. It must be published on our website at least twenty-one days prior to the general meeting. The preliminary notice must contain, among other things, the agenda, a draft of the resolutions to be submitted to the shareholders for consideration at the general meeting and a detailed description of the voting procedures (proxy voting, electronic voting or voting by mail), the procedures permitting shareholders to submit additional resolutions or items to the agenda and to ask written questions to the Board of Directors. The AMF also recommends that, prior to or simultaneously with the publication of the preliminary notice, we publish a summary of the notice indicating the date, time and place of the meeting in a newspaper of national circulation in France and on our website. ~~In any event, the preliminary notice must be published on our website at least 21 days prior to the general meetings. The preliminary notice must contain,~~
among other things, the agenda, a draft of the resolutions to be submitted to the shareholders and a detailed description of the voting procedures (proxy voting, electronic voting or voting by mail) and the procedure permitting shareholders to submit additional resolutions or items.
At least 15fifteen days prior to the date set for a first ~~call,~~convening, and at least ten days prior to any second ~~call,~~convening, we must send a final notice (avis de convocation) containing the final agenda, the date, time and place of the meeting and other information related to the meeting. Such final notice must be sent by mail to all registered shareholders who have held shares in registered form for more than one month prior to the date of the final notice and by registered mail, if shareholders have asked for it and paid the corresponding charges. The final notice must also be published in a newspaper authorized to publish legal announcements in the local administrative department (département) in which our Company is registered as well as in theBALO, with prior notice having been given to the AMF for informational purposes. IfEven if there are no ~~shareholder has proposed any~~proposals for new resolutions or items to be submitted to the shareholders at the meeting, ~~and provided that the Board of Directors has not altered the draft resolutions included in the preliminary notice,~~ we ~~are not required to~~must publish ~~the final notice; publishing a preliminary notice that stipulates that it shall be deemed to be equivalent to~~ a final notice ~~will be deemed sufficient.~~in a newspaper authorized to publish legal announcements in the local administrative department (départment) in with our Company is registered as well as in theBALO.

Other issues

In general, shareholders can only take action at ~~shareholders’~~shareholders' meetings on matters listed on the agenda. As an exception to this rule, shareholders may take action with respect to the appointment and dismissal of directors even ~~though~~if this action has not been included on the agenda.
        Additional resolutions to be submitted for approval by the shareholders at the shareholders' meeting may be proposed to the Board of Directors, for recommendation to the shareholders asat any time from the publication of the preliminary notice in theBALO until 25twenty-five days prior to the general meeting and in any case no later than 20twenty days following the publication of the preliminary notice in theBALO: by:
•
one or several shareholders together holding a specified percentage of shares;

•
a duly qualified association of shareholders who have held their shares in registered form for at least two years and who together hold at least 1% of our voting rights; or

•
the works council.
Within the same period, the shareholders may also propose additional items (points) to be submitted toand discussed during the ~~shareholders’ meeting.~~shareholders' meeting, without a shareholders' vote. The shareholders must substantiate the reasons for proposing their proposals of additional items.

The resolutions and the list of items added to the agenda of the ~~shareholders’~~shareholders' meeting must be promptly published on our website.

The Board of Directors must submit the resolutions to a vote of the shareholders after having made a recommendation thereon. The Board of Directors may also comment on the items that are submitted to the ~~shareholders’~~shareholders' meeting.

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Following the date on which documents must be made available to the shareholders (including documents to be submitted to the ~~shareholders’~~shareholders' meeting and resolutions proposed by the Board of Directors, which must be published on our website at least 21twenty-one days prior to the general meeting), shareholders may submit written questions to the Board of Directors relating to the agenda for the meeting until the fourth business day prior to the general meeting. The Board of Directors must respond to these questions during the meeting or may refer to a Q&A section located on our website in which the question submitted by a shareholder has already been answered.
Attendance at ~~Shareholders’~~Shareholders' Meetings; Proxies and Votes by Mail

In general, all shareholders may participate in general meetings either in person or by proxy. Shareholders may vote in person, by proxy or by mail.
The right of shareholders to participate in general meetings is subject to the recording (enregistrement comptable) of their shares on the third business day, zero hour (Paris time), preceding the general meeting:
•
for holders of registered shares: in the registered shareholder account held by the Company or on its behalf by an agent appointed by it; and

•
for holders of bearer shares: in the bearer shareholder account held by the accredited financial intermediary with whom such holders have deposited their shares; such financial intermediaries shall deliver to holders of bearer shares a shareholding certificate (attestation de participation) enabling them to participate in the general meeting.
•
for holders of bearer shares: in the bearer shareholder account held by the accredited financial intermediary with whom such holders have deposited their shares; such financial intermediaries shall deliver to holders of bearer shares a shareholding certificate (~~attestation de participation~~~~) enabling them to participate in the general meeting.~~
Attendance in Person
       ��Any shareholder may attend ordinary general meetings and extraordinary general meetings and exercise its voting rights subject to the conditions specified in the French Commercial Code and ourstatuts.

Proxies and Votes by Mail

Proxies are sent to any shareholder upon a request received between the publication of the final notice of meeting and six days before the general meeting and must be made available on our website at least 21twenty-one days before the general meeting. In order to be counted, such proxies must be received at our registered office, or at any other address indicated on the notice ~~convening~~of the meeting or by any electronic mail indicated on the notice of the meeting, prior to the date of the meeting (in practice, we request that shareholders return proxies at least three business days prior to the meeting; electronic proxies must be returned before 3 p.m. Paris time, on the day prior to the general meeting). A shareholder may grant proxies to any natural person or legal entity. The agent may be required to disclose certain information to the shareholder or to the public.

Alternatively, the shareholder may send us a blank proxy without nominating any representative. In this case, the chairman of the meeting will vote the blank proxies in favor of all resolutions proposed or approved by the Board of Directors and against all others.

With respect to votes by mail, we must send to shareholders a voting form upon request or must make available a voting form on our website at least 21twenty-one days before the general meeting. The completed form must be returned to us at least three days prior to the date of the ~~shareholders’~~shareholders' meeting. For holders of registered shares, in addition to traditional voting by mail, instructions may also be given via ~~internet starting in 2011 through procedures to be established.~~
the internet.
Quorum

The French Commercial Code requires that shareholders ~~together~~ holding in the aggregate at least 20% of the shares entitled to vote must be present in person, or vote by mail or by proxy, in order to fulfill the quorum requirement for:
•
an ordinary general meeting; and

•
an extraordinary general meeting where the only resolutions pertain to either (a) a proposed increase in our share capital through incorporation of reserves, profits or share premium, or (b) the potential issuance

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of free share warrants in the event of a public offer for our shares (article L. 233-32 of the French Commercial Code).

For any other extraordinary general meeting the quorum requirement is at least 25% of the shares entitled to vote, held by shareholders present in person, voting by mail or by proxy.

For a special meeting of holders of a certain category of shares, the quorum requirement is one third of the shares entitled to vote in that category, held by shareholders present in person, voting by mail or by proxy.

If a quorum is not present at a meeting, the meeting is adjourned. However, only questions that were on the agenda of the adjourned meeting may be discussed and voted ~~upon.~~
upon once the meeting resumes.
When an adjourned meeting is resumed, there is no quorum requirement for meetings cited in the first paragraph of this “"Quorum”" section. In the case of any other reconvened extraordinary general meeting or special meeting, the quorum requirement is 20% of the shares entitled to vote (or voting shares belonging to the relevant category for special meetings of holders of shares of such specific category), held by shareholders present in person or voting by mail or by proxy. If a quorum is not ~~present,~~met, the reconvened meeting may be adjourned for a maximum of two months with the same quorum requirement. No deliberation or action by the shareholders may take place without a quorum.
Votes Required for Shareholder Action

AThe affirmative vote of a simple majority of ~~shareholders~~the votes cast may pass a resolution at either an ordinary general meeting or an extraordinary general meeting where the only resolution(s) pertain to either (a) a proposed increase in our share capital through incorporation of reserves, profits or share premium, or (b) the potential issuance of free share warrants in the event of a public offer for our shares (article L. 233-32 of the French Commercial Code). At any other extraordinary general ~~shareholders’~~shareholders' meeting and at any special meeting of holders of a specific category of shares, athe affirmative vote of two-thirds ~~majority~~ of the votes cast is required.

Abstention from voting by those present or those represented by proxy or voting by mail is counted as a vote against the resolution submitted to a shareholder vote.
Changes to ~~Shareholders’~~Shareholders' Rights
Under French law, athe affirmative vote of two-thirds ~~majority vote~~of the votes cast at ~~the~~an extraordinary ~~shareholders’~~shareholders' meeting is required to change ourstatuts, which set out the rights attached to our shares, except for capital increases through incorporation of reserves, profits or share premium, or through the issuance of free share warrants in the event of a public offer for our shares (article L. 233-32 of the French Commercial Code).

The rights of a class of shareholders can be amended only after a special meeting of the class of shareholders affected has taken place. The voting requirements applicable to this type of special meeting are the same as those applicable to an extraordinary general ~~shareholders’~~shareholders' meeting. The quorum requirements for a special meeting are one-third of the voting shares, or 20% upon resumption of an adjourned meeting.

A unanimous ~~shareholders’~~shareholders' vote is required to increase the liabilities of shareholders.
Financial Statements and Other Communications with Shareholders

In connection with any ~~shareholders’~~shareholders' meeting, we must provide a set of documents including our annual report and a summary of the financial results of the five previous fiscal years to any shareholder who so requests.

We must also provide on our website at least 21twenty-one days before a ~~shareholders’~~shareholders' meeting certain information and a set of documents ~~including~~that includes the preliminary notice, the proxies and voting forms, the resolutions proposed by the Board of Directors, and the documents to be submitted to the ~~shareholders’~~shareholders' meeting pursuant to ~~article L.225-15~~articles L. 225-15 and ~~R.225-83~~R. 225-83 of the French Commercial Code, etc. The resolutions and the list of items added to the agenda of the ~~shareholders’~~shareholders' meeting must be promptly published on our website.

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Dividends
We may only distribute dividends out of our ~~“distributable~~"distributable profits,”" plus any amounts held in our reserves that the shareholders decide to make available for distribution, other than those reserves that are specifically required by law or ourstatuts. ~~“Distributable profits”~~"Distributable profits" consist of our unconsolidated net profit in each fiscal year, as increased or reduced by any profit or loss carried forward from prior years, less any contributions to the reserve accounts pursuant to law or ourstatuts.

Legal Reserve

The French Commercial Code requires us to allocate 5% of our unconsolidated net profit for each year to our legal reserve fund before dividends may be paid with respect to that year. Funds must be allocated until the amount in the legal reserve is equal to 10% of the aggregate par value of the issued and outstanding share capital. This restriction on the payment of dividends also applies to each of our French subsidiaries on an unconsolidated basis. At December 31, ~~2010,~~2012, our legal reserve amounted to €282,280,863, representing ~~10.7%~~10.64% of the aggregate par value of our issued and outstanding share capital as of that date. The legal reserve of any company subject to this requirement may serve to allocate losses that may not be allocated to other reserves, or may be distributed to shareholders upon liquidation of the company.

Approval of Dividends

According to the French Commercial Code, our Board of Directors may propose a dividend for approval by shareholders at the annual general ~~meeting of shareholders.~~shareholders' meeting. If we have earned distributable profits since the end of the preceding fiscal year, as reflected in an interim income statement certified by our independent auditors, our Board of Directors may distribute interim dividends to the extent of the distributable profits for the period covered by the interim income statement. Our Board of Directors exercises this authority subject to French law and regulations and may do so without obtaining shareholder approval.

Distribution of Dividends
Dividends are distributed to shareholderspro rata according to their respective holdings of shares. In the case of interim dividends, distributions are made to shareholders on the date set by our Board of Directors during the meeting in which the distribution of interim dividends is approved. The actual dividend payment date is decided by the shareholders at an ordinary general ~~shareholders’~~shareholders' meeting or by our Board of Directors in the absence of such a decision by the shareholders. Shareholders that own shares on the actual payment date are entitled to the dividend.
Dividends may be paid in cash or, if the ~~shareholders’~~shareholders' meeting so decides, in kind, provided that all shareholders receive a whole number of assets of the same nature paid in lieu of cash. Ourstatutsprovide that, subject to a decision of the ~~shareholders’~~shareholders' meeting taken by ordinary resolution, each shareholder may be given the choice to receive his dividend in cash or in shares.

Timing of Payment

According to the French Commercial Code, we must pay any existing dividends within nine months of the end of our fiscal year, unless otherwise authorized by court order. Dividends on shares that are not claimed within five years of the date of declared payment revert to the French State.
Changes in Share Capital
Increases in Share Capital
As provided for by the French Commercial Code, our share capital may be increased only with ~~the shareholders’~~shareholders' approval at an extraordinary general ~~shareholders’~~shareholders' meeting following the recommendation of our Board of Directors. The shareholders may delegate to our Board of Directors either the authority(délégation de compétence) or the power(délégation de pouvoir) to carry out any increase in share capital. Our Board of Directors may further delegate this power to our Chief Executive Officer or, subject to our Chief Executive Officer's approval, to his delegates(directeurs généraux délégués).

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Increases in our share capital may be effected by:
•
issuing additional shares;

•
increasing the par value of existing shares;

•
creating a new class of equity securities; or

•
exercising the rights attached to securities giving access to the share capital.

Increases in share capital by issuing additional securities may be effected through one or a combination of the following:
•
in consideration for cash;

•
in consideration for assets contributed in kind;

•
through an exchange offer;

•
by conversion of previously issued debt instruments;

•
by capitalization of profits, reserves or share premium; or

•
subject to various conditions, in satisfaction of debt incurred by our Company.

Decisions to increase the share capital through the capitalization of reserves, profits and/or share premium or through the issuance of free share warrants in the event of a public offer for our shares (article L. 233-32 of the
French Commercial Code) require ~~the~~shareholders' approval ofat an extraordinary general ~~shareholders’~~shareholders' meeting, acting under the quorum and majority requirements applicable to ordinary ~~shareholders’~~shareholders' meetings. Increases effected by an increase in the par value of shares require unanimous approval of the shareholders, unless effected by capitalization of reserves, profits or share premium. All other capital increases require ~~the~~shareholders' approval ofat an extraordinary general ~~shareholders’~~shareholders' meeting acting under the regular quorum and majority requirements for such meetings. See ~~“— Quorum”~~"— Quorum" and “—"— Votes Required for Shareholder ~~Action”~~Action" above.

~~Since the entry into force of order 2004-604 of June 24, 2004, the shareholders may delegate to our Board of Directors either the authority~~~~(délégation de compétence)~~ ~~or the power~~~~(délégation de pouvoir)~~ to carry out any increase in share capital. Our Board of Directors may further delegate this power to our Chief Executive Officer or, subject to our Chief Executive Officer’s approval, to his delegates~~(directeurs généraux délégués)~~.
On ~~April 17, 2009,~~May 6, 2011, our shareholders approved various resolutions delegating to the Board of Directors the authority to increase our share capital through the issuance of shares or securities giving access to the share capital, subject to an overall cap set at €1.3 billion. This cap applies to all the resolutions whereby the extraordinary ~~shareholders’~~shareholders' meeting delegated to the Board of Directors the authority to increase the share capital, it being also specified that:
•
the maximum aggregate par value of capital increases that may be carried out with preemptive rights maintained was set at €1.3 billion;

•
the maximum aggregate par value of capital increases that may be carried out by public offering without preemptive rights was set at ~~€500~~€520 million;

•
the maximum aggregate par value of capital increases that may be carried out by capitalization of share premium, reserves, profits or other items was set at €500 million; and

•
capital increases resulting in the issuance of securities to ~~employees, early retirees or retirees under our~~members of employee savings plans are limited to 2%1% of the share capital as computed on the date of the ~~Board’s~~Board of Directors' decision to issue such securities, and such issuances may be made at a discount of 20% (or 30% if certain French law restrictions on resales were to apply).

On ~~April 17, 2009,~~May 6, 2011, our shareholders also approved resolutions delegating to the Board of Directors the authority to increase the share capital by granting options to our employees and/or ~~free~~corporate officers, subject to the overall cap mentioned above and under the following terms and conditions:
•
the authorization is valid for a period of 26 months, and any options granted may not give entitlement to a total number of shares exceeding 1% of the share capital as computed on the date of the decision of the Board of Directors to grant such options; see "— Stock Options" above;

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        On May 4, 2012, our shareholders approved resolutions delegating to the Board of Directors the authority to increase the share capital by granting existing or new restricted shares to our employees and/or corporate officers, subject to the overall cap mentioned above and under the following terms and conditions:
•
the authorization is valid for a period of 2638 months, ~~to grant options to purchase or to subscribe for our shares to employees and/or corporate officers; such options may not give entitlement~~and is subject to a ~~total number~~limit of ~~shares exceeding 2.5%~~1.2% of the share capital as computed on the ~~day~~date of the ~~Board’s decision; see “— Stock Options” above;~~
~~the authorization, for a period of 38 months, to grant existing or new shares free of consideration to employees and/or corporate officers, up to a limit of 1%~~decision of the ~~share capital as computed on the day~~Board of ~~the Board’s decision;~~Directors to allot such shares; see “—"— Awards of ~~Shares”~~Shares" above.

See also ~~“Item~~"Item 6. Directors, Senior Management and Employees — E. Share ~~Ownership”~~Ownership".

Decreases in Share Capital

~~According to~~In accordance with the provisions of the French Commercial Code, any decrease in our share capital requires approval by the shareholders entitled to vote at an extraordinary general meeting. The share capital may be reduced either by decreasing the par value of the outstanding shares or by reducing the number of outstanding shares. The number of outstanding shares may be reduced either by an exchange of shares or by the repurchase and cancellation of shares. Holders of each class of shares must be treated equally unless each affected shareholder agrees otherwise.

In addition, specific rules exist to permit the cancellation of treasury shares, by which the ~~shareholders’~~shareholders' meeting may authorize the cancellation of up to a maximum of 10% of a ~~company’s~~company's share capital ~~per~~within any 24-month period. On ~~April 17, 2009,~~May 6, 2011, our shareholders delegated to our Board of Directors for 26 months the right to reduce our share capital by canceling our own shares.
Preemptive Rights
According to the French Commercial Code, if we issue additional securities to be paid in cash, current shareholders will have preemptive rights to these securities on apro rata basis. These preemptive rights require us to give priority treatment to current shareholders. The rights entitle the individual or entity that holds them to subscribe to the issuance of any securities that may increase the share capital of our Company by means of a cash payment or a set-off of cash debts. Preemptive rights are transferable during the subscription period relating to a particular offering. These rights may also be listed on Euronext Paris Stock Exchange.

Preemptive rights with respect to any particular offering may be waived by athe affirmative vote of shareholders holding a two-thirds ~~majority~~ of the shares entitled to vote at an extraordinary general meeting. Our Board of Directors and our independent auditors are required by French law to present reports that specifically address any proposal to waive preemptive rights. In the event of a waiver, the issue of securities must be completed within the period prescribed by law. Shareholders may also ~~may~~ notify us that they wish to waive their own preemptive rights with respect to any particular offering if they so choose.

The shareholders may decide at extraordinary general meetings to give the existing shareholders a non-transferable priority right to subscribe to the new securities, for a limited period of time.

In the event of a capital increase without preemptive rights to existing shareholders, French law requires that the capital increase be made at a price equal to or exceeding the weighted average market prices of the shares for the last three trading days on Euronext Paris Stock Exchange prior to the determination of the subscription price of the capital increase less 5%.
Form, Holding and Transfer of Shares
Form of Shares
Ourstatutsprovide that the shares may be held in either bearer form or registered form at the option of the holder.

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Holding of Shares
In accordance with French law relating to the dematerialization of securities, ~~shareholders’~~shareholders' ownership rights are represented by book entries instead of share certificates. We maintain a share account with Euroclear France (a French clearing system, which holds securities for its participants) for all shares in registered form, which is administered by BNP Paribas Securities Services. In addition, we maintain separate accounts in the name of each shareholder either directly or, at a ~~shareholder’s~~shareholder's request, through the ~~shareholder’s~~shareholder's accredited intermediary. Each shareholder account shows the name of the holder and the number of shares held. BNP Paribas Securities Services issues confirmations (attestations ~~d’inscription~~d'inscription en compte) to each registered shareholder as to shares registered in the ~~shareholder’s~~shareholder's account, but these confirmations are not documents of title.

Shares of a listed company may also be issued in bearer form. Shares held in bearer form are held and registered on the ~~shareholder’s~~shareholder's behalf in an account maintained by an accredited financial intermediary and are credited to an account at Euroclear France maintained by such intermediary. Each accredited financial intermediary maintains a record of shares held through it and provides the account holder with a securities account statement. Transfers of shares held in bearer form may only be made through accredited financial intermediaries and Euroclear France.
Shares held by persons who are not domiciled in France may be registered in the name of intermediaries who act on behalf of one or more investors. When shares are so held, we are entitled to request from such intermediaries the names of the investors. Also, we may request any legal entity (personne morale) which holds more than 2.5% of our shares or voting rights to disclose the name of any person who owns, directly or indirectly, more than one-third of its share capital or of its voting rights. A person not providing the complete requested information in time, or who provides incomplete or false information, will be deprived of its voting rights at ~~shareholders’~~shareholders' meetings and will have its payment of dividends withheld until it has provided the requested information in strict compliance with French law. If such person acted willfully, the person may be deprived by a French court of either its voting rights or its dividends or both for a period of up to five years.

Transfer of Shares
Ourstatutsdo not contain any restrictions relating to the transfer of shares.

Registered shares must be converted into bearer form before being transferred on the Euronext Paris ~~Market~~Stock Exchange on the ~~shareholders’~~shareholders' behalf and, accordingly, must be registered in an account maintained by an accredited financial intermediary on the ~~shareholders’~~shareholders' behalf. A shareholder may initiate a transfer by giving instructions to the relevant accredited financial intermediary.
        A fee or commission is payable to the broker involved in the transaction, regardless of whether the transaction occurs within or outside France. ~~No registration~~Registration duty is ~~normally~~currently payable in France ~~unless~~if a ~~transfer instrument has been~~written deed of sale and purchase (acte) is executed in ~~France.~~
France or outside France with respect to the shares of the Company.
Redemption of Shares

Under French law, our Board of Directors is entitled to redeem a set number of shares as authorized by the extraordinary ~~shareholders’~~shareholders' meeting. In the case of such an authorization, the shares redeemed must be cancelled within one month after the end of the offer to purchase such shares from shareholders. However, shares redeemed on the open market do not need to be cancelled if the company redeeming the shares grants options on or awards those shares to its employees within one year following the acquisition. See also “—"— Trading in Our Own ~~Shares”~~Shares" below.
Sinking Fund ~~Provisions.~~Provisions
Ourstatuts do not provide for any sinking fund provisions.

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Liability to Further Capital Calls

Shareholders are liable for corporate liabilities only up to the par value of the shares they hold; they are not liable to further capital calls.
Liquidation Rights
If we are liquidated, any assets remaining after payment of our debts, liquidation expenses and all of our remaining obligations will first be distributed to repay in full the par value of our shares. Any surplus will be distributedpro rataamong shareholders in proportion to the par value of their shareholdings.
Requirements for Holdings Exceeding Certain Percentages
The French Commercial Code provides that any individual or entity, acting alone or in concert with others, that becomes the owner, directly or indirectly, of more than 5%, 10%, 15%, 20%, 25%, 30%, 33¹/3%, 50%, 66²/3%, 90% or 95% of the outstanding shares or voting rights of a listed company in France, such as our Company, or that increases or decreases its shareholding or voting rights above or below any of those percentages, must notify the company, before the end of the fourth trading day following the date it crosses the threshold, of the number of shares it holds and their voting rights. The individual or entity must also notify the AMF before the end of the fourth trading day following the date it crosses ~~the~~any such threshold. The AMF makes the notice public.

~~The~~Pursuant to the French Commercial Code and the AMF ~~also requires disclosure~~General Regulation, the participation thresholds shall be calculated on the basis of ~~certain information relating~~the shares and voting rights owned, and shall take into account the shares and voting rights which are deemed to ~~other financial instruments (e.g., convertible or exchangeable securities, warrants, equity swaps, etc.) that could increase the shareholding of~~be shares and voting rights owned, even if the individual or ~~entity.~~entity does not itself hold shares or voting rights. In accordance with this deemed ownership principle, the individual or entity must take into account specific situations where shares and voting rights are deemed to be shares and voting rights owned when calculating the number of shares owned to be disclosed in the notifications to the Company and to the AMF. It includes among others situations where an individual or entity is entitled to acquire issued shares at its own initiative, immediately or at the end of a maturity period, under an agreement or a financial instrument, without set-off against the number of shares that this individual or entity is entitled to sell under another agreement or financial instrument. The individual or entity required to make such notification shall also take into account issued shares covered by an agreement or cash-settled financial instrument and having an economic effect for said individual or entity that is equivalent to owning such shares. In the cases of deemed ownership described above, the notification shall mention the type of deemed ownership and include a description of the main characteristics of the financial instrument or agreement with specific details required by the AMF General Regulation.
        The AMF General Regulation provides that shares and voting rights subject to multiple cases of deemed ownership shall only be counted once.
        When an individual or entity modifies the allocation between the shares it owns and its financial instruments or agreements deemed to be owned shares, it must disclose that change in a new notification. However, the change must only be disclosed if the acquisition of owned shares due to the settlement of the financial instruments or agreements causes the investor to cross a threshold.
Subject to certain limited exceptions, French law and AMF regulations impose additional reporting requirements on persons who acquire more than 10%, 15%, 20% or 25% of the outstanding shares or voting rights of a company listed ~~company~~ in France. These persons must file a report with the company and the AMF before the end of the fifth trading day following the date they cross ~~the~~any such threshold.

In the report, the acquirer will have to specify its intentions for the following six months including:
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whether it acts alone or in concert with others;

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the means of financing of the acquisition (the notifier shall indicate in particular whether the acquisition is being financed with equity or debt, the main features of that debt, and, where applicable, the main guarantees given or received by the notifier. The notifier shall also indicate what portion of its holding, if any, it obtained through securities loans);

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whether or not it intends to continue its purchases;

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whether or not it intends to acquire control of the company in question;

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the strategy it contemplatesvis-à-vis the issuer;

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the way it intends to implement its strategy, including: (i) any plans for a merger, reorganization, liquidation, or partial transfer of a substantial part of the assets of the issuer or of any other entity it controls within the meaning of article L. 233-3 of the French Commercial Code, (ii) any plans to modify the business of the issuer, (iii) any plans to modify the memorandum and articles of association of the issuer, (iv) any plans to delist a category of the issuer's financial instruments, and (v) any plans to issue the issuer's financial instruments;

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any agreement for the temporary transfer of shares or voting rights;

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the way it intends to settle its agreements or instruments on the shares or voting rights of the issuer mentioned in Article L. 233-9,4° and 4° bis of the French Commercial Code; and

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whether it seeks representation on the Board of Directors.

- ~~whether it acts alone or in concert with others;~~
- the means of financing of the acquisition (the notifier shall indicate in particular whether the acquisition is being financed with equity or debt, the main features of that debt, and, where applicable, the main guarantees given or received by the notifier. The notifier shall also indicate what portion of its holding, if any, it obtained through securities loans);
- ~~whether or not it intends to continue its purchases;~~
- ~~whether or not it intends to acquire control of the company in question;~~
- ~~the strategy it contemplates~~~~vis-à-vis~~ ~~the issuer;~~
- the way it intends to implement it: (i) any plans for a merger, reorganization, liquidation, or partial transfer of a substantial part of the assets of the issuer or of any other entity it controls within the meaning of Article L. 233-3 of the French Commercial Code, (ii) any plans to modify the business of the issuer, (iii) any plans to modify the memorandum and articles of association of the issuer, (iv) any plans to delist a category of the issuer’s financial instruments, and (v) any plans to issue the issuer’s financial instruments;
- ~~any agreement for the temporary transfer of shares or voting rights; and~~
- ~~whether it seeks representation on the Board of Directors.~~
The AMF makes the report public. Upon any change of intention within the six-month period following the filing of the report, it will have to file a new report for the following six-month period.

In order to enable shareholders to give the required notice, we must each month publish on our website and send the AMF a written notice setting forth the total number of our shares and voting rights (including treasury shares) whenever they vary from the figures previously published.

If any shareholder fails to comply with an applicable legal notification requirement, the shares in excess of the relevant threshold will be deprived of voting rights for all ~~shareholders’~~shareholders' meetings until the end of a two-year period following the date on which the owner complies with the notification requirements. In addition, any shareholder who fails to comply with these requirements may have all or part of its voting rights suspended for up to five years by the Commercial Court at the request of our Chairman, any shareholder or the AMF, and may be subject to criminal fines.

Under AMF regulations, and subject to limited exemptions granted by the AMF, any person or entity, acting alone or in concert, that crosses the threshold of 33¹~~/3%~~30% of the share capital or voting rights of a French listed company must initiate a public tender offer for the balance of the shares and securities giving access to the share capital or voting rights of such company.
Cash-settled derivative instruments or agreements mentioned in Article L. 233-9, 4° bis of the French Commercial Code are not included in the calculation of the number of shares related to the mandatory public tender offer.
In addition, ourstatutsprovide that any person or entity, acting alone or in concert with others, who becomes the owner of 1%, or any multiple of 1% of our share capital or our voting rights, even beyond the minimum declaration limits permitted by the legal and regulatory provisions, must notify us by certified mail, return receipt requested, within five trading days, of the total number of shares and securities giving access to our share capital and voting rights that such person then owns. The same provisions of ourstatutsapply whenever such owner increases or decreases its ownership of our share capital or our voting rights to such extent that it goes above or below one of the thresholds described in the preceding sentence. Any person or entity that fails to comply with such notification requirement will, upon the request of one or more shareholders holding at least 5% of our share capital or of our voting rights made at the general ~~shareholders’~~shareholders' meeting, be deprived of voting rights with respect to the shares in excess of the relevant threshold for all ~~shareholders’~~shareholders' meetings until the end of a two-year period following the date on which such person or entity complies with the notification requirements.
Change in Control/Anti-takeover
There are no provisions in ourstatuts that would have the effect of delaying, deferring or preventing a change in control of our Company or that would operate only with respect to a merger, acquisition or corporate
restructuring involving our Company or any of our subsidiaries. Further, there are no provisions in ourstatutsthat

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allow the issuance of preferred stock upon the occurrence of a takeover attempt or the addition of other ~~“anti-takeover”~~"anti-takeover" measures without a shareholder vote.
Ourstatuts do not include any provisions discriminating against any existing or prospective holder of our securities as a result of such shareholder owning a substantial number of shares.
Trading in Our Own Shares
Under French law, ~~sanofi-aventis~~Sanofi may not issue shares to itself. However, we may, either directly or through a financial intermediary acting on our behalf, acquire up to 10% of our issued share capital within a maximum period of 18 months, provided our shares are listed on a regulated market. Prior to acquiring our shares, we must publish a description of the share repurchase program (descriptif du programme de rachat ~~d’actions~~d'actions).

We may not cancel more than 10% of our issued share capital over any 24-month period. Our repurchase of shares must not result in our Company holding, directly or through a person acting on our behalf, more than 10% of our issued share capital. We must hold any shares that we repurchase in registered form. These shares must be fully paid up. Shares repurchased by us continue to be deemed ~~“issued”~~"issued" under French law but are not entitled to dividends or voting rights so long as we hold them directly or indirectly, and we may not exercise the preemptive rights attached to them.
The shareholders, at an extraordinary general shareholders meeting, may decide not to take these shares into account in determining the preemptive rights attached to the other shares. However, if the shareholders decide to take them into account, we must either sell the rights attached to the shares we hold on the market before the end of the subscription period or distribute them to the other shareholders on apro rata basis.
On May ~~17, 2010,~~4, 2012, our shareholders approved a resolution authorizing us to repurchase up to 10% of our shares over an 18-month period. Under this authorization, the purchase price for each ~~sanofi-aventis~~Sanofi ordinary share may not be greater than €80.00 and the maximum amount that ~~sanofi-aventis~~Sanofi may pay for the repurchases is ~~€10,547,832,400.~~€10,727,350,480. This authorization was granted for a period of 18 months from May ~~17, 2010~~4, 2012 and cancelled and replaced the authorization granted to the Board of Directors by the general meeting held on ~~April 17, 2009.~~May 6, 2011. A description of this share repurchase program as adopted by the Board of Directors on May ~~17, 2010,~~4, 2012,(descriptif duprogramme de rachat ~~d’actions)~~d'actions) was published on March ~~12, 2010.~~5, 2012.

Purposes of Share Repurchase Programs

Under the European regulation 2273/2003, dated December 22, 2003 (which we refer to in this section as the ~~“Regulation”~~"Regulation"), in application of European directive 2003/6/EC, dated January 28, 2003, known as the ~~“Market~~"Market Abuse ~~Directive” (the “Directive”) relating to share repurchase programs and the stabilization of financial instruments, came into effect on October 13, 2004.~~
~~The entry into force of the Regulation has resulted in changes in the manner in which share repurchase programs are implemented. Under the Regulation,~~Directive", an issuer will benefit from a safe harbor for share transactions that comply with certain conditions relating in particular to the pricing, volume and timing of transactions (see below) and that are made in connection with a share repurchase program the purpose of which is:
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to reduce the share capital through the cancellation of treasury shares; and/or

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to meet obligations arising from debt instruments exchangeable into equity instruments and/or the implementation of employee share option programs or other employee share allocation plans.

Safe harbor transactions will by definition not be considered market abuses under the Regulation. Transactions that are carried out for other purposes than those mentioned above do not qualify for the safe harbor. However, as permitted by the Directive, which provides for the continuation of existing practices that do not constitute market manipulation and that conform with certain criteria set forth in European directive 2004/72, dated April 29, 2004, the AMF published exceptions on March 22, 2005, October 1, 2008, March 21, 2011 and March 10, 2012 to permit the following existing market practices:
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~~transactions pursuant to a liquidity agreement entered into with a financial services intermediary that complies with the ethical code (~~~~charte de déontologie~~~~) approved by the AMF; and~~
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transactions pursuant to a liquidity agreement entered into with a financial services intermediary that complies with the ethical code (charte de déontologie) approved by the AMF; and

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the purchase of shares that are subsequently used as acquisition currency in a business combination transaction.

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The AMF confirmed that all transactions directed at maintaining the liquidity of an ~~issuer’s~~issuer's shares must be conducted pursuant to a liquidity agreement with a financial services intermediary acting independently.
~~Additionally, our program could be used for any purpose that is authorized or could be authorized under applicable laws and regulations.~~

Pricing, Volume and Other Restrictions

In order to qualify for the safe harbor, the issuer must generally comply with the following pricing and volume restrictions:
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a share purchase must not be made at a price higher than the higher of the price of the last independent trade and the highest current independent bid on the trading venues where the purchase is carried out;

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subject to certain exceptions for illiquid securities, the issuer must not purchase more than 25% of the average daily volume of the shares in any one day on the regulated market on which the purchase is carried out. The average daily volume figure must be based on the average daily volume traded in the month preceding the month of public disclosure of the share repurchase program and fixed on that basis for the authorized period of that program. If the program does not make reference to this volume, the average daily volume figure must be based on the average daily volume traded in the 20 trading days preceding the date of purchase.

In addition, an issuer must not:
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sell treasury shares during the period of the repurchase program (without prejudice to the right of the issuer to meet its obligations under employee share option programs or other employee share allocation plans or to use shares as acquisition currency as mentioned above); it being further specified that such prohibition is not applicable in the event of off-market block trades or if the share repurchase program is implemented by a financial services intermediary pursuant to a liquidity agreement as mentioned above; and
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~~effect any transaction during a “blackout period” imposed by the applicable law of the Member State in which the transaction occurs (~~~~i.e.,~~ under French law, during the period between the date on which the company has knowledge of insider information and the date on which such information is made public and during the 30-day period preceding the date of publication of annual and half-year financial statements or the 15-day period preceding the date of publication of quarterly financial information), without prejudice to transactions carried out pursuant to a liquidity agreement as mentioned above; or

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effect any transaction during a "blackout period" imposed by the applicable law of the Member State in which the transaction occurs (i.e., under French law, during the period between the date on which the company has knowledge of insider information and the date on which such information is made public and during the 30-day period preceding the date of publication of annual and half-year financial statements and the 15-day period preceding the date of publication of quarterly financial information), without prejudice to transactions carried out pursuant to a liquidity agreement as mentioned above; or

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effect any transaction in securities with respect to which the issuer has decided to defer disclosure of any material, non-public information.

Use of Share Repurchase Programs

Pursuant to the AMF rules, issuers must immediately allocate the repurchased shares to one of the purposes provided for in the Regulation and must not subsequently use the shares for a different purpose. As an exception to the foregoing, shares repurchased with a view to covering stock option plans may, if no longer needed for this purpose, be re-allocated for cancellation or sold in compliance with AMF requirements relating in particular to blackout periods. Shares repurchased in connection with one of the market practices authorized by the AMF (see above) may also be re-allocated to one of the purposes contemplated by the Regulation or sold in compliance with AMF requirements. Shares repurchased with a view to their cancellation must be cancelled within 24 months following their acquisition.

During the year ended December 31, ~~2010,~~2012, we used the authority delegated by our shareholders to repurchase our shares on the stock market.

Pursuant to our share repurchase ~~program~~programs authorized by our shareholders ~~in April 2009,~~on May 3, 2011 and on May 4, 2012, we repurchased ~~3,900,000~~13,573,643 of our shares for a weighted average price of ~~€53.85 in February 2010~~€60.59, i.e. a total cost of €823 million, €596,000 of which were incurred on brokerage fees and ~~2,100,000~~financial transaction taxes (net of ~~our shares for a weighted average price~~income taxes).

Table of ~~€56.02 in March 2010.~~
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On April, ~~28, 2010,~~26, 2012, the Board of Directors cancelled ~~7,911,300~~21,159,445 treasury shares, as follows:
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~~7,821,500 shares repurchased up to March 31, 2010~~
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18,597,406 shares repurchased between October 1, 2011 and March 31, 2012 pursuant to ~~the share repurchase programs of the Company, including:~~
~~1,011,500 shares repurchased in May 2008;~~
~~810,000 shares repurchased in June and August 2008;~~
~~5,871,026 shares repurchased on the market in February and March 2010; and~~
~~128,974 shares repurchased from Hoechst GmbH in March 2010 (following the expiration of its last stock option plan);~~
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~~89,800 shares previously allocated to expired stock option programs, which had been reallocated to the purpose of reducing the share capital.~~
~~In 2010, we also implemented~~ the share repurchase program ~~authorized by our shareholders in May 2010 with the sole aim of supporting the liquidity~~ of the Company;

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2,562,039 shares ~~through a liquidity contract entered into with an investment service provider in compliance with~~previously allocated to expired stock option programs, which had been reallocated to the ~~ethical code (~~~~charte de déontologie~~~~) approved by~~purpose of cancellation.
        On October 24, 2012, the ~~AMF.We entered into this liquidity contract with Exane BNP Paribas on~~Board of Directors cancelled 6,435,924 treasury shares repurchased between April 1, and September ~~16, 2010.~~30, 2012 pursuant to the share repurchase program of the Company.

~~Upon implementation of this contract, we allocated €40,000,000, of which €20,000,000 was initially made available,~~During 2012, pursuant to the liquidity ~~account. During 2010,~~contract, Exane BNP Paribas purchased ~~between November 1, 2010 and December 31, 2010, 750,296~~6,254,868 of our shares at an average weighted price of ~~€48.48~~€61.36 for a total amount of €383,803,530 and sold ~~735,296~~6,254,868 of our shares at an average weighted price of ~~€48.55.~~€61.48 for a total amount of €384,536,260.

In ~~2010,~~2012, of the ~~7,601,216~~5,766,116 shares allocated to stock purchase option plans outstanding at December 31, ~~2009, 1,326,730~~2011, 53,790 shares were transferred to grantees of ~~options,~~options.

As a result, as of December 31, ~~2010,~~2012, the 3,150,287 treasury shares, ~~were allocated as follows :~~
~~5,851,776 shares,~~ representing ~~0.446%~~0.24% of our share capital, were all allocated to outstanding stock purchase option ~~plans;~~
~~203,936 directly-owned~~plans. At the same date, none of the shares ~~representing 0.015% of our share capital, were allocated to cancellation; and~~
~~15,000 directly-owned shares, representing 0.001% of our share capital, were~~was allocated to the liquidity ~~account.~~account, even though the liquidity contract was outstanding.

As of December 31, ~~2010,~~2012, we directly owned ~~6,070,712 sanofi-aventis~~3,150,287 Sanofi shares with a par value of €2 representing around ~~0.46%~~0.24% of our share capital and with an estimated value of ~~€379,248,041,~~€213,000,157, based on the share price at the time of purchase.

Reporting Obligations

Pursuant to the AMF Regulation and the French Commercial Code, issuers trading in their own shares are subject to the following reporting obligations:
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issuers must report all transactions in their own shares on their web site within seven trading days of the transaction in a prescribed format, unless such transactions are carried out pursuant to a liquidity agreement that complies with the ethical code approved by the AMF; and

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issuers must declare to the AMF on a monthly basis all transactions completed under the share repurchase program unless they provide the same information on a weekly basis.
Ownership of Shares by Non-French Persons
The French Commercial Code and ourstatuts currently do not limit the right of non-residents of France or non-French persons to own or, where applicable, to vote our securities. However, non-residents of France must
file an administrative notice with the French authorities in connection with the acquisition of a controlling interest in our Company. Under existing administrative rulings, ownership of 33¹/3% or more of our share capital or voting rights is regarded as a controlling interest, but a lower percentage might be held to be a controlling interest in certain circumstances depending upon factors such as:
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the acquiring ~~party’s~~party's intentions;

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the acquiring ~~party’s~~party's ability to elect directors; or

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financial reliance by the company on the acquiring party.
Enforceability of Civil Liabilities
We are a limited liability company (société anonyme) organized under the laws of France, and most of our ~~directors~~officers and ~~officers~~directors reside outside the United States. In addition, a substantial portion of our assets is located in France.

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        As a result, it may be difficult for investors to effect service of process within the United States upon or obtain jurisdiction over our Company or our officers and directors in U.S. courts in actions predicated on ~~such persons.~~the civil liability provisions of U.S. securities law. It may also be difficult to enforce against them, either inside or outside the United States, judgments obtained against them in U.S. courts, or to enforce in U.S. courts, judgments obtained against them in courts in jurisdictions outside the United States, in any action based on civil liabilities under the U.S. federal securities laws. There is doubt as to the enforceability against such persons in France, whether in original actions or in actions to enforce judgments of U.S. courts, of liabilities based solely on the U.S. federal securities laws. Actions for enforcement of foreign judgments against such persons would require such persons who are of French nationality to waive their right under Article 15 of the French Civil Code to be sued only in France. We believe that no such French persons have waived such right with respect to actions predicated solely upon U.S. federal securities laws. In addition, actions in the United States under the U.S. federal securities laws could be affected under certain circumstances by the French law No. 80-538 of July ~~26, 1968, as amended,~~16, 1980, which may preclude or restrict the obtaining of evidence in France or from French persons in connection with such actions. Additionally, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in France.

C. Material Contracts
The Facilities Agreement

~~Sanofi-Aventis has~~In connection with the launch of its public tender offer for Genzyme, Sanofi executed on October 2, 2010 a Term Facilities Agreement (the ~~“Facilities Agreement”~~"Facilities Agreement") with J.P. Morgan plc, Société Générale Corporate & Investment Banking and BNP Paribas (the ~~“Initial~~"Initial Mandated Lead ~~Arrangers”~~Arrangers") which was further syndicated by the Initial Mandated Lead Arrangers among other financial institutions, for two unsecured term loan facilities available for drawdowns of up to US $15,000,000,000 in the aggregate for the purpose of financing part of the ~~proposed~~ acquisition of Genzyme Corporation, ~~(together, the “Acquisition Facility”):~~composed of:
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A US $10,000,000,000 term facility (“("Facility A”A") ~~maturing~~expiring 18 months from October 2, 2010, the date of execution of the Facilities ~~Agreement. The maturity of Facility~~ Agreement, with an optional six-month extension.

•
A ~~can be postponed by sanofi-aventis by 6 months.~~
~~A US~~ $5,000,000,000 ~~amortizable~~ term facility (“("Facility B”B") with final ~~maturity at~~expiry 42 months from the date of execution of the Facilities Agreement.

The interest rate on each facility iswas equal to the London Inter-Bank Overnight Rate (or ~~LIBOR)~~Libor), plus an applicable margin.

On March 29, 2011, available commitments under Facility A were reduced by an amount equivalent to the proceeds of an SEC-registered U.S. bond issue (approximately $7 billion). The ~~Initial Mandated Lead Arrangers have committed to provide~~remaining unused commitments of this facility were cancelled on April 1, 2011. On April 5, 2011, Sanofi drew down $4 billion under Facility B, and cancelled the ~~full amount~~remaining balance of $1 billion. On June 28, August 5 and November 3, 2011 Sanofi made early repayments of respectively $1 billion, $1 billion, $2 billion of the ~~loans under~~Facility B drawdown.
        As a result, the ~~Acquisition~~ Facility B drawdown was fully repaid as of November 3, 2011 and ~~have indicated their intention to form~~as a ~~syndicate of banks that would become lenders thereunder. The~~consequence, the entire Facilities Agreement contains representations and warranties customary for credit facilities of this nature, including as to the accuracy of financial statements, litigation and no conflict with material agreements or instruments. The Facilities Agreement contains certain covenants, including limitations on liens (with exclusions to the extent necessary to comply with margin lending regulations and certain other exceptions to be agreed upon), mergers, compliance with laws and change of business. The commitment of the Initial Mandated Lead Arrangers is available until December 31, 2011 at the latest and is conditional upon, among other things, there being no change in control of Parent, receipt of required approvals and consents and delivery of certain financial statements.
expired.
A copy of the Facilities Agreement and an amendment dated February 15, 2011 isare on file with the SEC as ~~exhibit~~exhibits 4.1 and 4.2 hereto. Reference isshould be made to such exhibits for a more complete description of the terms and conditions of the Acquisition Facility as amended, and the foregoing summary of such terms and conditions is qualified in its entirety by such exhibits.
The Agreement and Plan of Merger

On February 16, 2011, ~~sanofi-aventis~~Sanofi and its wholly owned subsidiary GC Merger Corp. signed an Agreement and Plan of Merger ~~which is~~ governed by the laws of the Commonwealth of Massachusetts, and subject to the jurisdiction of the courts of the Commonwealth of Massachusetts (the ~~“Merger Agreement”~~"Merger Agreement"), with Genzyme Corporation ~~(“Genzyme”~~("Genzyme"). Pursuant to the Merger Agreement, among other things, ~~sanofi-aventis~~Sanofi and GC Merger Corp. agreed to amend the outstanding tender offer to acquire all of the outstanding shares of common stock of Genzyme (the ~~“Genzyme Shares”~~"Genzyme Shares") ~~for~~in order to increase the price per share from $69 ~~per Genzyme Share~~to $74 in cash (the ~~tender offer as amended, the “Amended Offer”~~"Cash Consideration") ~~to reflect the terms~~

Table of ~~the Merger Agreement and to increase the consideration offered to (i) $74.00 in cash (the “Cash Consideration”) and (ii)~~Contents
plus one contingent value right (a ~~“CVR”~~"CVR") to be issued by ~~sanofi-aventis~~Sanofi subject to and in accordance with ~~the~~a CVR Agreement described below (collectively, the ~~“Merger Consideration”~~"Merger Consideration") per Genzyme Share. The Merger Agreement also ~~provides~~provided that, subject to the satisfaction or waiver of certain conditions, following consummation of the Amended Offer, GC Merger Corp. ~~will~~would be merged with and into Genzyme, with Genyzme surviving the Merger as a wholly-owned subsidiary of ~~sanofi-aventis~~Sanofi (the ~~“Merger”~~"Merger").

At the effective time of the Merger (the “Effective Time”), all remaining outstanding Genzyme Shares not tendered in the Amended Offer (other than Genzyme Shares owned by Genzyme, sanofi-aventis or either of their respective subsidiaries), will be converted into the right to receive the Merger Consideration. All outstanding Genzyme stock options (other than those arising under the Genzyme employee stock purchase plan and those with an exercise price in excess of the Cash Consideration) (“Genzyme Options”), restricted stock (“Restricted Stock”) and restricted stock units (“RSUs”) of Genzyme will be canceled immediately prior to consummation of the Amended Offer. Holders of Genzyme Options with an exercise price less than the Cash Consideration will receive, for each Genzyme Share subject to such Option, (i) a cash payment equal to the difference between the Cash Consideration and the exercise price of the Option, and (ii) one CVR. Holders of Restricted Stock and RSUs will receive (i) a cash payment equal to the Cash Consideration and (ii) one CVR per Restricted Share or RSU.
The Merger Agreement provides that sanofi-aventis shall cause GC Merger Corp. to amend the Offer and sanofi-aventis shall file a registration statement with the US Securities and Exchange Commission (“SEC”) to register the CVRs (the “CVR Registration Statement”) within fifteen business days after the date of the Merger Agreement. In the Amended Offer, each Genzyme Share accepted by GC Merger Corp.transaction was completed on April 8, 2011 in accordance with the terms and conditions of the Amended Offer will be exchanged for the right to receive the Merger Consideration. Sanofi-aventis shall cause GC Merger Corp. to accept for payment, and GC Merger Corp. shall accept for payment, all Genzyme Shares validly tendered and not validly withdrawn, pursuant to the terms and conditions of the Amended Offer, promptly following the Amended Offer’s expiration date.
GC Merger Corp.’s obligation to accept for payment and pay for all Genzyme Shares validly tendered pursuant to the Amended Offer is subject to the conditions that (a) the number of Genzyme Shares validly tendered and not validly withdrawn, together with any Genzyme Shares already owned by sanofi-aventis and its subsidiaries, represents at least a majority of the then-outstanding Genzyme Shares on a fully-diluted basis, (b) the CVR Registration Statement has been declared effective and no stop order suspending the effectiveness of the CVR Registration Statement is in effect and no proceedings for that purpose have been initiated or threatened by the SEC, (c) the CVRs being issued have been approved for listing on Nasdaq, (d) the CVR Agreement has been duly executed by sanofi-aventis and a mutually agreeable trustee and (e) certain other customary conditions as set forth in the Merger Agreement.
Genzyme has also granted to sanofi-aventis an irrevocable option (the “Top-Up Option”), which GC Merger Corp. will exercise promptly following consummation of the Amended Offer, under certain circumstances and subject to certain conditions, to purchase from Genzyme the number of Genzyme Shares that, when added to the Genzyme Shares already owned by sanofi-aventis or any of its subsidiaries following consummation of the Amended Offer, constitutes one Genzyme Share more than 90% of the Genzyme Shares then outstanding on a fully-diluted basis. If sanofi-aventis, GC Merger Corp. and any of their respective affiliates acquire more than 90% of the outstanding Genzyme Shares, including through exercise of the Top-Up Option, GC Merger Corp. will complete the Merger through the “short form” procedures available under Massachusetts law.
Sanofi-aventis, GC Merger Corp. and Genzyme each made representations, warranties and covenants in the Merger Agreement, including, among others, covenants by Genzyme to conduct its business in the ordinary course during the interim period between the execution of the Merger Agreement and ~~consummation~~the public exchange offer at a price of $74 in cash plus the ~~Merger.~~
issuance to Genzyme shareholders of one contingent value right ("CVR") per Genzyme share. The ~~Merger Agreement prohibits~~CVRs are listed on the NASDAQ Global Market and Genzyme ~~from soliciting or knowingly encouraging competing acquisition proposals. However, Genzyme may, subject to the terms and conditions set forth in the Merger Agreement, provide information to~~is now a ~~third party that makes an unsolicited acquisition proposal, and may engage in discussions and negotiations with a third party that makes an unsolicited acquisition proposal that the Genzyme board~~wholly-owned subsidiary of ~~directors determines constitutes or would reasonably be expected to lead to or result in a Superior Proposal (as defined in the Merger Agreement).~~
The Merger Agreement also provides for certain termination rights for both sanofi-aventis and Genzyme. Upon termination of the Merger Agreement under specified circumstances, Genzyme may be required to pay sanofi-aventis a termination fee of $575 million.
~~The Merger Agreement also provides that either party may specifically enforce the other party’s obligations under the Merger Agreement.~~
Sanofi.
The Contingent Value Rights Agreement.

~~At or prior to~~In connection with its acquisition of Genzyme Corporation, now a wholly-owned subsidiary of Sanofi, Sanofi issued one CVR per Genzyme share. On March 30, 2011, Sanofi and the ~~expiration of the Amended Offer, sanofi-aventis and a mutually acceptable~~American Stock Transfer & Trust Company, LLC, as trustee ~~will enter~~entered into a Contingent Value Rights agreement governed by the laws of the State of New York and subject to the jurisdiction of the courts of the State of New York (“("CVR ~~Agreement”~~Agreement") governing the terms of the CVRs. A
        Pursuant to the terms of the CVR Agreement, a holder of a CVR is entitled to cash payments upon the achievement of ~~certain milestones, including based on production levels~~contractually defined milestones. The first milestone related to manufacturing of ~~Cerezyme~~^®Cerezyme® and ~~Fabrazyme~~^®,Fabrazyme® had to be met by December 31, 2011 in order for the payment to be triggered. This milestone was not met and therefore lapsed. The remaining milestone payments are triggered by timely U.S. regulatory approval of alemtuzumab for treatment of multiple sclerosis ~~(“Lemtrada~~^™”("Lemtrada™"), and on achievement of certain aggregate ~~Lemtrada~~^™Lemtrada™ sales thresholds within defined periods ("Product Sales Milestones"), as ~~follows:~~summarized below:
•
Approval Milestone Payment.
  $1 per CVR upon receipt by Genzyme or any of its affiliates, on or before March 31, 2014, of the approval by the U.S. Food and Drug Administration of Lemtrada™ for treatment of multiple sclerosis.

•
Product Sales Milestone #1 Payment.  $2 per CVR if Lemtrada™ net sales post launch exceeds an aggregate of $400 million within specified periods and territories.

•
Product Sales Milestone #2 Payment.  $3 per CVR upon the first instance in which global Lemtrada™ net sales for a four calendar quarter period are equal to or in excess of $1.8 billion. If Product Sales Milestone #2 is achieved but the Approval Milestone was not achieved prior to March 31, 2014, the milestone payment amount will be $4 per CVR (however, in such event the Approval Milestone shall not also be payable).

•
Product Sales Milestone #3 Payment.  $4 per CVR upon the first instance in which global Lemtrada™ net sales for a four calendar quarter period are equal to or in excess of $2.3 billion (no quarter in which global Lemtrada™ net sales were used to determine the achievement of Product Sales Milestone #1 or #2 shall be included in the calculation of sales for determining whether Product Sales Milestone #3 has been achieved).

•
Product Sales Milestone #4 Payment.  $3 per CVR upon the first instance in which global Lemtrada™ net sales for a four calendar quarter period are equal to or in excess of $2.8 billion (no quarter in which global Lemtrada™ net sales were used to determine the achievement of Product Sales Milestone #1, #2 or #3 shall be included in the calculation of sales for determining whether Product Sales Milestone #4 has been achieved).

•
~~Cerezyme~~^®/~~Fabrazyme~~^® ~~Production Milestone Payment~~~~. $1 per CVR, if both Cerezyme~~^® ~~production meets or exceeds 734,600 400-unit vial equivalents and Fabrazyme~~^® ~~production meets or exceeds 79,000 35mg vial equivalents during calendar year 2011.~~
•
~~Approval Milestone Payment~~~~. $1 per CVR upon receipt by Genzyme or any of its affiliates, on or before March 31, 2014, of the approval by the U.S. Food and Drug Administration of Lemtrada~~^™ ~~for treatment of multiple sclerosis.~~
•
~~Product Sales Milestone #1 Payment~~~~. $2 per CVR if Lemtrada~~^™ ~~net sales post launch exceeds an aggregate of $400 million within specified periods and territory.~~
•
~~Product Sales Milestone #2 Payment~~~~. $3 per CVR upon the first instance in which global Lemtrada~~^™ net sales for a four calendar quarter period are equal to or in excess of $1.8 billion. If Product Sales Milestone #2 is achieved but the Approval Milestone was not achieved prior to March 31, 2014, the milestone payment amount will be $4 per CVR (however, in such event the Approval Milestone shall not also be payable).
•
~~Product Sales Milestone #3 Payment~~~~. $4 per CVR upon the first instance in which global Lemtrada~~^™ ~~net sales for a four calendar quarter period are equal to or in excess of $2.3 billion (no quarter in which global Lemtrada~~^™ net sales were used to determine the achievement of Product Sales Milestone #1 or #2 shall be included in the calculation of sales for determining whether Product Sales Milestone #3 has been achieved).
•
~~Product Sales Milestone #4 Payment~~~~. $3 per CVR upon the first instance in which global Lemtrada~~^™ ~~net sales for a four calendar quarter period are equal to or in excess of $2.8 billion (no quarter in which global Lemtrada~~^™ net sales were used to determine the achievement of Product Sales Milestone #1, #2 or #3 shall be included in the calculation of sales for determining whether Product Sales Milestone #4 has been achieved).
The CVRs will expire and no payments will be due under the CVR agreement on the earlier of (a) December 31, 2020 and (b) the date that Product Sales Milestone #4 is paid.
~~Sanofi-aventis~~        Sanofi has agreed to use ~~commercially reasonable efforts to achieve the Cerezyme~~^®~~/Fabrazyme~~^® ~~Production Milestone, and~~ diligent efforts (as defined in the CVR Agreement) to achieve each of the ~~other milestones above. Sanofi-aventis~~remaining milestones. For more information on Lemtrada™ see "Item 4.B Business Overview — Pharmaceutical Products — Multiple Sclerosis".

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        Sanofi has also agreed to use its commercially reasonable efforts to maintain a listing for trading of the CVRs on ~~Nasdaq.~~the NASDAQ market.

The CVR Agreement does not prohibit ~~sanofi-aventis~~Sanofi or any of its subsidiaries or affiliates from acquiring the CVRs, whether in open market transactions, private transactions or otherwise; ~~sanofi-aventis~~Sanofi has certain disclosure obligations in connection with such acquisitions under the CVR Agreement. On or after the third anniversary of the launch of ~~Lemtrada~~^™Lemtrada™, ~~sanofi-aventis~~Sanofi may also, subject to certain terms and conditions as set forth in the CVR Agreement, optionally purchase and cancel all (but not less than all) of the outstanding CVRs at the average trading price of the CVRs if the volume-weighted average CVR trading price is less than fifty cents over forty-five trading days and ~~Lemtrada~~^™Lemtrada™ sales in the prior four quarter period were less than one billion U.S. dollars in the aggregate.

A copy of the Merger Agreement and the form of CVR Agreement are on file with the SEC as ~~exhibit~~exhibits 4.3 and 4.4 hereto, respectively. Reference is made to such exhibits for a more complete description of the terms and conditions of the Merger Agreement and the CVR Agreement, and the foregoing summary of such terms and conditions is qualified in its entirety by such exhibits.

D. Exchange Controls

French exchange control regulations currently do not limit the amount of payments that we may remit to non-residents of France. Laws and regulations concerning foreign exchange controls do require, however, that all payments or transfers of funds made by a French resident to a non-resident be handled by an accredited intermediary. ~~In France, all registered banks and most credit establishments are accredited intermediaries.~~

E. Taxation
General

The following generally summarizes the material French and U.S. federal income tax consequences to U.S. holders (as defined below) of purchasing, owning and disposing of our ADSs and ordinary shares ~~PSSAs and PSSA-ADSs~~ (collectively the ~~“Securities”~~"Securities"). This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or listing of all potential tax effects of the purchase, ownership or disposition of our Securities. All of the following is subject to change. Such changes could apply retroactively and could affect the consequences described below.

This summary does not constitute a legal opinion or tax advice. Holders are urged to consult their own tax advisers regarding the tax consequences of the purchase, ownership and disposition of Securities in light of their particular circumstances, including the effect of any U.S. federal, state, local or other national tax laws.
        France has recently introduced a comprehensive set of new tax rules applicable to French assets that are held by or in foreign trusts. These rules provideinter alia for the inclusion of trust assets in the settlor's net assets for purpose of applying the French wealth tax, for the application of French gift and death duties to French assets held in trust, for a specific tax on capital on the French assets of foreign trusts not already subject to the French wealth tax and for a number of French tax reporting and disclosure obligations. The following discussion does not address the French tax consequences applicable to Securities held in trusts.If Securities are held in trust, the grantor, trustee and beneficiary are urged to consult their own tax adviser regarding the specific tax consequences of acquiring, owning and disposing of Securities.
The description of the French and U.S. federal income tax consequences set forth below is based on the laws (including, for U.S. federal income tax purposes, the Internal Revenue Code of 1986, as amended (the ~~“Code”~~"Code"), final, temporary and proposed U.S. Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof) in force as of the date of this annual report, the Convention Between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital of August 31, 1994 (the ~~“Treaty”~~"Treaty"), which entered into force on December 30, 1995 (as amended by any subsequent protocols, including the protocol of January 13, 2009), and the tax regulations issued by the French tax authorities (the ~~“Regulations”~~"Regulations") in force as of the date of this report. ~~All of the foregoing is subject to change. Such changes could apply retroactively and could affect the consequences described below.~~
In particular, the United States and France signed a protocol on January 13, 2009, that made several changes to the Treaty, including changes to the “Limitation on Benefits” provision. The protocol entered into force on December 23, 2009; its provisions became effective in respect of withholding taxes for amounts paid or credited on or after January 1, 2009 and in respect of other taxes for taxable years beginning on or after January 1, 2010.U.S. holders are advised to consult their own tax advisers regarding ~~the effect the protocol may have on~~ their eligibility for Treaty

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benefits, especially with regard to the "Limitations on Benefits" provision, in light of their own particular circumstances.
For the purposes of this discussion, a U.S. holder is a beneficial owner of Securities that is (i) an individual who is a U.S. citizen or resident for U.S. federal income tax purposes, (ii) a U.S. domestic corporation or certain other entities created or organized in or under the laws of the United States or any state thereof, including the District of Colombia, or (iii) otherwise subject to U.S. federal income taxation on a net income basis in respect of Securities. A non-U.S. holder is a person other than a U.S. holder.
If a partnership holds Securities, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership.If a U.S. holder is a partner in a partnership that holds Securities, the holder is urged to consult its own tax adviser regarding the specific tax consequences of acquiring, owning and disposing of Securities.
This discussion is intended only as a general summary and does not purport to be a complete analysis or listing of all potential tax effects of the acquisition, ownership or disposition of the Securities to any particular investor, and does not discuss tax considerations that arise from rules of general application or that are generally assumed to be known by investors. The discussion applies only to investors that hold our Securities as capital assets that have the U.S. dollar as their functional currency, that are entitled to Treaty benefits under the ~~“Limitation~~"Limitation on ~~Benefits”~~Benefits" provision contained in the Treaty, and whose ownership of the Securities is not effectively connected to a permanent establishment or a fixed base in France. Certain holders (including, but not limited to, U.S. expatriates, partnerships or other entities classified as partnerships for U.S. federal income tax purposes, banks, insurance companies, regulated investment companies, tax-exempt organizations, financial institutions, persons subject to the alternative minimum tax, persons who acquired the Securities pursuant to the exercise of employee stock options or otherwise as compensation, persons that own (directly, indirectly or by attribution) 5% or more of our voting stock or 5% or more of our outstanding share capital, dealers in securities or currencies, persons that elect to mark their securities to market for U.S. federal income tax purposes and persons holding Securities as a position in a synthetic security, straddle or conversion transaction) may be subject to special rules not discussed below.Holders of Securities are advised to consult their own tax advisers with regard to the application of French tax law and U.S. federal income tax law to their particular situations, as well as any tax consequences arising under the laws of any state, local or other foreign jurisdiction.
French Taxes
Estate and Gift Taxes and Transfer Taxes

In general, a transfer of Securities by gift or by reason of death of a U.S. holder that would otherwise be subject to French gift or inheritance tax, respectively, will not be subject to such French tax by reason of the Convention between the Government of the United States of America and the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritances and Gifts, dated November 24, 1978, unless the donor or the transferor is domiciled in France at the time of making the gift or at the time of his or her death, or the Securities were used in, or held for use in, the conduct of a business through a permanent establishment or a fixed base in France.
~~Generally, transfers~~        Pursuant to Article 235 ter ZD of the French General Tax Code, purchases of Securities ~~(other than ordinary shares)~~ are ~~not~~ subject to a 0.2% French ~~registration or stamp duty. Generally, transfers~~tax on financial transactions provided that Sanofi's market capitalization exceeds 1 billion euros as of ~~ordinary shares will not be~~December 1 of the year preceding the taxation year. A list of companies whose market capitalization exceeds 1 billion euros as of December 1 of the year preceding the taxation year is published annually by the French state. Pursuant to a ministerial regulation (arrêté) dated January 11, 2013, Sanofi is included in such list as a company whose market capitalization exceeds 1 billion euros as of December 1, 2012 and therefore, purchases of Sanofi's Securities are subject to ~~French registration or stamp duty if~~ such ~~transfers are not evidenced by a written agreement or if such an agreement is executed outside~~tax.

Table of ~~France.~~Contents
Wealth Tax
The French wealth taximpôt de solidarité sur la fortune applies only to individuals and does not generally apply to the Securities if the holder is a U.S. resident, as defined pursuant to the provisions of the ~~Treaty.~~Treaty, provided that the individual does not own directly or indirectly a shareholding exceeding 25% of the financial rights.
U.S. Taxes
Ownership of the Securities

Deposits and withdrawals by a U.S. holder of ordinary shares in exchange for ADSs, ~~or of PSSAs in exchange for PSSA-ADSs (including in connection with the intended termination of the deposit agreement with respect to the PSSA-ADSs),~~ will not be taxable events for U.S. federal income tax purposes. For U.S. tax
purposes, holders of ADSs will be treated as owners of the ordinary shares represented by such ~~ADSs, and holders of PSSA-ADSs will be treated as owners of the PSSAs represented by such PSSA-ADSs.~~ADSs. Accordingly, the discussion that follows regarding the U.S. federal income tax consequences of acquiring, owning and disposing of ordinary shares ~~and PSSAs~~ is equally applicable to ~~ADSs and PSSA-ADSs, respectively.~~ADSs.
Information Reporting and Backup Withholding Tax

Distributions made to holders and proceeds paid from the sale, exchange, redemption or disposal of Securities may be subject to information reporting to the Internal Revenue Service. Such payments may be subject to backup withholding taxes unless the holder (i) is a corporation or other exempt recipient or (ii) provides a taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred. Holders that are not U.S. persons generally are not subject to information reporting or backup withholding. However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments received within the United States or through a U.S.-related financial intermediary to establish that it is an exempt recipient. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a ~~holder’s~~holder's U.S. federal income tax liability. A holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the Internal Revenue Service and furnishing any required information.
Foreign Asset Reporting
        In addition, a U.S. holder that is an individual (and, to the extent provided in future regulations, an entity), may be subject to recently-enacted reporting obligations with respect to ordinary shares and ADSs if the aggregate value of these and certain other "specified foreign financial assets" exceeds $50,000. If required, this disclosure is made by filing Form 8938 with the U.S. Internal Revenue Service. Significant penalties can apply if holders are required to make this disclosure and fail to do so. In addition, a U.S. holder should consider the possible obligation to file a Form TD F 90-22.1 — Foreign Bank and Financial Accounts Report as a result of holding ordinary shares or ADSs. Holders are thus encouraged to consult their U.S. tax advisors with respect to these and other reporting requirements that may apply to their acquisition of ordinary shares and ADSs.
State and Local Taxes
In addition to U.S. federal income tax, U.S. holders of Securities may be subject to U.S. state and local taxes with respect to such Securities.Holders of Securities are advised to consult their own tax advisers with regard to the application of U.S. state and local income tax law to their particular situation.
ADSs-Ordinary Shares
French Taxes
Taxation of Dividends

Under French law, dividends paid by a French corporation, such as ~~sanofi-aventis,~~Sanofi, to non-residents of France are generally subject to French withholding tax at a rate of ~~25% (19%~~30% (21% for distributions made to individuals that are resident in the European Economic Area, and 15% for distributions made to ~~non-for-profit~~not-for-profit organizations with a head office in a Member State of the European Economic Area which would be subject to the tax regime set forth under article 206-5 of the French General Tax Code if its head office were located in France and which meet the criteria set forth in the administrative guidelines ~~4 H-2-10~~BOI-RPPM-RCM-30-30-10-70-20120912, n°130). Dividends

Table of ~~January 15, 2010). Dividends~~ Contents
paid by a French corporation, such as ~~sanofi-aventis,~~Sanofi, towards non-cooperative States or territories, as defined in Article 238-0 A of the French General Tax Code, will generally be subject to French withholding tax at a rate of ~~50%~~75%, irrespective of the tax residence of the beneficiary of the dividends if the dividends are received in such States or territories; however, eligible U.S. holders entitled to Treaty benefits under the ~~“Limitation~~"Limitation on ~~Benefits”~~Benefits" provision contained in the Treaty who are U.S. residents, as defined pursuant to the provisions of the Treaty and ~~receiving~~who receive dividends in non-cooperative States or territories, will not be subject to this ~~50%~~75% withholding ~~tax.~~tax rate.

Under the Treaty, the rate of French withholding tax on dividends paid to an eligible U.S. holder who is a U.S. resident as defined pursuant to the provisions of the Treaty and whose ownership of the ordinary shares or ADSs is not effectively connected with a permanent establishment or fixed base that such U.S. holder has in France, is reduced to 15%, or to 5% if such U.S. holder is a corporation and aowns directly or indirectly at least 10% of the share capital of the issuing company; such U.S. holder may claim a refund from the French tax authorities of the amount withheld in excess of the Treaty ~~rate~~rates of 15% or 5%, if any. For U.S. holders that are not individuals but are U.S. residents, as defined pursuant to the provisions of the Treaty, the requirements for eligibility for Treaty benefits, including the reduced 5% or 15% withholding tax ~~rate,~~rates contained in the ~~“Limitation~~"Limitation on ~~Benefits”~~Benefits" provision of the Treaty, are complicated, and certain technical changes were made to these requirements by the protocol of January 13, 2009. U.S. holders are advised to consult their own tax advisers regarding their eligibility for Treaty benefits in light of their own particular circumstances.

Dividends paid to an eligible U.S. holder may immediately be subject to the reduced ~~rate~~rates of 5% or 15%, provided that such holder establishes before the date of payment that it is a U.S. resident under the Treaty by completing and providing the depositary with a treaty form (Form 5000). Dividends paid to a U.S. holder that has not filed the Form 5000 before the dividend payment date will be subject to French withholding tax at the rate of ~~25%~~30% and
then reduced at a later date to 5% or 15%, provided that such holder duly completes and provides the French tax authorities with the treaty forms Form 5000 and Form 5001 before December 31 of the second calendar year following the year during which the dividend is paid. Pension funds and certain other tax-exempt entities are subject to the same general filing requirements as other U.S. holders except that they may have to supply additional documentation evidencing their entitlement to these benefits.

Form 5000 and Form 5001, together with instructions, will be provided by the depositary to all U.S. holders registered with the depositary and isare also available from the U.S. Internal Revenue Service. The depositary will arrange for the filing with the French Tax authorities of all such forms properly completed and executed by U.S. holders of ordinary shares or ADSs and returned to the depositary in sufficient time that they may be filed with the French tax authorities before the distribution so as to obtain immediately a reduced withholding tax rate.

The withholding tax refund, if any, ordinarily is paid within 12 months of filing the applicable French Treasury Form, but not before January 15 of the year following the calendar year in which the related dividend is paid.
Tax on Sale or Other Disposition

In general, under the Treaty, a U.S. holder who is a U.S. resident for purposes of the Treaty will not be subject to French tax on any capital gain from the redemption (other than redemption proceeds characterized as dividends under French domestic law), sale or exchange of ordinary shares or ADSs unless the ordinary shares or the ADSs form part of the business property of a permanent establishment or fixed base that the U.S. holder has in France. Special rules apply to holders who are residents of more than one country.
U.S. Taxes
Taxation of Dividends

For U.S. federal income tax purposes, the gross amount of any distribution paid to U.S. holders (that is, the net distribution received plus any tax withheld therefrom) will be treated as ordinary dividend income to the extent paid or deemed paid out of the current or accumulated earnings and profits of ~~sanofi-aventis~~Sanofi (as determined under U.S. federal income tax principles). Dividends paid by ~~sanofi-aventis~~Sanofi will not be eligible for the dividends-received deduction generally allowed to corporate U.S. holders.

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Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual U.S. holder with respect to ~~taxable years beginning before January 1, 2013, with respect to~~ the ADSs or our ordinary shares ~~will be~~is currently subject to taxation at a maximum rate of ~~15%~~20% if the dividends are ~~“qualified dividends.”~~"qualified dividends". Dividends paid on the ordinary shares or ADSs will be treated as qualified dividends if (i) the issuer is eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service has approved for the purposes of the qualified dividend rules and (ii) the issuer was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company ~~(“PFIC”~~("PFIC"). The Treaty has been approved for the purposes of the qualified dividend rules. Based on our audited financial statements and relevant market and shareholder data, we believe ~~sanofi-aventis~~Sanofi was not a PFIC for U.S. federal income tax purposes with respect to its ~~2010~~2012 taxable year. In addition, based on its ~~audited financial statements and~~ current expectations regarding the value and nature of its assets, the sources and nature of its income, and relevant market and shareholder data, we do not anticipate that ~~sanofi-aventis~~Sanofi will become a PFIC for its ~~2011~~2013 taxable year.Holders of ordinary shares and ADSs should consult their own tax advisers regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.
If you are a U.S. holder, dividend income received by you with respect to ADSs or ordinary shares generally will be treated as foreign source income for foreign tax credit purposes. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Distributions out of earnings and profits with respect to the ADSs or ordinary shares generally will be treated as ~~“passive category”~~"passive category" income (or, in the case of certain U.S. holders, ~~“general category”~~"general category" income). Subject to certain limitations, French income tax withheld in connection with any distribution with respect to the ADSs or ordinary shares may be claimed as a credit against the U.S. federal income tax liability of a U.S. holder if such U.S. holder elects for that year to
credit all foreign income taxes. Alternatively, such French withholding tax may be taken as a deduction against taxable income. Foreign tax credits will not be allowed for withholding taxes imposed in respect of certain short-term or hedged positions in Securities and may not be allowed in respect of certain arrangements in which a U.S. ~~holder’s~~holder's expected economic profit is insubstantial.The U.S. federal income tax rules governing the availability and computation of foreign tax credits are complex. U.S. holders should consult their own tax advisers concerning the implications of these rules in light of their particular circumstances.

To the extent that an amount received by a U.S. holder exceeds the allocable share of our current and accumulated earnings and profits, such excess will be applied first to reduce such U.S. ~~holder’s~~holder's tax basis in its ordinary shares or ADSs and then, to the extent it exceeds the U.S. ~~holder’s~~holder's tax basis, it will constitute capital gain from a deemed sale or exchange of such ordinary shares or ADSs (see “—"— Tax on Sale or Other ~~Disposition”~~Disposition", below).
The amount of any distribution paid in euros will be equal to the U.S. dollar value of the euro amount distributed, calculated by reference to the exchange rate in effect on the date the dividend is received by a U.S. holder of ordinary shares (or by the depositary, in the case of ADSs) regardless of whether the payment is in fact converted into U.S. dollars on such date.U.S. holders should consult their own tax advisers regarding the treatment of foreign currency gain or loss, if any, on any euros received by a U.S. holder or depositary that are converted into U.S. dollars on a date subsequent to receipt.

Distributions to holders of additional ordinary shares (or ADSs) with respect to their ordinary shares (or ADSs) that are made as part of a pro rata distribution to all ordinary shareholders generally will not be subject to U.S. federal income tax. However, if a U.S. holder has the option to receive a distribution in shares (or ADSs) or to receive cash in lieu of such shares (or ADSs), the distribution of shares (or ADSs) will be taxable as if the holder had received an amount equal to the fair market value of the distributed shares (or ADSs), and such ~~holder’s~~holder's tax basis in the distributed shares (or ADSs) will be equal to such amount.
Tax on Sale or Other Disposition

In general, for U.S. federal income tax purposes, a U.S. holder that sells, exchanges or otherwise disposes of its ordinary shares or ADSs will recognize capital gain or loss in an amount equal to the U.S. dollar value of the difference between the amount realized for the ordinary shares or ADSs and the U.S. ~~holder’s~~holder's adjusted tax basis (determined in U.S. dollars and under U.S. federal income tax rules) in the ordinary shares or ADSs. Such gain or loss generally will be ~~U.S. -source~~U.S.-source gain or loss, and will be treated as long-term capital gain or loss if the U.S. ~~holder’s~~holder's holding period in the ordinary shares or ADSs exceeds one year at the time of disposition. If the U.S. holder

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is an individual, any capital gain generally will be subject to U.S. federal income tax at preferential rates (currently a maximum of ~~15%~~20%) if specified minimum holding periods are met. The deductibility of capital losses is subject to significant limitations.
~~Participating Shares Series “A” (PSSAs) and PSSA-ADSs~~
~~French Taxes~~
~~Taxation of Annual Payments and Any Reorganization Payment~~Medicare Tax

~~Under French law, no French withholding tax is imposed on Annual Payments on the Participating Shares Series “A” (PSSAs) owned by~~Recently-enacted legislation requires certain U.S. holders. Pursuant to Article 131 quater of the French General Tax Code, the withholding tax exemption on Annual Payments is not subject to any filing requirement because the PSSAs have been offered exclusively outside France before March 1, 2010. In the event that French law should change and a French withholding tax becomes applicable to the Annual Payments, (i) sanofi-aventis or an affiliate shall be obligated, to the extent it may lawfully do so, to gross up such payments (with certain exceptions relating to the holder’s connection with France, failure to claim an exemption or failure to present timely such shares for payment) so that, after the payment of such withholding tax, the holder will receive an amount equal to the amount which the holder would have received had there been no withholding or (ii) sanofi-aventis may redeem the PSSAs.
~~Taxation of Redemption~~
In general, under the Treaty, a U.S. holder who is a U.S. resident for purposes of the Treaty will not be subject to French tax on any capital gain from the redemption, sale or exchange of PSSAs or PSSA-ADSs unless the PSSAs or PSSA-ADSs form part of the business property of a permanent establishment or fixed base that the U.S. holder has in France. Special rules apply to holders who are ~~residents~~individuals, estates or trusts to pay a Medicare tax of ~~more than one country.~~
~~U.S. Taxes~~
~~Taxation of Annual Payments~~
~~For U.S. federal income tax purposes, the gross amount of the annual payments paid~~3.8% (in addition to U.S. holders entitled thereto will be treated as ordinary dividend income (in an amount equal to the cash or fair market value of the property received) to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Such dividends generally will be foreign-source income and generally will be treated as “passive category” (or, in the case of certain U.S. holders, “general category”) income for foreign tax credit purposes. Dividends paid by sanofi-aventis will not be eligible for the dividends-received deduction generally allowed to corporate U.S. holders.
Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by a U.S. holder that is an individual with respect to taxable years beginning before January 1, 2011 with respect to the PSSAs or PSSA-ADSs willtaxes they would otherwise be subject ~~to taxation at a maximum rate of 15% if~~to) on their "net investment income" which would include, among other things, dividends and capital gains from the dividends are “qualified dividends.” Dividends paid on the PSSAs or PSSA-ADSs will be treated as qualified dividends if (i) the issuer is eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service has approved for the purposes of the qualified dividend rulesordinary shares and (ii) the issuer was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company (PFIC). The Treaty has been approved for the purposes of the qualified dividend rules. Based on our audited financial statements and relevant market and shareholder data, we believe we were not a PFIC for U.S. federal income tax purposes with respect to our 2010 taxable year. In addition, based on our audited financial statements and current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate that we will become a PFIC for our 2010 taxable year.~~Holders of PSSAs and PSSA-ADSs should consult their own tax advisers regarding the availability of the reduced dividend tax rate in light of their own particular circumstances.~~
To the extent that an amount received by a U.S. holder exceeds the allocable share of our current and accumulated earnings and profits, such excess will be applied first to reduce such U.S. holder’s tax basis in its PSSAs or PSSA-ADSs and then, to the extent it exceeds the U.S. holder’s tax basis, it will constitute gain from a deemed sale or exchange of such PSSAs or PSSA-ADSs (see “— Tax on Sale or Other Disposition (Including Redemption)”, below).
ADSs.
The amount of any distribution paid in euros will be equal to the U.S. dollar value of the distributed euros, calculated by reference to the exchange rate in effect on the date the dividend is received by a U.S. holder of PSSAs (or by the depositary, in the case of PSSA-ADSs), regardless of whether the payment is in fact converted into U.S. dollars on such date.U.S. holders should consult their own tax advisers regarding the treatment of foreign currency gain or loss, if any, on any euros received by a U.S. holder or depositary that are converted into U.S. dollars on a date subsequent to receipt.
~~Tax on Sale or Other Disposition (Including Redemption)~~
In general, for U.S. federal income tax purposes, a U.S. holder that sells, exchanges or otherwise disposes of PSSAs or PSSA-ADSs will recognize capital gain or loss in an amount equal to the U.S. dollar value of the difference between the amount realized for the PSSAs or PSSA-ADSs and the holder’s adjusted tax basis (determined in U.S. dollars) in the PSSAs or PSSA-ADSs. Such gain or loss generally will be U.S. -source gain or loss, and will be treated as long-term capital gain or loss if the U.S. holder’s holding period in the PSSAs or PSSA-ADSs exceeds one year at the time of disposition. If the U.S. holder is an individual, any capital gain
generally will be subject to U.S. federal income tax at preferential rates (currently a maximum of 15%) if specified minimum holding periods are met. The deductibility of capital losses is subject to significant limitations.
If, however, a U.S. holder’s PSSAs or PSSA-ADSs are redeemed and it has a direct or indirect stock interest in sanofi-aventis after such redemption, then amounts received in a redemption could, under applicable U.S. tax rules, be treated as a distribution taxable as a dividend that is measured by the full amount of cash received by such U.S. holder (to the extent of the current and accumulated earnings and profits of sanofi-aventis, as described above in “Taxation of Annual Payments”).~~U.S. holders should consult their own tax advisers as to the application of these rules to any such redemption.~~
F. Dividends and Paying Agents

N/A

G. Statement by Experts

N/A

H. Documents on Display

We are subject to the information requirements of the U.S. Securities Exchange Act of 1934, as amended, or Exchange Act, and, in accordance therewith, we are required to file reports, including this annual report on Form 20-F, and other information with the U.S. Securities and Exchange Commission, or Commission, by electronic means. ~~Our public~~
        You may review a copy of our filings ~~are available~~with the Commission, as well as other information furnished to the ~~public over the Internet~~Commission, including exhibits and schedules filed with it, at the ~~Commission’s Website~~Commission's public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information. In addition, the Commission maintains an Internet site at http://www.sec.gov that contains reports and other information regarding issuers that file electronically with the Commission (these documents are not incorporated by reference in this annual report).

I. Subsidiary Information

N/A

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Item 11. Quantitative and Qualitative Disclosures about Market Risk⁽¹⁾
General Policy

Liquidity risk, foreign exchange risk and interest rate risk, as well as related counterparty risk, are managed centrally by our dedicated treasury team within the Group Finance Department. Where it is not possible to manage these risks centrally, in particular due to regulatory restrictions (such as foreign exchange controls) or local tax restrictions, credit facilities and/or currency lines, guaranteed whenever necessary by the parent company, are contracted by our subsidiaries locally with banks, under the supervision of the central treasury team.

Our investment and financing strategies, as well as our interest rate and currency hedging strategies, are reviewed monthly by the Group Finance Department.

Our policy on derivatives prohibits speculative exposure.
Liquidity Risk

We operate a centralized treasury platform ~~according to which~~whereby all surplus cash and financing needs of our subsidiaries are invested with or funded by the parent company (where permitted by local legislation). The central treasury department manages the ~~Group’s~~Group's current and projected financing (debt, net of cash and cash equivalents), and ensures that the Group is able to meet its financial commitments by maintaining sufficient cash and confirmed credit facilities for the size of our operations and the maturity of our ~~debt.~~debt (see Notes D.17.c and D.17.g to the consolidated financial statements).

The ~~group tends to diversify~~Group diversifies its ~~short term~~short-term investments with leading banks using money-market products ~~that are immediately accessible~~with instant access or ~~have~~with a maturity ~~of less~~lower than three months. As of December 31, ~~2010,~~2012, cash and cash equivalents amounted to ~~€6,465~~€6,381 million and ~~short term~~short-term investments mainly comprised:
•
~~Mutual fund investments classified as Euro Money-Market Funds by the~~~~Autorité des Marchés Financiers~~~~, within a limit of 10% of held assets.~~
~~Bank~~
•
collective investments in 'short-term money market' and 'money market' euro-denominated funds based on the European classification used by theAutorité des Marchés Financiers, and in 'money market' U.S. dollar-denominated funds subject to the U.S. Securities and Exchange Commission regulation 2a-7. All such funds can be traded on a daily basis and the amount invested in each fund may not exceed 10% of the total amount invested in such funds;

•
bank current account deposits, bank term deposits and certificates of deposit with a maturity lower than three months. These short-term investments are entered into with leading financial institutions;

•
term deposits with a maturity ~~of less~~lower than three months.
These short-term investments are entered into with non-financial institutions.

As of December 31, ~~2010,~~2012, the Group had ~~€12.2~~€10 billion of undrawn general corporate purpose confirmed credit facilities, ~~not allocated to outstanding commercial paper drawdowns~~ of which ~~€6.2~~€3 billion expire in ~~2015, €5.8~~December 2013, €0.25 billion in ~~2012,~~July 2015 and ~~€0.2~~€6.75 billion in ~~2011.~~July 2017. Our credit facilities are not subject to financial covenant ratios.

In connection with the launch of a public tender offer for Genzyme on October 4, 2010, sanofi-aventis contracted on October 2, 2010 two credit facilities totaling $15 billion. These facilities, amended on February 15, 2011, may be drawn down in US dollars until December 31, 2011:
~~Facility A is a $10 billion facility expiring April 2, 2012 with an optional six-month extension.~~
~~Facility B is $5 billion amortizable facility expiring April 2, 2014.~~
~~These acquisition facilities are not subject to any financial covenant. The margin of Facility B will depend on the long-term credit rating of sanofi-aventis subsequent to the acquisition.~~
Our policy is to diversify our sources of funding through public or private issuances of debt securities, in ~~particular under our Euro~~the United States and in France (Euro Medium Term Note ~~program,~~program), and by issuing commercial paper in ~~France and~~ the United ~~States. On March 15, 2010, the Group filed a U.S shelf, not being used as of today.~~States and in France. The average ~~maturity~~duration of ~~our~~the total debt ~~is 3.9~~was 3.2 years as of December 31, ~~2010,~~2012, compared to ~~4.1~~3.5 years as of December 31, ~~2009.~~2011. Short-term commercial paper programs (U.S. dollar-denominated commercial paper swapped into ~~euros~~euro and euro-denominated commercial paper) are used to meet our short-term financing needs. In 2012, the French commercial paper program was not drawn down, whereas average drawdowns under the U.S. commercial paper program were €2.3 billion (maximum €3.3 billion). Drawdowns under these
⁽¹⁾ Information in this section is complementary to Note B.8.8. to our consolidated financial statements included at Item 18 of this annual report, with regards to information required by IFRS 7, and is covered by our independent registered public accounting firms’ report on the consolidated financial statements.
programs are generally renewed for periods of 2one and a half months. The commercial paper programs are backed by confirmed credit facilities (see description above), to permit the Group to continue to access financing if raising funds via commercial paper is no longer possible (for more information, see Note D.17 to the consolidated financial statements). In 2010, the average drawdown under these programs was €0.9 billion (maximum €1.7 billion). As of December 31, ~~2010, the drawdown under~~2012, these programs ~~amounted to €0.7 billion.~~were not drawn down.

In ~~the context of~~ a market-wide liquidity crisis, ~~and/or a downgrade of its rating,~~ the Group could be exposed to difficulties in calling up its available cash, a scarcity of ~~its~~ sources of funding including the above-mentioned programs, or to a deterioration ofin their ~~conditions.~~terms. This situation could damage the capacity of the Group to refinance its debt or to issue new debt on reasonable ~~conditions.~~terms.

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Interest Rate Risk

~~Our~~Since the financing of the Genzyme acquisition in 2011, the Group has managed its net debt in two currencies, the euro and the U.S. dollar (see note D.17 to the consolidated financial statements). The floating-rate portion of this debt exposes the Group to rises in interest rates, primarily in the Eonia and Euribor benchmark rates (for the euro) and in the U.S. Libor and Federal Fund Effective rates (for the U.S. dollar). In order to reduce the amount and/or volatility of the cost of debt, ~~is sensitive to changes in interest rates as regards~~ the floating-rate portion of the total debt (credit facilities, commercial paper, etc.), with reference to Eonia, US Libor and Euribor and in proportion to the amounts drawn under these programs. To optimize the cost of our debt or reduce its volatility, we use interestGroup has contracted derivative instruments (interest rate swaps, cross-currency swaps and ~~in certain circumstances~~ interest rate ~~options to alter~~options). These have the ~~fixed rate /~~ effect of altering the fixed/floating ~~rate mix~~split of ~~our~~the debt. These derivative instruments are denominated in euros or in U.S. dollars.

As of December 31, 2010, 66% of our total debt (amounting to €8,056 million) was fixed-rate and 34% was floating-rate after taking account of interest rate derivatives. Our cash and cash equivalents (amounting to €6,465 million) are fully floating-rate.
~~As of December 31, 2010,~~2012, the sensitivity of ~~our~~the total debt, net of cash and cash equivalents to interest rate fluctuations over a full year is as follows:
~~Change in 3-month Euribor~~ ~~Impact on~~
~~pre-tax~~
~~net income~~
~~(€ million)~~
~~+ 100 bp~~ 41
~~+ 25 bp~~ 10
~~- 25 bp~~ ~~(10~~ )
~~- 100 bp~~ ~~(41~~ )
Change in 3-month Euribor
Impact on pre-tax
net income
(€ million)
Impact on income/(expense)
recognized directly in
equity, before tax
(€ million)

+100 bp (10 ) (3 )
  +25 bp (2 ) (1 )
  -25 bp 2 1
-100 bp 10 3

Foreign Exchange Risk
a. Operational Foreign Exchange Risk

A substantial ~~proportion~~portion of our net sales is generated in countries in which the euro, which is our reporting currency, is not the functional currency. In ~~2010,~~2012, for example, ~~29.5%~~31% of our consolidated net sales were generated in the United States. Although we also incur expenses in those countries, the impact of those expenses is not enough wholly to offset the impact of exchange rates on net sales. Consequently, our operating income may be materially affected by fluctuations in the exchange rate between the euro and other currencies, primarily the U.S. dollar.

We operate a foreign exchange risk hedging policy to reduce the exposure of our operating income to exchange rate movements. This policy involves regular assessments of our worldwide foreign currency exposure, based on ~~budget estimates of~~ foreign-currency transactions to be carried out by the parent company and its subsidiaries. These transactions mainly comprise sales, purchases, research costs, co-marketing and co-promotion expenses, and royalties. To reduce the exposure of these transactions to exchange rate movements, we may contract currency hedges using liquid financial instruments, ~~such as~~mainly forward purchases and forward sales of ~~currency as well as call~~currencies, and ~~put options, and combinations~~swaps.

Table of ~~currency options (collars).~~
Contents
The table below shows operational currency hedging derivatives in place as of December 31, ~~2010,~~2012, with the notional amount translated into euros at the relevant closing exchange rate. See also Note ~~D.20.~~D.20 to the consolidated financial statements for the accounting classification of these instruments as of December 31, ~~2010.~~
2012.
Operational foreign exchange derivatives as of December 31, ~~2010~~2012 ⁽¹⁾:

(€ million)    Notional amount    Fair value
Forward currency sales    2,444       (25 )
Of which          •    U.S. dollar    1,380       (12 )
•    Russian rouble
   248       (7 )
•    Japanese yen
   202       (4 )
•    Pound sterling
   95       2
•    Australian dollar
   60       (1 )
Forward currency purchases    257       (2 )
Of which          •    Hungarian forint    84       (1 )
•    U.S. dollar
   51       (1 )
•    Canadian dollar
   31       —
•    Russian rouble
   30       —
•    Japanese yen
   18       —
Total
   2,701       (27 )
(€ million)
Notional amount
Fair value

Forward currency sales 2,972 21
Of which
•
U.S. dollar
972 6

•
Japanese yen
485 15

•
Russian rouble
368 (3 )

•
Singapore dollar
271 —

•
Chinese yuan renminbi
255 1

Forward currency purchases 944 (4 )
Of which
•
Singapore dollar
231 (4 )

•
Hungarian forint
166 (3 )

•
Swiss franc
110 —

•
Chinese yuan renminbi
94 —

•
U.S. dollar
69 —

Total 3,916 17

⁽¹⁾
~~(1)~~
As of December 31, 2009, the notional amount of forward currency sales was €2,800 million with a fair value of -€51 million (including forward sales of U.S. dollars of a notional amount of €1,757 million with a fair value of -€41 million). As of December 31, 2009, the notional amount of forward currency purchases was €377 million with a fair value of €6 million (including forward sales of U.S. dollars of a notional amount of €69 million with an immaterial fair value). In addition, as of December 31, 2009, the Group portfolio included purchased put options of a notional amount of €448 million with a fair value of €14 million, written call options of a notional amount of €881 million with a fair value of -€17 million, written put options of a notional of €278 million with a fair value of -€8 million and purchased call options of a notional of €555 million with a fair value of €10 million.
As of December 31, ~~2010,~~2011, the notional amount of forward currency sales was €3,446 million with a fair value of -€96 million (including forward sales of U.S. dollars of a notional amount of €1,779 million with a fair value of -€59 million). As of December 31, 2011, the notional amount of forward currency purchases was €1,077 million with a fair value of €7 million (including forward purchases of U.S. dollars of a notional amount of €69 million with an immaterial fair value).
        As of December 31, 2012, none of these instruments had an expiry date after ~~March 31, 2011.~~February 28, 2013 except for a specific forward currency purchase position for a total of £33 million expiring between 2013 and 2015.

These positions mainly hedge future foreign-currency cash flows arising after the balance sheet date in relation to transactions carried out during the year ended December 31, ~~2010~~2012 and recognized in the balance sheet at that date. Gains and losses on derivative instruments (forward contracts) have been and will continue to be calculated and recognized in parallel with the recognition of gains and losses on the hedged items. Due to this hedging relationship, the foreign exchange profit and loss on these items (derivative instruments and underlying assets as of December 31, ~~2010)~~2012) will be close to zero in ~~2011.~~2013.

b. Financial Foreign Exchange Risk

Some of our financing activities, such as the cash pooling arrangements for foreign subsidiaries outside the euro zone and our U.S. commercial paper issues, expose certain entities to financial foreign exchange risk (i.e., the risk of changes in the value of loans and borrowings denominated in a currency other than the functional currency of the lender or borrower). The net foreign exchange exposure ~~mainly concerns~~is hedged by the holding company ~~and is hedged by~~with firm financial instruments, usually forward contracts and currency ~~swaps.~~swaps, dealt with banking counterparties.

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The table below shows financial currency hedging instruments in place as of December 31, ~~2010, calculated using~~2012, with the notional amount translated into euros at the relevant closing exchange ~~rates prevailing as of that date.~~rate. See also Note ~~D.20.~~D.20 to the consolidated financial statements for the accounting classification of these instruments as of December 31, ~~2010.~~2012.
Financial foreign exchange derivatives as of December 31, ~~2010~~2012 ⁽¹⁾:
(€ million)
Notional amount
Fair value
Expiry

Forward currency sales 3,970 38
Of which
•
U.S. dollar
1,897 1 2013

•
Japanese yen
1,272 34 2013

•
Czech koruna
191 — 2013

Forward currency purchases 2,638 (12 )
Of which
•
Pound sterling
549 (3 ) 2013

•
U.S. dollar
521 1 2013

•
Singapore dollar
492 (4 ) 2013

Total 6,608 26

⁽¹⁾
As of December 31, 2011, the notional amount of forward currency sales was €4,900 million with a fair value of -€104 million (including forward sales of U.S. dollars of a notional amount of €2,964 million with a fair value of -€89 million). As of December 31, 2011, the notional amount of forward currency purchases was €2,719 million with a fair value of €24 million (including forward purchases of U.S. dollars of a notional amount of €828 million with a fair value of €10 million).


(€ million)    Notional amount    Fair value    Expiry
Forward currency purchases
   2,086       (13 )
Of which         • U.S. dollar
   814       (8 )    2011
• Pound sterling
   565       (11 )    2011
• Japanese yen
   169       —       2011
Forward currency sales
   2,728       (64 )
Of which         • Japanese yen
   904       (24 )    2011
• U.S. dollar
   862       (26 )    2012
• Czech koruna
   359       (7 )    2011
Total
   4,814       (77 )
~~(1)~~ As of December 31, 2009, the notional amount of forward currency purchases was €6,760 million with a fair value of €185 million (including forward purchases of U.S. dollars of a notional amount of €5,634 million with a fair value of €180 million). As of December 31, 2009, the notional amount of forward currency sales was €3,169 million with a fair value of -€7 million (including forward sales of U.S. dollars of a notional amount of €1,634 million with a fair value of -€28 million).
These forward contracts generate a net financial foreign exchange gain or loss arising from the interest rate ~~gap~~differential between the hedged currency and the euro, given that the foreign exchange gain or loss on the foreign-currency liabilities and receivables is offset by the change in the intrinsic value of the hedging instruments.

As of December 31, ~~2010,~~2012, none of the instruments had an expiry date after ~~September 30, 2012.~~March 31, 2013.

We may also hedge some future foreign-currency investment or divestment cash flows.

c. Other Foreign Exchange Risks

A significant ~~portion~~proportion of our consolidated net assets is denominated in U.S. dollars. For a breakdown of ~~our~~net assets see Note ~~D.35.2~~D.35 to ~~our~~the consolidated financial statements. As a result, any fluctuation in the exchange rate of the U.S. dollar against the euro affects our ~~equity, which may lead us to contract hedges of our net investments in foreign operations.~~equity. As of December 31, ~~2010,~~2012, we had no derivative instruments in place to limit the effect of such fluctuations.
        The Group operates a substantial portion of its activity within the euro zone and holds a significant part of its cash and cash equivalent in this currency, whereas its indebtedness is denominated in the euro and the U.S. dollar (for more information, see Note D.17.e to the consolidated financial statements). The euro is also the reporting currency of the Group. In the specific context of the sovereign debt crisis affecting certain European countries, the threatened or actual withdrawal of the euro as currency in one or more European Monetary Union countries and the associated fluctuations in currency exchange rates could have a material effect on our financial condition and earnings, the magnitude and consequences of which are unpredictable.
Counterparty Risk

Our financing and investing operations, as well as our currency and interest rate hedges, are contracted with leading banks. We set limits for investment and ~~derivatives~~derivative transactions with individual banks, depending on the rating of each bank. Compliance with these limits, which are based on notional amounts weighted by the residual maturity ~~of the commitment~~ and on the nature of the commitment, is monitored on a daily basis.

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The table below shows our total exposure as of December 31, ~~2010~~2012 by rating and in terms of our percentage exposure to the dominant counterparty.

(€ million)    Cash and cash equivalents
(excluding mutual funds)⁽¹⁾    Notional amounts of
currency hedges⁽²⁾    Notional amounts of
interest hedges⁽²⁾    General corporate
purpose credit facilities
AA    820       3,033       596       3,213
AA-    392       2,475       396       1,648
A+    345       2,426       92       6,363
A    21       —       —       1,421
A-    21       —       —       —
BBB ratings and not rated    17       —       —       355
Unallocated    44       —       —       —
Total
   1,660       7,934       1,084       13,000
% / rating of the dominant counterparty    37% / AA       12% / AA       25% / AA-       9% /A+
⁽¹⁾
~~Cash equivalents also include mutual fund investments of €4,805 million.~~
⁽²⁾
~~The notional amounts are computed on the basis of the forward rates negotiated at the inception date of the derivative instrument.~~
(€ million)
Cash and cash equivalent
(excluding mutual funds) ⁽¹⁾
Notional amounts of
currency hedges ⁽²⁾
Notional amounts of
interest hedges ⁽²⁾
General corporate
purpose credit facilities

AA- 608 1,095 300 690
A+ 1,029 4,452 2,016 3,195
A 1,019 5,512 2,102 5,175
A- 100 — — —
BBB+ 215 — — 250
BBB 301 262 600 690
Not splitted 145 — — —

Total 3,417 11,321 5,018 10,000

% / rating of the dominant counterparty 18% / AA- 16% / A 16% / A 7% / A

⁽¹⁾
Cash equivalents include mutual fund investments of €2,964 million.
⁽²⁾
The notional amounts are computed on the basis of the forward rates negotiated at the inception date of the derivative instruments.
Mutual fund investments are ~~mainly~~ made by the ~~sanofi-aventis~~Sanofi parent company. These mutual fund investments ~~classified as Euro Money-Market Funds~~are in 'short-term money market' and 'money market' euro-denominated funds based on the European classification used by theAutorité des Marchés Financiers, and 'money market' U.S. dollar-denominated funds subject to U.S. Securities and Exchange Commission regulation 2a-7. They show low volatility, low sensitivity to interest rate risk and a very low probability of loss of principal. ~~Both the~~The depositary banks of the mutual funds, and ~~the depositaries~~ of ~~sanofi-aventis~~Sanofi itself, are at least A+A rated.

Realization of counterparty risk could impact our liquidity in certain circumstances.
Stock Market Risk

It is our policy not to trade on the stock market for speculative purposes.

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Item 12. Description of Securities other than Equity Securities
~~N/A~~12.A Debt Securities
        Not applicable.
12.B Warrants and Rights
        Not applicable.
12.C Other Securities
        Not applicable.
12.D American Depositary Shares
General

JPMorgan Chase Bank, N.A. ~~(“JPMorgan”~~("JPMorgan"), as depositary, issues ~~Sanofi-Aventis~~Sanofi ADSs in certificated form (evidenced by an American depositary receipt, or ADR) or book-entry form. Each ADR is a certificate evidencing a specific number of ~~Sanofi-Aventis~~Sanofi ADSs. Each ~~Sanofi-Aventis~~Sanofi ADS represents one-half of one ~~Sanofi-Aventis~~Sanofi ordinary share (or the right to receive one-half of one ~~Sanofi-Aventis~~Sanofi ordinary share) deposited with the Paris, France office of BNP Paribas, as custodian.
Each ~~Sanofi-Aventis~~Sanofi ADS also represents an interest in any other securities, cash or other property that may be held by the depositary under the deposit agreement. The ~~depositary’s~~depositary's office is located at ~~4 New York~~1 Chase Manhattan Plaza, Floor 58, New York, New York ~~10004.~~10005-1401.

A holder may hold ~~Sanofi-Aventis~~Sanofi ADSs either directly or indirectly through his or her broker or other financial institution. The following description assumes holders hold their ~~Sanofi-Aventis~~Sanofi ADSs directly, in certificated form evidenced by ADRs. Holders who hold the ~~Sanofi-Aventis~~Sanofi ADSs indirectly must rely on the procedures of their broker or other financial institution to assert the rights of ADR holders described in this section. Holders should consult with their broker or financial institution to find out what those procedures are.

~~We do not treat holders~~Holders of ~~Sanofi-Aventis~~Sanofi ADSs ~~as one of our shareholders, and such holders~~ do not have ~~shareholder rights.~~the same rights as holders of Sanofi shares. French law governs shareholder rights. The ~~depositary is be the holder of the Sanofi-Aventis ordinary shares underlying holders’ Sanofi-Aventis ADSs. The~~ rights of holders of ~~Sanofi-Aventis~~Sanofi ADSs are set forth in the deposit agreement between ~~Sanofi-Aventis~~Sanofi and JPMorgan and in the ADR. New York law governs the deposit agreement and the ADRs.

The following is a summary of certain terms of the deposit agreement, aas amended. The form of ~~which~~our deposit agreement has been filed ~~as an~~ as an exhibit to our Form F-6 filed on August 7, 2007, and ~~which~~the amendment to our deposit agreement has been filed as an exhibit to Post-Effective Amendment No. 1 to our Form F-6 filed on April 30, 2011. Each of the form and the amendment is incorporated by reference into this document. For more complete information, holders should read the entire deposit agreement (including the amendment) and the ADR itself. Holders may also inspect a copy of the deposit agreement at the ~~depositary’s~~depositary's office.
Share Dividends and Other Distributions
Receipt of dividends and other distributions

The depositary has agreed to pay to holders of ~~Sanofi-Aventis~~Sanofi ADSs the cash dividends or other distributions that it or the custodian receives on the deposited ~~Sanofi-Aventis~~Sanofi ordinary shares and other deposited securities after deducting its fees and expenses. Holders of ~~Sanofi-Aventis~~Sanofi ADSs will receive these distributions in proportion to the number of ~~Sanofi-Aventis~~Sanofi ADSs that they hold.
Cash.    The depositary will convert any cash dividend or other cash distribution paid on the shares into U.S. dollars if, in its judgment, it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If the depositary determines that such a conversion and transfer is not possible, or if any approval from the French government is needed and cannot be obtained within a reasonable period, then the depositary may (1) distribute the foreign currency received by it to the holders of Sanofi ADSs or (2) hold the foreign currency distribution (uninvested and without liability for any interest) for the account of holders of Sanofi ADSs.

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        In addition, if any conversion of foreign currency, in whole or in part, cannot be effected to some holders of Sanofi ADSs, the deposit agreement allows the depositary to distribute the dividends only to those ADR holders to whom it is possible to do so. It will hold the foreign currency it cannot convert into U.S. dollars for the account of the ADR holders who have not been paid. It will not invest the funds it holds and it will not be liable for any interest.
Before making a distribution, any withholding taxes that must be paid under French law will be deducted. The depositary will distribute only whole U.S. dollars and cents and will round fractional cents down to the nearest whole cent.~~If the exchange rates fluctuate~~Exchange rate fluctuations during a ~~time~~period when the depositary cannot convert ~~the euro,~~euros into U.S. dollars may result in holders ~~may lose~~losing some or all of the value of ~~the~~a distribution.
Shares.    The depositary may, and at our request will, distribute new ADRs representing any shares we distribute as a dividend or free distribution, if we furnish it promptly with satisfactory evidence that it is legal to
do so. ~~The~~At its option, the depositary ~~will only~~may distribute ~~whole Sanofi-Aventis~~fractional Sanofi ADSs. ~~It will sell shares that would require it to deliver a fractional Sanofi-Aventis ADS and distribute the net proceeds in the same way as it distributes cash.~~ If the depositary does not distribute additional ~~Sanofi-Aventis~~Sanofi ADSs, the outstanding ADRs will also represent the new shares.
The depositary may withhold any tax or other governmental charges, or require the payment of any required fees and expenses, prior to making any distribution of additional Sanofi ADSs.
Rights to Receive Additional Shares.    If we offer holders of ~~Sanofi-Aventis~~Sanofi ordinary shares any rights to subscribe for additional shares or any other rights, the depositary, after consultation with us, ~~may~~will, in its discretion, either (1) make these rights available to holders or (2) dispose of such rights on behalf of ~~any~~ holders and make the net proceeds ~~available.~~available to holders. The depositary may make rights available to certain holders but not others if it determines it is lawful and feasible to do so. ~~The depositary must first consult with us. If by~~However, if, under the terms of the offering or for any other reason, the depositary may not make such rights available or dispose of such rights and make the net proceeds available, it will allow the rights to lapse. In that case, holders of ~~Sanofi-Aventis~~Sanofi ADSs will receive no value for them.
        In circumstances where rights would not otherwise be distributed by the depositary to holders of Sanofi ADSs, a holder of Sanofi ADSs may nonetheless request, and will receive from the depositary, any instruments or other documents necessary to exercise the rights allocable to that holder if the depositary first receives written notice from Sanofi that (1) Sanofi has elected, in its sole discretion, to permit the rights to be exercised and (2) such holder has executed the documents Sanofi has determined, in its sole discretion, are reasonably required under applicable law.
If the depositary makes rights available to holders of ~~Sanofi-Aventis~~Sanofi ADSs, upon instruction from such holders, it will exercise the rights and purchase the shares on such ~~holder’s~~holder's behalf. The depositary will then deposit the shares and deliver ADRs to such holders. It will only exercise rights if holders of ~~Sanofi-Aventis~~Sanofi ADSs pay it the exercise price and any other charges the rights require such holders to pay.

U.S. securities laws may restrict the sale, deposit, cancellation ~~and~~or transfer of ADRs issued upon exercise of rights. For example, holders of ~~Sanofi-Aventis~~Sanofi ADSs may not be able to trade ~~these Sanofi-Aventis~~Sanofi ADSs freely in the United States. In this case, the depositary may deliver ~~Sanofi-Aventis~~Sanofi ADSs under a separate restricted deposit agreement that will contain the same provisions as the deposit agreement, except for changes needed to ~~put~~implement the ~~restrictions in place.~~
required restrictions.
Other Distributions.    The depositary will ~~send~~distribute to holders of ~~Sanofi-Aventis~~Sanofi ADSs anything else we may distribute on deposited securities (after deduction or upon payment of fees and expenses or any taxes or other governmental charges) by any means it thinks is legal, ~~fair~~equitable and practical. If, for any reason, it cannot make the distribution in that way, the depositary ~~has a choice. It~~ may ~~decide to~~ sell what we distributed and distribute the net proceeds of the sale in the same way as it distributes cash dividends, or it may choose any other method to distribute the property it deems equitable and practicable.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ~~Sanofi-Aventis~~Sanofi ADSs. We have no obligation to register ~~Sanofi-Aventis~~Sanofi ADSs, shares, rights or other securities under the U.S. Securities Act of 1933, as amended. We also have no obligation to take any other action to permit the distribution of ADRs, shares, rights or anything else to holders of ~~Sanofi-Aventis~~Sanofi ADSs. This means that holders may not receive the distribution we make on our shares or any value for them if it is illegal or impractical for the depositary to make them available to such holders.

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        Elective Distributions.    Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof to the depositary and will indicate whether we wish the elective distribution to be made available to holders of Sanofi ADSs. In that case, we will assist the depositary in determining whether that distribution is lawful and reasonably practicable. The depositary will make the election available to holders of Sanofi ADSs only if it is reasonably practicable and if we have provided all the documentation contemplated in the deposit agreement. In that case, the depositary will establish procedures to enable holders of Sanofi ADSs to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement. If the election is not made available to holders of Sanofi ADSs, such holders will receive either cash or additional Sanofi ADSs, depending on what a shareholder in France would receive for failing to make an election, as more fully described in the deposit agreement.
Deposit, Withdrawal and Cancellation
Delivery of ADRs

The depositary will deliver ADRs if the holder or his or her broker deposit shares or evidence of rights to receive shares with the custodian. Upon payment of its fees and expenses and any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ~~Sanofi-Aventis~~Sanofi ADSs in the names the holder requests and will deliver the ADRs to the persons the holder requests at its office.

Obtaining ~~Sanofi-Aventis~~Sanofi ordinary shares

A holder may turn in his or her ADRs at the ~~depositary’s~~depositary's office. Upon payment of its fees and expenses and any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver (1) the underlying shares to an account designated by the holder and (2) any other deposited securities underlying the ADR at the office of a custodian or, at the ~~holder’s~~holder's request, risk and expense, the depositary will deliver the deposited securities at its office.
Voting Rights

A holder may instruct the depositary to vote the ~~Sanofi-Aventis~~Sanofi ordinary shares underlying his or her ~~Sanofi-Aventis~~Sanofi ADSs at any meeting of Sanofi shareholders, but only if we ~~ask~~request that the depositary to ask for holder instructions. Otherwise, holders will not be able to exercise their right to vote unless they withdraw the underlying ordinary shares from the ADR program and vote as an ordinary shareholder. However, holders may not know about the meeting sufficiently in advance to timely withdraw the underlying ordinary shares.
If we ask for holder instructions in connection with a meeting of Sanofi shareholders, the depositary will ~~notify~~mail materials to holders of Sanofi ADSs in the ~~upcoming vote~~manner described under the heading "Notices and ~~arrange~~Reports; Rights of Holders to deliver our voting materials to holders. The materials will (1) describe the matters to be voted on and (2) explain how holders may instruct the depositary to vote the shares or other deposited securities underlying their ADRs as holders direct.Inspect Books" below. For any instructions to be valid, the depositary must receive them on or before the date ~~specified.~~specified in the materials distributed by the depositary. The depositary will ~~try, as~~endeavor, in so far as practical, subject to French law and the provisions of ourstatuts, to vote or to have its agents vote the shares or other deposited securities as holders may validly instruct. The depositary will only vote or attempt to vote shares as holders validly instruct.
We cannot assure holders that they will receive the voting materials in time to ensure that holders can instruct the depositary to vote their shares. ~~The~~As long as they act in good faith, neither the depositary ~~and~~nor its agents ~~are not~~will be responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions.This means that holders may not be able to exercise their right to vote and there may be nothing holders can do if their shares are not voted as they requested.

Similar to our shares, ~~Sanofi-Aventis~~Sanofi ADSs evidenced by ADRs that are registered in the name of the same owner for at least two (2) years ~~will be~~are eligible for double voting rights ifso long as certain procedures are followed, as set out in the deposit agreement. For additional information regarding double voting rights, see ~~“Item~~"Item 10. Additional Information — B. Memorandum and Articles of Association — Voting ~~Rights”~~Rights".

The deposit agreement allows the depositary and ~~Sanofi-Aventis~~Sanofi to change the voting procedures or require additional voting procedures in addition to the ones described above if necessary or appropriate to comply with French or

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United States law or ourstatuts.For example, holders might be required to arrange to have their ~~Sanofi-Aventis~~Sanofi ADSs deposited in a blocked account for a specified period of time prior to a ~~shareholders’~~shareholders' meeting in order to be allowed to give voting instructions.
Notices and Reports; Rights of Holders to Inspect Books
        On or before the first date on which we give notice, by publication or otherwise, of any meeting of holders of shares or other deposited securities, or of any adjourned meeting of such holders, or of the taking of any action in respect of any cash or other distributions or the offering of any rights, we will transmit to the depositary a copy of the notice.
Upon notice of any meeting of holders of shares or other deposited securities, if requested in writing by ~~Sanofi-Aventis,~~Sanofi, the depositary will, as soon as practicable, ~~thereafter,~~ mail to the holders of Sanofi ADSs a notice, the form of which is in the discretion of the depositary, containing ~~(a)~~(1) a summary in English of ~~such~~the information contained in the notice of meeting ~~received~~provided by Sanofi to the depositary, ~~from the company, (b)~~(2) a statement that the holders as of the close of business on a specified record date will be entitled, subject to any applicable provision of French law and of ourstatuts, to instruct the depositary as to the exercise of the voting rights, if any, pertaining to the amount of shares or other deposited securities represented by their respective ADSs and ~~(c)~~(3) a statement as to the manner in which such instructions may be given.

The depositary will make available for inspection by ADS holders at the ~~depositary’s~~depositary's office any reports and communications, including any proxy soliciting material, received from ~~usthat~~us that are both ~~(a)~~(1) received by the depositary as the holder of the deposited securities and ~~(b)~~(2) made generally available to the holders of such deposited securities by us. The depositary will also, upon written request, send to ADS holders copies of such reports when furnished by us pursuant to the deposit agreement. Any such reports and communications, including any such proxy soliciting material, furnished to the depositary by us will be furnished in English to the extent such materials are required to be translated into English pursuant to any regulations of the SEC.

The depositary will keep books for the registration of ADRs and transfers of ADRs that at all reasonable times will be open for inspection by the holders provided that such inspection ~~shall~~is not be for the purpose of communicating with holders in the interest of a business or object other than our business or a matter related to the deposit agreement or the ADRs.
Fees and Expenses
Fees Payable By ADS Holders

Pursuant to the deposit agreement, holders of our ADSs may have to pay to JPMorgan, either directly or indirectly, fees or charges up to the amounts set forth in the table below.
Associated Fee
Depositary Action
$5.00 or less per 100 ADSs (or portion thereof)
Execution and delivery of ADRs for distributions and dividends in shares and rights to subscribe for additional shares or rights of any other nature and surrender of ADRs for the purposes of withdrawal, including the termination of the deposit agreement

$0.02 or less per ADS (or portion thereof)

Any cash distribution made pursuant to the deposit agreement, including, among other things:
•
• cash distributions or dividends,
•
• distributions other than cash, shares or rights,
•
• distributions in shares, and
•
• rights of any other nature, including rights to subscribe for additional shares.

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~~Taxes and other governmental charges~~
~~As applicable~~
Associated Fee Depositary Action
Registration fees in effect for the registration of transfers of shares generally on the share register of the company or foreign registrar and applicable to transfers of shares to or from the name of JPMorgan or its nominee to the custodian or its nominee on the making of deposits and withdrawals As applicable

A fee equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities

Distributions of securities other than cash, shares or rights

Any other charges payable by JPMorgan, its agents (and their agents), including BNP Paribas, as custodian (by deductions from cash dividends or other cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them)

Servicing of shares or other deposited securities
Expenses incurred by JPMorgan

•
Cable, telex and facsimile transmission (where expressly provided for in the deposit agreement)
•
• Foreign currency conversion into U.S. dollars

        In addition to the fees outlined above, each holder will be responsible for any taxes or other governmental charges payable on his or her Sanofi ADSs or on the deposited securities underlying his or her Sanofi ADSs. The depositary may refuse to transfer a holder's Sanofi ADSs or allow a holder to withdraw the deposited securities underlying his or her Sanofi ADSs until such taxes or other charges are paid. It may apply payments owed to a holder or sell deposited securities underlying a holder's Sanofi ADSs to pay any taxes owed, and the holder will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the number of Sanofi ADSs to reflect the sale and pay to the holder any proceeds, or send to the holder any property, remaining after it has paid the taxes. For additional information regarding taxation, see "Item 10. Additional Information — E. Taxation".

Fees Paid to ~~sanofi-aventis~~Sanofi by the Depositary

JPMorgan, as depositary, has agreed to reimburse ~~sanofi-aventis up~~Sanofi for certain expenses (subject to ~~$4,000,000 per year for expenses sanofi-aventis~~certain limits) Sanofi incurs relating to legal fees, investor relations servicing, investor-related presentations, ADR-related advertising and public relations in those jurisdictions in which the ADRs may be listed or otherwise quoted, investor relations channel, perception studies, ~~accountants’~~accountants' fees in relation to our annual report on Form 20-F or any other expenses directly or indirectly relating to managing the program or servicing the shareholders. The depositary has also agreed to provide additional payments to Sanofi based on certain performance indicators relating to the ADR facility. From January 1, ~~2010~~2012 to ~~February 28, 2011, sanofi-aventis has obtained~~December 31, 2012, Sanofi received from JPMorgan reimbursements ~~corresponding~~of $4,250,000 for expenses and no additional payments based on performance of the ADR facility were made. In addition to ~~the ceiling of $4,000,000 for 2010. Furthermore,~~such amounts, JPMorgan has agreed to waive ~~up to $425,000 each year in~~ servicing fees ~~for~~Sanofi may incur in connection with routine corporate actions such as annual general meetings and ~~divided~~dividend distributions, as well as for other assistance JPMorgan may provide Sanofi, such as preparation of tax and regulatory compliance ~~fees,~~documents for holders and investor relations advisory ~~services, etc.~~
~~Payment of Taxes~~
Each holder will be responsible for any taxes or other governmental charges payable on his or her Sanofi-Aventis ADSs or on the deposited securities underlying his or her Sanofi-Aventis ADSs. The depositary may refuse to transfer a holder’s Sanofi-Aventis ADSs or allow a holder to withdraw the deposited securities underlying his or her Sanofi-Aventis ADSs until such taxes or other charges are paid. It may apply payments owed to a holder or sell deposited securities underlying a holder’s Sanofi-Aventis ADSs to pay any taxes owed, and the holder will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the number of Sanofi-Aventis ADSs to reflect the sale and pay to the holder any proceeds, or send to the holder any property, remaining after it has paid the taxes.
services.
Changes Affecting Deposited Securities

If we:
•
change the nominal or par value of our ~~Sanofi-Aventis~~Sanofi ordinary shares;

•
recapitalize, reorganize, merge or consolidate, liquidate, sell assets, or take any similar action;

•
reclassify, split up or consolidate any of the deposited securities; or

•
distribute securities on the deposited securities that are not distributed to holders;

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then either:
•
the cash, shares or other securities received by the depositary will become deposited securities and each ~~Sanofi-Aventis~~Sanofi ADS will automatically represent its equal share of the new deposited securities; or

•
the depositary may, and will if we ask it to, distribute some or all of the cash, shares or other securities it receives. It may also deliver new ADRs or ask holders to surrender their outstanding ADRs in exchange for new ADRs identifying the new deposited securities.
Disclosure of Interests
The obligation of a holder or other person with an interest in our shares to disclose information under French law and under ourstatutsalso applies to holders and any other persons, ~~with~~other than the depositary, who have an interest in the ~~Sanofi-Aventis ADSs other than the depositary.~~Sanofi ADSs. The consequences for ~~failure~~failing to comply with these provisions ~~will be~~are the same for holders and any other persons with an interest as a holder of our ordinary shares. For additional information regarding these obligations, see ~~“Item~~"Item 10. Additional Information — B. Memorandum and Articles of Association — Requirements for Holdings Exceeding Certain ~~Percentages”~~Percentages".
Amendment and Termination
We may agree with the depositary to amend the deposit agreement and the ADRs without the consent of the ADS holders for any reason. If the amendment adds or increases fees or charges, except for taxes and other governmental charges or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses, or prejudices a substantial right of holders of ~~Sanofi-Aventis~~Sanofi ADSs, it will only become effective 30 days after the depositary notifies such holders of the amendment. However, we may not be able to provide holders of Sanofi ADSs with prior notice of the effectiveness of any modifications or supplements that are required to accommodate compliance with applicable provisions of law, whether or not those modifications or supplements could be considered to be materially prejudicial to the substantial rights of holders of Sanofi ADSs.At the time an amendment becomes effective, such holders will be considered, by continuing to hold their ADR, to have agreed to the amendment and to be bound by the ADR and the deposit agreement as amended.

The depositary will terminate the agreement if we ask it to do so. The depositary may also terminate the agreement if the depositary has told us that it would like to resign and we have not appointed a new depositary bank within 90 days. In both cases, the depositary must notify holders of Sanofi ADSs at least 30 days before termination.

After termination, the depositary and its agents will be required to do only the following under the deposit agreement: (1) collect distributions on the deposited securities, (2) sell rights and ~~(2)~~other property as provided in the deposit agreement and (3) deliver shares and other deposited securities upon cancellation of ADRs. Six months or more after termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it ~~received~~receives on the sale, as well as any other cash it is holding under the deposit agreement, for the pro rata benefit of the holders of
~~Sanofi-Aventis~~ Sanofi ADSs that have not surrendered their ~~Sanofi-Aventis~~Sanofi ADSs. It will have no liability for interest. ~~The depositary’s~~Upon termination of the deposit agreement, the depositary's only obligations will be to account for the proceeds of the sale and other cash and with respect to indemnification. After termination, our only obligation will be with respect to indemnification and to pay certain amounts to the depositary.
Limitations on Obligations and Liability to Holders of ~~Sanofi-Aventis~~Sanofi ADSs

The deposit agreement expressly limits our obligations and the obligations of the depositary, and it limits our liability and the liability of the depositary. We and the depositary:
•
are obligated only to take the actions specifically set forth in the deposit agreement without gross negligence or bad faith;

•
are not liable if either is prevented or delayed by law or circumstances beyond its control from performing its obligations under the deposit agreement;

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•
are not liable if either exercises, or fails to exercise, any discretion permitted under the deposit agreement;

•
have no obligation to become involved in a lawsuit or other proceeding related to the ~~Sanofi-Aventis~~Sanofi ADSs or the deposit agreement on ~~holders’~~holders' behalf or on behalf of any other party, unless indemnity satisfactory to it against all expense and liability is furnished as often as may be required; ~~and~~

•
are not liable for the acts or omissions made by any securities depository, clearing agency or settlement system or the insolvency of the custodian to the extent the custodian is not a branch or affiliate of JPMorgan;

•
may rely without any liability upon any ~~documents it believes in good faith~~written notice, request or other document believed by either of us to be genuine and to have been signed or presented by the proper ~~party.~~
parties; and

•
are not liable for any action or nonaction taken in reliance upon the advice of or information from legal counsel, accountants, any person presenting ordinary shares for deposit, any ADS holder, or any other person believed in good faith to be competent to give such advice or information.
        In addition, the depositary will not be liable for any acts or omissions made by a successor depositary. Moreover, neither we nor the depositary nor any of our respective agents will be liable to any holder of Sanofi ADSs for any indirect, special, punitive or consequential damages.
In        Pursuant to the terms of the deposit agreement, we and the depositary ~~agree~~have agreed to indemnify each other under certain circumstances.
Requirements for Depositary Actions

Before the depositary will deliver or register the transfer of ~~Sanofi-Aventis~~Sanofi ADSs, make a distribution on ~~Sanofi-Aventis~~Sanofi ADSs or process a withdrawal of shares, the depositary may require:
•
payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any shares or other deposited securities;

•
production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

•
compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver ~~Sanofi-Aventis~~Sanofi ADSs, register transfers of ~~Sanofi-Aventis~~Sanofi ADSs or permit withdrawals of shares when the transfer books of the depositary or our transfer books are closed, or at any time if the depositary or we think it advisable to do so.
Right to Receive the Shares Underlying the ~~Sanofi-Aventis~~Sanofi ADSs

Holders have the right to cancel their ~~Sanofi-Aventis~~Sanofi ADSs and withdraw the underlying ~~Sanofi-Aventis~~Sanofi ordinary shares at any time except:
•
when temporary delays arise when we or the depositary have closed our transfer books or the deposit of shares in connection with voting at a ~~shareholders’~~shareholders' meeting, or the payment of dividends;

•
when the holder or other holders of ~~Sanofi-Aventis~~Sanofi ADSs seeking to withdraw shares owe money to pay fees, taxes and similar charges; or

•
when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ~~Sanofi-Aventis~~Sanofi ADSs or to the withdrawal of shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

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Pre-Release of ~~Sanofi-Aventis~~Sanofi ADSs

Unless we ~~tell~~instruct the depositary not to, the deposit agreement permits the depositary to deliver ~~Sanofi-Aventis~~Sanofi ADSs before deposit of the underlying shares. This is called a pre-release of the ~~Sanofi-Aventis~~Sanofi ADSs. The depositary may also deliver shares upon cancellation of pre-released ~~Sanofi-Aventis~~Sanofi ADSs (even if the ~~Sanofi-Aventis~~Sanofi ADSs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying shares are delivered to the depositary. The depositary may receive ~~Sanofi-Aventis~~Sanofi ADSs instead of shares to close out a pre-release. Unless otherwise agreed in writing, the depositary may pre-release ~~Sanofi-Aventis~~Sanofi ADSs only under the following conditions: (1) before or at the time of the pre-release, the person to whom the pre-release is being made must represent to the depositary in writing that it or its customer (i) owns the shares or ~~Sanofi-Aventis~~Sanofi ADSs to be deposited, (ii) assigns all beneficial rights, title and interest in such shares or ADRs to the depositary in its capacity as depositary and (iii) will not take any action with respect to such shares or ADRs that is inconsistent with the transfer of beneficial ownership, other than in satisfaction of such pre-release; (2) the pre-release must be fully collateralized with cash, U.S. government securities or other collateral that the depositary considers appropriate; (3) the depositary must be able to close out the pre-release on not more than five business ~~days’~~days' notice; and (4) the depositary may require such further indemnities and credit regulations as it deems appropriate. In addition, the depositary will limit the number of ~~Sanofi-Aventis~~Sanofi ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so. The depositary may retain for its own account any compensation received by it in connection with the foregoing.

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PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies

N/A

Item 14. Material Modifications to the Rights of Security Holders

N/A

Item 15. Controls and Procedures

(a)    Our Chief Executive Officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Form 20-F, have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that material information relating to ~~sanofi-aventis~~Sanofi was timely made known to them by others within the Group.

(b)   Report of Management on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule ~~13a — 15(f)~~13a-15(f). Management assessed the effectiveness of internal control over financial reporting as of December 31, ~~2010~~2012 based on the framework in ~~“Internal~~"Internal Control — Integrated ~~Framework”~~Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on that assessment, management has concluded that the ~~Company’s~~Company's internal control over financial reporting was effective as of December 31, ~~2010~~2012 to provide reasonable assurance regarding the reliability of its financial reporting and the preparation of its financial statements for external purposes, in accordance with generally accepted accounting principles.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, and can only provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The effectiveness of the ~~Company’s~~Company's internal control over financial reporting has been audited by PricewaterhouseCoopers Audit and Ernst & Young ~~Audit,~~et Autres, independent registered public accounting firms, as stated in their report on the ~~Company’s~~Company's internal control over financial reporting as of December 31, ~~2010,~~2012, which is included herein. See paragraph (c) of the present Item 15, below.

(c)    See report of PricewaterhouseCoopers Audit and Ernst & Young ~~Audit,~~et Autres, independent registered public accounting firms, included under ~~“Item~~"Item 18. Financial ~~Statements”~~Statements" on page F-3.

(d)   There were no changes to our internal control over financial reporting that occurred during the period covered by this Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 16.

~~[Reserved]~~
[Reserved]

Item 16A. Audit Committee Financial Expert

Our Board of Directors has determined that Klaus Pohle, Robert Castaigne, Christian Mulliez and Gérard Van Kemmel, directors serving on the Audit Committee, are independent financial experts within the meaning of ~~§407~~paragraph 407 of the Sarbanes-Oxley Act of 2002.

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        The Board of Directors deemed Klaus Pohle to be a financial expert taking into account his education and professional experience in financial matters, accountancy and internal control. The Board of Directors determined that Robert Castaigne qualifies as a financial expert based on his education and
his experience as Chief Financial Officer of a major corporation. The Board of Directors deemed Christian Mulliez to be a financial expert taking into account his experience as Vice President, General Manager Administration and Finance of L'Oréal and graduate of theEcole Supérieure des Sciences Economiques et Commerciales (ESSEC). The Board of Directors determined that Gérard Van Kemmel qualifies as a financial expert based on his experience as a partner at an international accounting firm.
        The Board of Directors has determined that all ~~three~~five directors meet the independence criteria of U.S. Securities and Exchange Commission Rule 10A-3, ~~under the U.S. Securities Exchange Act of 1934, as amended,~~ although only Mrs. Piwnica, Mr. Castaigne, Mr. Pohle and Mr. Van Kemmel meet the French AFEP-MEDEF Code criteria of independence applied by the Board of Directors for general corporate governance purposes. (See Item 16.G, below.)

Item 16B. Code of Ethics

We have adopted a financial code of ethics, as defined in Item ~~16.B.~~16B. of Form 20-F under the Exchange Act. Our financial code of ethics applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and other officers performing similar functions, as ~~may be~~ designated from time to time. Our financial code of ethics is available on our Website at ~~www.sanofi-aventis.com~~www.sanofi.com (information on our website is not incorporated by reference in this annual report). A copy of our financial code of ethics may also be obtained without charge by addressing a written request to the attention of Individual Shareholder Relations at our headquarters in Paris. We will disclose any amendment to ~~a waiver of~~ the provisions of such financial code of ethics on our ~~website within 5 business days of such event.~~
website.

Item 16C. Principal ~~Accountants’~~Accountants' Fees and Services

See Note E. to our consolidated financial statements included at Item 18 of this annual report.

Item 16D. Exemptions from the Listing Standards for Audit Committees

N/A

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In ~~2010, sanofi-aventis~~2012, Sanofi made the following purchases of its ordinary shares.

Period    (a) Total Number
of Shares Purchased    (b) Average Price
Paid per Share    (c) Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs ⁽¹⁾    (d) Approximate Value of
Shares that May Yet Be
Purchased Under the
Plans or Programs
February 2010    3,900,000       € 53.85       3,900,000       € 10,314,188,680 ⁽¹⁾
March 2010    2,100,000       € 56.02       2,100,000       € 10,196,546,680 ⁽¹⁾
November 2010    213,811       € 48.02       213,811       € 10,537,565,195 ⁽²⁾
December 2010    536,485       € 48.67       536,485       € 10,511,454,470 ⁽²⁾

Period
(a) Total Number
of Shares Purchased
(b) Average Price
Paid per Share
(c) Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs ⁽¹⁾
(d) Approximate Value of
Shares that May Yet Be
Purchased Under the
Plans or Programs

February 2012 5,184,555 € 56.31 5,184,555 € 10,435,395,454
March 2012 1,953,164 € 57.60 1,953,164 € 10,322,886,122
April 2012 375,774 € 55.65 375,774 € 10,301,973,191
May 2012 257,373 € 57.08 257,373 € 10,287,283,561
June 2012 243,983 € 56.58 243,983 € 10,285,903,172
July 2012 2,274,000 € 65.61 2,274,000 € 10,136,695,283
August 2012 3,000,206 € 66.85 3,000,206 € 9,936,144,522
September 2012 284,588 € 65.84 284,588 € 9,917,407,277

⁽¹⁾
The Company was authorized to repurchase up to €10,727,350,480 of shares for a period of eighteen months (i.e., through November 4, 2013) by the Annual Shareholders' Meeting held on May 4, 2012.
        This schedule does not include purchases and sales conducted by Exane under a liquidity contract entered into in 2010 and that is still in effect. For more information see Item 10.BMemorandum and Articles of Association — Use of Share Repurchase Programs.

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The Company was authorized to repurchase its shares under the €480 million share repurchase program established by the Chief Executive Officer of the Company on February 11, 2010 in implementation of the shareholders resolution adopted at the Annual Shareholders’ Meeting of April 17, 2009 for a period of eighteen months (i.e., through October 16, 2010) authorizing the repurchase of up to €10,524,203,680 of shares for a period of eighteen months (i.e., through October 16, 2010). This authorization was replaced by a resolution adopted by the Annual Shareholders’ Meeting held on May 17, 2010 authorizing the repurchase of up to €10,547,832,400 of shares for a period of eighteen months (i.e., through November 16, 2011).
⁽²⁾
These repurchases of shares have been made in application of a liquidity contract entered into between the Company and Exane BNP Paribas for the period running from September 16, 2010 to December 31, 2010. This contract provides for an endowment of €40 million for market making activities, of which €20 million have been made available. The liquidity contract was entered into in implementation of the shareholders resolution adopted at the Annual Shareholders’ Meeting of May 17, 2010 authorizing the repurchase of up to €10,547,832,400 of shares for a period of eighteen months (i.e., through November 16, 2011).

Item 16F. Change in ~~Registrant’s~~Registrant's Certifying Accountant

N/A

Item 16G. Corporate Governance

~~Sanofi-aventis~~Sanofi is incorporated under the laws of France, with securities listed on regulated public markets in the United States (New York Stock Exchange) and France (Euronext Paris). Consequently, as described further ~~at “Item 6. Directors, Senior Management and Employees — C. Board practices” hereof,~~in our annual report, our corporate governance framework reflects the mandatory provisions of French corporate law, the securities laws and regulations of
France and the United States and the rules of the aforementioned public markets. In addition, we generally follow the ~~so-called “AFEP-MEDEF”~~"AFEP-MEDEF" corporate governance recommendations for French listed ~~issuers.~~issuers (hereafter referred to as the "AFEP-MEDEF Code"). As a result, our corporate governance framework is similar in many respects to, and provides investor protections that are comparable to — or in some cases, more stringent than — the corresponding rules of the New York Stock Exchange. Nevertheless, there are important differences to keep in mind.

In line with New York Stock Exchange rules applicable to domestic issuers, ~~sanofi-aventis~~Sanofi maintains a board of directors at least half of the members of which are independent. ~~Sanofi-aventis~~Sanofi evaluates the independence of members of our Board of Directors using the standards of the French AFEP-MEDEF ~~corporate governance recommendations~~Code as the principal reference. We believe that ~~AFEP-MEDEF’s~~AFEP-MEDEF's overarching criteria for independence — no relationship of any kind whatsoever with the Company, its group or the management of either that is such as to color a Board ~~member’s~~member's judgment — are on the whole consistent with the goals of the New York Stock ~~Exchange’s~~Exchange's rules although the specific tests proposed under the two standards may vary on some points. We note that under the AFEP-MEDEF ~~rules,~~Code, our non-executive Chairman of the Board has automatically been classified as non-independent although he has no relationship with ~~Sanofi-Aventis~~Sanofi that would cause him to be non-independent under the rules of the New York Stock Exchange. Additionally, we have complied with the audit committee independence and other requirements of the Rule 10A-3 under the U.S. Securities Exchange Act of 1934, as amended, adopted pursuant to the Sarbanes-Oxley Act of 2002. Our Compensation Committee includes non-independent members, which is permitted under the AFEP-MEDEF ~~rules,~~Code but would not be compliant with the rules of the New York Stock Exchange for domestic issuers.
Under French law, the committees of our Board of Directors are advisory only, and where the New York Stock Exchange Listed Company Manual would vest certain decision-making powers with specific committees by delegation (e.g., ~~nominating~~ appointment or audit committees), under French law our Board of Directors remains ~~under French law~~ the only competent body to take such decisions, albeit taking into account the recommendation of the relevant committees. Additionally, under French corporate law, it is the ~~shareholder meeting~~Shareholders' General Meeting of ~~sanofi-aventis~~Sanofi that is competent to appoint our auditors upon the proposal of our Board of Directors, although our ~~internal rules provide~~Board Charter provides that the Board of Directors will make its proposal on the basis of the recommendation of our Audit Committee. We believe that this requirement of French law, together with the additional legal requirement that two sets of statutory auditors be appointed, share the New York Stock ~~Exchange’s~~Exchange's underlying goal of ensuring that the audit of our accounts be conducted by auditors independent from company management.

In addition to the oversight role of our Compensation Committee for questions of management compensation including by way of equity, under French law any option or restricted share plans or other share capital increases, whether for the benefit of ~~top~~senior management or employees, may only be adopted by the Board of Directors pursuant to and within the limits of a shareholder resolution approving the related capital increase and delegating to the Board the authority to implement such operations.

As described above, a number of issues, which could be resolved directly by a board or its committees in the United States, require the additional protection of direct shareholder consultation in France. On the other hand, there is not a tradition of non-executive Board of ~~Director~~Directors sessions. Our ~~audit committee~~Audit Committee is entirely composed of independent directors as that term is defined in Rule 10A-3 under the U.S. Securities Exchange Act of 1934, as amended, adopted pursuant to the Sarbanes-Oxley Act of 2002. The composition of our Audit Committee, Compensation Committee, and Appointments and Governance Committee includes directors who are also officers ~~or recently retired officers~~ of our ~~principal shareholders.~~largest shareholder.

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As a ~~‘foreign~~'foreign private ~~issuer’~~issuer' under the U.S. securities laws, our Chief Executive Officer and our Chief Financial Officer issue the certifications required by §302 and §906 of the Sarbanes Oxley Act of 2002 on an annual basis (with the filing of our annual report on U.S. Form 20-F) rather than on a quarterly basis as would be the case of a U.S. corporation filing quarterly reports on U.S. Form 10-Q.

French corporate law provides that the Board of Directors must vote to approve a broadly defined range of transactions that could potentially create conflicts of interest between ~~sanofi-aventis~~Sanofi on the one hand and its ~~directors~~Directors and Chief Executive Officer on the other hand, ~~with these transactions~~which are then ~~being~~ presented to ~~our~~ shareholders for approval at the ~~following~~next annual ~~general~~ meeting. This legal safeguard provides shareholders with an opportunity to approve significant aspects of the Chief Executive ~~Officer’s~~Officer's compensation package even in the absence of ~~“say~~"say on ~~pay”~~pay" legislation in France, and it operates in place of certain provisions of the NYSE Listed Company Manual.
~~PART III~~
Item 16H. Mine Safety Disclosure
        N/A

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PART III
Item 17. Financial Statements

See Item 18.

Item 18. Financial Statements

See pages F-1 through ~~F-126~~F-122 incorporated herein by reference.

Item 19. Exhibits
1.1 Articles of association ~~(statuts)~~(statuts) of ~~sanofi-aventis~~Sanofi (English translation)
1.2 Board Charter ~~(Rè~~(Règlement Inté~~rieur)~~rieur) of ~~sanofi-aventis~~Sanofi (English translation)
2.1 Form of Deposit Agreement between ~~sanofi-aventis~~Sanofi and JPMorgan Chase Bank, N.A., as depositary (incorporated herein by reference to Exhibit A to the Registration Statement on Form F-6 dated August 7, 2007 relating to our American Depositary Shares, SEC File No. 333-145177)
2.2 Amendment No.1 to Deposit Agreement between Sanofi and JPMorgan Chase Bank, N.A., as depositary(incorporated herein by reference to Exhibit (a)(2) to Post-Effective Amendment No.1 to Form F-6 dated April 30, 2011 relating to our American Depositary Shares, SEC File No. 333-145177)
2.3 Instrument defining rights of holders of American Depositary Shares each representing one quarter of a Participating Share Series A (incorporated by reference to Item. 3 Exhibit (a) of the Registration Statement on Form F-6 (Registration No. 33-31904) dated November 21, 1989)
4.1 Facilities Agreement, dated October 2, 2010, by and among Sanofi-Aventis, BNP Paribas, J.P. Morgan plc and Société Générale Corporate & Investment Banking acting as Initial Mandated Lead Arrangers, Société Générale acting as Facilities Agent, the Companies listed as Additional Borrowers thereto and the Financial Institutions included as Lenders therein. (incorporated by reference to ~~Item. 12~~ Exhibit (b)(A) of the Tender Offer Statement on Schedule TO filed on October 4, ~~2010~~.2010.)
4.2 Amendment dated February 15, 2011 to the Facilities Agreement, dated October 2, 2010, by and among Sanofi-Aventis, BNP Paribas, J.P. Morgan plc and Société Générale Corporate & Investment Banking acting as Initial Mandated Lead Arrangers, Société Générale acting as Facilities Agent, the Companies listed as Additional Borrowers thereto and the Financial Institutions included as Lenders therein. (incorporated by reference to ~~Item. 12~~ Exhibit(b)(B) of Amendment No. 15 to the Tender Offer Statement on Schedule TOfiled on February 16, 2011)
4.3 Agreement and Plan of Merger, dated as of February 16, 2011, among Sanofi-Aventis, GC Merger Corp., and Genzyme Corporation (incorporated by reference to ~~Item. 12~~ Exhibit(d)(1) (d)(1) of Amendment No. 15 to the Tender Offer Statement on Schedule TO filed on February 16, 2011)
4.4 Form of Contingent Value Rights Agreement by and among Sanofi and Trustee (incorporated by reference to ~~Item. 12~~ Exhibit(d)(2) (d)(2) of Amendment No. 15 to the Tender Offer Statement on Schedule TO filed on February 16, 2011)
8.1 List of significant subsidiaries, see ~~“Item~~"Item 4. Information on the Company — C. Organizational ~~Structure”~~Structure" of this 20-F.
12.1 Certification by Christopher Viehbacher, Chief Executive Officer, required by Section 302 of the Sarbanes-Oxley Act of 2002
12.2 Certification by Jérôme Contamine, Principal Financial Officer, required by Section 302 of the Sarbanes-Oxley Act of 2002
13.1 Certification by Christopher Viehbacher, Chief Executive Officer, required by Section 906 of the Sarbanes-Oxley Act of 2002
13.2 Certification by Jérôme Contamine, Principal Financial Officer, required by Section 906 of the Sarbanes-Oxley Act of 2002
23.1 Consent of Ernst & Young ~~Audit~~et Autres dated ~~February 25, 2011~~
March 6, 2013
23.2 Consent of PricewaterhouseCoopers Audit dated ~~February 28, 2011~~
March 6, 2013
99.1 Report of the Chairman of the Board of Directors for ~~2010~~2012 as required by Art. L. 225-37 paragraph 6 of the French Commercial Code

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Signatures

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
~~sanofi-aventis~~
~~by:~~
~~/s/    CHRISTOPHER~~ V~~IEHBACHER~~
~~Christopher Viehbacher~~
~~Chief Executive Officer~~
~~Date: February 28, 2011~~
~~ANNUAL CONSOLIDATED FINANCIAL STATEMENTS~~
~~The financial statements are presented in accordance with~~
~~International Financial Reporting Standards (IFRS)~~
Sanofi
~~REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS~~by:

~~F-2 - F-3~~/s/CHRISTOPHER VIEHBACHER

Christopher Viehbacher
Chief Executive Officer
Date: March 6, 2013

Table of Contents

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
The financial statements are presented in accordance with
International Financial Reporting Standards (IFRS)
CONSOLIDATED BALANCE SHEETS
F-4 -– F-5

CONSOLIDATED INCOME STATEMENTS
~~F-6~~

F-6

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
~~F-7~~

F-7

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
~~F-8~~

F-8

CONSOLIDATED STATEMENTS OF CASH FLOWS
~~F-9~~

F-9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

F-10
– A.Basis of preparation

F-10 – F-11
~~– A.~~ ~~Basis of preparation~~
~~F-10 - F-11~~
– B.Summary of significant accounting policies
~~F-12 - F-34~~
F-11 – F-36
– C.Alliances
~~F-35 -~~
F-36 – F-39
– D.Detailed notes to the financial statements
~~F-37 - F-119~~
F-39 – F-116
– E.Principal ~~Accountants’~~Accountants' Fees and Services
~~F-120~~
F-117
– F.List of principal companies included in the consolidation for the year ended December 31, ~~2010~~2012
~~F-121 - F-126~~
F-118 – F-122

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRMS

SANOFI
~~SANOFI-AVENTIS~~
To the Board of Directors and Shareholders of ~~sanofi-aventis,~~Sanofi,

We have audited the accompanying consolidated balance sheets of ~~sanofi-aventis~~Sanofi and its subsidiaries (together the ~~“Group”~~"Group") as of December 31, ~~2010, 2009~~2012, 2011 and ~~2008,~~2010, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, ~~2010.~~2012. These financial statements are the responsibility of the ~~Group’s~~Group's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States), (the ~~“PCAOB”~~"PCAOB"). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, ~~2010, 2009~~2012, 2011 and ~~2008,~~2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2010,~~2012, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the PCAOB, the effectiveness of the ~~Group’s~~Group's internal control over financial reporting as of December 31, ~~2010,~~2012, based on criteria established in Internal ~~Control —~~ Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated ~~February 25, 2011~~March 6, 2013 expressed an unqualified opinion thereon.

Neuilly-sur-Seine and Paris-La Défense, ~~February 25, 2011~~March 6, 2013
PricewaterhouseCoopers Audit Ernst & Young ~~Audit~~
et Autres

Xavier Cauchois
~~Philippe Vogt~~
Christian Chiarasini ~~Jacques Pierres~~

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRMS

SANOFI
~~SANOFI-AVENTIS~~
To the Board of Directors and Shareholders of ~~sanofi-aventis,~~Sanofi,

We have audited internal control over financial reporting of ~~sanofi-aventis~~Sanofi and its subsidiaries (together ~~“the Group”~~"the Group") as of December 31, ~~2010,~~2012, based on criteria established in Internal ~~Control —~~ Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The ~~Group’s~~Group's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the ~~company’s~~company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States), (the ~~“PCAOB”~~"PCAOB"). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A ~~company’s~~company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A ~~company’s~~company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~company’s~~company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2010,~~2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the PCAOB, the consolidated balance sheets of the Group as of December 31, ~~2010, 2009~~2012, 2011 and ~~2008,~~2010, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, ~~2010~~2012 and our report dated ~~February 25, 2011~~March 6, 2013 expressed an unqualified opinion thereon.

~~Neuilly-sur-seine~~Neuilly-sur-Seine and Paris-La Défense, ~~February 25, 2011~~March 6, 2013
PricewaterhouseCoopers Audit Ernst & Young ~~Audit~~et Autres

Xavier Cauchois
~~Philippe Vogt~~
Christian Chiarasini ~~Jacques Pierres~~

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CONSOLIDATED BALANCE SHEETS

(€ million)    Note    December 31,
2010    December 31,
2009⁽¹⁾    December 31,
2008
ASSETS

Property, plant and equipment    D.3.    8,155    7,830    6,961
Goodwill    D.4.    31,932    29,733    28,163
Other intangible assets    D.4.    12,479    13,747    15,260
Investments in associates and joint ventures    D.6.    924    955    2,459
Non-current financial assets    D.7.    1,644    998    821
Deferred tax assets    D.14.    3,051    2,912    2,920
Non-current assets
      58,185    56,175    56,584
Inventories    D.9.    5,020    4,444    3,590
Accounts receivable    D.10.    6,507    6,015    5,303
Other current assets    D.11.    2,000    2,104    1,881
Current financial assets    D.12.    51    277    403
Cash and cash equivalents    D.13./D.17.    6,465    4,692    4,226
Current assets
      20,043    17,532    15,403
Assets held for sale or exchange    D.8.    7,036    6,544    —
TOTAL ASSETS
      85,264    80,251    71,987
⁽¹⁾
In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period (see Note D.1.).
(€ million)
Note
December 31,
2012
December 31,
2011 ⁽¹⁾
December 31,
2010

ASSETS
Property, plant and equipment D.3. 10,578 10,750 8,155
Goodwill D.4. 38,073 38,582 31,932
Other intangible assets D.4. 20,192 23,639 12,479
Investments in associates and joint ventures D.6. 487 807 924
Non-current financial assets D.7. 3,799 2,399 1,644
Deferred tax assets D.14. 4,377 3,633 3,051
Non-current assets 77,506 79,810 58,185
Inventories D.9. 6,379 6,051 5,020
Accounts receivable D.10. 7,507 8,042 6,507
Other current assets D.11. 2,355 2,401 2,000
Current financial assets D.12. 178 173 51
Cash and cash equivalents D.13.–D.17. 6,381 4,124 6,465
Current assets 22,800 20,791 20,043
Assets held for sale or exchange ⁽²⁾ D.8. 101 67 7,036

TOTAL ASSETS 100,407 100,668 85,264

⁽¹⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).
⁽²⁾
The assets of Merial, classified inAssets held for sale or exchange in 2010, were reclassified in 2011 to the relevant balance sheet line items, in accordance with paragraph 26 of IFRS 5 (see Notes D.2. and D.8.2.).

The accompanying notes on pages F-10 to ~~F-126~~F-122 are an integral part of the consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS

(€ million)    Note    December 31,
2010    December 31,
2009⁽¹⁾    December 31,
2008
LIABILITIES & EQUITY

Equity attributable to equity holders of sanofi-aventis    D.15.       53,097       48,322       44,866
Equity attributable to non-controlling interests    D.16.       191       258       205
Total equity
      53,288       48,580       45,071
Long-term debt    D.17.       6,695       5,961       4,173
Non-current liabilities related to business combinations and to non-controlling interests    D.18.       388       75       —
Provisions and other non-current liabilities    D.19.       9,326       8,236       7,730
Deferred tax liabilities    D.14.       3,808       4,933       5,668
Non-current liabilities
      20,217       19,205       17,571
Accounts payable       2,800       2,654       2,791
Other current liabilities    D.19.4.       5,624       5,369       4,721
Current liabilities related to business combinations and to non-controlling interests    D.18.       98       76       —
Short-term debt and current portion of long-term debt    D.17.       1,565       2,866       1,833
Current liabilities
      10,087       10,965       9,345
Liabilities related to assets held for sale or exchange    D.8.       1,672       1,501       —
TOTAL LIABILITIES & EQUITY
      85,264       80,251       71,987
⁽¹⁾
In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period (see Note D.1.).
(€ million)
Note
December 31,
2012
December 31,
2011 ⁽¹⁾
December 31,
2010

LIABILITIES & EQUITY
Equity attributable to equity holders of Sanofi D.15. 57,338 56,203 53,097
Equity attributable to non-controlling interests D.16. 134 170 191
Total equity 57,472 56,373 53,288
Long-term debt D.17. 10,719 12,499 6,695
Non-current liabilities related to business combinations and to non-controlling interests D.18. 1,350 1,336 388
Provisions and other non-current liabilities D.19. 11,036 10,346 9,326
Deferred tax liabilities D.14. 5,932 6,530 3,808
Non-current liabilities 29,037 30,711 20,217
Accounts payable 3,190 3,183 2,800
Other current liabilities D.19.4. 6,758 7,221 5,624
Current liabilities related to business combinations and to non-controlling interests D.18. 100 220 98
Short-term debt and current portion of long-term debt D.17. 3,812 2,940 1,565
Current liabilities 13,860 13,564 10,087
Liabilities related to assets held for sale or exchange ⁽²⁾ D.8. 38 20 1,672

TOTAL LIABILITIES & EQUITY 100,407 100,668 85,264

⁽¹⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).
⁽²⁾
The liabilities of Merial, classified inLiabilities related to assets held for sale or exchange in 2010, were reclassified in 2011 to the relevant balance sheet line items, in accordance with paragraph 26 of IFRS 5 (see Notes D.2. and D.8.2.).

The accompanying notes on pages F-10 to ~~F-126~~F-122 are an integral part of the consolidated financial statements.

Table of Contents

CONSOLIDATED INCOME STATEMENTS

(€ million)    Note    Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Net sales    D.34./D.35.    30,384    29,306 27,568
Other revenues       1,651    1,443 1,249
Cost of sales       (8,717 ) (7,880 ) (7,337 )
Gross profit       23,318    22,869 21,480
Research and development expenses       (4,401 ) (4,583 ) (4,575 )
Selling and general expenses       (7,567 ) (7,325 ) (7,168 )
Other operating income    D.25.    359    866 556
Other operating expenses    D.26.    (276 ) (481 ) (353 )
Amortization of intangible assets       (3,529 ) (3,528 ) (3,483 )
Impairment of intangible assets    D.5.    (433 ) (372 ) (1,554 )
Restructuring costs    D.27.    (1,372 ) (1,080 ) (585 )
Gains and losses on disposals, and litigation    D.28.    (138 ) —    76
Operating income       5,961    6,366 4,394
Financial expenses    D.29.    (467 ) (324 ) (335 )
Financial income    D.29.    105    24 103
Income before tax and associates and joint ventures       5,599    6,066 4,162
Income tax expense    D.30.    (1,242 ) (1,364 ) (682 )
Share of profit/loss of associates and joint ventures    D.31.    978    814 692
Net income excluding the held-for-exchange Merial business⁽¹⁾       5,335    5,516 4,172
Net income from the held-for-exchange Merial business⁽¹⁾    D.8.    386    175 120
Net income
      5,721    5,691 4,292
Net income attributable to non-controlling interests    D.32.    254    426 441
Net income attributable to equity holders of sanofi-aventis       5,467    5,265 3,851
Average number of shares outstanding (million)    D.15.9.    1,305.3    1,305.9 1,309.3
Average number of shares outstanding after dilution (million)    D.15.9.    1,308.2    1,307.4 1,310.9
– Basic earnings per share (in euros)       4.19    4.03 2.94
– Diluted earnings per share (in euros)       4.18    4.03 2.94
⁽¹⁾
Reported separately in accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations). For the other disclosures required under IFRS 5, refer to Note D.8. to our consolidated financial statements.
(€ million)
Note
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Net sales D.34.–D.35. 34,947 33,389 32,367
Other revenues 1,010 1,669 1,669
Cost of sales (11,118 ) (10,902 ) (9,398 )
Gross profit 24,839 24,156 24,638
Research and development expenses (4,922 ) (4,811 ) (4,547 )
Selling and general expenses (8,947 ) (8,536 ) (8,149 )
Other operating income D.25. 562 319 369
Other operating expenses D.26. (454 ) (315 ) (292 )
Amortization of intangible assets (3,291 ) (3,314 ) (3,529 )
Impairment of intangible assets D.5. (117 ) (142 ) (433 )
Fair value remeasurement of contingent consideration liabilities D.18. (192 ) 15 —
Restructuring costs D.27. (1,141 ) (1,314 ) (1,384 )
Other gains and losses, and litigation ⁽¹⁾ D.28. — (327 ) (138 )
Operating income 6,337 5,731 6,535
Financial expenses D.29. (553 ) (552 ) (468 )
Financial income D.29. 93 140 106
Income before tax and associates and joint ventures 5,877 5,319 6,173
Income tax expense D.30. (1,134 ) (455 ) (1,430 )
Share of profit/(loss) of associates and joint ventures D.31. 393 1,070 978
Net income 5,136 5,934 5,721

Attributable to non-controlling interests D.32. 169 241 254
Net income attributable to equity holders of Sanofi 4,967 5,693 5,467

Average number of shares outstanding (million) D.15.9. 1,319.5 1,321.7 1,305.3
Average number of shares outstanding after dilution (million) D.15.9. 1,329.6 1,326.7 1,308.2

– Basic earnings per share (in euros) 3.76 4.31 4.19
– Diluted earnings per share (in euros) 3.74 4.29 4.18

⁽¹⁾
See Note B.20.2.

The accompanying notes on pages F-10 to ~~F-126~~F-122 are an integral part of the consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009⁽¹⁾ Year ended
December 31,
2008
Net income
   5,721 5,691 4,292
Attributable to equity holders of sanofi-aventis
   5,467 5,265 3,851
Attributable to non-controlling interests
   254 426 441
Income (expense) recognized directly in equity:

• Available-for-sale financial assets    141 110 (132 )
• Cash flow hedges    17 (175 ) 104
• Remeasurement of previously-held equity interests:
• Merial (50%) ⁽²⁾
   —    1,379 —
• Zentiva (24.9%)
   —    108 —
• Actuarial gains/(losses)    (311 ) (169 ) (829 )
• Change in cumulative translation difference    2,654 (298 ) 948
• Tax effect of income and expenses recognized directly in equity⁽³⁾    152 (274 ) 132
Total income/(expense) recognized directly in equity
   2,653 681 223
Total recognized income/(expense) for the period
   8,374 6,372 4,515
Attributable to equity holders of sanofi-aventis
   8,109 5,945 4,090
Attributable to non-controlling interests
   265 427 425
⁽¹⁾
In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period (see Note D.1.).
⁽²⁾
Representing $2,029 million (equivalent to $1,551 million net of taxes) at the end of the purchase price allocation period (see Note D.1.), including a retrospective adjustment of $242 million following valuation adjustments to certain identifiable assets and liabilities.
⁽³⁾
~~See analysis in Note D.15.7.~~
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011 ⁽¹⁾
Year ended
December 31,
2010

Net income 5,136 5,934 5,721

Attributable to equity holders of Sanofi
4,967 5,693 5,467
Attributable to non-controlling interests
169 241 254

Other comprehensive income:
Actuarial gains (losses) (1,555 )⁽³⁾ (677 )⁽³⁾ (311 )

Tax effect ⁽²⁾ 492 138 172

Items not subsequently reclassifiable to profit or loss (1,063 ) (539 ) (139 )

• Available-for-sale financial assets 1,451 250 141
• Cash flow hedges (4 ) 5 17
• Change in currency translation differences (532 ) (95 ) 2,654
Tax effect ⁽²⁾ (117 ) 4 (20 )
Items subsequently reclassifiable to profit or loss 798 164 2,792

Other comprehensive income for the period, net of taxes (265 ) (375 ) 2,653

Comprehensive income 4,871 5,559 8,374

Attributable to equity holders of Sanofi
4,709 5,330 8,109
Attributable to non-controlling interests
162 229 265

⁽¹⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).
⁽²⁾
See analysis in Note D.15.7.
⁽³⁾
See Note D.19.1.

The accompanying notes on pages F-10 to ~~F-126~~F-122 are an integral part of the consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(€ million) Share
capital Additional
paid-in
capital and
retained
earnings Treasury
shares Stock options
and other
share-based
payment Other
items
recognized
directly in
equity⁽¹⁾
Attributable to
equity
holders
of sanofi-
aventis
Attributable to
non-controlling
interests Total
equity
Balance at January 1, 2008
2,732 47,162 (2,275 ) 1,468 (4,545 ) 44,542 177 44,719
Income/(expense) recognized directly in equity —    (693 ) —    —    932 239 (16 ) 223
Net income for the period —    3,851 —    —    —    3,851 441 4,292
Total recognized income/(expense) for the period
—    3,158 —    —    932 4,090 425 4,515
Dividend paid out of 2007 earnings (€2.07 per share) —    (2,702 ) —    —    —    (2,702 ) —    (2,702 )
Payment of dividends and equivalents to non-controlling interests —    —    —    —    —    —    (397 ) (397 )
Share repurchase program —    —    (1,227 ) —    —    (1,227 ) —    (1,227 )
Reduction in share capital (103 ) (2,843 ) 2,946 —    —    —    —    —
Share-based payment:
• Exercise of stock options 2 37 —    —    —    39 —    39
• Proceeds from sale of treasury shares on exercise of stock options —    —    4 —    —    4 —    4
• Value of services obtained from employees —    —    —    125 —    125 —    125
• Tax effect of exercise of stock options —    —    —    (12 ) —    (12 ) —    (12 )
Other movements —    7 —    —    —    7 —    7
Balance at December 31, 2008
2,631 44,819 (552 ) 1,581 (3,613 ) 44,866 205 45,071
Income/(expense) recognized directly in equity⁽³⁾ —    1,000 —    —    (320 ) 680 1 681
Net income for the period —    5,265 —    —    —    5,265 426 5,691
Total recognized income/(expense) for the period⁽³⁾
—    6,265 —    —    (320 ) 5,945 427 6,372
Dividend paid out of 2008 earnings (€2.20 per share) —    (2,872 ) —    —    —    (2,872 ) —    (2,872 )
Payment of dividends and equivalents to non-controlling interests —    —    —    —    —    —    (418 ) (418 )
Share-based payment:
• Exercise of stock options 6 134 —    —    —    140 —    140
• Proceeds from sale of treasury shares on exercise of stock options —    —    26 —    —    26 —    26
• Value of services obtained from employees —    —    —    114 —    114 —    114
• Tax effect of exercise of stock options —    —    —    1 —    1 —    1
Non-controlling interests generated by acquisitions —    —    —    —    —    —    49 49
Changes in non-controlling interests without loss of control —    —    —    —    —    —    (5 ) (5 )
Step acquisitions⁽²⁾ —    102 —    —    —    102 —    102
Balance at December 31, 2009⁽³⁾
2,637 48,448    (526 ) 1,696 (3,933 ) 48,322 258 48,580
Income/(expense) recognized directly in equity —    (139 ) —    —    2,781 2,642 11 2,653
Net income for the period —    5,467 —    —    —    5,467 254 5,721
Total recognized income/(expense) for the period
—    5,328 —    —    2,781 8,109 265 8,374
Dividend paid out of 2009 earnings (€2.40 per share) —    (3,131 ) —    —    —    (3,131 ) —    (3,131 )
Payment of dividends and equivalents to non-controlling interests —    —    —    —    —    —    (307 ) (307 )
Share repurchase program⁽⁴⁾ —    —    (321 ) —    —    (321 ) —    (321 )
Reduction in share capital⁽⁴⁾ (16 ) (404 ) 420 —    —    —    —    —
Share-based payment:
• Exercise of stock options 1 17 —    —    —    18 —    18
• Proceeds from sale of treasury shares on exercise of stock options —    —    56 —    —    56 —    56
• Value of services obtained from employees —    —    —    133 —    133 —    133
Non-controlling interests generated by acquisitions —    —    —    —    —    —    1 1
Changes in non-controlling interests without loss of control⁽⁵⁾ —    (89 ) —    —    —    (89 ) (26 ) (115 )
Balance at December 31, 2010
2,622 50,169    (371 ) 1,829    (1,152 ) 53,097 191 53,288
⁽¹⁾
~~See Note D.15.7.~~
⁽²⁾
~~Adjustment to retained earnings prior to acquisition of control over Zentiva, in particular the impairment loss recognized against the carrying amount of the equity interest in 2007.~~
⁽³⁾
In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period (see Note D.1.).
⁽⁴⁾
~~See Notes D.15.4. and D.15.5.~~
⁽⁵⁾
~~Primarily buyouts of non-controlling interests in Aventis Pharma Limited (India) and in Zentiva.~~
(€ million)
Share
capital
Additional
paid-in
capital and
retained
earnings
Treasury
shares
Stock options
and other
share-based
payment
Other
comprehensive
income ⁽¹⁾
Attributable to
equity
holders
of Sanofi
Attributable to
non-controlling
interests
Total
equity

Balance at January 1, 2010 2,637 48,448 (526 ) 1,696 (3,933 ) 48,322 258 48,580

Other comprehensive income for the period — (139 ) — — 2,781 2,642 11 2,653
Net income for the period — 5,467 — — — 5,467 254 5,721

Comprehensive income for the period — 5,328 — — 2,781 8,109 265 8,374

Dividend paid out of 2009 earnings (€2.40 per share) — (3,131 ) — — — (3,131 ) — (3,131 )
Payment of dividends and equivalents to non-controlling interests — — — — — — (307 ) (307 )
Share repurchase program ⁽³⁾ — — (321 ) — — (321 ) — (321 )
Reduction in share capital ⁽³⁾ (16 ) (404 ) 420 — — — — —
Share-based payment plans:
• Exercise of stock options 1 17 — — — 18 — 18
• Proceeds from sale of treasury shares on exercise of stock options — — 56 — — 56 — 56
• Value of services obtained from employees — — — 133 — 133 — 133
• Tax effects on the exercise of stock options — — — — — — — —
Non-controlling interests generated by acquisitions — — — — — — 1 1
Changes in non-controlling interests without loss of control — (89 ) — — — (89 ) (26 ) (115 )

Balance at December 31, 2010 2,622 50,169 (371 ) 1,829 (1,152 ) 53,097 191 53,288

Other comprehensive income for the period ⁽²⁾ — (539 ) — — 176 (363 ) (12 ) (375 )
Net income for the period — 5,693 — — — 5,693 241 5,934

Comprehensive income for the period ⁽²⁾ — 5,154 — — 176 5,330 229 5,559

Dividend paid out of 2010 earnings (€2.50 per share) — (3,262 ) — — — (3,262 ) — (3,262 )
Payment of dividends and equivalents to non-controlling interests — — — — — — (252 ) (252 )
Increase in share capital – dividends paid in shares ⁽³⁾ 76 1,814 — — — 1,890 — 1,890
Share repurchase program ⁽³⁾ — — (1,074 ) — — (1,074 ) — (1,074 )
Reduction in share capital ⁽³⁾ (21 ) (488 ) 509 — — — — —
Share-based payment plans: — — — — — — — —
• Exercise of stock options 4 66 — — — 70 — 70
• Issuance of restricted shares 1 (1 ) — — — — — —
• Proceeds from sale of treasury shares on exercise of stock options — — 3 — — 3 — 3
• Value of services obtained from employees — — — 143 — 143 — 143
• Tax effects on the exercise of stock options — — — 8 — 8 — 8
Change in non-controlling interests without loss of control — (2 ) — — — (2 ) 2 —

Balance at December 31, 2011 ⁽²⁾ 2,682 53,450 (933 ) 1,980 (976 ) 56,203 170 56,373

Other comprehensive income for the period — (1,063 ) — — 805 (258 ) (7 ) (265 )
Net income for the period — 4,967 — — — 4,967 169 5,136

Comprehensive income for the period — 3,904 — — 805 4,709 162 4,871

Dividend paid out of 2011 earnings (€2.65 per share) — (3,487 ) — — — (3,487 ) — (3,487 )
Payment of dividends and equivalents to non-controlling interests — — — — — — (178 ) (178 )
Share repurchase program ⁽³⁾ — — (823 ) — — (823 ) — (823 )
Reduction in share capital ⁽³⁾ (55 ) (1,493 ) 1,548 — — — — —
Share-based payment plans:
• Exercise of stock options ⁽³⁾ 24 621 — — — 645 — 645
• Issuance of restricted shares ⁽³⁾ 2 (2 ) — — — — — —
• Proceeds from sale of treasury shares on exercise of stock options — — 1 — — 1 — 1
• Value of services obtained from employees — — — 155 — 155 — 155
• Tax effects on the exercise of stock options — — — 25 — 25 — 25
Change in non-controlling interests without loss of control ⁽⁴⁾ — (90 ) — — — (90 ) (20 ) (110 )

Balance at December 31, 2012 2,653 52,903 (207 ) 2,160 (171 ) 57,338 134 57,472

⁽¹⁾
See Note D.15.7.
⁽²⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).
⁽³⁾
See Notes D.15.1., D.15.3., D.15.4. and D.15.5.
⁽⁴⁾
Primarily buyouts of non-controlling interests in subsidiaries controlled by Sanofi.
The accompanying notes on pages F-10 to ~~F-126~~F-122 are an integral part of the consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

(€ million)    Note    Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Net income attributable to equity holders of sanofi-aventis
      5,467 5,265 3,851
Net income from the held-for-exchange Merial business       (386 ) (175 ) (120 )
Dividends received from Merial       497 179 116
Non-controlling interests, excluding BMS⁽¹⁾       17 21 19
Share of undistributed earnings of associates and joint ventures       54 34 23
Depreciation, amortization and impairment of property, plant and equipment and intangible assets       5,129 5,011 5,985
Gains and losses on disposals of non-current assets, net of tax ⁽²⁾       (111 ) (25 ) (45 )
Net change in deferred taxes       (1,512 ) (1,169 ) (1,473 )
Net change in provisions       473 161 56
Cost of employee benefits (stock options and other share-based payments)       131 114 125
Impact of the workdown of acquired inventories remeasured at fair value       30 27 —
Unrealized (gains)/losses recognized in income       247 ⁽⁵⁾ (81 ) (13 )
Operating cash flow before changes in working capital
      10,036 9,362 8,524
(Increase)/decrease in inventories       (378 ) (489 ) (84 )
(Increase)/decrease in accounts receivable       (82 ) (429 ) (309 )
Increase/(decrease) in accounts payable       28 (336 ) (28 )
Net change in other current assets, current financial assets and other current liabilities       155 407 420
Net cash provided by/(used in) operating activities ⁽³⁾
      9,759 8,515 8,523
Acquisitions of property, plant and equipment and intangible assets    D.3./D.4.       (1,573 ) (1,785 ) (1,606 )
Acquisitions of investments in consolidated undertakings, net of cash acquired    D.1.       (1,659 ) (5,563 ) (661 )
Acquisitions of available-for-sale financial assets    D.1./D.7.       (74 ) (5 ) (6 )
Proceeds from disposals of property, plant and equipment, intangible assets and other non-current assets, net of tax ⁽⁴⁾    D.2.       131 85 123
Net change in loans and other non-current financial assets       (208 ) (19 ) (4 )
Net cash provided by/(used in) investing activities
      (3,383 ) (7,287 ) (2,154 )
Issuance of sanofi-aventis shares    D.15.       18 142 51
Dividends paid:
• to shareholders of sanofi-aventis       (3,131 ) (2,872 ) (2,702 )
• to non-controlling interests, excluding BMS⁽¹⁾       (7 ) (6 ) (6 )
Transactions with non-controlling interests, other than dividends       (97 ) —    —
Additional long-term debt contracted    D.17.       505 4,697 765
Repayments of long-term debt    D.17.       (1,981 ) (1,989 ) (1,253 )
Net change in short-term debt    D.17.       310 (785 ) 557
Acquisition of treasury shares    D.15.4.       (321 ) —    (1,227 )
Disposals of treasury shares, net of tax    D.15.       57 26 6
Net cash provided by/(used in) financing activities
      (4,647 ) (787 ) (3,809 )
Impact of exchange rates on cash and cash equivalents
      44 25 (45 )
Net change in cash and cash equivalents       1,773 466 2,515
Cash and cash equivalents, beginning of period
      4,692 4,226 1,711
Cash and cash equivalents, end of period    D.13.       6,465 4,692 4,226
⁽¹⁾   See Note C.1.
⁽²⁾   Including available-for-sale financial assets.
⁽³⁾   Including:

  Income tax paid
      (3,272 ) (2,981 ) (2,317 )
  Interest paid
      (474 ) (269 ) (317 )
  Interest received
      61 88    132
  Dividends received from non-consolidated entities
      3 5    5
(€ million)
Note
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Net income attributable to equity holders of Sanofi 4,967 5,693 5,467

Non-controlling interests, excluding BMS ⁽¹⁾ D.32. 20 15 17
Share of undistributed earnings of associates and joint ventures 37 27 52
Depreciation, amortization and impairment of property, plant and equipment and intangible assets 4,907 5,553 5,129
Gains and losses on disposals of non-current assets, net of tax ⁽²⁾ (86 ) (34 ) (111 )
Net change in deferred taxes (916 ) (1,865 ) (1,511 )
Net change in provisions ⁽³⁾ (710 ) 40 461
Cost of employee benefits (stock options and other share-based payments) D.15.2.–D.15.8. 155 143 133
Impact of the workdown of acquired inventories remeasured at fair value D.35.1. 23 476 142
Unrealized (gains)/losses recognized in income 106 (214 ) 245

Operating cash flow before changes in working capital 8,503 9,834 10,024

(Increase)/decrease in inventories (445 ) (232 ) (386 )
(Increase)/decrease in accounts receivable 368 (257 ) (96 )
Increase/(decrease) in accounts payable 67 (87 ) 59
Net change in other current assets, current financial assets and other current liabilities (322 ) 61 258

Net cash provided by/(used in) operating activities ⁽⁴⁾ 8,171 9,319 9,859

Acquisitions of property, plant and equipment and intangible assets D.3.–D.4. (1,612 ) (1,782 ) (1,662 )
Acquisitions of investments in consolidated undertakings, net of cash acquired ⁽⁷⁾ D.1.–D.18. (282 ) (13,590 ) (1,659 )
Acquisitions of available-for-sale financial assets D.7. (46 ) (26 ) (74 )
Proceeds from disposals of property, plant and equipment, intangible assets and other non-current assets, net of tax ⁽⁵⁾ 358 359 136
Net change in loans and other financial assets (5 ) 338 (216 )

Net cash provided by/(used in) investing activities (1,587 ) (14,701 ) (3,475 )

Issuance of Sanofi shares ⁽⁶⁾ D.15.1. 645 70 18
Dividends paid:
• to shareholders of Sanofi ⁽⁶⁾ (3,487 ) (1,372 ) (3,131 )
• to non-controlling interests, excluding BMS ⁽¹⁾ (10 ) (17 ) (7 )
Transactions with non-controlling interests, other than dividends (62 ) — (97 )
Additional long-term debt contracted D.17. 1,178 8,359 505
Repayments of long-term debt D.17. (1,345 ) (2,931 ) (1,984 )
Net change in short-term debt (448 ) (145 ) 314
Acquisition of treasury shares D.15.4. (823 ) (1,074 ) (321 )
Disposals of treasury shares, net of tax D.15. 1 3 57

Net cash provided by/(used in) financing activities (4,351 ) 2,893 (4,646 )

Impact of exchange rates on cash and cash equivalents 24 1 55

Impact of Merial cash and cash equivalents ⁽⁸⁾ D.8.2. — 147 —

Net change in cash and cash equivalents 2,257 (2,341 ) 1,793

Cash and cash equivalents, beginning of period 4,124 6,465 4,692
Cash and cash equivalents, end of period D.13. 6,381 4,124 6,465

⁽¹⁾
See note C.1.
⁽²⁾
Including available-for-sale financial assets.
⁽³⁾
This line item includes contributions paid to pension funds (see Note D.19.1.)
⁽⁴⁾
Including:

– Income tax paid
(2,735 ) (2,815 ) (3,389 )
– Interest paid
(495 ) (447 ) (475 )
– Interest received
68 100 62
– Dividends received from non-consolidated entities
6 7 3

⁽⁵⁾
Property, plant and equipment, intangible assets, investments in consolidated entities and other non-current financial assets.
⁽⁶⁾
The amounts shown for issuance of Sanofi shares and dividends paid to equity holders of Sanofi are presented net of dividends paid in shares, which do not generate a cash flow.
⁽⁷⁾
This line item also includes payments made in respect of contingent consideration identified and recognized as a liability in business combinations.
⁽⁸⁾
As of December 31, 2010, the cash and cash equivalents of Merial were presented in the balance sheet inAssets held for sale or exchange.
⁽⁴⁾
~~Property, plant~~ – Net change in cash and ~~equipment, intangible assets, investments~~cash equivalents excluding Merial
1,773
– Net change in ~~consolidated undertakings~~cash and ~~other non-current financial assets.~~cash equivalents of Merial
20
⁽⁵⁾
~~Arising primarily on the translation of U.S. dollar surplus~~ – Net change in cash ~~from American subsidiaries transferred to the sanofi-aventis parent company.~~and cash equivalents including Merial
1,793
The accompanying notes on pages F-10 to ~~F-126~~F-122 are an integral part of the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
~~Year ended December 31, 2010~~
INTRODUCTION
~~Sanofi-aventis and~~        Sanofi, together with its subsidiaries ~~(“sanofi-aventis”~~(collectively "Sanofi" or ~~“the Group”~~"the Group"), is a diversified global healthcare ~~group~~leader engaged in the research, development ~~manufacture~~ and marketing of therapeutic solutions focused on patient needs. Sanofi has fundamental strengths in the healthcare ~~products, drugs~~field, operating via seven growth platforms: Emerging Markets, Diabetes Solutions, Human Vaccines, Consumer Health Care (CHC), Animal Health, New Genzyme and ~~vaccines. The sanofi-aventis pharmaceutical portfolio includes flagship products, together with a broad range of prescription drugs, generic drugs and consumer health products.~~
~~Sanofi-aventis,~~Other Innovative Products. Sanofi, the parent company, is asociété anonyme (a form of limited liability company) incorporated under the laws of France. The registered office is at ~~174, avenue de France, 75013~~54, rue La Boétie, 75008 Paris, France.

~~Sanofi-aventis~~Sanofi is listed in Paris (Euronext: SAN) and New York (NYSE: SNY).

The consolidated financial statements for the year ended December 31, ~~2010,~~2012, and the notes thereto, were adopted by the ~~sanofi-aventis~~Sanofi Board of Directors on February ~~8, 2011.~~6, 2013.

A. BASIS OF PREPARATION
A.1. International Financial Reporting Standards (IFRS)

The consolidated financial statements cover the twelve-month periods ended December 31, ~~2010, 2009~~2012, 2011 and ~~2008.~~2010.

In accordance with Regulation No. 1606/2002 of the European Parliament and Council of July 19, 2002 on the application of international accounting standards, ~~sanofi-aventis~~Sanofi has presented its consolidated financial statements in accordance with IFRS since January 1, 2005. The term ~~“IFRS”~~"IFRS" refers collectively to international accounting and financial reporting standards (IASs and IFRSs) and to interpretations of the interpretations committees (SIC and IFRIC)~~, mandatorily applicable~~ with mandatory application as of December 31, ~~2010.~~2012.

The consolidated financial statements of ~~sanofi-aventis~~Sanofi as of December 31, ~~2010~~2012 have been prepared in compliance with IFRS as issued by the International Accounting Standards Board (IASB) and with IFRS as endorsed by the European Union as of December 31, ~~2010.~~2012.

IFRS as endorsed by the European Union as of December 31, ~~2010~~2012 are available under the heading ~~“IASs/IFRSs,~~"IAS/IFRS Standards and ~~Interpretations”~~Interpretations" via the following web ~~link~~link:
http://ec.europa.eu/internal_market/accounting/ias/index_en.htm.

The consolidated financial statements have been prepared in accordance with the IFRS general principles of fair presentation, going concern, accrual basis of accounting, consistency of presentation, materiality, and aggregation.

New standards, amendments and interpretations applicable in ~~2010~~2012 with an impact on the consolidated financial statements are described in Note A.2. For standards, amendments and interpretations issued by the IASB that ~~are~~do not ~~mandatorily applicable~~have mandatory application in ~~2010,~~2012, refer to Note B.28.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
A.2. New standards, amendments and interpretations applicable in ~~2010~~2012

~~New~~The new standards, amendments to standards and interpretations ~~applicable in 2010~~issued by the IASB with anmandatory application for the Group as from the 2012 fiscal year are listed below. These pronouncements have no impact on the consolidated financial statements of ~~sanofi-aventis~~the Group.
–
Amendment to IFRS 7 (Financial Instruments: Disclosures). This amendment applies to annual periods beginning on or after July 1, 2011, and has been endorsed by the European Union. It is intended to provide better financial information about transfers of financial assets, in particular securitizations. The amendment does not alter the way securitizations are accounted for, but clarifies the ~~year ended December 31, 2010~~disclosure requirements. The relevant disclosures relating to transfers of trade receivables are ~~as follows:~~provided in Note D.10. to the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~– Revised IFRS 3:~~
In 2008, the IASB issued a revised version of IFRS 3 (Business Combinations), which has been endorsed by the European Union. The revised IFRS 3, applied by sanofi-aventis to business combinations completed from 2010 onwards, changes the way in which the purchase method (now known as the “acquisition method” in the revised IFRS 3) is applied.
The accounting policies applicable to business combinations are described in Note B.3. “Business combinations and transactions with non-controlling interests”, and in Note B.22. “Income tax expense”, which deals with unrecognized deferred tax assets.
~~– Amended IAS 27~~
In 2008, the IASB issued an amended version of IAS 27 (Consolidated and Separate Financial Statements), which has been endorsed by the European Union and is applicable simultaneously with the revised IFRS 3. The amendments to IAS 27 largely relate to transactions with non-controlling interests, and to partial disposals resulting in loss of control. The relevant accounting policies are described in Note B.3. “Business combinations and transactions with non-controlling interests”.
~~– IFRS 5~~
The first “Annual Improvements to IFRSs” standard, issued in 2008, included an amendment to IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations), which is mandatorily applicable at the same time as the amended IAS 27. This amendment clarifies the treatment of disposals resulting in loss of control as regards IFRS 5: in such cases, all assets and liabilities of the entity involved must be classified as assets or liabilities “held for sale”. This standard has been endorsed by the European Union. The Group’s accounting policy for such transactions already complied with this amendment (see Note B.7. “Assets held for sale or exchange”).
–
Amendment ("Deferred Tax: Recovery of Underlying Assets") to IAS 12 (Income Taxes). This amendment relates to investment property measured using the fair value model under IAS 40, and is not applicable to the Group.

–
Amendment to IAS 1 (Presentation of Financial Statements). This requires items of other comprehensive income that are subsequently reclassifiable to profit or loss to be presented separately from those that are not, and was early adopted by Sanofi with effect from 2011. This amendment was endorsed by the European Union on June 5, 2012.
A.3. Use of estimates

The preparation of financial statements requires management to make reasonable estimates and assumptions based on information available at the date of ~~preparation~~the finalization of the financial ~~statements, that~~statements. These estimates and assumptions may affect the reported amounts of assets, liabilities, revenues and expenses in the financial statements, and disclosures of contingent assets and contingent ~~liabilities.~~
liabilities as at the date of the review of the financial statements. Examples of estimates and assumptions include:
–
amounts deducted from sales for projected sales returns, chargeback incentives, rebates and price reductions (see ~~Note~~Notes B.14. and D.23.);
~~provisions relating to product liability claims (see note D.22.);~~

–
impairment of property, plant and equipment, goodwill, intangible assets, and investments in associates and joint ventures (see ~~Note~~Notes B.6. and D.5.);

–
the valuation of goodwill and the valuation and useful life of acquired intangible assets (see Notes B.3., B.4.3., D.4. and ~~B.4.3.~~D.5.);

–
the amount of post-employment benefit obligations (see ~~Note~~Notes B.23. and D.19.1.);

–
the amount of provisions for restructuring, litigation, tax risks and environmental risks (see ~~Note~~Notes B.12., B.22., D.19. and D.22.);

–
the amount of deferred tax assets resulting from tax losses available for carry-forward and deductible temporary differences (see Notes B.22. and D.14.);

–
the measurement of contingent ~~payments~~consideration (see ~~Note~~Notes B.3. and D.18.).

Actual results could differ from these estimates.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
B.1. Basis of consolidation

In accordance with IAS 27 (Consolidated and Separate Financial Statements), the consolidated financial statements include the accounts of the ~~sanofi-aventis~~Sanofi parent company and those of its subsidiaries, using the full consolidation method. Subsidiaries are entities which the Group controls (i.e. it has the power to govern their financial and operating activities). The existence of effectively exercisable or convertible potential voting rights is taken into account in determining whether control exists. Control is presumed to exist where the Group holds more than 50% of an ~~entity’s~~entity's voting rights.

Equity interests in entities are consolidated from the date on which exclusive control of the entity is obtained; divested equity interests are deconsolidated on the date on which exclusive control ceases. The ~~Group’s~~Group's share of post-acquisition profits or losses is taken to the income statement, while post-acquisition movements in the ~~acquiree’s~~acquiree's reserves are taken to consolidated reserves.

Entities over which ~~sanofi-aventis~~Sanofi exercises joint control are known as ~~“joint ventures”~~"joint ventures" and are accounted for using the equity method in accordance with the option in IAS 31 (Interests in Joint Ventures).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Entities over which ~~sanofi-aventis~~Sanofi exercises significant influence are accounted for by the equity method in accordance with IAS 28 (Investments in Associates). Significant influence exists where ~~sanofi-aventis~~Sanofi has the power to participate in the financial and operating policy decisions of the investee, but without the power to exercise control or joint control over those policies. Significant influence is presumed to exist where the Group owns, directly or indirectly via its subsidiaries, between 20% and 50% of the voting rights of the investee.

Acquisition-related costs are included as a component of the cost of acquiring joint ventures and associates.

Material transactions between consolidated companies are eliminated, as are intragroup profits.
B.2. Foreign currency translation
B.2.1. Accounting for transactions in foreign currencies in individual company accounts

Non-current assets (other than receivables) and inventories acquired in foreign currencies are translated into the functional currency using the exchange rate prevailing at the acquisition date.
Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. The resulting gains and losses are recorded in the income statement. However, foreign exchange gains and losses arising from the translation of advances between consolidated subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are recognized directly in equity in~~Cumulative~~Currency translation difference.
B.2.2. Foreign currency translation of the financial statements of foreign subsidiaries
        Sanofi presents its consolidated financial statements in euros (€).
In accordance with IAS 21 (The Effects of Changes in Foreign Exchange Rates), each Group subsidiary translates foreign currency transactions into the currency that is most representative of its economic environment (the functional currency).

All assets and liabilities are translated into euros using the exchange rate of the ~~subsidiary’s~~subsidiary's functional currency prevailing at the balance sheet date. Income statements are translated using a weighted average exchange rate for the period. The resulting currency translation difference is recognized as a separate component of equity in the consolidated statement of comprehensive income, and is recognized in the income statement only when the subsidiary is sold or is wholly or partially liquidated.

Under the exemptions allowed by IFRS 1, ~~sanofi-aventis~~the Sanofi Group elected to eliminate, through equity, all ~~cumulative~~currency translation differences for foreign operations at the January 1, 2004 IFRS transition date.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
B.3. Business combinations and transactions with non-controlling interests
B.3.1. Accounting for business combinations, transactions with non-controlling interests and loss of control

Business combinations are accounted for using the acquisition method. Under this method, the ~~acquiree’s~~acquiree's identifiable assets and liabilities that satisfy the recognition criteria of IFRS 3 are measured initially at their fair values as at the date of acquisition, except for (i) non-current assets classified as held for sale ~~which~~(which are measured at fair value less costs to ~~sell.~~sell) and (ii) assets and liabilities that fall within the scope of IAS 12 (Income Taxes) and IAS 19 (Employee Benefits). Restructuring liabilities are ~~not~~ recognized as a liability of the acquiree ~~unless~~only if the acquiree has an obligation as atof the acquisition date to carry out the restructuring.

Business combinations completed on or after January 1, 2010 are accounted for in accordance with the revised IFRS 3 (Business Combinations) and the amended IAS 27 (Consolidated and Separate Financial Statements). These revised standards are applied prospectively.

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~~The changes in these two standards have resulted in changes in the terminology used:~~
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

~~Revised IFRS 3 terminology~~
~~Non-controlling interests~~
~~Previous terminology:~~ ~~Minority interests~~
~~Contingent consideration~~
~~Alternative term:~~~~Contingent payment~~
~~Consideration transferred~~
~~Definition:~~~~Initial payment + contingent consideration~~
The principal accounting rules applicable to business combinations and transactions with non-controlling interests include:
– ~~Acquisition-related costs are recognized as an expense on the acquisition date, as a component of~~~~Operating income~~~~. In the case of business combinations completed before January 1, 2010, these costs were accounted for as a component of the cost of the acquisition.~~
– Contingent consideration is recognized in equity if the contingent payment is settled by delivery of a fixed number of the acquirer’s equity instruments; in all other cases, it is recognized in liabilities related to business combinations. Contingent consideration is recognized at fair value at the acquisition date irrespective of the probability of payment. Subsequent adjustments after the twelve-month purchase price allocation period are recognized in profit or loss if the contingent consideration was originally recognized as a liability.
–
Acquisition-related costs are recognized as an expense on the acquisition date, as a component ofOperating income.

–
Contingent consideration is recognized in equity if the contingent payment is settled by delivery of a fixed number of the acquirer's equity instruments; otherwise, it is recognized inLiabilities related to business combinations. Contingent consideration is recognized at fair value at the acquisition date irrespective of the probability of payment. If the contingent consideration was originally recognized as a liability, subsequent adjustments to the liability are recognized in profit or loss in the line itemFair value remeasurement of contingent consideration liabilities, unless the adjustment is made within the twelve months following the acquisition date and relates to facts and circumstances existing as of that date. Subsequent contingent consideration adjustments in respect ~~of business combinations completed before January 1, 2010 continue to be accounted for in accordance with the pre-revision IFRS 3, i.e. through goodwill.~~
~~In the case~~ of business combinations completed before January 1, 2010 ~~where~~continue to be accounted for in accordance with the contractual arrangements for the combination included an adjustment to the cost of the combination contingent upon future events, this adjustment was included in the cost of the combination at the acquisition date, if the adjustment was probable and could be measured reliably. If the adjustment was not probable or could not be measured reliably, it was not included in the cost of the combination on initial recognition of the combination. If the adjustment subsequently became probable and reliably measurable, the additional consideration was treated as an adjustment to the cost of the combinationpre-revision IFRS 3 (i.e. ~~as an adjustment to~~through goodwill).
– In the case of a step acquisition, the previously-held equity interest in the acquiree is remeasured at its acquisition-date fair value, with the difference between this fair value and the carrying amount taken to profit or loss, along with any gains or losses relating to the previously-held interest that were initially recognized directly in equity (other comprehensive income) and which are reclassifiable to profit or loss.

–
In the case of ~~business combinations where control was acquired~~a step acquisition, the previously-held equity interest in ~~stages before January 1, 2010, goodwill was determined~~the acquiree is remeasured at ~~each stage as~~its acquisition-date fair value, with the ~~excess~~difference between this fair value and the carrying amount taken to profit or loss, along with any gains or losses relating to the previously-held interest that were recognized in other comprehensive income and which are reclassifiable to profit or loss.

–
Goodwill may be calculated on the basis of either (i) the ~~cost of the transaction over the~~entire fair value of the acquiree, or (ii) a share ~~of assets acquired in each transaction. The remeasurement~~ of the fair value of the ~~previously-held~~acquiree proportionate to the interest acquired. This option may be elected for each acquisition individually.

–
The effects of (i) a buyout of non-controlling interests in a subsidiary already controlled by the Group, and (ii) a divestment of a percentage interest without loss of control, are recognized in equity.

–
In a partial disposal resulting in loss of control, the retained equity interest ~~was~~is remeasured at fair value at the date of loss of control; the gain or loss recognized on the disposal will include the effect of this remeasurement and the items initially recognized in equity onand reclassified to profit or loss.

–
Adjustments to the ~~line~~~~Remeasurement~~values of ~~previously-held equity interests~~.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
assets and liabilities initially determined provisionally (pending the results of independent valuations or further analysis) are recognized as a retrospective adjustment to goodwill if they are made within twelve months of the acquisition date. Once this twelve-month period has elapsed, the effects of any adjustments are recognized directly in the income statement, unless they qualify as an error correction.

– Goodwill may be calculated on the basis of either (i) the entire fair value of the acquiree, or (ii) a share of the fair value of the acquiree proportionate to the interest acquired. This option may be elected for each acquisition individually. For business combinations completed before January 1, 2010, goodwill was in all cases calculated on the basis of a share of the fair value of the acquiree proportionate to the interest acquired.
– The effects of (i) a buyout of non-controlling interests in a subsidiary already controlled by the Group, and (ii) divestment of a percentage interest without loss of control, are recognized in equity.
– In a partial disposal resulting in loss of control, the retained equity interest is remeasured at fair value at the date of loss of control; the gain or loss recognized on the disposal will include the effect of this remeasurement and the gain or loss on the sale of the equity interest, including items initially recognized in equity and reclassified to profit or loss.
– Adjustments to the values of assets and liabilities initially determined provisionally (pending the results of independent valuations or further analysis) are recognized as a retrospective adjustment to goodwill if they are made within twelve months of the acquisition date. Once this twelve-month period has elapsed, the effects of any adjustments are recognized directly in the income statement, unless they qualify as an error correction.
Under the exemptions allowed by IFRS 1, ~~sanofi-aventis~~the Sanofi Group elected not to restate in accordance with IFRS 3 any business combinations completed prior to the January 1, 2004 transition date. This includes the combination between Sanofi and Synthélabo that took place in 1999.
Purchase price allocations are performed under the responsibility of management, with assistance from an independent valuer in the case of major acquisitions.
The revised IFRS 3 does not specify an accounting treatment for contingent consideration arising from a business combination made by an entity prior to the acquisition of control in that entity and carried as a liability in the acquired entity's balance sheet. The accounting treatment applied by the Group to such a liability is to measure it at fair value as of the acquisition date and to report it in the line itemLiabilities related to business combinations and to non-controlling interests. This treatment is consistent with that applied to contingent consideration in the books of the acquirer.
B.3.2. Goodwill

The excess of the cost of an acquisition over the ~~Group’s~~Group's interest in the fair value of the identifiable assets and liabilities of the acquiree is recognized as goodwill at the date of the business combination.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Goodwill arising on the acquisition of subsidiaries is shown as a separate line in the balance sheet in intangible assets underGoodwill, whereas goodwill arising on the acquisition of associates and joint ventures is recorded inInvestments in associates and joint ventures.

Goodwill arising on the acquisition of foreign entities is measured in the functional currency of the acquired entity and translated using the exchange rate prevailing at the balance sheet date.

In accordance with IAS 36 (Impairment of Assets), goodwill is carried at cost less accumulated impairment (see Note B.6.).

Goodwill is tested for impairment annually for each cash-generating unit (CGU) and whenever events or circumstances indicate that impairment might exist. Such events or circumstances include significant changes liable to have an other-than-temporary impact on the substance of the original investment.
B.4. Other intangible assets

~~Intangible~~Other intangible assets are initially measured at acquisition cost or production cost, including any directly attributable costs of preparing the asset for its intended use, or (in the case of assets acquired in a business combination) at fair value as at the date of the combination. They are amortized on a straight line basis over their useful lives.

The useful lives of intangible assets are reviewed at each reporting date. The effect of any adjustment to useful lives is recognized prospectively as a change of accounting estimate.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Amortization of other intangible assets is recognized in the income statement underAmortization of intangible assets with the exception of amortization of acquired or internally-developed software, which is recognized on the relevant line of the income statement according to the purpose for which the software is used.

~~Sanofi-aventis~~The Group does not own any other intangible assets with an indefinite useful ~~life, other~~life.
        Intangible assets (other than ~~goodwill.~~
~~Intangible assets~~goodwill) are carried at cost less accumulated amortization and accumulated impairment, if any, in accordance with IAS 36 (see Note B.6.).
B.4.1. Research and development not acquired in a business combination
–
Internally generated research and development
In accordance with IAS 38 (Intangible Assets), internally generated research expenditure is expensed as incurred underResearch and development expenses.
Under IAS 38, internally generated development expenses are recognized as an intangible asset if, and only if, all the following six criteria can be demonstrated: (a) the technical feasibility of completing the development project; (b) the ~~Group’s~~Group's intention to complete the project; (c) the ~~Group’s~~Group's ability to use the project; (d) the probability that the project will generate future economic benefits; (e) the availability of adequate technical, financial and other resources to complete the project; and (f) the ability to measure the development expenditure reliably.
Due to the risks and uncertainties relating to regulatory approval and to the research and development process, the six criteria for capitalization are considered not to have been met until marketing approval has been obtained from the regulatory authorities. Consequently, internally generated development expenses arising before marketing approval has been obtained, mainly the cost of clinical trials, are expensed as incurred underResearch and development expenses.
Chemical industrial development expenses incurred to develop a second-generation process are incurred after initial regulatory approval has been obtained, in order to improve the industrial process for an active

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
ingredient. To the extent that the six IAS 38 criteria are considered as being met, these expenses are capitalized underOther intangible assetsas incurred.
–
Separately acquired research and development
Payments for separately acquired research and development are capitalized underOther intangible assets provided that they meet the definition of an intangible asset: a resource that is (i) controlled by the Group, (ii) expected to provide future economic benefits, and (iii) identifiable (i.e. is either separable or arises from contractual or legal rights). Under paragraph 25 of IAS 38, the first condition for capitalization (the probability that the expected future economic benefits will flow to the entity) is considered to be satisfied for separately acquired research and development. Because the amount of the payments is determinable, the second condition for capitalization (the cost can be measured reliably) is also met. Consequently, upfront and milestone payments to third parties related to pharmaceutical products for which regulatory marketing approval has not yet been obtained are recognized as intangible assets, and amortized on a straight line basis over their useful lives from the date on which regulatory approval is obtained.
Payments under research and development arrangements relating to access to technology or to databases and payments made to purchase generics files are also capitalized, and amortized over the useful life of the intangible asset.
Subcontracting arrangements, payments for research and development services and continuous payments under research and development collaborations that are unrelated to the outcome of the research and development efforts, are expensed over the service term.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
B.4.2. Intangible assets not acquired in a business combination

Licenses other than those related to pharmaceutical products and research projects, in particular software licenses, are capitalized at acquisition cost, including any directly attributable cost of preparing the software for its intended use. Software licenses are amortized on a straight line basis over their useful lives for the Group (three to five years).

Internally generated costs incurred to develop or upgrade software are capitalized if the IAS 38 criteria for recognition as an intangible asset are satisfied, and amortized on a straight line basis over the useful life of the software from the date on which the software is ready for use.
B.4.3. Intangible assets acquired in a business combination
Intangible assets acquired in a business combination which relate to in-process research and development and are reliably measurable are identified separately ~~identified~~ from goodwill and capitalized inOther intangible assets in accordance with IFRS 3 (Business Combinations) and IAS 38 (Intangible Assets). The related deferred tax liability is also recognized.

In-process research and development acquired in a business combination is amortized on a straight line basis over its useful life from the date of receipt of regulatory approval.

Rights to products ~~sold~~marketed by the Group are amortized on a straight line basis over their useful lives, determined on the basis of cash flow forecasts that take account of, ~~(among~~among other ~~factors)~~factors, the period of legal protection of the related patents.
B.5. Property, plant and equipment

Property, plant and equipment is initially measured and recognized at acquisition cost, including any directly attributable cost of preparing the asset for its intended use, or (in the case of assets acquired in a business combination) at fair value as at the date of the combination. The component-based approach to accounting for property, plant and equipment is applied. Under this approach, each component of an item of property, plant and

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
equipment with a cost which is significant in relation to the total cost of the item and which has a different useful life from the other components must be depreciated separately.

After initial measurement, property, plant and equipment is carried at cost less accumulated depreciation and impairment, except for land which is carried at cost less impairment.

Subsequent costs are not recognized as assets, unless (i) it is probable that future economic benefits associated with these costs will flow to the Group, and (ii) the costs can be measured reliably.

Day-to-day maintenance costs of property, plant and equipment are expensed as incurred.

Borrowing costs attributable to the financing of items of property, plant and equipment, and incurred during the construction period of such items, are capitalized as part of the acquisition cost of the item.

Government grants relating to non-current assets are deducted from the acquisition cost of the asset to which they relate.

In accordance with IAS 17 (Leases), items of property, plant and equipment leased by ~~sanofi-aventis~~Sanofi as lessee under finance leases are recognized as an asset in the balance sheet, with the related lease obligation recognized as a liability. A lease qualifies as a finance lease if it transfers substantially all the risks and rewards of ownership of the asset to the Group. Assets held under finance leases are carried at the lower of the fair value of the leased asset or the present value of the minimum lease payments, and are depreciated over the shorter of the useful life of the asset or the term of the lease.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The depreciable amount of items of property, plant and equipment, net of any residual value, is depreciated on a straight line basis over the useful life of the asset. The useful life of an asset is usually equivalent to its economic life.

The useful lives of property, plant and equipment are as follows:
Buildings 15 to 40 years
Fixtures 10 to 20 years
Plant and equipment 5 to 15 years
Other ~~tangible assets~~ property, plant and equipment 3 to 15 years

Useful lives and residual values of property, plant and equipment are reviewed annually. The effect of any adjustment to useful lives or residual values is recognized prospectively as a change of accounting estimate.

Depreciation of property, plant and equipment is recognized as an expense in the income statement, in the relevant classification of expense by function.
B.6. Impairment of property, plant and equipment, intangible assets, and investments in associates and joint ventures
B.6.1. Impairment of property, plant and equipment and intangible assets

Assets that generate separate cash flows and assets included in cash-generating units (CGUs) are assessed for impairment in accordance with IAS 36 (Impairment of Assets), when events or changes in circumstances indicate that the asset or CGU may be impaired.

A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Under IAS 36, each CGU to which goodwill is allocated must (i) represent the lowest level within the entity at which the goodwill is monitored for internal management purposes, and (ii) not be larger than an operating segment determined in accordance with IFRS 8 (Operating Segments), before application of the IFRS 8 aggregation criteria.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Consequently, the CGUs used by ~~sanofi-aventis~~the Group to test goodwill for impairment correspond to the geographical sub-segments of each operating segment.

Quantitative and qualitative indications of impairment (primarily relating to the status of the research and development portfolio, pharmacovigilance, patent litigation, and the launch of competing products) are reviewed at each reporting date. If there is any internal or external indication of impairment, the Group estimates the recoverable amount of the asset or CGU.

Intangible assets not yet available for use (such as capitalized in-process research and development), and CGUs that include goodwill, are tested for impairment annually whether or not there is any indication of impairment, and more frequently if any event or circumstance indicates that they might be impaired. These assets are not amortized.

When there is an internal or external indication of impairment, the Group estimates the recoverable amount of the asset and recognizes an impairment loss ~~when~~if the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of the asset is the higher of its fair value less costs to sell or its value in use. To determine the value in use, the Group uses estimates of future cash flows generated by the asset or CGU, prepared using the same methods as those used in the initial measurement of the asset or CGU on the basis of medium-term plans.

In the case of goodwill, estimates of future cash flows are based on a five-year strategic plan plus an extrapolation of the cash flows beyond the five-year plan, plus a terminal value. In the case of other intangible assets, the period used is based on the economic life of the asset.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Estimated cash flows are discounted at long-term market interest rates that reflect the best estimate by ~~sanofi-aventis~~Sanofi of the time value of money, the risks specific to the asset or CGU, and economic conditions in the geographical regions in which the business activity associated with the asset or CGU is located.

Certain assets and liabilities that are not directly attributable to a specific CGU are allocated between CGUs on a basis that is reasonable, and consistent with the allocation of the corresponding goodwill.
Impairment losses on intangible assets are recognized underImpairment of intangible assets in the income statement.
B.6.2. Impairment of investments in associates and joint ventures
In accordance with IAS 28 (Investments in Associates), the Group applies the criteria specified in IAS 39 (Financial Instruments: Recognition and Measurement) to determine whether an investment in an associate or joint venture may be impaired (see Note B.8.2.). If an investment is impaired, the amount of the impairment loss is determined by applying IAS 36 (see Note B.6.1.) and recognized inShare of profit/loss of associates and joint ventures.
B.6.3. Reversals of impairment losses charged against property, plant and equipment, intangible assets, and investments in associates and joint ventures

At each reporting date, the Group assesses if events or changes in circumstances indicate that an impairment loss recognized in a prior period in respect of an asset (other than goodwill) or an investment in an associate or joint venture can be reversed. If this is the case, and the recoverable amount as determined based on the new estimates exceeds the carrying amount of the asset, the Group reverses the impairment loss only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset.
Reversals of impairment losses in respect of other intangible assets are recognized in the income statement ~~under~~line itemImpairment of intangible assets, while reversals of impairment losses in respect of investments in associates and joint ventures are recognized in the income statement ~~under~~line itemShare of profit/loss of associatesand joint ventures. Impairment losses taken against goodwill are never reversed, unless the goodwill is part of the carrying amount of an investment in an associate or joint venture.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
B.7. Assets held for sale or exchange

In accordance with IFRS 5 (Non-Current Assets Held for Sale and Discontinued Operations), non-current assets and groups of assets must be classified as held for sale in the balance sheet if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. Within the meaning of IFRS 5, the term ~~“sale”~~"sale" also includes exchanges for other assets.

Non-current assets or asset groups held for sale must be available for immediate sale in their present condition, subject only to terms that are usual and customary for sales of such assets, and a sale must be highly probable. Criteria used to determine whether a sale is highly probable include:
–
the appropriate level of management must be committed to a plan to sell;

–
an active program to locate a buyer and complete the plan must have been initiated;

–
the asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value;

–
completion of the sale should be foreseeable within the twelve months following the date of classification as held for sale or exchange; and

–
actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

– ~~the appropriate level of management must be committed to a plan to sell;~~
– ~~an active program to locate a buyer and complete the plan must have been initiated;~~
– ~~the asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value;~~
– ~~completion of the sale should be foreseeable within the twelve months following the date of classification as held for sale or exchange; and~~
– ~~actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Before the initial classification of the non-current asset (or asset group) as ~~“held~~"held for sale or ~~exchange”~~exchange", the carrying amounts of the asset (or of all the assets and liabilities in the asset group) must be measured in accordance with the applicable standards.

Subsequent to classification as ~~“held~~"held for sale or ~~exchange”~~exchange", the non-current asset (or asset group) is measured at the lower of carrying amount or fair value less costs to sell, with any write-down recognized by means of an impairment loss. Once a non-current asset has been classified as ~~“held~~"held for sale or ~~exchange”~~exchange", it is no longer depreciated or amortized.
In a disposal of an equity interest leading to loss of control, all the assets and liabilities of the entity involved are classified as assets or liabilities ~~“held~~"held for ~~sale”~~sale" in the balance sheet line itemsAssets held for sale or exchange orLiabilities related to assets held for sale or exchange, provided that the disposal satisfies the IFRS 5 classification criteria.

The profit or loss generated by a ~~held-for-sale~~held for sale asset group is reported on a separate line in the income statement for the current period and for the comparative periods presented, provided that the asset group:
– ~~represents a separate major line of business or geographical area of operations; or,~~
– ~~is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or,~~
– ~~is a subsidiary acquired exclusively with a view to resale.~~
–
represents a separate major line of business or geographical area of operations; or,

–
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or,

–
is a subsidiary acquired exclusively with a view to resale.
Events or circumstances beyond the ~~Group’s~~Group's control may extend the period to complete the sale or exchange beyond one year without precluding classification of the asset (or disposal group) inAssets held for sale or exchange provided that there is sufficient evidence that the Group remains committed to the planned sale or exchange.
        Finally, in the event of changes to a plan of sale that require an asset no longer to be classified as held for sale, IFRS 5 specifies the following treatment:
–
The assets and liabilities previously classified as held for sale are reclassified to the appropriate balance sheet line items, with no restatement of comparative periods.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
–
Each asset is measured at the lower of:

(a)
its carrying amount before the asset was classified as held for sale, adjusted for any depreciation, amortization or revaluation that would have been recognized if the asset had not been classified as held for sale; and

(b)
its recoverable amount at the date of the reclassification.

–
The backlog of depreciation, amortization and impairment not recognized while non-current assets were classified as held for sale must be reported in the same income statement line item as that used to report (i) any impairment losses arising on initial classification of the assets as held for sale and (ii) gains or losses on the sale of such assets. In the consolidated income statement, these impacts are reported in the line itemOther gains and losses, and litigation.

–
The net income of a business previously classified as discontinued or held for exchange and reported on a separate line in the income statement must be reclassified and included in net income from continuing operations, for all periods reported.

–
In addition, segment information disclosed in the notes to the financial statements in accordance with IFRS 8 (Operating Segments) and relating to the income statement and the statement of cash flows (acquisitions of non-current assets) must also be restated for all prior periods reported.
B.8. Financial instruments
B.8.1. Non-derivative financial assets

Under IFRS, and in accordance with IAS 39 and IAS 32 (Financial Instruments: Presentation), ~~sanofi-aventis~~Sanofi has adopted the following classification for non-derivative financial assets, based on the type of asset and on management intent at the date of initial recognition (except for assets already held at the transition date and reclassified at that date in accordance with IFRS 1). The designation and classification of such financial assets are subsequently reassessed at each reporting date.

Non-derivative financial assets are recognized on the date when ~~sanofi-aventis~~Sanofi becomes party to the contractual terms of the asset. On initial recognition, financial assets are measured at fair value, plus direct transaction costs in the case of financial assets not designated as fair value through profit or loss.

Classification, presentation and subsequent measurement of non-derivative financial assets are as follows:
–
Financial assets at fair value through profit or loss
These assets are classified in the balance sheet in the line itemsNon-current financial assets, Current financial assets andCash and cash equivalents.
Financial assets at fair value through profit or loss comprise assets held for trading (financial assets acquired principally for the purpose of reselling them in the near term, usually within less than 12 months), and financial instruments designated as fair value through profit and loss on initial recognition in accordance with the conditions for application of the fair value option.
These financial assets are carried at fair value, without any deduction for transaction costs that may be incurred on sale. Realized and unrealized gains and losses resulting from changes in the fair value of these assets are recognized in the income statement, inFinancial income orFinancial expenses.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Realized and unrealized foreign exchange gains and losses on financial assets in currencies other than the euro are recognized in the income statement inFinancialincome orFinancial expenses.
–
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are (i) designated by management as available-for-sale or (ii) not classified as ~~“financial~~"financial assets at fair value through profit or ~~loss”~~loss", ~~“held-to-maturity investments”~~"held-to-maturity investments" or ~~“loans~~"loans and ~~receivables”~~receivables". This category includes participating

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
interests in quoted or unquoted companies (other than investments in associates and joint ventures) that management intends to hold on a long-term basis. Available-for-sale financial assets are classified inNon-current financial assets.
Available-for-sale financial assets are measured at fair value, without any deduction for transaction costs that may be incurred on sale. Gains and losses arising from changes in the fair value of these assets, including unrealized foreign exchange gains and losses, are recognized directly in equity in the consolidated statement of comprehensive income in the period in which they occur, except for impairment losses and foreign exchange gains and losses on debt instruments. On derecognition of an available-for-sale financial asset, or on recognition of an impairment loss on such an asset, the cumulative gains and losses previously recognized in equity are recognized in the income statement for the period underFinancial incomeorFinancial expenses.
Interest income and dividends on equity instruments are recognized in the income statement underFinancial income when the Group is entitled to receive payment.
Available-for-sale financial assets in the form of participating interests in companies not quoted in an active market are measured at cost if their fair value cannot be measured reliably; an impairment loss is recognized when there is objective evidence that such an asset is impaired.
Realized foreign exchange gains and losses are recognized in the income statement underFinancial income orFinancial expenses.
–
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group has the positive intention and ability to hold to maturity.
These investments are measured at amortized cost using the effective interest method.
~~Sanofi-aventis~~Sanofi did not hold any such investments during the years ended December 31, ~~2010, 2009~~2012, 2011 or ~~2008.~~2010.
–
Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented in current assets, underOther current assets in the case of loans and underAccounts receivable in the case of receivables. Loans with a maturity of more than 12 months are presented in ~~“Long-term~~"Long-term loans and ~~advances”~~advances" underNon-current financial assets. Loans and receivables are measured at amortized cost using the effective interest method.

Realized and unrealized foreign exchange gains and losses are recognized in the income statement underFinancialincome orFinancialexpenses.

B.8.2. Impairment of non-derivative financial assets

Indicators of impairment are reviewed for all non-derivative financial assets at each reporting date. Such indicators include default in contractual payments, significant financial difficulties of the issuer or debtor, probability of bankruptcy, or prolonged or significant decline in quoted market price. An impairment loss is recognized in the income statement ~~when~~if there is objective evidence ~~that an~~of impairment resulting from one or more events after the initial recognition of the asset ~~is impaired.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Year ended December 31, 2010~~

(a "loss event") and this loss event has a reliably measurable impact on the estimated future cash flows of the financial asset (or group of financial assets).

The impairment loss on loans and receivables, which are measured at amortized cost, is the difference between the carrying amount of the asset and the present value of estimated future cash flows discounted at the financial ~~asset’s~~asset's original effective interest rate.

When an impairment loss is identified on an available-for-sale financial asset, the cumulative losses previously recognized directly in equity are recorded in the income statement. The loss recognized in the income

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
statement is the difference between the acquisition cost (net of principal ~~repayment~~repayments and amortization) and the fair value at the time of impairment, less any impairment loss previously recognized in the income statement.

The impairment loss on investments in companies ~~that are~~ not quoted in an active market and ~~are~~ measured at cost is the difference between the carrying amount of the investment and the present value of its estimated future cash flows, discounted at the current market interest rate for similar financial assets.
Impairment losses in respect of loans are recognized underFinancial expenses in the income statement.
Impairment losses in respect of trade receivables are recognized underSelling and general expenses in the income statement.

Impairment losses on investments in companies that are not quoted in an active market and are measured at cost, and on equity instruments classified as available-for-sale financial assets, cannot be reversed through the income statement.
B.8.3. Derivative instruments
Derivative instruments that do not qualify for hedge accounting are initially and subsequently measured at fair value, with changes in fair value recognized in the income statement inOther operating income or inFinancial income orFinancial expenses depending on the nature of the underlying economic ~~underlying~~item which they are intended to hedge.

Derivative instruments that qualify for hedge accounting are measured in accordance with the hedge accounting requirements of IAS 39 (see Note B.8.4.).
B.8.4. Hedging

Hedging involves the use of derivative financial instruments. Changes in the fair value of these instruments are intended to offset the exposure of the hedged items to changes in fair value.

As part of its overall interest rate risk and foreign exchange risk management policy, the Group enters into various transactions involving derivative instruments. Derivative instruments used in connection with the ~~Group’s~~Group's hedging policy may include forward exchange contracts, currency options, interest rate swaps and interest rate options.

Derivative financial instruments qualify as hedging instruments for hedge accounting purposes when (a) at the inception of the hedge there is formal designation and documentation of the hedging relationship and of the risk management strategy and objective; (b) the hedge is expected by management to be highly effective in offsetting the risk; (c) the forecast transaction being hedged is highly probable and presents an exposure to variations in cash flows that could ultimately affect profit or loss; (d) the effectiveness of the hedge can be reliably measured; and (e) the hedge is assessed on an ongoing basis and determined actually to have been highly effective throughout the reporting periods for which the hedge was designated.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
These criteria are applied when the Group uses derivative instruments designated as a fair value hedge, a cash flow hedge or a hedge of a net investment in a foreign operation.
–
Fair value hedge
A fair value hedge is a hedge of the exposure to changes in fair value of a recognized asset or liability or unrecognized firm commitment that could affect profit or loss.
Changes in fair value of the hedging instrument and changes in fair value of the hedged item attributable to the hedged risk are recognized in the income statement, underOther operating incomefor hedges of operating activities and underFinancial income orFinancial expenses for hedges of investing or financing activities.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
–
Cash flow hedge
A cash flow hedge is a hedge of the exposure to variability in cash flows attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecast transaction, ~~that~~which could affect profit or loss.
Changes in fair value of the hedging instrument attributable to the effective portion of the hedge are recognized directly in equity in the consolidated statement of comprehensive income. Changes in fair value attributable to the ineffective portion of the hedge are recognized in the income statement underOther operating incomefor hedges of operating activities, and underFinancial income orFinancial expenses for hedges of investing or financing activities.
Cumulative changes in fair value of the hedging instrument previously recognized in equity are ~~transferred~~reclassified to the income statement when the hedged transaction affects profit or loss. These transferred gains and losses are recorded underOther operating incomefor hedges of operating activities andFinancial income orFinancial expenses for hedges of investing or financing activities.
When a forecast transaction results in the recognition of a non-financial asset or liability, cumulative changes in the fair value of the hedging instrument previously recognized in equity are included in the initial measurement of the asset or liability.
When the hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss previously recognized in equity remains separately recognized in equity until the forecast transaction occurs. However, if the Group no longer expects the forecast transaction to occur, the cumulative gain or loss previously recognized in equity is recognized immediately in the income statement.
–
Hedge of a net investment in a foreign operation

In the case of a hedge of a net investment in a foreign operation, changes in the fair value of the hedging instrument attributable to the effective portion of the hedge are recognized directly in equity in the consolidated statement of comprehensive income. Changes in fair value attributable to the ineffective portion of the hedge are recognized in the income statement underFinancial incomeorFinancial expenses. When the investment in the foreign operation is sold, the changes in the fair value of the hedging instrument previously recognized in equity are ~~transferred~~reclassified to the income statement underFinancial incomeorFinancial expenses.

–: Discontinuation of hedge accounting

Hedge accounting is discontinued when (a) the hedging instrument expires or is sold, terminated or exercised, or (b) the hedge no longer meets the criteria for hedge accounting, or (c) the Group revokes the hedge designation, or (d) management no longer expects the forecast transaction to occur.

B.8.5. Non-derivative financial liabilities

–: Borrowings and debt

Bank borrowings and debt instruments are initially measured at fair value of the consideration received, net of directly attributable transaction costs.

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

~~Year ended December 31, 2010~~

Subsequently, they are measured at amortized cost using the effective interest method. All costs related to the issuance of borrowings or debt instruments, and all differences between the issue proceeds net of transaction costs and the value on redemption, are recognized underFinancial expensesin the income statement over the term of the debt using the effective interest method.

–: Liabilities related to business combinations and to non-controlling interests

Liabilities related to business combinations and to non-controlling interests are split into a current portion and a non-current portion. These line items are used to recognize contingent consideration payable in connection with business combinations (see Note B.3.1. for a description of the relevant accounting policy), and the fair value of put options granted to non-controlling interests.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair value adjustments to put options granted to non-controlling interests are recognized with a matching entry in equity.
–
Other non-derivative financial liabilities
Other non-derivative financial liabilities include trade accounts payable, which are measured at fair value (which in most cases equates to face value) on initial recognition, and subsequently at amortized cost.
B.8.6. Fair value of financial instruments

Under IFRS 7 (Financial Instruments: Disclosures), fair value measurements must be classified using a fair value hierarchy with the following levels:
– ~~Level 1: quoted prices in active markets for identical assets or liabilities (without modification or repackaging);~~
– ~~Level 2: quoted prices in active markets for similar assets and liabilities, and valuation techniques in which all important inputs are derived from observable market data; and~~
– ~~Level 3: valuation techniques in which not all important inputs are derived from observable market data.~~
–
Level 1: quoted prices in active markets for identical assets or liabilities (without modification or repackaging);

–
Level 2: quoted prices in active markets for similar assets and liabilities, and valuation techniques in which all important inputs are derived from observable market data; and

–
Level 3: valuation techniques in which not all important inputs are derived from observable market data.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The table below sets forth the principles used to measure the fair value of the principal financial assets and liabilities recognized by ~~sanofi-aventis~~the Group in its consolidated balance sheet:
~~Note~~
~~Type of financial~~
~~instrument~~
~~Measurement~~
~~principle applied~~
~~in the consolidated~~
~~balance sheet~~ ~~Level in the~~
~~IFRS 7 fair value~~
~~hierarchy as~~
~~disclosed in the~~
~~notes to the~~
~~consolidated~~
~~financial~~
~~statements~~
Method used to determine fair value as
~~disclosed in the notes to the consolidated financial statements~~

Market data

Level in
IFRS 7
fair value
hierarchy

Note
Type of financial
instrument
Measurement
principle
Valuation model
Exchange
rate
Interest rate
Volatility
D.7. Available-for-sale financial assets (quoted equity securities) Fair value 1 Quoted market price N/A
D.7. Available-for-sale financial assets (unquoted debt securities) Fair value 2 Present value of future cash flows N/A Mid swap + z-spread for
bonds of comparable risk
and maturity N/A
D.7. Long-term loans and advances Amortized cost N/A The amortized cost of long-term loans and advances at the balance sheet date is not materially different from their fair value.
D.7. ~~Assets~~Financial assets recognized under the fair value option⁽¹⁾ Fair value 1 Market value ~~(net~~
(net asset value) N/A
D.20. Forward currency contracts Fair value 2 Present value of future cash flows ECB
Fixing < 1 year: Mid Money Market
> 1 year: Mid Zero Coupon N/A

D.20.

Currency options

Fair value

2

Options with no knock-out feature:
Garman & Kohlhagen

Knock-out options: Merton, Reiner & Rubinstein

ECB
Fixing

< 1 year: Mid Money Market
> 1 year: Mid Zero Coupon
~~N/A~~
~~D.20.~~
~~Currency options~~ ~~Fair value~~ 2
~~Options with no knock-out feature:~~
~~Garman & Kohlhagen~~
~~Knock-out options: Merton, Reiner & Rubinstein~~
~~ECB~~
~~Fixing~~ ~~< 1 year: Mid Money Market~~
~~> 1 year: Mid Zero Coupon~~
Mid in-the-
money
D.20. Interest rate swaps Fair value 2 Present value of future cash flows N/A < 1 year: Mid Money Market
and LIFFE interest rate futures
~~futures~~
> 1 year: Mid Zero Coupon
N/A
D.20. Cross-currency swaps Fair value 2 Present value of future cash flows ECB
Fixing < 1 year: Mid Money Market
and LIFFE interest rate futures
~~futures~~
> 1 year: Mid Zero Coupon
N/A
D.13. Investments in collective investment schemes Fair value 1 Market value ~~(net~~
(net asset value) N/A
D.13. Negotiable debt instruments, commercial paper, sight deposits and term deposits Amortized cost N/A Because these instruments have a maturity of less than 3 months, amortized cost is regarded as an acceptable approximation of fair value as disclosed in the notes to the consolidated financial statements.

D.17.

Financial liabilities

Amortized cost⁽²⁾

N/A

For financial liabilities with a maturity of less than 3 months, amortized cost is regarded as an acceptable approximation of fair value as disclosed in the notes to the consolidated financial statements.

For financial liabilities with a maturity of more than 3 months, fair value as disclosed in the notes to the consolidated financial statements is determined either by reference to quoted market prices at the balance sheet date (quoted instruments) or by discounting the future cash flows based on observable market data at the balance sheet date (unquoted instruments).
D.18. Liabilities related to business combinations and to non-controlling interests (CVRs) Fair value 1 Quoted market price N/A
D.18. Liabilities related to business combinations and to non-controlling interests (except CVRs) Fair value⁽³⁾ 3 Contingent consideration payable in a business combination is a financial liability under IAS 32. The fair value of such liabilities is determined by adjusting the contingent consideration at the balance sheet date using the method described in Note D.18.
⁽¹⁾
~~These assets are held to fund a deferred compensation plan offered to certain employees, included in the obligations described in Note D.19.1.~~
⁽²⁾
In the case of financial liabilities designated as hedged items in a fair value hedging relationship, the carrying amount in the consolidated balance sheet includes changes in fair value relating to the hedged risk(s).
⁽³⁾
~~In the case of business combinations completed prior to the application of the revised IFRS 3, contingent consideration is recognized when payment becomes probable (see Note B.3.1.).~~
⁽¹⁾
These assets are held to fund a deferred compensation plan offered to certain employees, included in the obligations described in Note D.19.1.
⁽²⁾
In the case of financial liabilities designated as hedged items in a fair value hedging relationship, the carrying amount in the consolidated balance sheet includes changes in fair value relating to the hedged risk(s).
⁽³⁾
In the case of business combinations completed prior to application of the revised IFRS 3, contingent consideration is recognized when payment becomes probable (see Note B.3.1.).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The other financial assets and liabilities included in the ~~Group~~consolidated balance sheet ~~are the following:~~are:
•
Non-derivative current financial assets and liabilities: due to their short-term maturity, the fair value of these instruments approximates their carrying amount (i.e., historical cost less any credit risk allowance).

•
Investments in equity instruments not quoted in an active ~~market: in accordance with IFRS 7, the fair value of these instruments is not disclosed because their~~market whose fair value cannot be measured ~~reliably.~~
reliably, which are measured at amortized cost in accordance with IAS 39.
B.8.7. Derecognition of financial instruments

~~Sanofi-aventis~~Sanofi derecognizes a financial ~~assets~~asset when the contractual rights to cash flows from ~~these assets~~the asset have ended or have been transferred and when the Group has transferred substantially all risks and rewards of ownership of ~~these assets.~~the asset. If the Group has neither transferred nor retained substantially all the risks and rewards of ownership of ~~these assets, they are~~a financial asset, it is derecognized if the Group does not retain the control of ~~these assets.~~the asset.

~~Financial liabilities are~~A financial liability is derecognized when the ~~Group’s~~Group's contractual obligations in respect of ~~such liabilities are~~the liability is discharged, or cancelled or ~~expired.~~
extinguished.
B.8.8. Risks relating to financial instruments

Market risks in respect of non-current financial assets, cash equivalents, derivative instruments and debt are described in the risk factors presented in Item 3.D. and Item 11.

Credit risk is the risk that customers may fail to pay their debts. This risk also arises as a result of the concentration of the ~~Group’s~~Group's sales with its largest customers, in particular certain wholesalers in the United States. Customer credit risk is described in the risk factors presented in Item 3.D.
B.9. Inventories

Inventories are measured at the lower of cost or net realizable value. Cost is calculated using the weighted average cost method or the first-in, first-out method, depending on the nature of the inventory.

The cost of finished goods inventories includes costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
B.10. Cash and cash equivalents

Cash and cash equivalents as shown in the consolidated balance sheet and statement of cash flows comprise cash, plus liquid short-term investments that are (i) readily convertible into cash, and (ii) subject to an insignificant risk of changes in value in the event of movements in interest rates.
B.11. Treasury shares

In accordance with IAS 32, ~~sanofi-aventis~~Sanofi treasury shares are deducted from equity, irrespective of the purpose for which they are held. No gain or loss is recognized in the income statement on the purchase, sale, impairment or cancellation of treasury shares.
B.12. Provisions for risks

In accordance with IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), ~~sanofi-aventis~~Sanofi records a provision where it has a present obligation, whether legal or constructive, as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the outflow of resources.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
If the obligation is expected to be settled more than twelve months after the balance sheet date, or has no definite settlement date, the provision is recorded underProvisions and other non-current liabilities.

Provisions relating to the insurance programs in which the ~~Group’s~~Group's captive insurance company participates are based on risk exposure estimates calculated by management, with assistance from independent actuaries, using IBNR (Incurred But Not Reported) techniques. These techniques use past claims experience, within the Group and in the market, to estimate future trends in the cost of claims.

Contingent liabilities are not recognized, but are disclosed in the notes to the financial statements unless the possibility of an outflow of economic resources is remote.

Provisions are estimated on the basis of events and circumstances related to present obligations at the balance sheet date, of past experience, and to the best of ~~management’s~~management's knowledge at the date of preparation of the financial statements.

Reimbursements offsetting the probable outflow of resources are recognized as assets only if it is virtually certain that they will be received. Contingent assets are not recognized.

Restructuring provisions are recognized if the Group has a detailed, formal restructuring plan at the balance sheet date and has announced its intention to implement this plan to those affected by it.

No provisions are recorded for future operating losses.

~~Sanofi-aventis~~Sanofi records non-current provisions for certain obligations such as legal environmental obligations and litigation where an outflow of resources is probable and the amount of the outflow can be reliably estimated. Where the effect of the time value of money is material, these provisions are measured at the present value of the expenditures expected to be required to settle the obligation, calculated using a discount rate that reflects an estimate of the time value of money and the risks specific to the obligation.
Increases in provisions to reflect the effects of the passage of time are recognized inFinancial expenses.
B.13. Emission rights
Under international agreements, the European Union has committed to reducing greenhouse gas emissions and instituted an emissions allowance trading scheme. ~~Approximately ten sanofi-aventis~~Seven Sanofi sites in Europe are directly covered by the scheme. ~~Sanofi-aventis~~Sanofi accounts for emission allowances as follows: the annual allowances allocated by government are recognized as intangible assets measured at fair value at the date of initial recognition, with a matching liability recognized to reflect the government grant effectively arising from the fact that allowances are issued free of charge. As and when allowances are consumed, they are transferred to ~~“Deliverable allowances”~~"Deliverable allowances" in order to recognize the liability to government in respect of actual CO₂ emissions. If the allocated allowances are insufficient to cover actual emissions, an expense is recognized in order to reflect the additional allowances deliverable; this expense is measured at the market value of the allowances.
B.14. Revenue recognition
Revenue arising from the sale of goods is presented in the income statement underNet sales. Net sales comprise revenue from sales of pharmaceutical products, vaccines, and active ingredients, net of sales returns, of customer incentives and discounts, and of certain sales-based payments paid or payable to the healthcare authorities.

Revenue is recognized when all of the following conditions have been met: the risks and rewards of ownership have been transferred to the customer; the Group no longer has effective control over the goods sold;
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
the amount of revenue and costs associated with the transaction can be measured reliably; and it is probable that the economic benefits associated with the transaction will flow to the Group, in accordance with IAS 18 (Revenue). In particular,

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
the contracts between ~~sanofi pasteur~~Sanofi Pasteur and government agencies specify terms for the supply and acceptance of batches of vaccine; revenue is recognized when these conditions are met.

The Group offers various types of price reductions on its products. In particular, products sold in the United States are covered by various governmental programs (such as Medicare and Medicaid) under which products are sold at a discount. Rebates are granted to healthcare authorities, and under contractual arrangements with certain customers. Some wholesalers are entitled to chargeback incentives based on the selling price to the end customer, under specific contractual arrangements. Cash discounts may also be granted for prompt payment.

Returns, discounts, incentives and rebates, as described above, are recognized in the period in which the underlying sales are recognized as a reduction of sales revenue.

These amounts are calculated as follows:
•
Provisions for chargeback incentives are estimated on the basis of the relevant ~~subsidiary’s~~subsidiary's standard sales terms and conditions, and in certain cases on the basis of specific contractual arrangements with the customer. They represent ~~management’s~~management's best estimate of the ultimate amount of chargeback incentives that will eventually be claimed by the customer.

•
Provisions for rebates based on attainment of sales targets are estimated and accrued as each of the underlying sales transactions is recognized.

•
Provisions for price reductions under Government and State programs, largely in the United States, are estimated on the basis of the specific terms of the relevant regulations and/or agreements, and accrued as each of the underlying sales transactions is recognized.

•
Provisions for sales returns are calculated on the basis of ~~management’s~~management's best estimate of the amount of product that will ultimately be returned by customers. In countries where product returns are possible, ~~sanofi-aventis~~Sanofi has implemented a returns policy that allows the customer to return products within a certain period either side of the expiry date (usually 6 months before and 12 months after the expiry date). The provision is estimated on the basis of past experience of sales returns.

The Group also takes account of factors such as levels of inventory in its various distribution channels, product expiry dates, information about potential discontinuation of products, the entry of competing generics into the market, and the launch of over-the-counter medicines.

In each case, the provisions are subject to continuous review and adjustment as appropriate based on the most recent information available to management.

The Group believes that it has the ability to measure each of the above provisions reliably, using the following factors in developing its estimates:
•
the nature and patient profile of the underlying product;

•
the applicable regulations and/or the specific terms and conditions of contracts with governmental authorities, wholesalers and other customers;

•
historical data relating to similar contracts, in the case of qualitative and quantitative rebates and chargeback incentives;

•
past experience and sales growth trends for the same or similar products;

•
actual inventory levels in distribution channels, monitored by the Group using internal sales data and externally provided data;

•
the shelf life of the ~~Group’s~~Group's products; and

•
market trends including competition, pricing and demand.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Non-product revenues, mainly comprising royalty income from license arrangements that constitute ongoing operations of the Group (see Note C.), are presented inOther revenues.
B.15. Cost of sales

Cost of sales consists primarily of the industrial cost of goods sold, payments made under licensing agreements, and distribution costs. The industrial cost of goods sold includes the cost of materials, depreciation of property, plant and equipment and software, personnel costs, and other expenses attributable to production.
B.16. Research and development expenses

Internally generated research costs are expensed as incurred.
Internally generated pharmaceutical development costs are also expensed as incurred; they are not capitalized, because the criteria for capitalization are considered not to have been met until marketing approval for the related product has been obtained from the regulatory authorities. Recharges to or contributions from alliance partners are recorded as a reduction inResearch and development expenses.

Note B.4.1. ~~“Research~~"Research and development not acquired in a business ~~combination”~~combination" and Note B.4.3. ~~“Intangible~~"Intangible assets acquired in a business ~~combination”~~combination" describe the principles applied to the recognition of separately acquired research and development.
B.17. Other operating income and expenses
~~B.17.~~B.17.1. Other operating income

Other operating incomeincludes the share of profits that ~~sanofi-aventis~~Sanofi is entitled to receive from alliance partners in respect of product marketing agreements. It also includes revenues generated under certain complex agreements, which may include partnership and co-promotion agreements.

Upfront payments received are deferred for as long as a service obligation remains. Milestone payments are assessed on a case by case basis, and recognized in the income statement on delivery of the products and/or provision of the services in question. Revenue generated in connection with these services is recognized on the basis of delivery of the goods or provision of the services to the other contracting party.

This line also includes realized and unrealized foreign exchange gains and losses on operating activities (see Note B.8.4.), and operating gains on disposals not regarded as major disposals (see Note B.20.).
~~B.18.~~B.17.2. Other operating expenses

Other operating expenses mainly comprise the share of profits that alliance partners are entitled to receive from ~~sanofi-aventis~~Sanofi under product marketing agreements.
~~B.19.~~B.18. Amortization and impairment of intangible assets
~~B.19.1.~~B.18.1. Amortization of intangible assets

The expenses recorded in this line item mainly comprise amortization of product rights (see Note D.4.), which are presented as a separate item because the benefit of these rights to the ~~Group’s~~Group's commercial, industrial and development functions cannot be separately identified.

Amortization of software is recognized as an expense in the income statement, in the relevant line items of expense by function.

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~~B.19.2.~~
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
B.18.2. Impairment of intangible assets

This line item records impairment losses (other than those associated with restructuring) recognized against intangible assets (including goodwill), and any reversals of such impairment losses.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~B.19. Fair value remeasurement of contingent consideration liabilities
~~Year ended December 31, 2010~~        Changes in the fair value of contingent consideration that was (i) already carried in the books of an acquired entity or (ii) granted in connection with a business combination and initially recognized as a liability are reported in profit or loss in accordance with the principles described in Note B.3.1. Such adjustments are reported separately in the income statement, in the line item
Fair value remeasurement of contingent consideration liabilities. This line item also includes the effect of the unwinding of discount, and of exchange rate movements where the liability is expressed in a currency other than the functional currency of the reporting entity.
B.20. Restructuring costs and ~~Gains~~Other gains and losses, ~~on disposals,~~ and litigation
B.20.1. Restructuring costs

Restructuring costsinclude early retirement benefits, compensation for early termination of contracts, and rationalization costs relating to restructured sites. Asset impairment losses directly attributable to restructuring are also recorded on this line. Restructuring costs included on this line relate only to unusual and major restructuring plans.
B.20.2. ~~Gains~~Other gains and losses, ~~on disposals,~~ and litigation

This line item ~~comprises~~ includes the impact of material transactions of an unusual nature or amount which the Group believes it necessary to report separately in the income statement in order to improve the relevance of the financial statements.
        The line itemOther gains and losses, and litigation includes the following:
•
gains and losses on major disposals of property, plant and equipment, ~~and~~of intangible assets, of assets (or groups of assets and liabilities) held for sale, or of a business within the meaning of the revised IFRS 3, other than those considered to be restructuring costs;

•
impairment losses and reversals of impairment losses on assets (or groups of assets and liabilities) held for sale, other than those considered to be restructuring costs;

•
expenses related to the reclassification of non-current assets previously accounted for as held for sale, where the amounts involved relate to previously-reported periods;

•
gains on bargain purchases; and

•
costs and provisions ~~related~~relating to major litigation.
B.21. Financial ~~expenses/~~expenses and income
B.21.1. Financial expenses

Financial expensesmainly comprise interest charges on debt financing, negative changes in the fair value of financial instruments (where changes in fair value are taken to the income statement), realized and unrealized foreign exchange losses on financing and investing activities, and impairment losses on financial instruments. They also include any reversals of impairment losses on financial instruments.

Financial expenses also include the expenses arising from the unwinding of discount on non-current provisions, except provisions for retirement benefits and other long-term employee benefits. This line does not include cash discounts, which are deducted from net sales.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
B.21.2. Financial income

Financial income includes interest and dividend income, positive changes in the fair value of financial instruments (where changes in fair value are taken to the income statement), realized and unrealized foreign exchange gains on financing and investing activities, and gains or losses on disposals of financial assets.
B.22. Income tax expense

Income tax expense includes all current and deferred taxes of consolidated companies.

~~Sanofi-aventis~~The Sanofi Group accounts for deferred taxes in accordance with IAS 12 (Income Taxes), using the methods described below.

Deferred tax assets and liabilities are recognized on taxable and deductible temporary differences, and on tax loss carry-forwards. Temporary differences are differences between the carrying amount of an asset or liability in the balance sheet and its tax base.
Reforms to French business taxes were enacted on December 31, 2009 and apply as from January 1, 2010. The new tax, the CET (Contribution Economique Territoriale), has two components: the CFE (Cotisation ~~Fonciere~~Foncière des Entreprises) and the CVAE (Cotisation sur la Valeur Ajoutée des Entreprises). The second component is determined by applying a rate to the amount of value added generated by the business during the year.

Given that part of the CVAE component is calculated as the amount by which certain revenues exceed certain expenses, and given that this tax will be borne primarily by companies that own intellectual property rights on income derived from those rights (royalties, and margin on sales to third parties and to other Group companies), ~~sanofi-aventis~~the Group regards the CVAE component as meeting the definition of income taxes specified in IAS 12, paragraph 2 (“("taxes which are based on taxable ~~profits”~~profits").
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Deferred tax assets and liabilities are calculated using the tax rate expected to apply in the period when a temporary difference is expected to reverse, based on tax rates enacted or substantively enacted at the balance sheet date.

~~Unused~~Deferred tax assets are recognized in respect of deductible temporary differences, tax losses available for carry-forward and unused tax credits ~~are recognized as deferred tax assets~~ to the extent that itfuture recovery is ~~probable that future taxable profits will be available against which they can be utilized.~~regarded as probable. The recoverability of deferred tax assets is assessed on a case-by-case basis, taking account of the profit forecasts contained in the Group's long-term business plan.

~~Sanofi-aventis~~The Sanofi Group recognizes a deferred tax liability for temporary differences relating to interests in subsidiaries, associates and joint ventures except when the Group is able to control the timing of the reversal of the temporary differences. This applies in particular when the Group is able to control dividend policy and it is probable that the temporary differences will not reverse in the foreseeable future.

No deferred tax is recognized on eliminations of intragroup transfers of interests in subsidiaries, associates or joint ventures.

For consolidation purposes, each tax entity calculates its own net deferred tax position. All net deferred tax asset and liability positions are then aggregated and shown as separate line items on the assets and liabilities sides of the consolidated balance sheet respectively. Deferred tax assets and liabilities can be offset only if (i) the Group has a legally enforceable right to set off current tax assets and current tax liabilities, and (ii) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.

Deferred taxes are not discounted, except implicitly in the case of deferred taxes on assets and liabilities which are themselves discounted.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Withholding taxes on intragroup royalties and dividends, and on royalties and dividends collected from third parties, are accounted for as current income taxes.

In accounting for business combinations, the Sanofi Group complies with the revised IFRS 3 as regards the recognition of deferred tax assets after the initial accounting period. This means that the Group recognizes in profit or loss for the period any deferred tax assets recognized by the acquiree after the end of this period on temporary differences or tax loss carry-forwards existing at the acquisition date. ~~Under~~
        The positions adopted by the ~~pre-revision IFRS 3, applicable prior~~Group in tax matters are based on its interpretation of tax laws and regulations. Some of these positions may be subject to ~~January 1, 2010, such items were recognized as a reduction in~~uncertainty. The Group assesses the amount of ~~goodwill.~~
the tax liability to be recognized on the basis of the following assumptions: that its position will be examined by one or more tax authorities on the basis of all relevant information; that a technical assessment is carried out with reference to legislation, case law, regulations, and established practice; and that each position is assessed individually, with no offset or aggregation between positions. The line itemIncome tax expense includes the effect of tax disputes, and any penalties and late payment interest arising from such disputes.
B.23. Employee benefit obligations

~~Sanofi-aventis~~The Sanofi Group offers retirement benefits to employees and retirees of the Group. These benefits are accounted for in accordance with IAS 19 (Employee Benefits).

These benefits are in the form of either defined-contribution plans or defined-benefit plans.

In the case of defined-contribution plans, the contributions paid by ~~sanofi-aventis~~Sanofi are expensed in the period in which they occur, and no actuarial estimate is performed.

In the case of defined-benefit plans, ~~sanofi-aventis~~Sanofi recognizes its obligations to employees as a liability, based on an actuarial estimate of the rights vested and/or currently vesting in employees and retirees using the projected unit credit method. The amount of the liability is recognized net of the fair value of plan assets.

These estimates are performed at least once a year, and rely on demographic and financial assumptions ~~about~~such as life expectancy, employee turnover, and salary increases. The estimated obligation is discounted.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
In the case of multi-employer defined-benefit plans where plan assets cannot be allocated to each participating employer with sufficient reliability, the plan is accounted for as a defined-contribution plan, in accordance with paragraph 30 of IAS 19.

Obligations in respect of other post-employment benefits (healthcare, life insurance) offered by Group companies to employees are also recognized as a liability based on an actuarial estimate of the rights vested or currently vesting in employees and retirees at the balance sheet date.

Actuarial gains and losses relating to defined-benefit plans (pensions and other post-employment benefits), arising from the effects of changes in actuarial assumptions and experience adjustments, are recognized in equity net of deferred taxes via the consolidated statement of comprehensive income, under the option allowed by ~~the amendment to~~ IAS 19.
        All unrecognized actuarial gains and losses at the transition date, ~~(January~~January 1, ~~2004)~~2004, were recognized inEquity attributable to equity holders of ~~sanofi-aventis~~Sanofi at that date in accordance with the optional treatment allowed in IFRS 1.

Past service cost is recognized as an expense on a straight-line basis over the average period until the benefits become vested. If benefits are already vested on the introduction of, or changes to, a defined-benefit plan, past service cost is recognized immediately as an expense.

Actuarial gains and losses and past service cost relating to other long-term employee benefits are recognized immediately in the income statement.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
B.24. Share-based payment
B.24.1. Stock option plans

~~Sanofi-aventis~~Sanofi has granted a number of equity-settled, share-based payment plans (stock option plans) to some of its employees.

In accordance with IFRS 2 (Share-Based Payment), services received from employees as consideration for stock options are recognized as an expense in the income statement, with the matching entry recognized in equity. The expense corresponds to the fair value of the stock option plans, and is charged to income on a straight-line basis over the four-year vesting period of the plan.

The fair value of stock option plans is measured at the date of grant using the Black-Scholes valuation model, taking into account the expected life of the options. The expense recognized in this evaluation takes into account the expected cancellation rate of the options. The expense is adjusted over the vesting period to reflect ~~the~~ actual cancellation rates resulting from the departure of the holders of the options.
B.24.2. Employee share ownership plans

The ~~sanofi-aventis~~Sanofi Group may offer its employees the opportunity to subscribe to reserved share issues at a discount to the reference market price. Shares allotted to employees under these plans fall within the scope of IFRS 2. The discount is measured at the subscription date and recognized as an expense, with no reduction for any lock-up period.
B.24.3. Restricted share plans

~~Sanofi-aventis~~Sanofi may award restricted share plans to certain of its employees. The terms of these plans may make the award contingent on performance criteria for some grantees.

In accordance with IFRS 2, an expense equivalent to the fair value of such plans is recognized on a straight line basis over the vesting period of the plan, with the matching entry credited to equity. Depending on the country, the vesting period of such plans is ~~either~~between two orand four years. Plans with a two-year or three-year vesting period are subject to a two-year lock-up period.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The fair value of stock option plans is based on the fair value of the equity instruments granted, representing the fair value of the services received during the vesting period. The fair value of an equity instrument granted under a plan is the market price of the share at the grant date, adjusted for expected dividends during the vesting period.
B.25. Earnings per share

Basic earnings per share is calculated using the weighted average number of shares outstanding during the reporting period, adjusted on a time-weighted basis from the acquisition date to reflect the number of ~~sanofi-aventis~~Sanofi shares held by the Group. Diluted earnings per share is calculated on the basis of the weighted average number of ordinary shares, computed using the treasury stock method.

This method assumes that (a) all outstanding dilutive options and warrants are exercised, and (b) the Group acquires its own shares at the quoted market price for an amount equivalent to the cash received as consideration for the exercise of the options or warrants, plus the expense arising on unamortized stock options.

~~In the event~~Table of ~~a stock split or restricted share issue, earnings per share for prior periods is adjusted accordingly.~~Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
B.26. Segment information

In accordance with IFRS 8 (Operating Segments), the segment information reported by ~~sanofi-aventis~~Sanofi is prepared on the basis of internal management data provided to the Chief Executive Officer, who is the ~~Group’s~~Group's chief operating decision maker. The performance of these segments is monitored individually using internal reports and common indicators.

~~Sanofi-aventis reports information for two~~The segments reported by the Group correspond to its operating segments, with no aggregation. The Group consists of three operating segments: Pharmaceuticals, ~~and~~ Human Vaccines (Vaccines). and Animal Health. All other activities are combined in a separate segment, Other. These segments reflect the ~~Group’s~~Group's internal organizational structure, and are used internally for performance measurement and resource allocation.

Information on operating segments is provided in Note D.34. ~~“Split~~"Split of net ~~sales”~~sales" and Note D.35. ~~“Segment information”~~"Segment information".
B.27. Management of capital

In order to maintain or adjust the capital structure, the Group can adjust the amount of dividends paid to shareholders, or repurchase its own shares, or issue new shares, or issue securities giving access to its capital.

The following objectives are defined under the terms of the ~~Group’s~~Group's share repurchase programs:
•
the implementation of any stock option plan giving entitlement to purchase shares in the Sanofi parent company;

•
the allotment or sale of shares to employees under statutory profit-sharing schemes and employee savings plans;

•
the awarding of restricted shares;

•
the cancellation of some or all of the repurchased shares;

•
market-making in the secondary market in the shares by an investment services provider under a liquidity contract in compliance with the ethical code recognized by theAutorité des marchés financiers;

•
the delivery of shares on the exercise of rights attached to securities giving access to the capital by redemption, conversion, exchange, presentation of a warrant or any other means;

•
the delivery of shares (in exchange, as payment, or otherwise) in connection with mergers and acquisitions;

•
the execution by an investment services provider of purchases, sales or transfers by any means, in particular via off-market trading;

•
or any other purpose that is or may in the future be authorized under the applicable laws and regulations.

– ~~the implementation of any stock option plan giving entitlement to purchase shares in the sanofi-aventis parent company;~~
– ~~the allotment or sale of shares to employees under statutory profit-sharing schemes and employee savings plans;~~
– ~~the award of restricted shares;~~
– ~~the cancellation of some or all of the repurchased shares;~~
– ~~market-making in the secondary market in the shares by an investment services provider under a liquidity contract in compliance with the ethical code recognized by the~~~~Autorité des marchés financiers~~;
– ~~the delivery of shares on the exercise of rights attached to securities giving access to the capital by redemption, conversion, exchange, presentation of a warrant or any other means;~~
– ~~the delivery of shares (in exchange, as payment, or otherwise) in connection with mergers and acquisitions;~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
– ~~the execution by an investment services provider of purchases, sales or transfers by any means, in particular via off-market trading;~~
– ~~or any other purpose that is or may in the future be authorized under the applicable laws and regulations.~~
The Group is not subject to any constraints on equity capital imposed by third parties.
The gearing ratio (the ratio of debt, net of cash and cash equivalents to total equity) is a non-GAAP financial indicator used by management to measure overall net indebtedness and to manage the Group’s equity capital.
Total equity includesEquity attributable to equity holders of ~~sanofi-aventis~~Sanofi andEquity attributable to non-controlling interests, as shown on the consolidated balance sheet. ~~Debt,~~We define "Debt, net of cash and cash ~~equivalents is defined~~equivalents" as (i) the sum total of short-term debt, ~~plus~~ long-term debt ~~plus related~~and interest rate and currency derivatives used to hedge debt, minus (ii) the sum total of cash and cash equivalents and interest rate and currency derivatives used to hedge cash and cash equivalents.
~~For trends in this ratio, see Note D.17.~~
B.28. New pronouncements issued by the IASB ~~standards, amendments~~ and ~~interpretations~~ applicable from ~~2011~~2013 onwards

New ~~standards, amendments and interpretations~~pronouncements applicable in ~~2010~~2012 with an impact on the consolidated financial statements are described in Note A.2. ~~“New standards, amendments and interpretations applicable in 2010”.~~

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The note below describes standards, amendments and interpretations issued by the IASB that will ~~be mandatorily applicable~~have mandatory application in ~~2011~~2013 or subsequent years, and the ~~Group’s~~Group's position regarding future application. None of these standards, amendments or interpretations has been early adopted by ~~sanofi-aventis.~~
the Group.
B.28.1. Standards and amendments applicable to the ~~sanofi-aventis~~Sanofi consolidated financial statements
        In May 2011, the IASB issued five standards (or amendments to standards) designed to improve the principles applied in the preparation of consolidated financial statements and the disclosure requirements for joint arrangements and for any type of entity in which an interest is held. In June 2012, the Accounting Regulatory Committee (ARC) issued a recommendation that these five pronouncements (the first five listed below) should have mandatory application within the European Union no later than annual periods beginning on or after January 1, 2014, with an option for early adoption. The Sanofi Group will apply these standards and amendments (all of which were endorsed by the European Union in December 2012) with effect from January 1, 2013.
•
IFRS 10 (Consolidated Financial Statements) supersedes the parts of IAS 27 (Consolidated and Separate Financial Statements) relating to consolidated financial statements, and SIC-12 (Consolidation — Special Purpose Entities). The new standard redefines the concept of control. The Group has completed its assessment of IFRS 10, which will have no impact on the scope of consolidation.

•
IFRS 11 (Joint Arrangements) supersedes IAS 31 (Interests in Joint Ventures) and SIC-13 (Jointly Controlled Entities — Non-Monetary Contributions by Venturers). The new standard establishes principles that are applicable to the accounting for arrangements that give joint control, which are classified either as a "joint operation" or as a "joint venture". Whether an arrangement is classified as a joint operation or a joint venture depends on the rights to the assets of the arrangement, and obligations for the liabilities of the arrangement, of each of the parties under the terms of the contractual arrangement establishing joint control. Under IFRS 11, proportionate consolidation is no longer a permitted option; the Group has not made use of this option. The Group has completed its assessment of IFRS 11, which will have no impact on the scope of consolidation.

•
IFRS 12 (Disclosures of Interests in Other Entities) covers all the disclosures required when an entity holds interests in subsidiaries, associates or unconsolidated structured entities, regardless of the level of control or influence over the entity. The impact of this standard on the notes to the financial statements is currently under review.
        Two standards — IAS 27 (Consolidated and Separated Financial Statements) and IAS 28 (Investments in Associates) were amended, to bring them into line with the changes introduced by the publication of IFRS 10, IFRS 11 and IFRS 12.
•
The amended IAS 27 (Separate Financial Statements) is now limited to the provisions applicable to accounting for interests in subsidiaries, jointly controlled entities and associates by reporting entities that prepare separate financial statements in accordance with IFRS.

•
The amended IAS 28 (Investments in Associates and Joint Ventures) must be applied in accounting for interests in associates, and for interests in joint ventures as defined in IFRS 11.

•
In June 2012, the IASB issued "Transition Guidance", a further amendment to IFRS 10, IFRS 11 and IFRS 12.
In October ~~2010,~~2012, the IASB issued an amendment to IFRS ~~7 (Financial Instruments: Disclosures).~~10, IFRS 11 and IFRS 12 on Investment Entities. This amendment is applicable ~~to annual periods beginning on or after July~~from January 1, ~~2011,~~2014, and has not yet been endorsed by the European Union. The Group does not expect this amendment to have an impact on its consolidated financial statements. An investment entity is an entity meeting specific criteria; in particular its corporate purpose is to invest funds in order to obtain returns in the form of capital appreciation or investment income. The amendment requires investment entities to account for their investment in the entities they control at fair value through profit or loss; this is an exception to the IFRS 10 consolidation requirements. The Group does not expect this amendment to have an impact on its consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
        In May 2011, the IASB and the FASB jointly issued a standard proposing a common definition of fair value, and application guidance. The standard — IFRS 13 (Fair Value Measurement) under IFRS — also specifies the disclosures to be made to help users of financial statements understand how fair value is measured. The standard does not change the scope of application of fair value accounting. It will have mandatory application as from January 1, 2013 and was endorsed by the European Union in December 2012. The Group is ~~intended~~currently assessing this new standard, but does not expect it to ~~improve disclosure about transfers~~have a material impact on the financial statements.
        In June 2011, the IASB issued an amended version of IAS 19, which will have mandatory application from January 1, 2013 and was endorsed by the European Union on June 5, 2012. The amendment must be applied retrospectively, which means that it must be applied to comparative periods as though it had always been applied.
•
The principal changes to IAS 19 are as follows:

–
The main change is to the method applied in determining the assumption used for the long-term return on plan assets, which will now be based on the discount rate used to measure the present value of the obligation. The current method is based on the expected return on plan assets. Net interest expense on a defined-benefit liability now consists of two components: interest expense, and interest income.

–
The amended IAS 19 also eliminates the option of deferring actuarial gains and losses under the "corridor" method. Under the revised standard, all actuarial gains and losses must be recognized directly in other comprehensive income. The Group already applies this method.

–
Finally, the amended standard eliminates the deferral of unvested past service cost, which must now be recognized immediately in profit or loss.
        Applying the amendments to IAS 19 would have had an overall negative impact on net income of €78 million in 2012 and €47 million in 2011. The main components of the impact are:
–
Negative impact of the change in the discount rate used to determine the return on plan assets: €99 million in 2012, €80 million in 2011.

–
Positive impact of (i) the elimination of deferral of unvested past service cost and (ii) the immediate recognition in profit or loss of all the effects of plan amendments: €6 million in 2012, €21 million in 2011.
        In December 2011, the IASB issued two amendments on the offsetting of financial assets ~~in particular securitization transactions. It does~~and financial liabilities:
–
Amendment to IFRS 7 (Financial Instruments: Disclosures), applicable retrospectively to annual periods beginning on or after January 1, 2013, which introduced additional disclosure requirements about the offsetting of financial assets and financial liabilities.

–
Amendment to IAS 32 (Financial Instruments: Presentation), applicable retrospectively to annual periods beginning on or after January 1, 2014, which clarified the requirements relating to offsetting.
        These amendments, which do not alter the ~~way~~current accounting treatment of offsetting, have no impact on the Group's financial statements. They were endorsed by the European Union in ~~which securitizations are currently accounted for, but specifies the disclosures that must be made.~~December 2012.

In May ~~2010,~~2012, the IASB issued ~~the third “Improvements~~Annual Improvements to ~~IFRSs”,~~IFRSs: 2009-2011 Cycle, as part of its annual process of revising and improving existing standards. This ~~document~~pronouncement has not yet been endorsed by the European Union. The amendments contained in this document do not contradict existing standards, but merely provide clarification. Most of these amendments (applicable to annual periods beginning on or after July1, 2010) are intended to clarify how the revised IFRS 3 (Business Combinations) is toit contains will be applied, and to achieve consistency between the revised IFRS 3, the amended IAS 27 (Consolidated and Separate Financial Statements), and other IASB pronouncements affected by the application of these two standards. Sanofi-aventis does not expect any material impact from the application of the 2010 “Improvements to IFRSs”, which also contains an amendment to IAS 34 (Interim Financial Reporting), applicable to annual periods beginning on or after January 1, ~~2011. This amendment requires~~2013. The Group does not expect these amendments to have a material impact on its financial statements. The principal amendments are:
–
IAS 1 (Presentation of Financial Statements): clarification of the requirements for comparative information and consistency with the conceptual framework.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
–
IAS 16 (Property, Plant and Equipment): classification of servicing equipment.

–
IAS 32 (Financial Instruments: Presentation): tax effects of distributions to holders of equity instruments, and of transaction costs of an equity transaction.

–
IAS 34 (Interim Financial Reporting): interim financial ~~reports to include an explanation of events~~reporting and ~~transactions that are significant to an understanding of changes in the financial position~~segment information for total assets and ~~performance of the reporting entity.~~
liabilities.

In late 2009, the IASB issued ~~the following standards and amendments, of which only~~ IFRS 9 (Financial Instruments), which has not yet been endorsed by the European ~~Union:~~
~~Amendment to IAS 24 (Related Party Disclosures). This amendment, applicable to annual periods beginning on or after January 1, 2011, sets out the disclosure requirements in respect of future~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
commitments related to a particular event involving related parties. Sanofi-aventis already discloses such information. The amendment also simplified the disclosure requirements for government-related entities; this part of the amendment does not apply to sanofi-aventis.
~~IFRS 9 (Financial Instruments).~~Union. This standard is applicable to annual periods beginning on or after January 1, ~~2013,~~2015, and completes the first of the three phases of the IASB financial instruments project. The next two phases will deal with ~~“Financial~~"Financial Instruments: Amortized Cost and ~~Impairment”~~Impairment" and ~~“Hedge Accounting”~~"Hedge Accounting". ~~Final completion of IFRS 9 is scheduled for the first half of 2011.~~ The three phases of IFRS 9 are intended to replace IAS 39 (Financial Instruments: Recognition and Measurement). The Group will assess the overall impact of IFRS 9 once all the phases have been published.

Amendment to IAS 32 (Financial Instruments: Presentation), on the classification of rights issues. This amendment is applicable to annual periods beginning on or after February 1, 2010, and deals with issues of subscription rights in a currency other than the issuer’s functional currency. To date, such issues have been accounted for as derivatives (i.e. as a liability). Under the amendment, subscription rights must be recognized as equity when certain conditions are met, irrespective of the currency in which the exercise price is expressed. Because sanofi-aventis has not issued any instruments of this type, this amendment does not apply to the consolidated financial statements.
In ~~December 2010,~~March 2012, the IASB issued "Government Loans", an amendment to IFRS 1. Because IFRS 1 deals with the ~~following amendments, which have~~first-time adoption of IFRS, this amendment is not applicable to the Group.
B.28.2. New interpretations
        The IASB has issued IFRIC 20 (Stripping Costs in the Production Phase of a Surface Mine). This interpretation will be applicable from January 2013, and has not yet been endorsed by the European ~~Union:~~
Amendment to IAS 12 (Income Taxes). This amendment, applicable to annual periods beginning on or after January 1, 2012, provides a practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model in IAS 40 (Investment Property). Because sanofi-aventis does not own any investment property measured in accordance with IAS 40, this amendmentUnion. It does not apply to the ~~consolidated financial statements.~~
Amendments to IFRS 1 (First-Time Adoption of International Financial Reporting Standards). Two amendments to IFRS 1 have been issued. The first allows first-time adopters to derecognize their financial assets and financial liabilities prospectively at the date of transition to IFRS, rather than from the fixed date (January 1, 2004) initially stipulated in IFRS 1. Such derecognition must comply with IAS 39 (Financial Instruments: Recognition and Measurement). The second gives guidance on how an entity should present IFRS financial statements after a period during which it has been unable to do so because of severe hyperinflation. These amendments are applicable to annual periods beginning on or after July 1, 2011, but because they apply solely to first-time adopters of IFRS they have no impact on the sanofi-aventis consolidated financial statements.
~~B.28.2. New interpretations~~
~~The IASB has also issued the following interpretations, which are mandatorily applicable from 2011 onwards and had been endorsed by the European Union at the balance sheet date:~~
IFRIC 19 (Extinguishing Financial Liabilities with Equity Instruments). This interpretation, which applies to annual periods beginning on or after July 1, 2010, addresses the classification and measurement methods to be used by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor to extinguish all or partactivities of the ~~financial liability. Given the absence of any transaction falling within the scope of this interpretation, IFRIC 19 does not apply to the sanofi-aventis consolidated financial statements.~~
Amendment to IFRIC 14 (IAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction). This amendment, applicable to annual periods beginning on or after January 1, 2011, clarifies the accounting treatment of voluntary prepayments intended to meet minimum funding requirements. It will be applicable from 2011 onwards, and has no impact on the sanofi-aventis consolidated financial statements.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~Group.
~~Year ended December 31, 2010~~
C. ALLIANCES
C.1. Alliance arrangements with Bristol-Myers Squibb (BMS)

Two of the ~~Group’s~~Group's leading products were jointly developed with BMS: the anti-hypertensive agent irbesartan ~~(Aprovel~~^®(Aprovel®/~~Avapro~~^®Avapro®/~~Karvea~~^®Karvea®) and the anti-atherothrombosis treatment clopidogrel bisulfate ~~(Plavix~~^®(Plavix®/~~Iscover~~^®Iscover®).
As inventor of the two molecules, ~~sanofi-aventis~~Sanofi is paid a royalty on ~~all~~a portion of sales generated by these ~~products.~~products in the co-promotion and co-marketing territories. The portion of this royalty received by ~~sanofi-aventis~~Sanofi on sales generated by BMS in territories under the operational management of BMS (see below) is recorded inOther revenues. As co-developers of the products, ~~sanofi-aventis~~Sanofi and BMS each receive equal development royalties from their two licensees, which have been responsible, since 1997, for marketing the products using their local distribution networks, composed of subsidiaries of both groups. These licensees operate in two separate territories: (i) Europe, Africa, Asia and the Middle East, under the operational management of ~~sanofi-aventis;~~Sanofi; and (ii) other countries (excluding Japan), under the operational management of BMS. In Japan, ~~Aprovel~~^®Aprovel® has ~~since June 2008~~ been marketed jointly by Shionogi Pharmaceuticals and Dainippon Sumitomo Pharma Co. ~~Ltd.~~Ltd since June 2008. The alliance with BMS does not cover the rights to ~~Plavix~~^®Plavix® in Japan, where the product is marketed by ~~sanofi-aventis.~~Sanofi.

The products are marketed in different ways in different countries.

Co-promotion consists of a pooling of sales resources under a single brand name, and is preferably achieved through contracts or through appropriate tax-transparent legal entities. Each partner records directly its share of taxable income.

Co-marketing consists of separate marketing of the products by each local affiliate using its own name and resources under different brand names for the product.

In certain countries of Eastern Europe, Africa, Asia, Latin America and the Middle East, the products are marketed on an exclusive basis by ~~sanofi-aventis.~~Sanofi.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In the territory managed by ~~sanofi-aventis,~~Sanofi, operations are recognized by the Group as follows:
(i)
In most countries of Western Europe and in some Asian countries (excluding Japan) for clopidogrel bisulfate (Plavix®/Iscover®) only, co-promotion is used for both products. The legal entities used are partnerships (sociétés en participation) or other tax-transparent entities, which are majority-owned by and under the operational management of the Group. Sanofi recognizes all the revenue associated with the sale of the drugs, as well as the corresponding expenses. The share of profits reverting to BMS subsidiaries is shown inNet income attributable to non-controlling interests in the income statement, with no tax effect (because BMS receives a pre-tax share of profits).
The line itemNon-controlling interests, excluding BMS in the consolidated statement of cash flows takes account of the specific terms of the alliance agreement.
(ii)
In Germany, Spain and Greece, and in Italy for irbesartan (Aprovel®/Avapro®/ Karvea®/Karvezide®) only, co-marketing is used for both products, and Sanofi recognizes revenues and expenses generated by its own operations.

(iii)
In those countries in Eastern Europe, Africa, the Middle East and Asia (excluding Japan) where the products are marketed exclusively by Sanofi, the Group recognizes revenues and expenses generated by its own operations. Sanofi has had the exclusive right to market Aprovel® in Scandinavia and in Ireland since September 2006, and the exclusive right to market Plavix® in Malaysia since January 1, 2010.

~~(i)~~
~~In most countries of Western Europe and in some Asian countries (excluding Japan) for clopidogrel bisulfate (Plavix~~^®~~/Iscover~~^®~~) only, co-promotion is used for both products. The legal entities used are partnerships (~~~~sociétés en participation~~) or other tax-transparent entities, which are majority-owned by and under the operational management of the Group. Sanofi-aventis recognizes all the revenue associated with the sale of the drugs, as well as the corresponding expenses. The share of profits reverting to BMS subsidiaries is shown in~~Net income attributable to non-controlling interests~~ ~~in the income statement, with no tax effect (because BMS receives a pre-tax share of profits).~~
~~The line item~~~~Non-controlling interests, excluding BMS~~ ~~in the consolidated statement of cash flows takes account of the specific terms of the alliance agreement.~~
~~(ii)~~
~~In Germany, Spain and Greece, and in Italy for irbesartan (Aprovel~~^®~~/Avapro~~^®~~/ Karvea~~^®~~) only, co-marketing is used for both products, and sanofi-aventis recognizes revenues and expenses generated by its own operations.~~
~~(iii)~~
In those countries in Eastern Europe, Africa, the Middle East and Asia (excluding Japan) where the products are marketed exclusively by sanofi-aventis, the Group recognizes revenues and expenses generated by its own operations. Sanofi-aventis has had the exclusive right to market Aprovel^® ~~in Scandinavia and in Ireland since September 2006, and the exclusive right to market Plavix~~^® ~~in Malaysia since January 1, 2010.~~
In the territory managed by BMS, operations are recognized by the Group as follows:
(i)
Co-promotion is used in the United States, Canada and Puerto Rico through entities that are majority-owned by and under the operational management of BMS. Sanofi does not recognize revenues; rather, it invoices the entity for its promotion expenses, records its royalty income inOther revenues, and records its share of profits (net of tax) inShare of profit/loss of associates and joint ventures.

(ii)
In Brazil, Mexico, Argentina and Australia for clopidogrel bisulfate (Plavix®/Iscover®) and for irbesartan (Aprovel®/Avapro®/Karvea®/Karvezide®) and in Colombia for clopidogrel bisulfate only, co-marketing is used, and Sanofi recognizes revenues and expenses generated by its own operations.

(iii)
In certain other Latin American countries, where the products are marketed exclusively by Sanofi, the Group recognizes revenues and expenses generated by its own operations.
        On September 27, 2012, Sanofi and BMS signed an agreement relating to their alliance following the loss of exclusivity of Plavix® and Avapro®/Avalide® in many major markets.
~~(i)~~
~~Co-promotion is used in the United States, Canada and Puerto Rico through entities that are majority-owned by and under the operational management of BMS. Sanofi-aventis does not recognize revenues;~~
        Under the terms of this new agreement, which took effect on January 1, 2013, BMS will return to Sanofi its rights to Plavix® and Avapro®/Avalide® in all markets worldwide with the exception of Plavix in the U.S. and Puerto Rico, giving Sanofi sole control and freedom to operate commercially. In exchange, BMS will receive royalty payments on Sanofi's sales of branded and unbranded Plavix® and Avapro®/Avalide® worldwide (except for Plavix® in the United States and Puerto Rico) until 2018, and will also receive a payment of $200 million from Sanofi in December 2018, part of which will be to buy out the non-controlling interests (see Notes D.16. and D.18.). Rights to Plavix® in the United States and Puerto Rico remain unchanged and continue to be governed by the terms of the original agreement until December 2019.
        In addition, under the terms of the agreement ongoing disputes between the companies related to the alliance have been resolved. The resolution of these disputes includes various commitments by both companies, including a one-time payment of $80 million by BMS to Sanofi as compensation for the loss caused by the Avalide® supply disruption in the United States in 2011.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~C.2. Alliance arrangements with Regeneron
•
Collaboration agreement on Zaltrap® (aflibercept)
        Zaltrap® (aflibercept) is a solution administered by intravenous perfusion, used in association with 5-fluorouracil, leucovorin and irinotecan (FOLFIRI) as a treatment for metastatic colorectal cancer.
        In September 2003, Sanofi and Regeneron signed an agreement to collaborate on the development and commercialization of Zaltrap® (see Note D.21.). Under the terms of this agreement (as amended in 2005), Sanofi is responsible for funding 100% of the development costs, co-promotion rights are shared between Sanofi and Regeneron, and the profits generated from sales of Zaltrap® worldwide (except Japan) are shared equally. Sales of Zaltrap® made by subsidiaries under the control of Sanofi are recognized in consolidated net sales, and the associated costs incurred by those subsidiaries are recognized as operating expenses in the consolidated income statement. Regeneron's share of the profits is recognized in the line itemOther operating expenses, a component of operating income.
        Under the terms of the same agreement, Regeneron agreed to repay 50% of the development costs initially funded by Sanofi. Contractually, this amount represents 5% of the residual repayment obligation per quarter, but may not exceed Regeneron's profit share for the quarter unless Regeneron voluntarily decides to make a larger payment in a given quarter.
~~rather, it invoices the entity for its promotion expenses, records its royalty income in~~~~Other revenues~~~~, and records its share of profits (net of tax) in~~~~Share of profit/loss of associates and joint ventures~~.
        The agreement also stipulates milestone payments to be made by Sanofi on receipt of specified marketing approvals for Zaltrap® in the United States, within the European Union and in Japan.
~~(ii)~~
~~In Brazil, Mexico, Argentina and Australia for clopidogrel bisulfate (Plavix~~^®~~/Iscover~~^®~~) and for irbesartan (Aprovel~~^®~~/Avapro~~^®~~/Karvea~~^® ~~) and in Colombia for clopidogrel bisulfate only, co-marketing is used, and sanofi-aventis recognizes revenues and expenses generated by its own operations.~~
        In the United States, Zaltrap® is a registered trademark of Regeneron Pharmaceuticals, Inc. The product was approved by the U.S. Food and Drug Administration (FDA) in August 2012, and has been marketed in the United States since that date.
~~(iii)~~ ~~In certain other Latin American countries, where the products are marketed exclusively by sanofi-aventis, the Group recognizes revenues and expenses generated by its own operations.~~
        In Japan, Sanofi will develop and commercialize Zaltrap®, with Regeneron entitled to receive a royalty.
•
Collaboration agreement on the discovery, development and commercialization of human therapeutic antibodies
        In November 2007, Sanofi and Regeneron signed additional agreements under which Sanofi committed to funding the development costs of Regeneron's human monoclonal antibody research program until 2017, up to a maximum of $160 million a year (see Note D.21.). Sanofi has an option to license for further development any antibodies discovered by Regeneron that attain Investigational New Drug (IND) status.
        If such an option is exercised, Sanofi is primarily responsible for funding, and co-develops the antibody with Regeneron. Sanofi and Regeneron would share co-promotion rights and profits on sales of the co-developed antibodies. Development costs for the drug candidate are shared between the companies, with Sanofi generally funding these costs up front, except that following receipt of the first positive Phase III trial results for a co-developed drug candidate, subsequent Phase III trial-related costs for that drug candidate are shared 80% by Sanofi and 20% by Regeneron. Once a product begins to be marketed, Regeneron will progressively repay out of its profits 50% of the development costs borne by Sanofi for all antibodies licensed by Sanofi. However, Regeneron are not required to apply more than 10% of its share of the profits from collaboration products in any calendar quarter towards reimbursing Sanofi for these development costs. Under the terms of the collaboration agreement, Sanofi may also be required to make milestone payments based on aggregate sales of antibodies. In 2012, six antibodies were in clinical development; two of which were in Phase III.
        If Sanofi does not exercise its licensing option for an antibody under development, Sanofi will be entitled to receive a royalty once the antibody begins to be marketed.

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~~C.2.~~
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
C.3. Alliance agreements with Warner Chilcott (previously with Procter & Gamble Pharmaceuticals, the ~~“Alliance Partner”~~"Alliance Partner")

~~Actonel~~^®Actonel® (risedronate sodium) is a new-generation biphosphonate indicated for the treatment and prevention of osteoporosis. Historically, ~~Actonel~~^®Actonel® was developed and marketed in collaboration with Procter & Gamble Pharmaceuticals. Procter & Gamble sold its pharmaceuticals interests to Warner Chilcott on October 30, 2009. Consequently, ~~Actonel~~^®Actonel® has, since that date, been marketed in collaboration with Warner Chilcott.

This alliance agreement covers the worldwide development and marketing of the product, except for Japan for which ~~sanofi-aventis~~the Group holds no rights.

Local marketing arrangements may take various forms:
•
•
Co-promotion, whereby sales resources are pooled but only one of the two parties to the alliance agreement (Sanofi or the Alliance Partner) invoices product sales. Co-promotion is carried out under contractual agreements and is not based on any specific legal entity. The Alliance Partner sells the product and incurs all the related costs in France and Canada. This co-promotion scheme also included Germany, Belgium and Luxembourg until December 31, 2007, the Netherlands until March 31, 2008, and the United States and Puerto Rico until March 31, 2010. Sanofi recognizes its share of revenues under the agreement as a component of operating income on theOther operating income line. Since April 1, 2010, Sanofi has received royalties from the Alliance Partner on sales made by the Alliance Partner in the United States and Puerto Rico. In the secondary co-promotion territories (the United Kingdom until December 31, 2008, Ireland, Sweden, Finland, Greece, Switzerland, Austria, Portugal and Australia) Sanofi sells the product, and recognizes all the revenues from sales of the product along with the corresponding expenses. The share due to the Alliance Partner is recognized inCost of sales.

•
Co-promotion, whereby sales resources are pooled but only one of the two parties to the alliance agreement (sanofi-aventis or the Alliance Partner) invoices product sales. Co-promotion is carried out under contractual agreements and is not based on any specific legal entity. The Alliance Partner sells the product and incurs all the related costs in France and Canada. This co-promotion scheme also included Germany, Belgium and Luxembourg until December 31, 2007, the Netherlands until March 31, 2008, and the United States and Puerto Rico until March 31, 2010. Sanofi-aventis recognizes its share of revenues under the agreement as a component of operating income on the~~Other operating income~~ line. Since April 1, 2010, sanofi-aventis has received royalties from the Alliance Partner on sales made by the Alliance Partner in the United States and Puerto Rico. In the secondary co-promotion territories (the United Kingdom until December 31, 2008, Ireland, Sweden, Finland, Greece, Switzerland, Austria, Portugal and Australia) sanofi-aventis sells the product, and recognizes all the revenues from sales of the product along with the corresponding expenses. The share due to the Alliance Partner is recognized in~~Cost of sales~~.
Co-marketing, which applies in Italy, whereby each party to the alliance agreement sells the product in the country under its own name, and recognizes all revenue and expenses from its own operations in its income statement. Each company also markets the product independently under its own brand name in Spain, although Spain is not included in the co-marketing territory.

•
The product has been marketed by the Alliance Partner independently in Germany, Belgium and Luxembourg since January 1, 2008; in the Netherlands since April 1, 2008; and in the United Kingdom since January 1, 2009. Sanofi recognizes its share of revenues under the alliance agreement inOther operating income.

•
In all other territories, Sanofi has exclusive rights to sell the product and recognizes all revenues and expenses from its own operations in its income statement, but in return for these exclusive rights pays the Alliance Partner a royalty based on actual sales. This royalty is recognized inCost of sales.

•
The product has been marketed by the Alliance Partner independently in Germany, Belgium and Luxembourg since January 1, 2008; in the Netherlands since April 1, 2008; and in the United Kingdom since January 1, 2009. Sanofi-aventis recognizes its share of revenues under the alliance agreement in~~Other operating income~~.
•
In all other territories, sanofi-aventis has exclusive rights to sell the product and recognizes all revenue and expenses from its own operations in its income statement, but in return for these exclusive rights pays the Alliance Partner a royalty based on actual sales. This royalty is recognized in~~Cost of sales~~.
~~Sanofi-aventis~~In 2010, Sanofi and Warner Chilcott ~~have begun~~began negotiations on the future of their alliance arrangements.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~ In an arbitration proceeding, an arbitration panel decided on July 14, 2011 that the termination by Warner Chilcott of an ancillary agreement did not entail the termination of the Actonel® Alliance. Pursuant to this decision, the alliance will remain in effect until January 1, 2015.
~~Year ended December 31, 2010~~
D. ~~DETAILED NOTES TO~~PRESENTATION OF THE FINANCIAL STATEMENTS
D.1. ~~Significant acquisitions~~Impact of changes in the scope of consolidation

Business combinations completed on or after January 1, 2010 are accounted for using the acquisition method in accordance with the revised IFRS 3. The accounting policies applicable to business combinations are described in Note B.3.1.
D.1.1. Business combinations during 2012
        During the year, Sanofi completed the acquisitions of Pluromed, Inc. (Biosurgery) and Newport (Animal Health). The impact of these acquisitions was not material at Group level (see Note D.4.).

Table of Contents
~~D.1.1. Principal~~
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.1.2. Final purchase price allocation for 2011 acquisitions
– Genzyme
        Sanofi acquired control of Genzyme Corporation (Genzyme) at a cash price of $74 per share or $20.4 billion (€14.3 billion) on April 4, 2011, the completion date of the public exchange offer for all of the outstanding shares of common stock of Genzyme. Genzyme, a wholly-owned subsidiary of Sanofi, is a biotechnology group headquartered in Cambridge, Massachusetts (United States). Genzyme's primary areas of focus were rare diseases, renal endocrinology, oncology and biosurgery.
        As part of the acquisition, Sanofi issued one contingent value right (CVR) per Genzyme share held by Genzyme shareholders. Sanofi issued 291 million CVRs.
        The CVRs (representing a maximum commitment of $4.1 billion at the acquisition date) are listed on the NASDAQ market under the ticker "GCVRZ". As of April 4, 2011, the quoted price per CVR was $2.35, equivalent to $685 million (€481 million) for all the CVRs issued. This price was used as the basis for determining the overall fair value of the contingent consideration. In accordance with the revised IFRS 3, this contingent consideration was measured at fair value at the acquisition date and included in the price paid to acquire control of Genzyme for the purposes of determining goodwill. The liability related to this contingent consideration is recognized in the balance sheet line itemLiabilities related to business combinations and to non-controlling interests (see Note D.18.).
        The final purchase price allocation is as follows:
(€ million)
Fair value at
acquisition date
Property, plant and equipment 1,933
Other intangible assets 10,059
Non-current financial assets 103
Inventories 925
Accounts receivable 764
Cash and cash equivalents 1,267
Long-term and short-term debt (835 )
Liability related to the "Bayer" contingent consideration (585 )
Accounts payable (315 )
Deferred taxes (2,911 )
Other assets and liabilities (166 )
Net assets of Genzyme as of April 4, 2011 10,239
Goodwill 4,575
Purchase price ⁽¹⁾ 14,814
⁽¹⁾
Includes €481 million representing the valuation of the CVRs as of the acquisition date.
        On completion of the valuations carried out during the measurement period, the deferred tax liability was €489 million higher than in the provisional purchase price allocation as of December 31, 2011 (see Note D.1.1 to the financial statements for the year ended December 31, 2011). This increase was mainly due to the finalization of the assessment of the tax regimes applicable to the €10,059 million of intangible assets. This assessment was finalized within the measurement period, in accordance with paragraph 45 of the revised IFRS 3. Consequently, the comparative amounts reported for 2011 have been revised, in accordance with paragraph 49 of the revised IFRS 3.
        In a business combination completed in May 2009, prior to Sanofi's acquisition of control over Genzyme, Genzyme acquired from Bayer Schering Pharma A.G. (Bayer) the worldwide development and marketing rights to

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
alemtuzumab (under the brand name Lemtrada^TM), a molecule currently under development for multiple sclerosis, as well as the rights to the products Campath®, Fludara® and Leukine®.
        This pre-existing contingent consideration was measured at its fair value as of April 4, 2011, and was recognized as a liability in the balance sheet line itemLiabilities related to business combinations and to non-controlling interests. The amount is remeasured at fair value at each reporting date. The impact of the resulting fair value adjustment is recognized in profit or loss in the line itemFair value remeasurement of contingent consideration liabilities, in the same way as other contingent consideration on business combinations (see Note D.18.).
        Acquisition-related costs recognized in profit or loss in 2011 amounted to €65 million, mostly recorded in the line itemOther operating expenses.
        The impact of this acquisition, as reflected in the statements of cash flows in the line itemAcquisitions of investments in consolidated undertakings, net of cash acquired, was a net cash outflow of €13.1 billion.
– BMP Sunstone
        On February 24, 2011, Sanofi completed the acquisition of 100% of BMP Sunstone Corporation, a pharmaceutical company previously quoted on the NASDAQ market, which is developing a portfolio of branded pharmaceuticals and healthcare products in China. Through BMP Sunstone, the Group manufactures pediatric and feminine healthcare products, sold in pharmacies across the country.
        The purchase consideration was €384 million, excluding acquisition-related costs of €4 million that were recognized mainly in the line itemOther operating expenses in 2011.
        The final purchase price allocation for this acquisition was completed in 2012, and was not materially different from the provisional allocation in 2011.
– Topaz Pharmaceuticals, Inc.
        In October 2011, Sanofi acquired Topaz Pharmaceuticals Inc., a U.S. pharmaceutical research company which has developed an innovative anti-parasitic treatment for head lice. An upfront payment of $35 million was made upon closing of the transaction. The agreement provides for other potential milestone payments when the product obtains marketing approval and based on the attainment of sales targets. The total amount of these payments, including the upfront payment, could reach $207.5 million.
        The final purchase price allocation for this acquisition was completed in 2012, and was not materially different from the provisional allocation in 2011.
– Universal Medicare Private Limited
        In November 2011, Sanofi acquired the business of Universal Medicare Private Limited, one of the leading Indian producers of neutraceuticals and life management products, including vitamins, antioxidants, mineral supplements and anti-arthritics, for a consideration of €83 million.
        The final purchase price allocation for this acquisition was completed in 2012, and was not materially different from the provisional allocation in 2011.
D.1.3. Disposals
        In 2012, Sanofi sold its 39.1% interest in Société Financière des Laboratoires de Cosmétologie Yves Rocher.
        In 2011, Sanofi sold its Dermik dermatology business to Valeant Pharmaceuticals International Inc. for €321 million. The transaction includes all Dermik assets, including a portfolio of several leading brands in

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
therapeutic and esthetic dermatology such as Benzaclin®, Carac® and Sculptra®, and a manufacturing site in Canada.
        The pre-tax loss arising from this sale was recognized in 2011 in the line itemOther gains and losses, and litigation (see Note D.28.).
        There were no material disposals during the year ended December 31, 2010.
D.1.4. Business combinations during 2010
        The principal acquisitions in 2010 were as follows:
-– TargeGen, Inc. (TargeGen)

In July 2010, ~~sanofi-aventis~~Sanofi acquired 100% of the capital of TargeGen, Inc., a U.S. biopharmaceutical company developing small ~~molecule~~molecules kinase inhibitors for the treatment of certain forms of leukemia, lymphoma and other hematological malignancies and blood disorders. An upfront payment of $75 million was made on completion. ~~Future~~The agreement provides for other potential milestone payments ~~may be made~~ at various stages in the development of TG ~~101348, TargeGen’s~~101 348, TargeGen's principal product candidate. The total amount of payments (including the upfront payment) could reach $560 million.
The ~~provisional~~final purchase price allocation ~~of TargeGen is shown below:~~for this acquisition was not materially different from the provisional allocation.

($ million)    Historical
cost    Fair value
remeasurement    Fair
value
Intangible assets⁽¹⁾    —       230    230
Deferred taxes    53    (83 )    (30 )
Other assets and liabilities    1    —       1
Net assets of TargeGen (July 2010)
   54    147    201
Goodwill
         —
Purchase price⁽²⁾
         201
⁽¹⁾
~~TG 101348, a product currently in the development phase.~~
⁽²⁾
~~Includes the estimated contingent consideration relating to potential future milestone payments (see Note D.18.).~~
- Chattem, Inc. (Chattem)

On February 9, 2010, ~~sanofi-aventis acquired Chattem, Inc. by~~Sanofi successfully ~~completing~~completed a cash tender ~~offer. Headquartered~~offer for Chattem, based in Chattanooga (United States),. Chattem ~~is a major consumer health player~~has become Sanofi's platform in the United States ~~producing and distributing 26 branded~~for consumer health products ~~toiletries~~ and ~~dietary supplements across various market segments. Chattem will manage the Allegra~~^® ~~brand, and act as the platform for sanofi-aventis~~ over-the-counter ~~and consumer health~~ products ~~in the United States. As of December 31, 2010, sanofi-aventis held 100% of the outstanding shares of Chattem.~~
~~The provisional purchase price allocation of Chattem is shown below:~~

($ million)    Historical
cost Fair value
remeasurement
Fair
value

Intangible assets    576 967    1,543
Property, plant and equipment    38 3    41
Inventories    48 29    77
Deferred taxes    (2 ) (376 )    (378 )
Long-term and short-term debt    (377 ) (114 )    (491 )
Other assets and liabilities    (65 ) (15 )    (80 )
Net assets of Chattem as of February 9, 2010
   218 494    712
Goodwill
      1,064
Purchase price
      1,776 ⁽¹⁾⁽²⁾
⁽¹⁾
~~Acquisition-related costs recognized directly in profit or loss amounted to $16 million.~~
⁽²⁾
~~Resulting in a net cash outflow of €1,277 million.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~Since the acquisition date, Chattem has generated net sales of €328 million and business net income (see definition in Note D.35.) of €110 million,~~ and has ~~made a negative contribution of €5 million to net income (including expenses recognized during~~managed the ~~period in connection with the fair value remeasurement of the company’s assets at the acquisition date).~~
~~D.1.2. Other principal business combinations in the year ended December 31, 2010~~
– The acquisition in April 2010 of a controlling interest in the capital of Bioton Vostok, a Russian insulin manufacturer. Under the terms of the agreement, put options were granted to non-controlling interests (see Note D.18. “Liabilities related to business combinations and to non-controlling interests”).
– The formation in May 2010 of a joint venture with Nichi-Iko Pharmaceuticals Co. Ltd. (Nichi-Iko), a leading player in the Japanese generics market, to expand generics activities in the country. As well as forming this joint venture, sanofi-aventis also took a 4.66% equity interest in the capital of Nichi-Iko (see Note D.7.).
– ~~The acquisition in June 2010 of the cosmetics and skincare products distribution activities of the Canadian company Canderm Pharma, Inc. This business generated CAD 24 million of net sales in 2009.~~
– The acquisition in August 2010 of a 100% equity interest in the Polish company Nepentes S.A. for a consideration of PLN 425 million (€106 million), aimed at diversifying the sanofi-aventis consumer health portfolio in Poland, and in Central and Eastern Europe generally.
– The acquisition in October 2010 of VaxDesign, a U.S. biotechnology company which has developed a technology for in vitro modeling of the human immune system that can be used to select the best candidate vaccines at the pre-clinical stage. Under the terms of the agreement, an upfront payment of $55 million was made upon closing of the transaction, and a further $5 million will be payable upon completion of a specified development milestone.
– The acquisition in October 2010 of a 60% equity interest in the Chinese company Hangzhou Sanofi Minsheng Consumer Healthcare Co. Ltd, in partnership with Minsheng Pharmaceutical Co., Ltd., with sanofi-aventis also granting the alliance partner a put option over the remaining shares not held by sanofi-aventis (see Note D.18.).
~~D.1.3. Principal acquisitions during 2009~~
~~- Merial~~
The acquisition by sanofi-aventis of the equity interest held by Merck & Co., Inc. in Merial Limited (Merial) was completed on September 17, 2009. Consequently, the twelve-month purchase price allocation period ended in September 2010. Detailed information about the impact of Merial on the sanofi-aventis consolidated financial statements for the year ended December 31, 2010 is provided in Note D.8. “Assets held for sale or exchange”.
~~The final purchase price allocation is set forth in the table below:~~

($ million)          Historical
cost    Fair value
remeasurement Fair
value
Intangible assets       147    5,153 5,300
Property, plant and equipment       740    130 870
Inventories       492    241 733
Deferred taxes       53    (1,440 ) (1,387 )
Other assets and liabilities       264    (46 ) 218
Net assets of Merial as of September 17, 2009
   a       1,696    4,038 5,734
Share of net assets acquired as of September 17, 2009 (50%)
   b          2,867
Goodwill (September 17, 2009 transaction)    c          1,169
Purchase price⁽¹⁾    d=b+c          4,036
⁽¹⁾
~~Includes acquisition-related costs of $36 million~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~The fair value of Merial as of September 17, 2009, as reported in the sanofi-aventis consolidated financial statements after adjustments to the purchase price allocation, breaks down as follows:~~
~~($ million)~~ ~~Fair value~~
~~Purchase price~~
d ~~4,036~~
~~+ Carrying amount of the previously-held equity interest in Merial (equity method)~~ ~~1,765~~
~~+ Remeasurement of the previously-held equity interest (50%), excluding goodwill~~⁽¹⁾ ~~1,551~~
~~Total value of Merial in the sanofi-aventis consolidated financial statements as of September 17, 2009, after adjustments to the purchase price allocation~~
~~7,352~~
~~Comprising:~~
~~– Net assets of Merial as of September 17, 2009~~ a ~~5,734~~
~~– Goodwill (September 17, 2009)~~ c ~~1,169~~
~~– Goodwill (August 20, 2004)~~ ~~449~~
⁽¹⁾
~~Adjusted by $193 million during the purchase price allocation period.~~
~~- BiPar~~
On April 27, 2009, sanofi-aventis acquired 100% of BiPar Sciences (BiPar), an American biopharmaceutical company developing novel tumorselective approaches for the treatment of different types of cancers. BiPar is the leading company in the emerging field of DNA (DeoxyriboNucleic Acid) repair using Poly ADP-Ribose Polymerase (PARP) inhibitors. The purchase price is contingent on the achievement (regarded as probable) of milestones related to the development of BSI-201, and could reach $500 million. The amount of contingent consideration recognized in the balance sheet as at December 31, 2010 is disclosed in Note D.18. “Liabilities related to business combinations and to non-controlling interests”.Allegra® brand since 2011. The final purchase price allocation for this acquisition was not materially different from the provisional allocation.
        The other acquisitions in 2010 were as follows:
–
~~- Medley~~
OnThe acquisition in April ~~27, 2009, sanofi-aventis~~2010 by Sanofi of a controlling interest in the capital of Bioton Vostok, a Russian insulin manufacturer. Under the terms of the agreement, put options were granted to non-controlling interests (see Note D.18.).

–
The formation in May 2010 of a joint venture with Nichi-Iko Pharmaceuticals Co. Ltd. (Nichi-Iko), a leading player in the Japanese generics market. As well as forming this joint venture, Sanofi also acquired a 4.66% equity interest in the capital of Nichi-Iko Pharmaceuticals Co. Ltd. (see Note D.7.).

–
The acquisition in June 2010 of the cosmetics and skincare products distribution activities of the Canadian company Canderm Pharma, Inc.

–
The acquisition in August 2010 of a 100% equity interest in ~~Medley,~~ the ~~third largest pharmaceutical~~Polish company Nepentes S.A. for a consideration of PLN 425 million (€106 million), aimed at diversifying the Sanofi consumer health portfolio in ~~Brazil~~Poland, and in Central and Eastern Europe generally.

–
The acquisition in October 2010 of VaxDesign, a U.S. biotechnology company which has developed a technology for in vitro modeling of the human immune system that can be used to select the best candidate vaccines at the pre-clinical stage. Under the terms of the agreement, an upfront payment of $55 million was made upon closing of the transaction, and a ~~leading generics company~~further $5 million will be payable upon completion of a specified development milestone.

–
The acquisition in ~~that country. The purchase price, based on an enterprise value~~October 2010 of €500 million, was €348 million inclusive of acquisition-related costs. The final purchase price allocation for this acquisition was not materially different from the provisional allocation, and the final amount of goodwill recognized was €376 million.
~~- Zentiva~~
On March 11, 2009, sanofi-aventis successfully closed its offer for Zentiva N.V. (Zentiva). As of December 31, 2009, sanofi-aventis held about 99.1% of Zentiva’s share capital. The purchase price was €1,200 million, including acquisition-related costs. The final purchase price allocation for this acquisition was not materially different from the provisional allocation, and the final amount of goodwill recognized was €886 million. Following the buyout of the remaining non-controlling interests, sanofi-aventis held a ~~100%~~60% equity interest in ~~Zentiva as of December 31, 2010.~~
~~Previously, sanofi-aventis~~the Chinese company Hangzhou Sanofi Minsheng Consumer Healthcare Co. Ltd, in partnership with Minsheng Pharmaceutical Co., Ltd., with Sanofi also granting the alliance partner a put option over the remaining shares not held ~~a 24.9% interest in Zentiva, which was accounted for as an associate~~ by ~~the equity method~~Sanofi (see Note ~~D.6.~~D.18.).

Table of Contents
~~- Shantha Biotechnics~~
In August 2009, sanofi-aventis took control of Shantha Biotechnics (Shantha), a vaccines company based in Hyderabad (India), by acquiring the shares of ShanH, the owner of Shantha. In the purchase price allocation, identifiable intangible assets other than goodwill were measured at a fair value of €374 million. This amount includes the acquisition-date value of the Shan5^® ~~pentavalent vaccine, which was partially written down in 2010 (see Note D.5.).~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended~~D.2. Merial
        In March 2010, Sanofi exercised its contractual right to combine its Animal Health business (Merial) with that of Merck (Intervet/Schering-Plough) to form a new joint venture owned equally by Merck and Sanofi. Consequently, all of the assets and liabilities of Merial were reported respectively in the line itemsAssets held for sale or exchange andLiabilities related to assets held for sale or exchange, and the net income of Merial was reported in the line itemNet income from the held-for-exchange Merial business, in accordance with IFRS 5 (see Note B.7.).
        However, on March 22, 2011, Merck and Sanofi announced the end of the agreement to form a new joint venture in animal health and the decision to maintain two separate entities, Merial and Intervet/Schering-Plough, operating independently. This decision was primarily due to the complexity of implementing the proposed transaction, both in terms of the nature and extent of the anticipated divestitures and the length of time necessary for the worldwide antitrust review process.
        As a result, Sanofi's investment in Merial has since January 1, 2011 been presented in the relevant line items of the consolidated balance sheet and income statement. In accordance with IFRS 5 (see Note B.7.), this change in accounting method was treated as follows:
–
As of December 31, 2012 and 2011, the assets and liabilities of Merial are reported in the relevant balance sheet line items, without restating the presentation of the balance sheet as of December 31, 2010.

–
The net income from the Merial business presented in the line itemNet income from the held-for-exchange Merial business in the previously published financial statements has been reclassified and included in income from continuing operations for all periods reported.

–
Merial's assets have been valued since January 1, 2011 at their carrying amount before their reclassification as assets held for sale, adjusted for any depreciation, amortization or impairment which would have been recognized if the asset had never been classified as held for sale.

–
The backlog of depreciation, amortization and impairment not recognized during the period from September 18, 2009 through December 31, 2010
~~D.1.4. Other principal business combinations~~ amounts to €519 million (see Note D.28.), and is reported in the ~~year ended December 31, 2009~~
– ~~Fovea Pharmaceuticals SA (Fovea), a privately-held French biopharmaceutical research and development company specializing~~income statement in ophthalmology, acquired October 30, 2009. The purchase consideration is contingent on milestone payments of up to €280 million linked to the development of three products. The amount of contingent consideration recognized in the balance sheet as at December 31, 2010 is disclosed in Note D.18. “Liabilities related to business combinations and to non-controlling interests”.
– ~~Oenobiol (November 2009), one of France’s leading players in health and beauty dietary supplements.~~
– ~~Laboratorios Kendrick (March 2009), one of Mexico’s leading manufacturers of generics.~~
– ~~Helvepharm (July 2009), a Swiss generics company.~~
~~D.1.5. Principal acquisitions during 2008~~
~~- Acambis~~
~~In September 2008, sanofi-aventis completed~~ the acquisition of Acambis plc for £285 million. Acambis plc became Sanofi Pasteur Holding Ltd, a wholly-owned subsidiary of Sanofi Pasteur Holding S.A. This company develops novel vaccines that address unmet medical needsline itemOther gains and losses, and litigation.

–
Depreciation and amortization from January 1, 2011 are presented in the income statement line item corresponding to the type or substantially improve current standards of care. Sanofi Pasteur and Acambis plc had already been developing vaccines in a successful partnership of more than a decade: Acambis plc had been conducting major projects under exclusive collaboration agreements with sanofi pasteur, for vaccines against dengue fever and Japanese encephalitis (see Note D.4.).
~~- Symbion Consumer~~
~~In September 2008, sanofi-aventis completed the acquisition~~use of the ~~Australian company Symbion CP Holdings Pty Ltd (Symbion Consumer) for AUD 560 million. Symbion Consumer manufactures, markets and distributes nutraceuticals (vitamins and mineral supplements) and over~~asset, based on the ~~counter brands throughout Australia and New Zealand. Symbion Consumer has a portfolio~~principles applied to continuing operations.

–
In addition, this decision extinguished Sanofi's obligation to pay Merck $250 million to establish parity in the joint venture, or to pay the additional consideration of ~~brands including Natures Own, Cenovis, Bio-organics, Golden Glow and Microgenics (see Note D.4.).~~
~~In accordance with~~$750 million stipulated in the pre-revision IFRS 3 (see Note B.3.1.), adjustments to the acquisition cost of business combinations completed prior to January 1, 2010 (Fovea, Shantha, Medley) — in particular those contingent upon future events — have been recognized as adjustments to goodwill.
agreement signed on July 29, 2009.

~~D.2. Divestments~~Table of Contents
~~No material divestments occurred during 2010, 2009 or 2008.~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~D.3. Property, plant and equipment

~~D.3.~~ ~~Property, plant and equipment~~
Property, plant and equipment (including assets held under finance leases) comprise:

(€ million)    Land Buildings Plant &
equipment Fixtures,
fittings & other Property, plant
and equipment
in process    Total
Gross value at January 1, 2008    213    2,994    4,498    1,382    1,291       10,378
Changes in scope of consolidation    5    13    9    —    12       39
Acquisitions and other increases    —    30    55    67    1,207       1,359
Disposals and other decreases    (4 ) (6 ) (4 ) (58 ) (1 )    (73 )
Translation differences    (7 ) (46 ) (80 ) (22 ) 13       (142 )
Transfers    8    315    501    176    (1,010 )    (10 )
Gross value at December 31, 2008    215    3,300    4,979    1,545    1,512       11,551
Changes in scope of consolidation    61    245    199    26    13       544
Acquisitions and other increases    1    32    87    63    1,170       1,353
Disposals and other decreases    (3 ) (22 ) (23 ) (157 ) (17 )    (222 )
Translation differences    6    26    24    5    4       65
Transfers    (5 ) 463    581    122    (1,348 )    (187 )
Gross value at December 31, 2009    275    4,044    5,847    1,604    1,334       13,104
Changes in scope of consolidation    1    29    15    5    7       57
Acquisitions and other increases    1    12    57    71    1,058       1,199
Disposals and other decreases    (3 ) (14 ) (12 ) (124 ) —       (153 )
Translation differences    11    172    134    38    31       386
Transfers    (11 ) 312    482    76    (1,076 )    (217 )
Gross value at December 31, 2010    274    4,555    6,523    1,670    1,354       14,376
Accumulated depreciation & impairment at January 1, 2008    (3 ) (888 ) (1,976 ) (940 ) (33 )    (3,840 )
Depreciation expense    —    (205 ) (476 ) (161 ) —       (842 )
Impairment losses    (1 ) (17 ) (14 ) (5 ) (4 )    (41 )
Disposals    —    —    —    50    —       50
Translation differences    —    11    46    13    —       70
Transfers    —    6    20    (13 ) —       13
Accumulated depreciation & impairment at December 31, 2008    (4 ) (1,093 ) (2,400 ) (1,056 ) (37 )    (4,590 )
Depreciation expense    —    (238 ) (530 ) (161 ) —       (929 )
Impairment losses    (4 ) (73 ) (22 ) (4 ) (5 )    (108 )
Disposals    2    12    24    148    2       188
Translation differences    —    (4 ) (16 ) (3 ) —       (23 )
Transfers    3    87    103    (5 ) —       188
Accumulated depreciation & impairment at December 31, 2009    (3 ) (1,309 ) (2,841 ) (1,081 ) (40 )    (5,274 )
Depreciation expense    —    (298 ) (623 ) (167 ) —       (1,088 )
Impairment losses    (4 ) (29 ) 12    (2 ) (6 )    (29 )
Disposals    —    10    1    114    —       125
Translation differences    —    (66 ) (67 ) (24 ) —       (157 )
Transfers    5    140    42    11    4       202
Accumulated depreciation & impairment at December 31, 2010    (2 ) (1,552 ) (3,476 ) (1,149 ) (42 )    (6,221 )
Carrying amount: January 1, 2008    210    2,106    2,522    442    1,258       6,538
Carrying amount: December 31, 2008    211    2,207    2,579    489    1,475       6,961
Carrying amount: December 31, 2009    272    2,735    3,006    523    1,294       7,830
Carrying amount: December 31, 2010
   272    3,003    3,047    521    1,312       8,155
(€ million)
Land
Buildings
Plant &
equipment
Fixtures,
fittings & other
Property, plant
and equipment
in process
Total

Gross value at January 1, 2010 275 4,044 5,847 1,604 1,334 13,104

Changes in scope of consolidation 1 29 15 5 7 57
Acquisitions and other increases 1 12 57 71 1,058 1,199
Disposals and other decreases (3 ) (14 ) (12 ) (124 ) — (153 )
Currency translation differences 11 172 134 38 31 386
Transfers⁽³⁾ (11 ) 312 482 76 (1,076 ) (217 )

Gross value at December 31, 2010 274 4,555 6,523 1,670 1,354 14,376

Merial ⁽¹⁾ 31 384 208 50 84 757
Changes in scope of consolidation 72 770 396 13 613 1,864
Acquisitions and other increases 5 28 111 82 1,214 1,440
Disposals and other decreases (3 ) (32 ) (19 ) (89 ) (1 ) (144 )
Currency translation differences 4 60 (27 ) — 45 82
Transfers⁽³⁾ (8 ) 171 448 284 (1,060 ) (165 )

Gross value at December 31, 2011 375 5,936 7,640 2,010 2,249 18,210

Changes in scope of consolidation — 5 1 — — 6
Acquisitions and other increases 9 70 83 44 1,145 1,351
Disposals and other decreases (5 ) (8 ) (17 ) (161 ) (22 ) (213 )
Currency translation differences (2 ) (42 ) (23 ) (10 ) (11 ) (88 )
Transfers⁽³⁾ 7 320 622 235 (1,326 ) (142 )

Gross value at December 31, 2012 384 6,281 8,306 2,118 2,035 19,124

Accumulated depreciation & impairment at January 1, 2010 (3 ) (1,309 ) (2,841 ) (1,081 ) (40 ) (5,274 )

Depreciation expense — (298 ) (623 ) (167 ) — (1,088 )
Impairment losses (4 ) (29 ) 12 (2 ) (6 ) (29 )
Disposals — 10 1 114 — 125
Currency translation differences — (66 ) (67 ) (24 ) — (157 )
Transfers⁽³⁾ 5 140 42 11 4 202

Accumulated depreciation & impairment at December 31, 2010 (2 ) (1,552 ) (3,476 ) (1,149 ) (42 ) (6,221 )

Changes in scope of consolidation — 24 18 12 — 54
Depreciation expense ⁽²⁾ — (362 ) (700 ) (199 ) — (1,261 )
Impairment losses (28 ) (184 ) (31 ) (29 ) (15 ) (287 )
Disposals — 23 3 81 — 107
Currency translation differences (1 ) (10 ) 26 1 (1 ) 15
Transfers⁽³⁾ 12 151 54 (85 ) 1 133

Accumulated depreciation & impairment at December 31, 2011 (19 ) (1,910 ) (4,106 ) (1,368 ) (57 ) (7,460 )

Depreciation expense — (353 ) (655 ) (193 ) — (1,201 )
Impairment losses 1 (19 ) (23 ) — (111 ) (152 )
Disposals 3 3 5 145 21 177
Currency translation differences — 8 5 6 — 19
Transfers ⁽³⁾ — 39 51 (21 ) 2 71

Accumulated depreciation & impairment at December 31, 2012 (15 ) (2,232 ) (4,723 ) (1,431 ) (145 ) (8,546 )

Carrying amount: January 1, 2010 272 2,735 3,006 523 1,294 7,830

Carrying amount: December 31, 2010 272 3,003 3,047 521 1,312 8,155

Carrying amount: December 31, 2011 356 4,026 3,534 642 2,192 10,750

Carrying amount: December 31, 2012 369 4,049 3,583 687 1,890 10,578

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~⁽¹⁾
~~Year ended December 31, 2010~~
~~The “Transfers”~~This line includes the Merial property, plant and equipment previously presented asAssets held for sale or exchange, which were reclassified following the ~~years ended December 31,~~announcement of the decision to maintain two separate entities (Merial and Intervet/Schering-Plough) operating independently.
⁽²⁾
Includes the expense related to the backlog of depreciation for 2009 and 2010 on Merial property plant, and ~~2009 mainly comprises~~equipment previously classified asAssets held for sale or exchange; this expense is presented in the line itemOther gains and losses, and litigation in the income statement.
⁽³⁾
This line also includes reclassifications of assets toAssets held for sale or exchange.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
        Acquisitions during 2012 amounted to €1,351 million. The Pharmaceuticals segment made acquisitions totaling €1,061 million, primarily investments in industrial facilities (€533 million excluding Genzyme in 2012, versus €510 million in 2011 and €471 million in 2010) and in construction and fitting-out at research sites (€97 million in 2012, versus €124 million in 2011 and €159 million in 2010). Genzyme accounted for €301 million of Pharmaceuticals segment acquisitions in 2012, compared with €218 million in 2011. Acquisitions by the Vaccines segment reached €207 million (versus €302 million in 2011 and €423 million in 2010). The Animal Health segment accounted for €83 million of acquisitions in 2012, versus €78 million in 2011. Acquisitions of property, plant and equipment included €27 million of capitalized interest costs, against €44 million in 2011 and €27 million in 2010.
        Firm orders for property, plant and equipment stood at €323 million as of December 31, 2012 (versus €292 million as of December 31, 2011 and €321 million as of December 31, 2010). Property, plant and equipment pledged as security for liabilities amounted to €225 million as of December 31, 2012 (versus €239 million as of December 31, 2011 and €26 million as of December 31, ~~2010 (€15 million as of December 31, 2009 and €10 million as of December 31, 2008)~~2010).

~~Following impairment~~Impairment tests ~~conducted on~~of property, plant and equipment conducted using the method described in Note B.6., resulted in the recognition during 2012 of net impairment losses of €152 million. Most of this relates to the reorganization of research and development (see Note D.27.). In 2011, impairment testing led to the recognition of net impairment losses of €287 million, relating mainly to research and development sites and to an industrial facility in Slovakia. In 2010, an impairment loss of €53 million was recognized ~~in the year ended December 31, 2010~~ (mainly ~~in respect of~~on a site ~~designated as~~ held for sale), ~~along with~~as well as an impairment loss reversal of €24 million. In the year ended December 31, 2009, an impairment loss of €107 million was recognized on sites designated as held for sale (principally, Alnwick in the United Kingdom and Porcheville in France); see Note D.8.2. In the year ended December 31, 2008, an impairment loss of €41 million was recognized, primarily on industrial sites in France and the United States.

Acquisitions made in the Pharmaceuticals segment related primarily to investments in industrial facilities (€471 million in 2010, versus €496 million in 2009 and €501 million in 2008) and in facilities and equipment at research sites (€159 million in 2010, versus €325 million in 2009 and €376 million in 2008). Acquisitions in the Vaccines segment totaled €423 million in 2010 (compared with €446 million in 2009 and €382 million in 2008). Capitalized borrowing costs amounting to €27 million were included in acquisitions of property, plant and equipment in 2010, versus €30 million in 2009 and €24 million in 2008. Firm orders for property, plant and equipment amounted to €321 million at December 31, 2010, versus €351 million at December 31, 2009 and €450 million at December 31, 2008.
The table below shows amounts for items of property, plant and equipment held under finance leases:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Land 3 7 7
Buildings 86 137 84
Other property, plant and equipment 17 17 15

Total gross value 106 161 106

Accumulated depreciation and impairment (42 ) (64 ) (78 )

Carrying amount 64 97 28



(€ million)    December 31,
2010 December 31,
2009 December 31,
2008
Land    7    7    7
Buildings    84    99    99
Other property, plant and equipment    15    6    7
Total gross value
   106    112    113
Accumulated depreciation and impairment    (78 ) (81 ) (83 )
Carrying amount
   28    31    30
Future minimum lease payments due under finance leases atas of December 31, ~~2010~~2012 were €100 million (compared with €123 million as of December 31, 2011 and €28 million ~~(versus €27 million at~~as of December 31, ~~2009 and €31 million at December 31, 2008)~~2010), including interest of €22 million (versus €30 million as of December 31, 2011 and €3 million ~~(versus €3 million at~~as of December 31, ~~2009 and €5 million at December 31, 2008)~~2010).

The payment schedule is as follows:

December 31, 2010    Payments due by period
(€ million)    Total    Under
1 year    From 1 to
3 years    From 3 to
5 years
Over 5
years

Finance lease obligations:

– principal
   25       6       11       6       2
– interest
   3       1       2       —       —
Total
   28       7       13       6       2
December 31, 2012
Payments due by period

(€ million)
Total
Under
1 year
From 1 to
3 years
From 3 to
5 years
Over
5 years

Finance lease obligations:
– principal 78 13 27 27 11
– interest 22 7 9 4 2

Total 100 20 36 31 13

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.4. Goodwill and other intangible assets

Other intangible assets break down as follows:

(€ million)    Acquired
Aventis
R&D Other
Acquired
R&D Rights to
marketed
Aventis
products Products,
trademarks
and other
rights Software Total
other
intangible
assets
Gross value at January 1, 2008    2,644    336    29,011    1,554    587    34,132
Changes in scope of consolidation    —    198    —    139    2    339
Acquisitions and other increases    —    85    —    18    47    150
Disposals and other decreases    —    (74 ) —    (2 ) (53 ) (129 )
Translation differences    109    15    1,008    66    1    1,199
Transfers    (300 ) (2 ) 300    (15 ) 1    (16 )
Gross value at December 31, 2008    2,453    558    30,319    1,760    585    35,675
Changes in scope of consolidation    —    789    —    1,405    12    2,206
Acquisitions and other increases    —    275    —    62    56    393
Disposals and other decreases    —    (70 ) —    (1 ) (2 ) (73 )
Translation differences    (45 ) (51 ) (451 ) 47    2    (498 )
Transfers    (87 ) (9 ) 87    11    2    4
Gross value at December 31, 2009    2,321    1,492    29,955    3,284    655    37,707
Changes in scope of consolidation    —    192 —    1,365 —    1,557
Acquisitions and other increases    —    167 —    154 67 388
Disposals and other decreases    —    (7 ) —    (3 ) (9 ) (19 )
Translation differences    121 61 1,669 304 28 2,183
Transfers    (173 ) (341 ) 173 389 (1 ) 47
Gross value at December 31, 2010
   2,269 1,564 31,797 5,493 740 41,863
Accumulated amortization & impairment at January 1, 2008    (267 ) (19 ) (13,365 ) (811 ) (488 ) (14,950 )
Amortization expense    —    (29 ) (3,277 ) (176 ) (52 ) (3,534 )
Impairment losses, net of reversals    (1,233 ) (69 ) (253 ) 1    —    (1,554 )
Disposals    —    71    —    2    53    126
Translation differences    (2 ) (1 ) (486 ) (37 ) 1    (525 )
Transfers    18    —    (18 ) 24    (2 ) 22
Accumulated amortization & impairment at Dec. 31, 2008    (1,484 ) (47 ) (17,399 ) (997 ) (488 ) (20,415 )
Amortization expense    —    (70 ) (3,155 ) (303 ) (50 ) (3,578 )
Impairment losses, net of reversals    —    (28 ) (344 ) —    —    (372 )
Disposals    —    69    —    2    —    71
Translation differences    28    2    288    19    (1 ) 336
Transfers    —    2    —    (4 ) —    (2 )
Accumulated amortization & impairment at Dec. 31, 2009    (1,456 ) (72 ) (20,610 ) (1,283 ) (539 ) (23,960 )
Amortization expense    —    —    (3,050 ) (479 ) (49 ) (3,578 )
Impairment losses, net of reversals    (10 ) (132 ) (117 ) (174 ) —    (433 )
Disposals    —    5 —    3 9 17
Translation differences    (75 ) (3 ) (1,178 ) (106 ) (24 ) (1,386 )
Transfers    1 62 —    (108 ) 1 (44 )
Accumulated amortization & impairment at Dec. 31, 2010    (1,540 ) (140 ) (24,955 ) (2,147 ) (602 ) (29,384 )
Carrying amount: January 1, 2008    2,377 317 15,646 743 99 19,182
Carrying amount: December 31, 2008    969 511 12,920 763 97 15,260
Carrying amount: December 31, 2009    865 1,420 9,345 2,001 116 13,747
Carrying amount: December 31, 2010
   729 1,424 6,842 3,346 138 12,479
(€ million)
Acquired
Aventis
R&D
Other
Acquired
R&D
Rights to
marketed
Aventis
products
Products,
trademarks
and other
rights
Software
Total
other
intangible
assets

Gross value at January 1, 2010 2,321 1,492 29,955 3,284 655 37,707

Changes in scope of consolidation — 192 — 1,365 — 1,557
Acquisitions and other increases — 167 — 154 67 388
Disposals and other decreases — (7 ) — (3 ) (9 ) (19 )
Currency translation differences 121 61 1,669 304 28 2,183
Transfers ⁽³⁾ (173 ) (341 ) 173 389 (1 ) 47

Gross value at December 31, 2010 2,269 1,564 31,797 5,493 740 41,863

Merial ⁽¹⁾ — 674 — 3,235 70 3,979
Changes in scope of consolidation (42 ) 2,235 (1,044 ) 8,122 38 9,309
Acquisitions and other increases — 92 — 62 107 261
Disposals and other decreases — (13 ) — (9 ) (2 ) (24 )
Currency translation differences 43 154 667 580 7 1,451
Transfers ⁽³⁾ (167 ) (444 ) 167 450 11 17

Gross value at December 31, 2011 2,103 4,262 31,587 17,933 971 56,856

Changes in scope of consolidation — 10 — 79 — 89
Acquisitions and other increases — 87 — 123 83 293
Disposals and other decreases — (20 ) — (15 ) (30 ) (65 )
Currency translation differences (36 ) (53 ) (553 ) (296 ) (8 ) (946 )
Transfers ⁽³⁾ (279 ) (178 ) 279 166 12 —

Gross value at December 31, 2012 1,788 4,108 31,313 17,990 1,028 56,227

Accumulated amortization & impairment at January 1, 2010 (1,456 ) (72 ) (20,610 ) (1,283 ) (539 ) (23,960 )

Amortization expense — — (3,050 ) (479 ) (49 ) (3,578 )
Impairment losses, net of reversals (10 ) (132 ) (117 ) (174 ) — (433 )
Disposals and other decreases — 5 — 3 9 17
Currency translation differences (75 ) (3 ) (1,178 ) (106 ) (24 ) (1,386 )
Transfers 1 62 — (108 ) 1 (44 )

Accumulated amortization & impairment at Dec. 31, 2010 (1,540 ) (140 ) (24,955 ) (2,147 ) (602 ) (29,384 )

Changes in scope of consolidation 42 — 832 1 1 876
Amortization expense ⁽²⁾ — — (1,754 ) (1,972 ) (107 ) (3,833 )
Impairment losses, net of reversals — (101 ) 34 (75 ) (1 ) (143 )
Disposals and other decreases — 13 — 8 5 26
Currency translation differences (33 ) (6 ) (591 ) (119 ) (2 ) (751 )
Transfers — — — (4 ) (4 ) (8 )

Accumulated amortization & impairment at December 31, 2011 (1,531 ) (234 ) (26,434 ) (4,308 ) (710 ) (33,217 )

Amortization expense — — (1,452 ) (1,839 ) (105 ) (3,396 )
Impairment losses, net of reversals 12 (111 ) — (18 ) (3 ) (120 )
Disposals and other decreases — 18 — 16 25 59
Currency translation differences 30 4 475 96 6 611
Transfers — (1 ) — 3 26 28

Accumulated amortization & impairment at December 31, 2012 (1,489 ) (324 ) (27,411 ) (6,050 ) (761 ) (36,035 )

Carrying amount: January 1, 2010 865 1,420 9,345 2,001 116 13,747

Carrying amount: December 31, 2010 729 1,424 6,842 3,346 138 12,479

Carrying amount: December 31, 2011 572 4,028 5,153 13,625 261 23,639

Carrying amount: December 31, 2012 299 3,784 3,902 11,940 267 20,192

⁽¹⁾
This line item includes the Merial other intangible assets (other than goodwill) previously presented asAssets held for sale or exchange, which were reclassified following the announcement of the decision to maintain two separate entities (Merial and Intervet/Schering-Plough) operating independently.
⁽²⁾
Includes the expense related to the backlog of amortization for 2009 and 2010 on Merial intangible assets previously classified asAssets held for sale or exchange; this expense is presented in the line itemOther gains and losses, and litigation in the income statement.
⁽³⁾
The "Transfers" line mainly relates to acquired R&D that came into commercial use during the year and is being amortized from the date of marketing approval.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Movements in goodwill for the last three financial periods are shown below:
(€ million)
Gross value
Impairment
Carrying amount

Balance at January 1, 2010 29,758 (25 ) 29,733

Movements for the period ⁽¹⁾ 1,017 — 1,017
Currency translation differences 1,183 (1 ) 1,182

Balance at December 31, 2010 31,958 (26 ) 31,932

Merial goodwill ⁽²⁾ 1,210 — 1,210
Genzyme goodwill ⁽³⁾ 4,575 — 4,575
Other movements for the period ⁽¹⁾ 275 — 275
Currency translation differences 588 2 590

Balance at December 31, 2011 ⁽⁴⁾ 38,606 (24 ) 38,582

Acquisitions during the period ⁽¹⁾ 14 — 14
Other movements for the period ⁽⁵⁾ (144 ) — (144 )
Currency translation differences (376 ) (3 ) (379 )

Balance at December 31, 2012 38,100 (27 ) 38,073

⁽¹⁾
Mainly relating to changes in the scope of consolidation: in 2012, relates to Newport (€8 million) and Pluromed, Inc. (€6 million) (see Note D.1.1.).
⁽²⁾
Previously reported inAssets held for sale or exchange, and reclassified following the announcement of the decision to maintain Merial and Intervet/Schering-Plough as two separate businesses operating independently.
⁽³⁾
See Note D.1.2.
⁽⁴⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).
⁽⁵⁾
Mainly comprises an adjustment to goodwill following reversal of the Fovea contingent consideration liability in accordance with the pre-revision IFRS 3 (see Note D.18.).
•  Genzyme acquisition (2011)
        The Genzyme final purchase price allocation resulted in the recognition of intangible assets totaling €10,059 million as of the acquisition date (see Note D.1.2.). This figure includes €7,727 million for marketed products in the fields of rare diseases (primarily Cerezyme®, Fabrazyme® and Myozyme®), renal endocrinology (primarily Renagel®), biosurgery (primarily Synvisc®), and oncology. It also includes €2,148 million for assets relating to Genzyme's in-process research and development projects, primarily Lemtrada^TM and eliglustat. The Genzyme brand was valued at €146 million.
•  Merial acquisition (2009)
        When Sanofi took control of Merial in 2009, intangible assets were recognized for a total of €3,980 million. This figure includes €3,104 million for marketed products (in particular Frontline®), €674 million for in-process research and development projects, and €131 million for the Merial brand.

(€ million)    Gross value Impairment Carrying amount
Balance at January 1, 2008    27,226 (27 ) 27,199
Movements for the period⁽¹⁾    397 —    397
Translation differences    565 2    567
Balance at December 31, 2008    28,188 (25 ) 28,163
Movements for the period⁽¹⁾    1,798 —    1,798
Translation differences    (228 ) —    (228 )
Balance at December 31, 2009    29,758 (25 ) 29,733
Movements for the period⁽¹⁾    1,017 —    1,017
Translation differences    1,183 (1 ) 1,182
Balance at December 31, 2010    31,958 (26 ) 31,932
        In 2012, some of the acquired research and development (€15 million) came into commercial use, and began to be amortized from the date of marketing approval. The main item involved was a parasiticide for the bovine market in the United States.
⁽¹⁾
~~Mainly relating to changes in the scope of consolidation.~~
        In 2011, some of the acquired research and development (€451 million) came into commercial use, and began to be amortized from the date of marketing approval. The main item involved was Certifect® in the United States and the European Union.
•  Aventis ~~Acquisition~~acquisition (2004)

On August 20, 2004, ~~sanofi-aventis~~Sanofi acquired Aventis, a global pharmaceutical group created in 1999 by the merger between Rhône-Poulenc and Hoechst.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As part of the process of creating the new Group, the two former parent companies — Sanofi-Synthélabo (renamed ~~sanofi-aventis)~~Sanofi) and Aventis — were merged on December 31, 2004.

The total purchase price as measured under IFRS 3 (Business Combinations) was €52,908 million, of which €15,894 million was settled in cash.

Goodwill arising from the acquisition of Aventis amounted to €28,285 million as of December 31, 2012 (compared with €28,573 million as of December 31, 2011 and €28,228 million atas of December 31, ~~2010, compared with €27,221 million at December 31, 2009 and €27,632 million at December 31, 2008.~~2010).

Rights to marketed products and goodwill arising on the Aventis acquisition were allocated on the basis of the split of the ~~Group’s~~Group's operations into business and geographical segments, and valued in the currency of the relevant geographical segment (mainly euros and U.S. dollars) with assistance from an independent valuer. The average period of amortization for marketed products was initially set at 8 years, based on cash flow forecasts which, among other factors, take account of the period of legal protection offered by the related patents.

Rights to marketed Aventis products represent a diversified portfolio of rights relating to many different products. As of December 31, ~~2010, 80.6%~~2012, 75% of the carrying amount of these rights related to the Pharmaceuticals segment, and ~~19.4%~~25% to the Vaccines segment. ~~The five principal pharmaceutical products in this portfolio by carrying amount (Lantus~~^®~~/Apidra~~^®~~: €1,859 million; Lovenox~~^®~~: €541 million; Allegra~~^®~~: €350 million; Actonel~~^®~~: €323 million; Arava~~^®~~: €316 million) accounted for approximately 61.5% of the total carrying amount of product rights for the Pharmaceuticals business as of December 31, 2010.~~

During ~~2008,~~2012, some of the acquired Aventis research and development (€~~300~~279 million) came into commercial ~~use; it is being~~use, and began to be amortized from the date of marketing approval. The main products involved are ~~Pentacel~~^® ~~vaccine~~the multiple sclerosis treatment Aubagio® (teriflunomide) in the United States, and the ~~“once-a-month” dose of Actonel~~^®second-line prostate cancer drug Jevtana® (cabazitaxel) in the ~~United States.~~rest of the world.

During ~~2009,~~2011, some of the acquired Aventis research and development (€87167 million) came into commercial ~~use; it is being~~use, and began to be amortized from the date of marketing approval. The main item involved was the oncology product ~~involved is Sculptra~~^®Jevtana® (cabazitaxel) in the ~~United States.~~European Union.

~~During~~In 2010, some of the acquired Aventis research and development (€173 million) came into commercial ~~use; it is being amortized from the date of marketing approval.~~use. The main ~~product~~item involved iswas the oncology ~~drug Jevtana~~^®product Jevtana® (cabazitaxel) in the United States.
•  Other acquisitions
        Acquisitions of intangible assets (excluding software and business combinations) amounted to €210 million in 2012, most of which related to licensing agreements (for a description of the principal agreements, see Note D.21.).
        During 2012, €163 million of acquired research and development (other than Aventis and Merial acquired R&D) came into commercial use; the main item involved was €97 million relating to an anti-parasite product acquired in the Topaz Pharmaceuticals Inc. acquisition (see Note D.1.2.).
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~        Intangible assets relating to CO₂ emission quotas amounted to €4.1 million at December 31, 2012, compared with €4.2 million at December 31, 2011.
~~Year~~        The increase in goodwill and other intangible assets (excluding Genzyme and Merial) in the year ended December 31, ~~2010~~
2011 primarily related to the acquisition of BMP Sunstone (see Note D.1.2.).
        Acquisitions of intangible assets (excluding software and business combinations) in 2011 amounted to €154 million, mainly related to licensing agreements (for a description of the principal agreements, see Note D.21.).
~~Other acquisitions~~

Increases in goodwill and other intangible assets ~~and goodwill~~ during the year ended December 31, 2010 were mainly due to business combinations completed during the year. ~~Details of the~~The purchase price allocations for the principal acquisitions made during 2010, ~~are provided~~as described in Note ~~D.1. “Significant acquisitions”.~~
Acquisitions of intangible assets during 2010 (other than software and assets recognized in business combinations) totaled €321 million, most of which related to license agreements (see Note D.21. for a description ofD.1.4., generated the ~~principal agreements).~~following impacts:
~~The effects of the final purchase price allocations of the principal acquisitions of 2009 (see Note D.1.) were as follows:~~
~~Medley:~~
–
Chattem: recognition of intangible assets of ~~€181~~€1,121 million, and goodwill of ~~€376~~€773 million.
~~Zentiva:~~

–
TargeGen: recognition of intangible assets of ~~€976 million (mainly comprising the value~~€176 million.

Table of ~~marketed products and of the Zentiva trademark), and of goodwill of €886 million (including the effect of buyouts of non-controlling interests during the period).~~
~~BiPar: valuation of the principal product under development, BSI-201, at €539 million as of the acquisition date.~~
~~Shantha: recognition of intangible assets of €374 million.~~
Contents
~~The effects of the final purchase price allocations of the principal acquisitions of 2008 (see Note D.1.) were as follows:~~
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

~~Symbion Consumer: recognition of intangible assets of €116 million, and goodwill of €206 million.~~
~~Acambis: recognition of intangible assets of €223 million (including €198 million for research projects), and goodwill of €197 million.~~
~~During the year ended December 31,~~In 2010, acquired non-Aventis research brought into commercial use mainly comprised Zentiva generics in Eastern Europe, the Japanese encephalitis vaccine, and the ~~Libertas~~^®Libertas® formulation of ~~Actonel~~^®Actonel® in the United States.
•  Dermik sale (2011)

~~Acquisitions~~The "Change in scope of consolidation" line includes the €212 million carrying amount of the intangible assets ~~during 2009~~ (other than ~~software~~goodwill) of the Dermik dermatology business (which was sold to Valeant Pharmaceuticals International, Inc.), and ~~assets recognized in business combinations) totaled €337~~the derecognition of the €77 million ~~and related mainly~~goodwill relating to ~~license agreements, including the collaboration agreements with Exelixis and Merrimack.~~
Acquisitions of intangible assets during 2008 (other than software and assets recognized in business combinations) totaled €103 million and related mainly to license agreements, including the collaboration agreements with Novozymes and Dyax Corp.
Dermik.
Amortization of intangible assets is recognized in the income statement ~~under~~in theAmortization of intangible assets line item except for amortization of software, which is recognized onin the relevant ~~line~~component of ~~the~~operating income ~~statement~~ according to the purpose for which the software is used:

(€ million)    Year ended
December 31,
2010    Year ended
December 31,
2009    Year ended
December 31,
2008
Cost of sales    11       11       10
Research and development expenses    11       14       14
Selling and general expenses    26       24       28
Other operating expenses    1       1       —
Total
   49       50       52
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010 ⁽¹⁾

Cost of sales 27 13 11
Research and development expenses 13 16 11
Selling and general expenses 61 55 26
Other gains and losses, and litigation ⁽²⁾ — 18 —
Other operating expenses 4 5 1

Total 105 107 49

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~⁽¹⁾
Excluding Merial
~~Year ended December 31, 2010~~⁽²⁾
See Note D.28.
D.5. Impairment of intangible assets and property, plant and equipment
•  Goodwill

The recoverable amount of cash generating units (CGUs) is determined by reference to the value in use of each CGU, based on discounted estimates of the future cash flows from the CGU, in accordance with the policies described in Note B.6.1.

The allocation of goodwill ~~to CGUs~~as of December 31, 2012 is shown below:
(€ million)
Pharmaceuticals:
Europe
Pharmaceuticals:
North America
Pharmaceuticals:
Other Countries
Vaccines:
USA
Vaccines:
Other Countries
Animal
Health
Group
Total

Goodwill 15,025 14,010 6,717 751 337 1,233 38,073

        The goodwill arising on Pluromed, Inc. was allocated to the Pharmaceuticals North America CGU. The goodwill arising on Newport was allocated to the Animal Health CGU.

(€ million)    December 31, 2010
      Pharmaceuticals:
Europe    Pharmaceuticals:
North America    Pharmaceuticals:
Other Countries    Vaccines:
USA    Vaccines:
Other Countries    Group
Total
Goodwill    13,718       12,525       4,612       739       338       31,932
        The goodwill arising on Genzyme was allocated to the relevant CGUs in the Pharmaceuticals segment.
~~Value~~        The value in use isof each CGU was determined by applying ~~a post-tax~~an after-tax discount rate ~~of 9%~~ to estimated future ~~post-tax~~after-tax cash ~~flows~~flows.
        A separate discount rate is used for each CGU in order to take account of its specific economic conditions.
        The rates used for impairment testing in 2012 were in a range from 7.0% to 10.5% (principally 8.0% for Pharmaceuticals North America, and 8.5% for Pharmaceuticals Europe); an identical value in use for the Group would be obtained by applying a uniform 9% rate to all the CGUs.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
        The pre-tax discount ~~rate (calculated~~rates applied to estimated pre-tax cash flows are calculated by iteration from the previously-determined value in ~~use) applied~~use. They range from 12.4% to ~~estimated future pre-tax cash flows is approximately~~14.0%, and equate to a uniform rate of 13% for the ~~entire Group.~~Group as a whole.

The assumptions used in testing goodwill for impairment are reviewed annually. Apart from the discount rate, the principal assumptions used in ~~2010~~2012 were as follows:
–
The perpetual growth rates applied to future cash flows were in a range from 0% (in particular, for Europe and North America) to 2%1% for Pharmaceuticals CGUs, and from 1% to 3% for the Vaccines and Animal Health CGUs.
~~Sanofi-aventis~~

–
The Group also applies assumptions on the probability of success of its current research and development projects, and more generally on its ability to renew its product portfolio in the longer term.

Value in use (determined as described above) is compared with carrying amount, and this comparison is then subject to sensitivity analysis with reference to the two principal parameters (discount rate and perpetual growth rate).

NoOver all the CGUs, no reasonable change in the assumptions used in 2012 would require an impairment ~~would need~~loss to be recognized ~~unless the discount rate used to calculate~~against goodwill. No impairment loss would be required even if value in use ~~was~~were to ~~exceed~~be calculated using:
–
a discount rate up to 2.6 points above the ~~9% rate actually used by more than 2.5 percentage points. Similarly,~~ rates used; or

–
a ~~zero~~ perpetual growth rate ~~would not result in any impairment of~~up to 5.5 points below the ~~goodwill of these CGUs.~~
rates used.

No impairment losses were recognized against goodwill in the years ended December 31, ~~2010, 2009~~2012, 2011, or ~~2008.~~2010.
•  Other intangible assets

When there is evidence that an asset may have become impaired, its value in use is calculated by applying a post-tax discount rate to the estimated future post-tax cash flows from that asset. For the purposes of impairment testing, the tax cash flows relating to the asset are determined using a notional tax rate incorporating the notional tax benefit that would result from amortizing the asset if its value in use were regarded as its depreciable amount for tax purposes. Applying post-tax discount rates to post-tax cash flows gives the same values in use as would be obtained by applying pre-tax discount rates to pre-tax cash flows.

The post-tax discount rates used ~~during 2010~~in 2012 for impairment testing of other intangible assets in the Pharmaceuticals, Vaccines and ~~Vaccines~~Animal Health segments were obtained by adjusting the ~~Group’s Weighted Average Cost~~Group's 8% weighted average cost of ~~Capital of 8%~~capital to reflect specific country and business risks, giving post-tax rates in a range from 9% to ~~13%~~11%.

In most cases, there are no market data that would enable fair value less costs to sell to be determined other than by means of a similar estimate based on future cash flows. Consequently, the recoverable amount is in substance equal to the value in use.
        In 2012, impairment testing of other intangible assets (excluding software) resulted in the recognition of a €117 million net impairment loss, mainly comprising:
–
net impairment losses of €99 million against Pharmaceuticals research projects, largely due to the discontinuation of some development programs in Oncology; and

–
impairment losses of €18 million against rights for marketed products in Pharmaceuticals and Vaccines.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
        In 2011, impairment testing of other intangible assets (excluding software) resulted in the recognition of a €142 million net impairment loss. This includes:
–
~~Year ended December 31, 2010~~Impairment losses of €101 million against Pharmaceuticals research projects, primarily as a result of the interruption of the Goiter research program and the ending of research collaboration agreements; and

–
A net loss of €41 million, reflecting (i) impairment losses against various marketed products in the Pharmaceuticals segment and (ii) partial reversal of an impairment loss taken against Actonel®, following confirmation that the terms of the collaboration agreement signed with Warner Chilcott were to be maintained.

In 2010, impairment losses of €433 million were recognized based on the results of impairment testing of other intangible assets. These losses arose mainly on marketed products (€291 million), including ~~Actonel~~^®Actonel® (due to proposed amendments to the terms of the collaboration agreement with Warner ~~Chilcott, see Note C.2.)~~Chilcott) and ~~Shan5~~^®Shan5® (due to revised sales projections following requalification of the vaccine by the World Health Organization). Impairment losses recognized in respect of research projects totaled €142 million, and arose mainly from revisions to the development plan for BSI-201 following announcement of the initial results from the Phase III trial in triple-negative metastatic breast cancer and from decisions to halt development on some other projects.
~~In 2009, impairment losses of €372 million were recognized based on the results of impairment tests. These losses related mainly to the marketed products Actonel~~^®~~, Benzaclin~~^® ~~and Nasacort~~^®~~, and took account of changes in the competitive environment and the approval dates of generics.~~
~~In 2008, impairment losses were recognized to take account of:~~
– the discontinuation of research projects, principally larotaxel and cabazitaxel (new taxane derivatives intended as treatments for breast cancer, €1,175 million) and the antihypertensive ilepatril, both of which were recognized as assets on the acquisition of Aventis, plus the oral anti-cancer agent S-1 following the termination of the agreement with Taiho Pharmaceutical on development and marketing of this product;
–
~~settlements reached with Barr in the United States relating to the marketed product Nasacort~~^®~~, and the impact of generics on certain products.~~
•  Property, plant and equipment

Impairment losses taken against property, plant and equipment are disclosed in Note D.3.
D.6. Investments in associates and joint ventures

For definitions of the terms ~~“associate”~~"associate" and ~~“joint venture”~~"joint venture", refer to Note B.1.

Investments in associates and joint ventures break down as follows:
(€ million)
% interest
December 31,
2012
December 31,
2011
December 31,
2010

Sanofi Pasteur MSD 50.0 287 313 343
Infraserv GmbH and Co. Höchst KG 31.2 79 87 92
Entities and companies managed by Bristol-Myers Squibb ⁽¹⁾ 49.9 74 307 265
Financière des Laboratoires de Cosmétologie Yves Rocher — — — 128
Other investments — 47 100 96

Total 487 807 924

⁽¹⁾
Under the terms of the agreements with BMS (see Note C.1.), the Group's share of the net assets of entities majority-owned by BMS is recorded inInvestments in associates and joint ventures.
        Since November 2011, Sanofi has no longer been represented on the Board of Directors of Financière des Laboratoires de Cosmétologie Yves Rocher and consequently, as a result of the loss of significant influence, no longer accounts for this interest using the equity method. This interest was recognized as an available-for-sale financial asset as of December 31, 2011, and was sold in August 2012.

(€ million)    % interest    Dec. 31,
2010    Dec. 31,
2009 Dec. 31,
2008
Sanofi Pasteur MSD    50.0       343       407 427
Merial (until September 17, 2009)    50.0       —       — ⁽²⁾ 1,203
InfraServ Höchst    31.2       92       95 96
Entities and companies managed by Bristol-Myers Squibb⁽¹⁾    49.9       265       234 196
Zentiva (until March 30, 2009)    24.9       —       — ⁽³⁾ 332
Financière des Laboratoires de Cosmétologie Yves Rocher    39.1       128       123 119
Other investments    —       96       96 86
Total
      924       955 2,459
        The reduction in the carrying amount of the interests in entities and companies managed by Bristol-Myers Squibb during the year ended December 31, 2012 mainly reflects the loss of exclusivity for Plavix® and Avapro® in the United States during 2012.
⁽¹⁾
~~Under the terms of the agreements with BMS (see Note C.1.), the Group’s share of the net assets of entities majority-owned by BMS is recorded in~~~~Investments in associates and joint ventures.~~
⁽²⁾
~~Merial has been accounted for by the full consolidation method since September 18, 2009; see Note D.8.~~
⁽³⁾
~~Zentiva has been accounted for by the full consolidation method since March 31, 2009; see Note D.1.~~

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The financial statements include arm's length commercial transactions between the Group and certain of its associates and joint ~~ventures.~~ventures that are regarded as related parties. The principal transactions ~~of this nature~~and balances with related parties are summarized below:

(€ million)    2010    2009    2008
Sales    541       517       432
Royalties⁽¹⁾    1,324       1,179       1,014
Accounts receivable⁽¹⁾    441       419       370
Purchases    227       247       254
Accounts payable    22       32       30
Other liabilities⁽¹⁾    350       297       242
⁽¹⁾

(€ million)
2012
2011
2010

Sales 320 526 541
Royalties ⁽¹⁾ 564 1,292 1,324
Accounts receivable ⁽¹⁾ 79 503 441

Purchases 231 236 227
Accounts payable 22 21 22
Other liabilities ⁽¹⁾ 100 404 350

⁽¹⁾
These items mainly relate to entities ~~and companies managed by BMS.~~
~~Key financial indicators for associates~~ and ~~joint ventures, excluding the effects of purchase price allocations, are as follows:~~

      Principal associates ⁽¹⁾
100% impact    Principal joint ventures ⁽²⁾
Share held by sanofi-aventis
(€ million)    2010    2009    2008    2010    2009    2008
Non-current assets    512       526       1,919       25       27       354
Current assets    1,336       1,278       2,717       231       224       688
Non-current liabilities    468       336       913       100       32       99
Current liabilities    690       792       1,798       142       178       404
Equity attributable to equity holders of sanofi-aventis    387       391       1,622       14       41       536
Non-controlling interests    303       285       303       —       —       2
Net sales    8,114       9,325       9,770       459       1,203       1,537
Cost of sales    2,130       2,397       2,555       179       359       433
Operating income    3,163       3,144       2,838       49       312       372
Net income    3,035       2,880       2,384       8       222       225
⁽¹⁾
The figures reported above are full-year figures, before allocation of partnership profits. The following associates are included in this table for 2008: BMS/Sanofi Pharmaceuticals Holding Partnership, BMS/Sanofi Pharmaceuticals Partnership, BMS/Sanofi-Synthelabo Partnership, Yves Rocher, Merial, Sanofi Pasteur MSD, and Zentiva. Figures for Merial are not included in this table with effect from September 18, 2009 (the date since when Merial has been accounted for by the full consolidation method), and figures for Zentiva are not included in this table with effect from March 31, 2009 (the date since when Zentiva has been accounted for by the full consolidation method).
⁽²⁾
~~The principal joint ventures are:~~
~~Partner~~ ~~Business~~
~~Merial (~~~~until September 17, 2009)~~ ~~Merck & Co., Inc.~~ ~~Animal Health~~
~~Sanofi Pasteur MSD~~ ~~Merck & Co., Inc.~~ ~~Vaccines~~
companies managed by BMS.
D.7. Non-current financial assets
The main items included inNon-current financial assets are:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Available-for-sale financial assets 2,569 1,302 816
Pre-funded pension obligations (see Note D.19.1.) 6 6 4
Long-term loans and advances 695 573 483
Assets recognized under the fair value option 135 124 121
Derivative financial instruments (see Note D.20.) 394 394 220

Total 3,799 2,399 1,644



(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Available-for-sale financial assets    816       588       491
Pre-funded pension obligations (see Note D.19.1.)    4       3       1
Long-term loans and advances    483       256       186
Assets recognized under the fair value option    121       100       72
Derivative financial instruments (see Note D.20.)    220       51       71
Total
   1,644       998       821
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Equity ~~investments~~interests classified as available-for-sale financial assets ~~include:~~
~~A total of 1.5 million shares representing a 4.66% equity interest in Nichi-Iko, acquired in June 2010 and valued on~~include the ~~basis of the quoted market price as of December 31, 2010 at €40 million.~~following publicly traded investments:
–
An ~~18.32%~~ equity interest in the biopharmaceuticals company Regeneron, with which ~~sanofi-aventis~~Sanofi has research and development collaboration agreements (see ~~Note~~Notes D.21. and C.2.). This investment had a carrying amount of €2,051 million as of December 31, 2012 based on the quoted market price of $171.07 as of that date; this compares with a carrying amount of €678 million as of December 31, 2011 and €389 million atas of December 31, ~~2010 (€248~~2010.

–
An equity interest in the biopharmaceuticals company Merrimack Pharmaceuticals, with a carrying amount of €24 million atas of December 31, ~~2009, and €195~~2012.

–
A 4.66% equity interest in Nichi-Iko Pharmaceuticals Co. Ltd. valued at €28 million atas of December 31, ~~2008).~~
~~Equity interests in research and development companies such~~2012, based on the quoted market price as ~~Proteome Science (€2~~of that date (compared with €34 million atbased on the quoted market price as of December 31, ~~2010, €2~~2011).

–
An equity interest in Isis Pharmaceuticals, obtained via the acquisition of Genzyme, valued at €40 million atas of December 31, ~~2009, and €3~~2012 based on the quoted market price as of that date (versus €28 million atas of December 31, ~~2008) and Genfit (€3 million at December 31, 2010, €5 million at December 31, 2009, €4 million at December 31, 2008)~~2011).

–
Financial assets held to match commitments, ~~(€288 million at December 31, 2010, €269 million at December 31, 2009, and €223 million at December 31, 2008).~~
~~During 2010, the Group divested its 13% equity interest in ProStrakan for €28 million; this investment had a carrying amount of €25~~amounting to €301 million as of December 31, ~~2009.~~
2012, €272 million as of December 31, 2011, and €288 million as of December 31, 2010.

~~During 2008, the Group divested its equity interest~~Other comprehensive income recognized in ~~Millennium (carrying amount €46 million), generating a pre-tax gain~~respect of ~~€38 million (see Note D.29.).~~
~~The cumulative~~available-for-sale financial assets represents unrealized net after-tax ~~gain recognized directly~~gains of €1,745 million as of December 31, 2012 (including €1,669 million for the investment in Regeneron), versus €409 million as of December 31, 2011 and €164 million as of December 31, 2010.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
        A 10% fall in the stock prices of quoted equity oninvestments classified as available-for-sale financial assets atwould have had the following impact as of December 31, 2010 was €164 million, relating mainly to the investment in Regeneron (€111 million). This compares with a cumulative unrealized net after-tax gain of €38 million at December 31, 2009, and a cumulative unrealized net after-tax loss of €49 million at December 31, 2008, mainly on the investment in Regeneron.2012:
~~The impact of a 10% fall in stock prices on quoted shares included in available-for-sale assets at December 31, 2010 would have been as follows:~~
(€ million)
Sensitivity

~~Income/(expense) recognized directly in equity,~~Other comprehensive income before tax (58231 )
Income before tax —
Total
(58231 )

AAs regards other available-for-sale financial assets, a 10% fall in stock prices ~~of other available-for-sale financial assets~~ combined with a simultaneous 0.5% rise in the yield curve would have had the following impact atas of December 31, ~~2010:~~2012:
(€ million)
Sensitivity

~~Income/(expense) recognized directly in equity,~~Other comprehensive income before tax (1718 )
Income before tax —
Total⁽¹⁾
(1718 )
⁽¹⁾
This impact would represent approximately 6% of the value of the underlying assets.

⁽¹⁾
~~This impact would represent approximately 6% of the value of the underlying assets.~~
Available-for-sale financial assets also include equity investments not quoted in an active market. These investments had a carrying amount of €82 million as of December 31, 2012, €260 million as of December 31, 2011, and €47 million atas of December 31, ~~2010, compared with €31 million at~~2010. The reduction in 2012 is related to the sale of the investment in Yves Rocher.
        The carrying amount of Greek government bonds as of December 31, ~~2009 and €34~~2012 was €16 million, ~~at December 31, 2008.~~of which €8 million are reported inCurrent financial assets (see Note D.12.).

Long-term loans and advances are measured at amortized cost, which at the balance sheet date was not materially different from their fair value. The increase in long-term loans and advances between December 31, 2009 and December 31, 2010 was mainly due to surety paid in connection with ongoing litigation.
Assets recognized under the fair value option represent a portfolio of financial investments held to fund a deferred compensation plan offered to certain employees.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
D.8. Assets and liabilities held for sale or exchange

A breakdown as of December 31, ~~2010~~2012 of assets held for sale or exchange, and of liabilities related to assets held for sale or exchange, is shown below:

(€ million)          December 31,
2010    December 31,
2009⁽¹⁾
Merial    D.8.1.       7,019       6,540
Other    D.8.2.       17       4
Total assets held for sale or exchange
      7,036       6,544
Merial    D.8.1.       1,672       1,501
Total liabilities related to assets held for sale or exchange
      1,672       1,501
⁽¹⁾
~~In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period.~~
(€ million)

December 31,
2012
December 31,
2011
December 31,
2010

Merial ⁽¹⁾ D.8.2. — — 7,019
Other D.8.1. 101 67 17

Total assets held for sale or exchange 101 67 7,036

Merial ⁽¹⁾ D.8.2. — — 1,672
Other D.8.1. 38 20 —

Total liabilities related to assets held for sale or exchange 38 20 1,672

~~D.8.1. Merial~~⁽¹⁾
In March 2010, sanofi-aventis exercised its contractual right to combine Merial with the Intervet/Schering-Plough business to form a new joint venture equally owned by Merck and sanofi-aventis. Formation of the new joint venture is subject to signature of final agreements, antitrust review in the United States, Europe and other countries, and other customary closing conditions. Closing of the transaction is expected in 2011.
~~In accordance with the accounting policy described in Note B.7., with effect from December 31, 2009 the entire~~The assets of Merial, ~~have been reported on the line~~classified inAssets held for sale or exchange in 2010, were reclassified in 2011 to the relevant balance sheet line items, in accordance with paragraph 26 of IFRS 5.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.8.1. Other assets held for sale
        As of December 31, 2012, other assets held for sale mainly comprised certain assets of BMP Sunstone held for sale; Zentiva's industrial site at Hlohovec (Slovakia); and research and development sites in the United States and France.
        As of December 31, 2011, other assets held for sale mainly comprised assets of the BMP Sunstone sub-group that had been held for sale since the acquisition date, plus research and development sites in France and industrial or tertiary sites in Europe.
        As of December 31, 2010, other assets held for sale comprised research and development sites in France.
D.8.2. Merial
        As explained in Note D.2., ~~and~~ the ~~entire~~assets and liabilities of Merial have been reported onin the relevant balance sheet line~~Liabilities related to assets held for sale or exchange. The net income of Merial is reported on the line~~~~Net income from the held-for-exchange Merial business~~.
item since January 1, 2011.
The table below shows the assets and liabilities of Merial classified inAssets held for sale or exchange andLiabilities related to assets held for sale or exchange at as of December 31, 2010, ~~and December 31, 2009,~~ after elimination of intercompany balances between Merial and other Group companies.

(€ million)    December 31,
2010    December 31,
2009⁽¹⁾
Assets

• Property, plant and equipment and financial assets
   811       684
• Goodwill
   1,209       1,124
• Intangible assets
   3,961       3,683
• Deferred tax assets
   92       60
• Inventories
   344       425
• Accounts receivable
   405       373
• Other current assets
   50       64
• Cash and cash equivalents
   147       127
Total assets held for sale or exchange
   7,019       6,540
Liabilities

• Long-term debt
   4       6
• Non-current provisions
   70       85
• Deferred tax liabilities
   1,132       1,034
• Short-term debt
   24       22
• Accounts payable
   161       124
• Other current liabilities
   281       230
Total liabilities related to assets held for sale or exchange
   1,672       1,501
(€ million)
⁽¹⁾December 31,
2010
Assets
~~In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable~~• Property, plant and equipment and financial assets ~~and liabilities of Merial during the purchase price allocation period.~~
811
• Goodwill
1,210
• Other intangible assets
3,961
• Deferred tax assets
92
• Inventories
344
• Accounts receivable
405
• Other current assets
49
• Cash and cash equivalents
147
Total assets held for sale or exchange 7,019
Liabilities
• Long-term debt
4
• Non-current provisions
70
• Deferred tax liabilities
1,132
• Short-term debt
24
• Accounts payable
161
• Other current liabilities
281
Total liabilities related to assets held for sale or exchange 1,672

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Changes in the balances relating to Merial between December 31, 2009 and December 31, 2010 are mainly due to translation effects arising from movements in the U.S. dollar exchange rate between those dates, and to adjustments to the purchase price allocation.
~~The components of~~~~Net income from the held-for-exchange Merial business~~ ~~are shown below:~~

(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Net sales
   1,983 479 ⁽²⁾ —
Operating income    575 69 ⁽²⁾ —
Net financial income/(expense)    —    2 ⁽²⁾ —
Income tax expense    (189 ) (35 )⁽²⁾ —
Share of profit/(loss) of associates and joint ventures    —    139 ⁽¹⁾ 120
Net income from the held-for-exchange Merial business
   386 175 120
⁽¹⁾
~~Until September 17, 2009.~~
⁽²⁾
~~From September 18, 2009.~~
The table below sets forth, as required by IFRS 5, disclosures of how net income attributable to equity holders of sanofi-aventis, net income attributable to non-controlling interests, basic earnings per share and diluted earnings per share are split between activities other than Merial and the held-for-exchange Merial business:

(€ million)    Year ended
December 31,
2010    Year ended
December 31,
2009    Year ended
December 31,
2008
Net income excluding the held-for-exchange Merial business    5,335       5,516       4,172
Net income from the held-for-exchange Merial business    386       175       120
Net income
   5,721       5,691       4,292
Net income attributable to non-controlling interests:

Net income excluding the held-for-exchange Merial business
   254       426       441
Net income from the held-for-exchange Merial business
   —       —       —
Net income attributable to non-controlling interests
   254       426       441
Net income attributable to equity holders of sanofi-aventis:

Net income excluding the held-for-exchange Merial business
   5,081       5,090       3,731
Net income from the held-for-exchange Merial business
   386       175       120
Net income attributable to equity holders of sanofi-aventis
   5,467       5,265       3,851
Basic earnings per share:

Excluding the held-for-exchange Merial business (in euros)
   3.89       3.90       2.85
Held-for-exchange Merial business (in euros)
   0.30       0.13       0.09
Basic earnings per share (in euros)
   4.19       4.03       2.94
Diluted earnings per share:

Excluding the held-for-exchange Merial business (in euros)
   3.88       3.90       2.85
Held-for-exchange Merial business (in euros)
   0.30       0.13       0.09
Diluted earnings per share (in euros)
   4.18       4.03       2.94
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~The table below sets forth the net sales of Merial’s principal products, expressed in millions of U.S. dollars:~~

($ million)    Year ended
December 31,
2010    Year ended
December 31,
2009    Year ended
December 31,
2008
Frontline^® and other fipronil-based products    1,027       996       1,053
Vaccines    837       794       790
Avermectin    473       475       512
Other    298       289       288
Total
   2,635       2,554       2,643
~~The contractual obligations and other commitments of Merial as of December 31, 2010 are as follows:~~

(€ million)    Payments due by period
   Total Under
1 year From 1 to
3 years    From 3 to
5 years Over
5 years
Obligations and other contractual commitments:
• outflows
   129 104 9    12 4
• inflows
   (34 ) (30 ) —       (3 ) (1 )
Total obligations and other contractual commitments
   95 74 9    9 3
~~D.8.2. Other assets held for sale~~
~~As of December 31, 2010, other assets held for sale relate to R&D facilities in France.~~
As of December 31, 2009, other assets held for sale related to the ongoing divestment of the R&D facilities at Alnwick and Porcheville and of an industrial site. An impairment loss of €107 million was charged against these assets (and recognized under~~Restructuring costs~~ ~~in the income statement) prior to their reclassification as held for sale.~~
As of December 31, 2008, sanofi-aventis had assets held for sale relating to the ongoing divestment of a plant at Colomiers in the Haute-Garonne region of France. These assets were fully written down as of that date.
D.9. Inventories

Inventories break down as follows:

December 31, 2012
December 31, 2011
December 31, 2010

(€ million)
Gross
Impairment
Net
Gross
Impairment
Net
Gross
Impairment
Net

Raw materials 969 (72 ) 897 973 (93 ) 880 838 (88 ) 750
Work in process 3,755 (294 ) 3,461 3,444 (209 ) 3,235 2,940 (255 ) 2,685
Finished goods 2,171 (150 ) 2,021 2,107 (171 ) 1,936 1,714 (129 ) 1,585

Total 6,895 (516 ) 6,379 6,524 (473 ) 6,051 5,492 (472 ) 5,020

        The value of inventories related to Genzyme was €925 million at the acquisition date (see note D.1.2.) and €540 million at December 31, 2011. Merial inventories reclassified as of January 1, 2011 amounted to €344 million (see note D.8.2.).

(€ million)    December 31, 2010    December 31, 2009    December 31, 2008
   Gross    Impairment Net    Gross    Impairment Net    Gross    Impairment Net
Raw materials    838       (88 ) 750       752       (96 ) 656       615       (91 ) 524
Work in process    2,940       (255 ) 2,685       2,456       (241 ) 2,215       2,028       (226 ) 1,802
Finished goods    1,714       (129 ) 1,585       1,709       (136 ) 1,573       1,449       (185 ) 1,264
Total
   5,492       (472 ) 5,020       4,917       (473 ) 4,444       4,092       (502 ) 3,590

The impact of changes in provisions for impairment of inventories ~~in 2010 is~~was a net expense of €28 million in 2012, compared with €6 million in 2011 and €22 million ~~compared with €26 million~~ in ~~2009 and €30 million in 2008. Impairment losses against inventories as of December 31, 2010 relate primarily to the product Ketek~~^®.2010.
        Inventories pledged as security for liabilities ~~amount~~amounted to ~~€11~~€16 million atas of December 31, ~~2010.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
2012.
D.10. Accounts receivable

Accounts receivable break down as follows:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Gross value 7,641 8,176 6,633
Impairment (134 ) (134 ) (126 )

Net value 7,507 8,042 6,507

        The value of trade receivables related to Genzyme totaled €764 million at the acquisition date (see Note D.1.2.). Merial trade receivables reclassified as of January 1, 2011 amounted to €405 million (see Note D.8.2.).

(€ million)
December 31,
2010

December 31,
2009

December 31,
2008

Gross value    6,633 6,111 5,391
Impairment    (126 ) (96 ) (88 )
Net value
   6,507 6,015 5,303

~~The impact~~Impairment losses (net of ~~changes in provisions for impairment of~~reversals) against accounts receivable (see Note B.8.2.) amounted to €11 million in ~~2010 is a net expense of~~2012, compared with €32 million ~~compared with a net expense of €5 million~~ in ~~2009~~both 2011 and ~~a net expense of €7 million in 2008.~~2010.

The gross value of overdue receivables atas of December 31, ~~2010 is~~2012 was €1,057 million, compared with €1,103 million as of December 31, 2011 and €887 million ~~(versus €884 million at~~as of December 31, ~~2009 and €794 million at December 31, 2008).~~2010.
(€ million)
Overdue accounts
Gross value
Overdue
<1 month
Overdue from
1 to 3 months
Overdue from
3 to 6 months
Overdue from
6 to 12 months
Overdue
>12 months

December 31, 2012 1,057 371 247 152 126 161
December 31, 2011 1,103 278 227 187 135 276
December 31, 2010 887 255 207 127 97 201



(€ million)    Overdue accounts
Gross value    Overdue <
1 month    Overdue from
1 to 3 months    Overdue from
3 to 6 months    Overdue from
6 to 12 months    Overdue >
12 months
December 31, 2010    887       255       207       127       97       201
December 31, 2009    884       288       172       132       110       182
December 31, 2008    794       267       146       121       95       165
Amounts overdue by more than one month relate mainly to public-sector customers.
        Some Sanofi subsidiaries have assigned receivables to factoring companies or banks, without recourse. Because these receivables were assigned without recourse, they have been derecognized from the balance sheet as of December 31, 2012; the amount involved is €53 million. The residual guarantees relating to these transfers are immaterial.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.11. Other current assets

Other current assets break down as follows:

(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Taxes recoverable    1,188       1,019       927
Other receivables⁽¹⁾    626       914       781
Prepaid expenses    186       171       173
Total
   2,000       2,104       1,881
⁽¹⁾
~~This line mainly comprises amounts due from alliance partners, advance payments to suppliers, sales commission receivable, and amounts due from employees.~~
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Taxes recoverable 1,575 1,455 1,188
Other receivables ⁽¹⁾ 522 690 626
Prepaid expenses 258 256 186

Total 2,355 2,401 2,000

⁽¹⁾
This line mainly comprises amounts due from alliance partners, advance payments to suppliers, sales commission receivable, and amounts due from employees.
D.12. Current financial assets

Current financial assets break down as follows:

(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Interest rate derivatives measured at fair value (see Note D.20.)    1       18       33
Currency derivatives measured at fair value (see Note D.20.)    27       251       348
Other current financial assets    23       8       22
Total
   51       277       403
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Interest rate derivatives measured at fair value (see Note D.20.) 40 90 1
Currency derivatives measured at fair value (see Note D.20.) 82 48 27
Other current financial assets 56 ⁽¹⁾ 35 ⁽²⁾ 23

Total 178 173 51

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~⁽¹⁾
~~Year ended~~
Includes €8 million of Greek government bonds as of December 31, ~~2010~~2012 (see Note D.7.).
⁽²⁾
Includes €23 million of Greek government bonds as of December 31, 2011.
D.13. Cash and cash equivalents

(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Cash    696       689       502
Cash equivalents⁽¹⁾    5,769       4,003       3,724
Cash and cash equivalents⁽²⁾⁽³⁾
   6,465       4,692       4,226
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Cash 904 1,029 696
Cash equivalents ⁽¹⁾ 5,477 3,095 5,769

Cash and cash equivalents ⁽²⁾ 6,381 4,124 6,465

⁽¹⁾
Cash equivalents as of December 31, 2012 mainly comprised (i) €2,964 million invested in collective investment schemes, including euro-denominated funds classified by the AMF as "money-market" or "short-term money-market" and U.S. dollar-denominated money-market funds compliant with SEC Rule 2a-7 (December 31, 2011: €1,879 million); (ii) €1,065 million of term deposits (December 31, 2011: €316 million); (iii) €510 million of commercial paper (December 31, 2011: €260 million); and (iv) €507 million held by captive insurance and reinsurance companies in accordance with insurance regulations (December 31, 2011: €460 million).
⁽²⁾
Includes €100 million held by the Venezuelan subsidiary as of December 31, 2012, which is subject to foreign exchange controls.

⁽¹⁾
Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Cash equivalents at December 31, 2010 mainly comprised €4,805 million invested in collective investment schemes classified as Euro Money-Market Funds by the Autorité des Marchés Financiers and €786 million of term deposits.
⁽²⁾
Includes cash held by captive insurance and reinsurance companies in accordance with insurance regulations: €436 million at December 31, 2010, €430 million at December 31, 2009, and €429 million at December 31, 2008.
⁽³⁾
~~Includes €31 million held by the Venezuelan subsidiary, which is subject to foreign exchange controls.~~
D.14. Net deferred tax position

The net deferred tax position breaks down as follows:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Deferred tax on:
• Consolidation adjustments (intragroup margin in inventory) 1,156 858 875
• Provision for pensions and other employee benefits 1,608 1,297 1,157
• Remeasurement of other acquired intangible assets ⁽¹⁾ (5,641 ) (6,815 ) (3,706 )
• Recognition of acquired property, plant and equipment at fair value (83 ) (75 ) (76 )
• Equity interests in subsidiaries and investments in foreign affiliates ⁽²⁾ (1,276 ) (1,154 ) (399 )
• Tax losses available for carry-forward 593 617 152
• Stock options and other share-based payment 79 40 12
• Accrued expenses and provisions deductible at the time of payment ⁽³⁾ 1,923 1,946 1,349
• Other 86 389 (121 )

Net deferred tax liability (1,555 ) (2,897 ) (757 )

⁽¹⁾
Includes deferred tax liabilities of €1,417 million as of December 31, 2012 relating to the remeasurement of Aventis intangible assets, €2,761 million relating to Genzyme, and €368 million relating to Merial.
⁽²⁾
In some countries, the Group is liable to withholding taxes and other tax charges when dividends are distributed. Consequently, the Group recognizes a deferred tax liability on the reserves of foreign subsidiaries (approximately €22.6 billion) which the Group regards as likely to be distributed in the foreseeable future.
⁽³⁾
Includes deferred tax assets related to restructuring provisions, amounting to €615 million as of December 31, 2012, €451 million as of December 31, 2011, and €389 million as of December 31, 2010.
        The reserves of Sanofi subsidiaries that would be taxable if distributed but for which no distribution is planned, and for which no deferred tax liability has therefore been recognized, totaled €18.4 billion as of December 31, 2012, compared with €15.7 billion as of December 31, 2011 and €16.2 billion as of December 31, 2010.

(€ million)    December 31,
2010 December 31,
2009 December 31,
2008
Deferred tax on:
• Consolidation adjustments (intragroup margin in inventory)    875 858 845
• Provision for pensions and other employee benefits    1,157 1,097 1,070
• Remeasurement of acquired intangible assets⁽¹⁾    (3,706 ) (4,144 ) (4,805 )
• Recognition of acquired property, plant and equipment at fair value    (76 ) (99 ) (65 )
• Tax cost of distributions made from reserves⁽²⁾    (399 ) (643 ) (769 )
• Tax losses available for carry-forward    152 70 171
• Stock options    12 21 6
• Other non-deductible provisions and other items    1,228 819 799
Net deferred tax liability
   (757 ) (2,021 ) (2,748 )

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

⁽¹⁾
~~Includes a deferred tax liability of €2,559 million as of December 31, 2010 relating to the remeasurement of Aventis intangible assets.~~
⁽²⁾
In some countries, the Group is liable to withholding taxes and other tax charges when dividends are distributed. Consequently, the Group recognizes a deferred tax liability on those reserves (approximately €16 billion) which the Group regards as likely to be distributed in the foreseeable future (see Note D.30.).
The table below shows when the tax losses available for carry-forward by the Group are due to expire:
(€ million)
Tax losses available
for carry-forward ⁽¹⁾

2013 24
2014 15
2015 30
2016 16
2017 145
2018 and later ⁽²⁾ 2,197

Total at December 31, 2012 2,427 ⁽³⁾

Total at December 31, 2011 2,699 ⁽⁴⁾

Total at December 31, 2010 1,028 ⁽⁵⁾

⁽¹⁾
Excluding tax loss carry-forwards on asset disposals. Tax loss carry-forwards on asset disposals were zero at December 31, 2012 and December 31, 2011, versus €101 million at December 31, 2010.
⁽²⁾
Mainly comprises tax losses available for carry-forward indefinitely.
⁽³⁾
The Group's policies for the recognition of deferred tax assets are described in Note B.22. The recognition of deferred tax assets is determined on the basis of profit forecasts for each tax group. These forecasts are consistent with the Group's long-term business plan, and are based on time horizons that take account of the period of availability of tax loss carry-forwards and the specific circumstances of each tax group. Deferred tax assets relating to tax loss carry-forwards as of December 31, 2012 amounted to €734 million, of which €141 million were not recognized.
⁽⁴⁾
Deferred tax assets relating to tax loss carry-forwards as of December 31, 2011 amounted to €843 million, of which €226 million were not recognized.
⁽⁵⁾
Deferred tax assets relating to tax loss carry-forwards as of December 31, 2010 amounted to €357 million, of which €205 million were not recognized.


(€ million)
2011    21
2012    19
2013    15
2014    8
2015    17
2016 and later    948
Total tax losses available for carry-forward at December 31, 2010⁽¹⁾
   1,028
Total tax losses available for carry-forward at December 31, 2009
   642
Total tax losses available for carry-forward at December 31, 2008
   845
⁽¹⁾
Excluding tax loss carry-forwards on asset disposals. Tax loss carry-forwards on asset disposals amounted to €101 million at December 31, 2010, €597 million at December 31, 2009, and €776 million at December 31, 2008.
Use of ~~these~~ tax loss carry-forwards is limited to the entity in which they arose. In jurisdictions where tax consolidations are in place, tax losses can be netted against taxable income generated by ~~the~~ entities in the same consolidated tax group.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Deferred tax assets not recognized because their future recovery was not regarded as probable given the expected results of the entities in question amounted to €413 million in 2012, €476 million in 2011, and €451 million ~~at December 31,~~in 2010 (including €35 million on asset disposals)~~, compared with €486 million at December 31, 2009 (including €99 million on asset disposals) and €374 million at December 31, 2008 (including €162 million on asset disposals)~~.
The effect of recognizing previously unrecognized deferred tax assets in accounting for business combinations (requiring a corresponding adjustment to goodwill) amounted to €88 million at December 31, 2009 and €6 million at December 31, 2008.
D.15. Consolidated ~~shareholders’~~shareholders' equity
D.15.1. Share capital

The share capital of ~~€2,621,995,570~~€2,652,685,918 consists of ~~1,310,997,785~~1,326,342,959 shares with a par value of €2.

~~The number of own~~Treasury shares held by the Group ~~as treasury shares is~~are as follows:

Number of shares
in million
%

December 31, 2012 3.1 0.24%
December 31, 2011 17.2 1.28%
December 31, 2010 6.1 0.46%
January 1, 2010 9.4 0.71%



      Number of shares    %
December 31, 2010    6,070,712       0.46%
December 31, 2009    9,422,716       0.71%
December 31, 2008    10,014,971       0.76%
January 1, 2008    37,725,706       2.76%
Treasury shares are deducted from ~~shareholders’~~shareholders' equity. Gains and losses on disposals of treasury shares are taken directly to equity and are not recognized in net income for the period.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Movements in the share capital of the ~~sanofi-aventis~~Sanofi parent company over the last three years are presented below:
Date
Transaction
Number of
shares
Share
capital ⁽¹⁾
Additional
paid-in
capital ⁽¹⁾

January 1, 2010 1,318,479,052 2,637 6,738

During 2010 Capital increase by exercise of stock subscription options 430,033 1 17
Board of Directors meeting of April 28, 2010 Capital reduction by cancellation of treasury shares (7,911,300 ) (16 ) (404 )

December 31, 2010 1,310,997,785 2,622 6,351

During 2011 Capital increase by exercise of stock subscription options 1,593,369 4 66
During 2011 Capital increase by issue of restricted shares 587,316 1 (1 )
June 16, 2011 Capital increase by payment of dividends in shares 38,139,730 76 1,814
Board of Directors meeting of July 27, 2011 Capital reduction by cancellation of treasury shares (2,328,936 ) (5 ) (116 )
Board of Directors meeting of November 2, 2011 Capital reduction by cancellation of treasury shares (8,070,453 ) (16 ) (372 )

December 31, 2011 1,340,918,811 2,682 7,742

During 2012 Capital increase by exercise of stock subscription options 11,945,454 24 621
During 2012 Capital increase by issue of restricted shares 1,074,063 2 (2 )
Board of Directors meeting of April 26, 2012 Capital reduction by cancellation of treasury shares (21,159,445 ) (42 ) (1,088 )
Board of Directors meeting of October 24, 2012 Capital reduction by cancellation of treasury shares (6,435,924 ) (13 ) (405 )

December 31, 2012 1,326,342,959 2,653 6,868

⁽¹⁾
Amounts expressed in € million.


      (€ million)
Date    Transaction    Number of
shares Share
capital Additional
paid-in
capital
January 1, 2008
      1,365,916,644    2,732    9,410
During 2008    Capital increase by exercise of stock subscription options    1,046,238    2    37
Board meeting of April 29, 2008    Capital reduction by cancellation of treasury shares    (51,437,419 ) (103 ) (2,843 )
December 31, 2008
      1,315,525,463    2,631    6,604
During 2009    Capital increase by exercise of stock subscription options    2,953,589    6    134
December 31, 2009
      1,318,479,052    2,637    6,738
During 2010    Capital increase by exercise of stock subscription options    430,033    1    17
Board meeting of April 28, 2010    Capital reduction by cancellation of treasury shares    (7,911,300 ) (16 ) (404 )
December 31, 2010
      1,310,997,785    2,622    6,351
For equity related disclosures ~~about the management of capital~~ as required under IFRS 7, refer to Note B.27.
        A total of 11,945,454 shares were issued during 2012 as a result of the exercise of Sanofi stock subscription options.
        In addition, a total of 1,074,063 shares vested and were issued in 2012 under restricted share plans. This total includes 523,477 shares issued in March 2012 under the March 1, 2010 plan, and 533,000 shares issued in October 2012 to grantees in France under the global plan under which all employees were entitled to 20 shares each.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.15.2. Restricted share plans

Restricted share plans are accounted for in accordance with the policies described in Note B.24.3.
–
The ~~meeting of the sanofi-aventis~~ Board of Directors ~~held on October 27, 2010 decided to award~~meeting of March 5, 2012 approved a ~~worldwide~~ restricted share plan ~~under~~with performance conditions involving 4,694,260 shares, of which 20 shares were granted to each employee of the Group. The fair value per share granted is the market price of the share as of the date of grant (€49.53), adjusted for expected dividends during the vesting period. A total of 2,101,340 shares were granted under this plan.
~~The fair value of this restricted share plan is €67 million.~~
~~The meeting of the sanofi-aventis Board of Directors held on March 1, 2010 decided to award a discretionary restricted share plan. A total of 1,231,249 shares were granted, 699,524 of which~~3,127,160 will vest after a four-year service period and ~~531,725~~1,567,100 will vest after a three-year service period but will be subject to a further two-year lock-up period.
The plan was measured as of the date of grant. The fair value per share awarded is the quoted market price per share as of that date (€57.62), adjusted for dividends expected during the vesting period.
The fair value of this plan is €192 million. This amount is being recognized in profit or loss over the vesting period, with the matching entry recognized directly in equity; the expense recognized in 2012 was €45 million.
–
The Board of Directors meeting of March 9, 2011 approved a restricted share plan with performance conditions involving 3,330,650 shares, of which 1,934,610 will vest after a four-year service period and 1,396,040 will vest after a two-year service period but will be subject to a further two-year lock-up period. The fair value per share ~~granted~~awarded is the quoted market price per share as of the date of grant (€50.28), adjusted for dividends expected during the vesting period.
The fair value of this plan is €125 million.
–
The Board of Directors meeting of October 27, 2010 approved a worldwide restricted share plan, under which 20 shares were awarded to each employee of the Group. The fair value per share awarded is the quoted market price per share as of the date of grant (€49.53), adjusted for dividends expected during the vesting period. A total of 2,101,340 shares were awarded under this plan.
The fair value of this plan is €67 million.
–
The Board of Directors meeting of March 1, 2010 approved a restricted share plan involving 1,231,249 shares, of which 699,524 will vest after a four-year service period and 531,725 will vest after a two-year service period but will be subject to a further two-year lock-up period. The fair value per share awarded is the quoted market price per share as of the date of grant (€54.82), adjusted for expected dividends during the vesting period.
The fair value of this ~~restricted share~~ plan is €50 million.

The total expense recognized for all restricted share plans in the year ended December 31, ~~2010~~2012 was ~~€36~~€125 million, compared with ~~€11~~€84 million in the year ended December 31, ~~2009.~~2011 and €36 million in the year ended December 31, 2010.

AsThe number of restricted shares not yet vested as of December 31, ~~2010, there were 4,467,968 restricted shares outstanding: 2,101,340~~2012 was 10,414,053, comprising 4,584,920 under the 2012 plans, 3,184,240 under the 2011 plans, 1,470,980 under the October 2010 ~~plan, 1,208,261~~plans, 631,544 under the March 2010 ~~plan,~~plans, and ~~1,158,367~~542,369 under the March 2009 ~~plan. As~~plans. The number of restricted shares not yet vested was 7,062,324 as of December 31, ~~2009, there were 1,181,049 restricted shares outstanding.~~
The meeting of the sanofi-aventis Board of Directors held on March 2, 2009 decided to award a restricted share plan. A total of 1,194,064 shares were granted, 604,004 of which will vest after a four-year service period2011 and 590,060 of which will vest after a two-year service period but will be subject to a further two-year lock-up period (including 65,000 shares which are also contingent upon performance conditions). The fair value per share granted is the market price per share4,467,968 as of ~~the date of grant (€41.10), adjusted for expected dividends during the vesting period.~~
~~The fair value of this restricted share plan is €37 million.~~
December 31, 2010.
D.15.3. Capital increase ~~reserved for employee share ownership plans~~
        On May 6, 2011, the Annual General Meeting of Sanofi shareholders approved the payment of a dividend of €2.50 per share in respect of the year ended December 31, 2010, with an option for payment in cash or in newly-issued Sanofi shares. This option was exercised by shareholders representing 57.8% of the shares, as a result which 38,139,730 new shares were issued for payment of the dividend in shares. The shares issued represent 2.9% of the share capital, and led to an increase of €76 million in the share capital and €1,814 million in additional paid-in capital (net of issuance costs).
        Capital increases arising from the exercise of Sanofi stock subscription options and restricted share plans are described in Note D.15.1.
There were no share issues reserved for ~~employee share ownership plans~~employees in 2010, ~~2009~~2011 or ~~2008.~~2012.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.15.4. Repurchase of ~~sanofi-aventis~~Sanofi shares

~~The sanofi-aventis Shareholders’~~On May 4, 2012, the Annual General Meeting of ~~May 17, 2010 authorized~~Sanofi shareholders approved a share repurchase program for a period of 18 months. ~~Sanofi-aventis has not repurchased any of its own shares under~~Under this program ~~since that date.~~and only this program, the Group repurchased 6,060,150 shares in 2012 for a total amount of €397 million.

~~Under~~On May 6, 2011, the ~~share repurchase program authorized by the Shareholders’~~ Annual General Meeting of ~~April 17, 2009, sanofi-aventis~~Sanofi shareholders approved a share repurchase program for a period of 18 months. Under this program, the Group repurchased ~~5,871,026~~7,513,493 shares in the first half of ~~its own shares during 2010~~2012 for a total amount of ~~€321~~€426 million, and 21,655,140 shares in 2011 for a total amount of €1,074 million.

~~Sanofi-aventis~~On May 17, 2010, the Annual General Meeting of Sanofi shareholders approved a share repurchase program for a period of 18 months. The Group did not repurchase any of its own shares ~~during 2009.~~
~~The Shareholders’ Annual General Meeting of May 14, 2008 authorized a share repurchase program,~~ under ~~which sanofi-aventis purchased 810,000 of its own shares during the period from June 6, 2008 through August 21, 2008 for a total of €36 million (including transaction costs).~~
this program.
D.15.5. ~~Reduction~~Reductions in share capital

~~The meeting of~~On October 24, 2012, the ~~sanofi-aventis~~ Board of Directors ~~held on~~approved the cancellation of 6,435,924 treasury shares (€418 million), representing 0.49% of the share capital as of that date.
        On April 26, 2012, the Board of Directors approved the cancellation of 21,159,445 treasury shares (€1,130 million), representing 1.60% of the share capital as of that date.
        On November 2, 2011, the Board of Directors approved the cancellation of 8,070,453 treasury shares (€388 million), representing 0.60% of the share capital as of that date.
        On July 27, 2011, the Board of Directors approved the cancellation of 2,328,936 treasury shares (€121 million), representing 0.17% of the share capital as of that date.
        On April 28, 2010, ~~decided to cancel~~the Board of Directors approved the cancellation of 7,911,300 treasury shares (€420 million), representing 0.60% of the share capital as of that date.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The meeting of the sanofi-aventis Board of Directors held on April 29, 2008 decided to cancel 51,437,419 treasury shares (€2,946 million), of which 51,407,169 had been repurchased through April 14, 2008 under the share repurchase program, representing 3.77% of the share capital as of that date (see Note D.15.4.).
These cancellations had no effect on ~~consolidated shareholders’~~shareholders' equity.
D.15.6. ~~Cumulative~~Currency translation differences

~~Cumulative~~Currency translation differences break down as follows:
(€ million)
December 31,
2012
December 31,
2011 ⁽¹⁾
December 31,
2010

Attributable to equity holders of Sanofi (1,918 ) (1,390 ) (1,318 )
Attributable to non-controlling interests (24 ) (16 ) (4 )

Total (1,942 ) (1,406 ) (1,322 )

⁽¹⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).


(€ million)    December 31,
2010 December 31,
2009⁽¹⁾ December 31,
2008
Attributable to equity holders of sanofi-aventis    (1,318 ) (3,962 ) (3,669 )
Attributable to non-controlling interests    (4 ) (15 ) (16 )
Total
   (1,322 ) (3,977 ) (3,685 )
⁽¹⁾
In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period (see Note D.1.); the impact on cumulative translation differences was €3 million.
The movement in ~~cumulative~~currency translation differences during the period was mainly due to the effect of changes in the U.S. dollar exchange rate, primarily on goodwill, intangible assets and inventories.

In accordance with the accounting policy described in Note B.8.4., ~~cumulative~~currency translation differences attributable toequity holders of ~~sanofi-aventis~~Sanofi include the ~~post-tax effect~~effects of currency hedges of net investments in foreign ~~operations, which amounted to~~operations; these effects (after tax) were €72 million at December 31, 2012, €66 million at December 31, 2011, and €85 million at December 31, ~~2010 compared with €86 million at December 31, 2009 and €98 million at December 31, 2008.~~2010.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.15.7. ~~Income and expenses recognized directly in equity~~Other comprehensive income

Movements in other comprehensive income ~~and expenses recognized directly in equity break down~~are as follows:

(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009⁽¹⁾ Year ended
December 31,
2008
Balance, beginning of period
   (3,755 ) (4,436 ) (4,659 )
Available-for-sale financial assets:
• Change in fair value⁽²⁾
   141 110 (132 )
• Tax effects
   (15 ) (23 ) 33
Cash flow hedges:
• Change in fair value⁽³⁾
   17 (175 ) 104
• Tax effects
   (6 ) 61 (37 )
Zentiva fair value remeasurement:
• Change in fair value⁽⁴⁾
   —    108 —
• Tax effects
   —    (28 ) —
Merial fair value remeasurement:
• Change in fair value⁽⁴⁾
   —    1,379 —
• Tax effects
   —    (326 ) —
Actuarial gains and losses
• Impact of asset ceiling
   1 2 2
• Actuarial gains/(losses) excluding associates, joint ventures and Merial
   (316 ) (169 ) (824 )
• Actuarial gains/(losses) on associates and joint ventures
   (1 ) (2 ) (7 )
• Actuarial gains/(losses) on Merial
   5 —    —
• Tax effects
   172 36 136
Change in cumulative translation differences
• Translation differences on foreign subsidiaries^(5)/(6)
   2,656 (280 ) 948
• Hedges of net investments in foreign operations
   (2 ) (18 ) —
• Tax effects
   1 6 —
Balance, end of period
   (1,102 ) (3,755 ) (4,436 )
Attributable to equity holders of sanofi-aventis    (1,097 ) (3,739 ) (4,419 )
Attributable to non-controlling interests    (5 ) (16 ) (17 )
⁽¹⁾
In accordance with IFRS 3 (Business Combinations), sanofi-aventis adjusted the values of certain identifiable assets and liabilities of Merial during the purchase price allocation period (see Note D.1.); the impact on the fair value remeasurement was €164 million before tax effects, and a tax effect of (€33) million.
⁽²⁾
~~Includes reclassifications to profit or loss: (€0.4) million in 2010, (€1) million in 2009, and (€11) million in 2008.~~
⁽³⁾
Includes reclassifications to profit or loss: €7 million in 2010, (€123) million in 2009 and (€9) million in 2008 in operating income; €5 million in 2010, (€35) million in 2009 and (€17) million in 2008 in net financial expense.
⁽⁴⁾
~~Fair value remeasurement of the previously-held equity interest (Zentiva 24.9%, Merial 50%) as of the date when control was acquired.~~
⁽⁵⁾
~~Includes €155 million for Merial in 2010, and €10 million for Merial from the acquisition date through December 31, 2009.~~
⁽⁶⁾
~~Includes a reclassification of €3 million to profit or loss in 2010.~~
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011 ⁽¹⁾
Year ended
December 31,
2010

Balance, beginning of period (1,477 ) (1,102 ) (3,755 )

Attributable to equity holders of Sanofi (1,460 ) (1,097 ) (3,739 )
Attributable to non-controlling interests (17 ) (5 ) (16 )

Actuarial gains/(losses)
• Impact of asset ceiling
1 — 1
• Actuarial gains/(losses) excluding associates and joint ventures
(1,549 ) (677 ) (311 )
• Actuarial gains/(losses) on associates and joint ventures
(7 ) — (1 )
• Tax effects
492 138 172

Items not subsequently reclassifiable to profit or loss (1,063 ) (539 ) (139 )

Available-for-sale financial assets:
• Change in fair value ⁽²⁾
1,451 250 141
• Tax effects
(114 ) (5 ) (15 )
Cash flow hedges:
• Change in fair value ⁽³⁾
(4 ) 5 17
• Tax effects
1 (2 ) (6 )
Change in currency translation differences:
• Currency translation differences on foreign subsidiaries ⁽⁴⁾
(542 ) (65 ) 2,656
• Hedges of net investments in foreign operations
10 (30 ) (2 )
• Tax effects
(4 ) 11 1

Items subsequently reclassifiable to profit or loss 798 164 2,792

Balance, end of period (1,742 ) (1,477 ) (1,102 )

Attributable to equity holders of Sanofi (1,718 ) (1,460 ) (1,097 )
Attributable to non-controlling interests (24 ) (17 ) (5 )

⁽¹⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).
⁽²⁾
Including reclassifications to profit or loss: (€16 million) in 2012, not significant in 2011 or 2010.
⁽³⁾
Including reclassifications to profit or loss in operating income: not significant in 2012 or 2011, €7 million in 2010; in net financial expense, €0.4 million in 2012, €2 million in 2011 and €5 million in 2010.
⁽⁴⁾
Includes reclassifications to profit or loss of (€1 million) in 2012, €1 million in 2011 and €3 million in 2010.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.15.8. Share-based payment
Stock option plans
a) Assumption by ~~sanofi-aventis~~Sanofi of the obligations of Aventis
Stock subscription option plans

With effect from December 31, 2004, ~~sanofi-aventis~~Sanofi substituted for Aventis in all the rights and obligations of the issuer in respect of stock subscription options granted to employees and former corporate officers of Aventis and of related companies (as defined in article L.225-180 of the Commercial Code) and not exercised as of that date.

With effect from December 31, 2004, stock subscription options granted by Aventis and not yet exercised may be exercised in ~~sanofi-aventis~~Sanofi shares on the same terms, subject to the adjustments described below. The number and subscription price of the optioned shares have been adjusted to reflect the share exchange ratio applicable to Aventis shareholders, subject to possible further adjustment in the event of future capital transactions. The new terms for the exercise of options, subject to future financial adjustments, are as follows:
•
The number of ~~sanofi-aventis~~Sanofi shares for which each grantee may subscribe under a given stock option plan equals the number of Aventis shares to which the grantee may subscribe under that plan multiplied by the exchange ratio applicable to the shareholders (i.e. 27/23), rounded down to the nearest whole number.

•
The subscription price per ~~sanofi-aventis~~Sanofi share equals the subscription price per Aventis share divided by the exchange ratio applicable to the shareholders (i.e. 27/23), rounded down to the nearest euro cent.
b) Description of stock option plans
Stock subscription option plans
~~2010~~        On March 5, 2012, the Board of Directors granted 814,050 stock subscription ~~option~~options at an exercise price of €56.44 per share. The vesting period is four years, and the plan ~~awarded by sanofi-aventis~~expires on March 5, 2022.
        On March 9, 2011, the Board of Directors granted 874,500 stock subscription options at an exercise price of €50.48 per share. The vesting period is four years, and the plan expires on March 9, 2021.
On March 1, 2010, the ~~sanofi-aventis~~ Board of Directors granted 8,121,355 stock subscription options at an exercise price of €54.12 per share.
The vesting period is four years, and the plan expires on February 28, 2020.
~~2009 stock subscription option plan awarded by sanofi-aventis~~
~~On March 2, 2009, the Board of Directors granted 7,736,480 stock subscription options at an exercise price of €45.09 per share.~~
~~The vesting period is four years, and the plan expires on March 2, 2019.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Stock purchase option plans

The table shows all ~~sanofi-aventis~~Sanofi stock purchase option plans still outstanding or under which options were exercised in the year ended December 31, ~~2010.~~2012.
Origin
Date of grant
Options
granted
Start date of
exercise period
Expiration
date
Exercise
price (€)
Options
outstanding at
December 31,
2012

Synthélabo 10/18/1994 330,200 10/18/1999 10/18/2014 6.01 5,200
Synthélabo 01/12/1996 208,000 01/12/2001 01/12/2016 8.56 8,870
Synthélabo 04/05/1996 228,800 04/05/2001 04/05/2016 10.85 18,500
Synthélabo 10/14/1997 262,080 10/14/2002 10/14/2017 19.73 23,442
Synthélabo 06/25/1998 296,400 06/26/2003 06/25/2018 28.38 3,500
Synthélabo 03/30/1999 716,040 03/31/2004 03/30/2019 38.08 232,025
Sanofi-Synthélabo 05/22/2002 3,111,850 05/23/2006 05/22/2012 69.94 —

Total 291,537

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


Origin    Date of grant    Options
granted    Start date of
exercise period    Expiration
date    Exercise
price (€)    Options
outstanding at
December 31,
2010
Synthélabo    12/15/1993       364,000       12/15/1998       12/15/2013       6.36       6,200
Synthélabo    10/18/1994       330,200       10/18/1999       10/18/2014       6.01       10,900
Synthélabo    01/12/1996       208,000       01/12/2001       01/12/2016       8.56       19,270
Synthélabo    04/05/1996       228,800       04/05/2001       04/05/2016       10.85       34,670
Synthélabo    10/14/1997       262,080       10/14/2002       10/14/2017       19.73       29,242
Synthélabo    06/25/1998       296,400       06/26/2003       06/25/2018       28.38       10,520
Synthélabo    03/30/1999       716,040       03/31/2004       03/30/2019       38.08       320,185
Sanofi-Synthélabo    05/24/2000       4,292,000       05/25/2004       05/24/2010       43.25       —
Sanofi-Synthélabo    05/10/2001       2,936,500       05/11/2005       05/10/2011       64.50       2,535,539
Sanofi-Synthélabo    05/22/2002       3,111,850       05/23/2006       05/22/2012       69.94       2,880,750
Total
                  5,847,276
~~Sanofi-aventis~~Sanofi shares acquired to cover stock purchase ~~options~~option plans are deducted from ~~shareholders’~~shareholders' equity. The exercise of all outstanding stock purchase options would increase ~~shareholders’~~shareholders' equity by ~~€375~~€10 million.
Stock subscription option plans

Details of the terms of exercise of stock subscription options granted under the various plans are presented below in ~~sanofi-aventis~~Sanofi share equivalents. These options have been granted to certain corporate officers and employees of Group companies.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The table shows all ~~sanofi-aventis~~Sanofi stock subscription option plans still outstanding or under which options were exercised in the year ended December 31, ~~2010.~~2012.
Origin
Date of grant
Options
granted
Start date of
exercise period
Expiration
date
Exercise
price (€)
Options
outstanding at
December 31,
2012

Aventis 03/06/2002 1,173,913 03/07/2005 03/06/2012 69.82 —
Aventis 11/12/2002 11,775,414 11/13/2005 11/12/2012 51.34 —
Aventis 12/02/2003 12,012,414 12/03/2006 12/02/2013 40.48 1,850,188
Sanofi-Synthélabo 12/10/2003 4,217,700 12/11/2007 12/10/2013 55.74 1,359,860
Sanofi-aventis 05/31/2005 15,228,505 06/01/2009 05/31/2015 70.38 12,897,536
Sanofi-aventis 12/14/2006 11,772,050 12/15/2010 12/14/2016 66.91 9,591,305
Sanofi-aventis 12/13/2007 11,988,975 12/14/2011 12/13/2017 62.33 8,632,330
Sanofi-aventis 03/02/2009 7,736,480 03/04/2013 03/01/2019 45.09 7,143,460
Sanofi-aventis 03/01/2010 8,121,355 03/03/2014 02/28/2020 54.12 7,597,245
Sanofi-aventis 03/09/2011 874,500 03/10/2015 03/09/2021 50.48 844,500
Sanofi 03/05/2012 814,050 03/06/2016 03/05/2022 56.44 814,050

Total 50,730,474



Origin    Date of grant    Options
granted    Start date of
exercise period    Expiration
date    Exercise
price (€)
Options
outstanding at
December 31,
2010

Aventis    05/11/2000       877,766       05/11/2003       05/11/2010       49.65       —
Aventis    11/14/2000       13,966,871       11/15/2003       11/14/2010       67.93       —
Aventis    03/29/2001       612,196       03/30/2004       03/29/2011       68.94       546,756
Aventis    11/07/2001       13,374,051       11/08/2004       11/07/2011       71.39       9,516,335
Aventis    03/06/2002       1,173,913       03/07/2005       03/06/2012       69.82       1,173,906
Aventis    11/12/2002       11,775,414       11/13/2005       11/12/2012       51.34       5,250,212
Aventis    12/02/2003       12,012,414       12/03/2006       12/02/2013       40.48       5,274,033
Sanofi-Synthélabo    12/10/2003       4,217,700       12/11/2007       12/10/2013       55.74       3,816,770
Sanofi-aventis    05/31/2005       15,228,505       06/01/2009       05/31/2015       70.38       13,362,425
Sanofi-aventis    12/14/2006       11,772,050       12/15/2010       12/14/2016       66.91       10,875,740
Sanofi-aventis    12/13/2007       11,988,975       12/14/2011       12/13/2017       62.33       11,239,195
Sanofi-aventis    03/02/2009       7,736,480       03/04/2013       03/01/2019       45.09       7,421,945
Sanofi-aventis    03/01/2010       8,121,355       03/03/2014       02/28/2020       54.12       7,946,335
Total
                  76,423,652
The exercise of all outstanding stock subscription options would increase ~~shareholders’~~shareholders' equity by approximately ~~€4,628~~€3,060 million. The exercise of each option results in the issuance of one share.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Summary of stock option plans

A summary of stock options outstanding at each balance sheet date, and of changes during the relevant periods, is presented below:

Exercise price

Number of
options
Weighted average
per share (€)
Total
(€ million)

Options outstanding at January 1, 2010 87,870,341 61.87 5,436
Options exercisable 57,717,316 63.04 3,638

Options granted 8,121,355 54.12 440
Options exercised (1,756,763 ) 42.50 (75 )
Options cancelled ⁽¹⁾ (1,269,312 ) 59.56 (75 )
Options forfeited (10,694,693 ) 67.21 (719 )

Options outstanding at December 31, 2010 82,270,928 60.86 5,007
Options exercisable 55,663,453 63.63 3,542

Options granted 874,500 50.48 44
Options exercised (1,679,029 ) 43.11 (72 )
Options cancelled ⁽¹⁾ (1,137,052 ) 57.64 (66 )
Options forfeited (12,597,283 ) 69.90 (880 )

Options outstanding at December 31, 2011 67,732,064 59.54 4,033
Options exercisable 51,916,769 62.51 3,245

Options granted 814,050 56.44 46
Options exercised (11,999,244 ) 53.87 (646 )
Options cancelled ⁽¹⁾ (557,554 ) 58.40 (33 )
Options forfeited (4,967,305 ) 66.40 (330 )

Options outstanding at December 31, 2012 51,022,011 60.17 3,070
Options exercisable 34,622,756 64.93 2,248

⁽¹⁾
Cancellations mainly due to the departure of the grantees.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


   Exercise price
      Number of
options Weighted average
per share (€)    Total
(€ million)
Options outstanding at January 1, 2008    88,275,695 62.34       5,503
Of which exercisable    50,643,150 59.05       2,991
Options exercised    (1,141,554 ) 36.82       (42 )
Options cancelled⁽¹⁾    (1,682,800 ) 65.51       (110 )
Options forfeited    (146,391 ) 34.14       (5 )
Options outstanding at December 31, 2008    85,304,950 62.66       5,345
Of which exercisable    48,713,680 59.59       2,903
Options granted    7,736,480 45.09       349
Options exercised    (3,545,344 ) 46.69       (165 )
Options cancelled⁽¹⁾    (1,000,535 ) 61.72       (62 )
Options forfeited    (625,210 ) 48.89       (31 )
Options outstanding at December 31, 2009    87,870,341 61.87       5,436
Of which exercisable    57,717,316 63.04       3,638
Options granted    8,121,355 54.12       440
Options exercised    (1,756,763 ) 42.50       (75 )
Options cancelled⁽¹⁾    (11,609,223 ) 67.01       (778 )
Options forfeited    (354,782 ) 46.24       (16 )
Options outstanding at December 31, 2010    82,270,928 60.86       5,007
Of which exercisable    55,663,453 63.63       3,542
⁽¹⁾
~~Cancellations mainly due to the departure of the grantees.~~
The table below provides summary information about options outstanding and exercisable as of December 31, ~~2010:~~2012:

      Outstanding       Exercisable
Range of exercise prices per share    Number of
options    Average
residual life
(in years)    Weighted
average
exercise
price per
share (€)       Number of
options    Weighted
average
exercise
price per
share (€)
From €1.00 to €10.00 per share    36,370       4.31       7.42       36,370       7.42
From €10.00 to €20.00 per share    63,912       5.96       14.91       63,912       14.91
From €20.00 to €30.00 per share    10,520       7.49       28.38       10,520       28.38
From €30.00 to €40.00 per share    320,185       8.25       38.08       320,185       38.08
From €40.00 to €50.00 per share    12,695,978       5.99       43.17       5,274,033       40.48
From €50.00 to €60.00 per share    17,013,317       5.52       53.63       9,066,982       53.19
From €60.00 to €70.00 per share    29,251,886       5.11       65.39       18,012,691       67.31
From €70.00 to €80.00 per share    22,878,760       2.93       70.80       22,878,760       70.80
Total
   82,270,928             55,663,453
– of which stock purchase options
   5,847,276             5,847,276
– of which stock subscription options
   76,423,652             49,816,177
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~

Outstanding
Exercisable

Range of exercise prices per share
Number of
options
Average
residual life
(in years)
Weighted
average
exercise
price per
share (€)
Number of
options
Weighted
average
exercise
price per
share (€)

From €1.00 to €10.00 per share 14,070 2.58 7.62 14,070 7.62
From €10.00 to €20.00 per share 41,942 4.12 15.81 41,942 15.81
From €20.00 to €30.00 per share 3,500 5.48 28.38 3,500 28.38
From €30.00 to €40.00 per share 232,025 6.25 38.08 232,025 38.08
From €40.00 to €50.00 per share 8,993,648 5.09 44.14 1,850,188 40.48
From €50.00 to €60.00 per share 10,615,655 6.60 54.22 1,359,860 55.74
From €60.00 to €70.00 per share 18,223,635 4.43 64.74 18,223,635 64.74
From €70.00 to €80.00 per share 12,897,536 2.41 70.38 12,897,536 70.38

Total 51,022,011 34,622,756

Measurement of stock option plans

The fair value of the stock subscription option plan awarded in ~~2010~~2012 is ~~€66~~€7 million. This amount is recognized as an expense over the vesting period, with the matching entry ~~to shareholder’s~~recognized directly in equity. On this basis, an expense of ~~€14~~€1 million was recognized in the year ended December 31, ~~2010.~~2012.

The fair value of the plan awarded in ~~2009 is €34~~2011 was €6 million.

The following assumptions were used in determining the fair value of these plans:
–
Dividend yield: ~~4.66% (2010~~5.28% (2012 plan)~~, 5.72% (2009~~ and 5.12% (2011 plan).

–
Volatility of ~~sanofi-aventis~~Sanofi shares, computed on a historical basis: ~~27.08% (2010 plan), 27.06% (2009 plan).~~
26.69% for the 2012 plan, 26.93% for the 2011 plan.

–
Risk-free interest rate: ~~2.56% (2010~~2.30% (2012 plan), ~~2.84% (2009~~3.05% (2011 plan).

–
Plan maturity: 7 years (2012 plan), 6 years ~~(2010 and 2009 plans)~~(2011 plan). The plan maturity is the average expected remaining life of the options, based on observations of past employee behavior.

The fair value of the options granted in ~~2010~~2012 and ~~2009~~2011 is ~~€9.09~~€8.42 and ~~€4.95~~€7.88 per option, respectively.

The expense recognized for stock option plans, and the matching entry ~~taken to shareholders’~~recognized in equity, was €30 million for 2012 (including €3 million for the Vaccines segment); €59 million for 2011 (including €6 million for the Vaccines segment); and €97 million ~~in the year ended December 31,~~for 2010 (including €10 million for the Vaccines segment), €102 million in the year ended December 31, 2009 (including €12 million for the Vaccines segment), and €125 million in the year ended December 31, 2008 (including €13 million for the Vaccines segment).

As of December 31, ~~2010,~~2012, the total unrecognized cost ~~related to non-vested~~of unvested stock ~~option plans~~options was ~~€103~~€31 million, to be recognized over a weighted average period of ~~2.31~~two years. The current tax benefit related to the exercise of stock options in ~~2010~~2012 was €15 million (versus €2 million in 2011 and €1 million in ~~2010, €2 million in 2009, and €2 million in 2008.~~2010).

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.15.9. Number of shares used to compute diluted earnings per share

Diluted earnings per share is computed using the number of shares outstanding plus stock options with a potentially dilutive effect.
(in millions)
December 31,
2012
December 31,
2011
December 31,
2010

Average number of shares outstanding 1,319.5 1,321.7 1,305.3
Adjustment for options with potentially dilutive effect 4.0 1.7 1.7
Adjustment for restricted shares with potentially dilutive effect 6.1 3.3 1.2

Average number of shares used to compute diluted earnings per share 1,329.6 1,326.7 1,308.2



(in millions)    December 31,
2010    December 31,
2009    December 31,
2008
Average number of shares outstanding    1,305.3       1,305.9       1,309.3
Adjustment for options with potentially dilutive effect    1.7       1.1       1.6
Adjustment for restricted shares with potentially dilutive effect    1.2       0.4       —
Average number of shares used to compute diluted earnings per share    1,308.2       1,307.4       1,310.9
In ~~2010,~~2012, a total of ~~69.1~~32 million stock options were not taken into account in the calculation of diluted earnings per share because they did not have a potentially dilutive effect, compared with ~~80.3~~56 million in ~~2009~~2011 and ~~76.2~~69.1 million in ~~2008.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
2010.
D.16. Non-controlling interests

Non-controlling interests in consolidated companies break down as follows:

(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Non-controlling interests of ordinary shareholders:

• BMS⁽¹⁾    41       104       111
• Zentiva    28       32       —
• Aventis Pharma Ltd India    75       73       60
• Maphar    7       7       6
• Sanofi-aventis Korea    7       5       4
• Shantha Biotechnics    9       12       —
• Other    24       25       24
Total
   191       258       205
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Non-controlling interests of ordinary shareholders:
• BMS ⁽¹⁾ — 34 41
• Zentiva 14 21 28
• Sanofi India Ltd 63 58 75
• Maphar 7 7 7
• Sanofi-Aventis Korea — 7 7
• Shantha Biotechnics 8 10 9
• Other 42 33 24

Total 134 170 191

⁽¹⁾
Under the terms of the agreement signed in September 2012 relating to the alliance with BMS (see Note C.1.), Sanofi committed to buy out the non-controlling interests held by BMS for €70 million in 2018. The resulting liability was recognized inNon-current liabilities related to business combinations and to non-controlling interests as of December 31, 2012 (see Note D.18.).

Table of Contents
⁽¹⁾

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Under the terms of the agreements with BMS (see Note C.1.), the BMS share of the net assets of entities majority-owned by sanofi-aventis is recognized in~~~~Non-controlling interests~~ ~~(refer to the statement of changes in equity).~~
D.17. Debt, cash and cash equivalents

The table below shows changes in the ~~Group’s~~Group's financial position over the last three years:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Long-term debt 10,719 12,499 6,695
Short-term debt and current portion of long-term debt 3,812 2,940 1,565

Interest rate and currency derivatives used to hedge debt (433 ) (483 ) (218 )

Total debt 14,098 14,956 8,042

Cash and cash equivalents (6,381 ) (4,124 ) (6,465 )

Interest rate and currency derivatives used to hedge cash and cash equivalents 2 27 —

Debt, net of cash and cash equivalents 7,719 10,859 1,577



(€ million)    December 31,
2010 December 31,
2009 December 31,
2008
Long-term debt    6,695    5,961    4,173
Short-term debt and current portion of long-term debt    1,565    2,866    1,833
Interest rate and currency derivatives used to hedge debt    (218 ) (7 ) 22
Total debt
   8,042    8,820    6,028
Cash and cash equivalents    (6,465 ) (4,692 ) (4,226 )
Debt, net of cash and cash equivalents
   1,577    4,128    1,802
~~“Debt,~~"Debt, net of cash and cash ~~equivalents”~~equivalents" is a ~~non-GAAP~~ financial indicator used by management and investors to measure the ~~company’s~~company's overall net indebtedness.

~~Trends in the gearing ratio are shown below:~~

(€ million)    December 31,
2010 December 31,
2009 December 31,
2008
Debt, net of cash and cash equivalents    1,577    4,128    1,802
Total equity    53,288    48,580    45,071
Gearing ratio
   3.0 % 8.5 % 4.0 %
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
A reconciliation of carrying amount to value on redemption is shown below:

      Value on redemption
(€ million)    Carrying
amount:
Dec. 31, 2010 Amortized
cost    Adjustment to
debt measured
at fair value Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2008
Long-term debt    6,695 27       (39 ) 6,683 5,943    4,123
Short-term debt and current portion of long-term debt    1,565 —       —    1,565 2,853    1,815
Interest rate and currency derivatives used to hedge debt    (218 ) —       26 (192 ) 8    22
Total debt
   8,042 27       (13 ) 8,056 8,804    5,960
Cash and cash equivalents    (6,465 ) —       —    (6,465 ) (4,692 ) (4,226 )
Debt, net of cash and cash equivalents
   1,577 27       (13 ) 1,591 4,112    1,734

Value on redemption
December 31,
(€ million)
Carrying
amount:
Dec. 31, 2012
Amortized
cost
Adjustment to
debt measured
at fair value
2012
2011
2010

Long-term debt 10,719 45 (322 ) 10,442 12,278 6,683
Short-term debt and current portion of long-term debt 3,812 — — 3,812 2,937 1,565

Interest rate and currency derivatives used to hedge debt (433 ) — 269 (164 ) (258 ) (192 )

Total debt 14,098 45 (53 ) 14,090 14,957 8,056

Cash and cash equivalents (6,381 ) — — (6,381 ) (4,124 ) (6,465 )

Interest rate and currency derivatives used to hedge cash and cash equivalents 2 — — 2 24 —

Debt, net of cash and cash equivalents 7,719 45 (53 ) 7,711 10,857 1,591

a) Principal financing transactions during the year

The ~~following~~ financing ~~transaction~~transactions that took place during ~~2010:~~2012 were as follows:
~~Issuance in April 2010 of~~
–
a ~~supplementary tranche of €500~~€750 million ~~to the existing fixed-rate~~ bond issue ~~(annual~~maturing November 2017 and bearing interest at an annual rate of ~~3.125%)~~1%, carried out in November 2012 under a Euro Medium Term Notes public bond issue program;

–
a €428 million bank loan maturing ~~October 10, 2014.~~
December 2017.

Three bond issues were ~~repaid~~redeemed on maturity:
~~January 2007~~
–
the March 2011 bond issue ~~with a nominal value~~ of ~~£200 million (€227 million), which matured January 18, 2010;~~
~~December 2007 bond issue with a nominal value of CHF 200 million (€136 million), which matured January 21, 2010;~~
~~September 2003 bond issue with a nominal value of €1.5~~$1 billion, which matured ~~September 15, 2010.~~
March 28, 2012;

–
the December 2008 and January 2009 bond issues of CHF525 million, which matured December 19, 2012.

Table of Contents
On July 6, 2010, sanofi-aventis contracted a new €7 billion general-purpose syndicated credit facility with a pool of sixteen banks. This facility may be drawn down in either euros or U.S. dollars, and expires on July 6, 2015.
On the same day, sanofi-aventis terminated ahead of the contractual expiry date (i) a €4 billion syndicated credit facility due to expire January 12, 2011 and (ii) two bilateral credit facilities totaling $850 million, and also reduced an existing €8 billion credit facility to €6 billion.
In connection with the launch of the public tender offer for Genzyme on October 4, 2010, sanofi-aventis contracted two acquisition facilities on October 2, 2010. These facilities total $15 billion and may be drawn down in U.S. dollars up to and including July 2, 2011. Details about these facilities are provided below.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended~~        The Group also repaid on maturity a €200 million loan from the European Investment Bank, originally contracted on December ~~31, 2010~~
13, 2007.
        During 2012, the Group amended the terms of its €7 billion facility as follows:
–
a second one-year extension was agreed on September 28, 2012. The fourteen banks that accepted the initial extension in November 2011 also accepted this second extension of their €6.275 billion commitment, which will now expire in July 2017;

–
a new bank joined the loan syndicate, with the terms of the facility amended such that €0.250 billion of the facility will now expire July 6, 2015 and €6.750 billion will expire July 3, 2017.
        On July 16, 2012, the Group agreed an initial one-year extension of its €3 billion syndicated credit facility with the fourteen banks.
b) Debt, net of cash and cash equivalents by type, at value on redemption
(€ million)
December 31, 2012
December 31, 2011
December 31, 2010

Non-current
Current
Total
Non-current
Current
Total
Non-current
Current
Total

Bond issues 9,886 2,509 12,395 11,662 1,324 12,986 5,879 92 5,971
Other bank borrowings 478 994 1,472 522 562 1,084 771 402 1,173
Commercial paper — — — — 695 695 — 735 735
Finance lease obligations 65 13 78 80 12 92 19 6 25
Other borrowings 13 42 55 14 62 76 14 57 71
Bank credit balances — 254 254 — 282 282 — 273 273
Interest rate and currency derivatives used to hedge debt (124 ) (40 ) (164 ) (143 ) (115 ) (258 ) (194 ) 2 (192 )

Total debt 10,318 3,772 14,090 12,135 2,822 14,957 6,489 1,567 8,056

Cash and cash equivalents — (6,381 ) (6,381 ) — (4,124 ) (4,124 ) — (6,465 ) (6,465 )
Interest rate and currency derivatives used to hedge cash and cash equivalents — 2 2 — 24 24 — — —

Debt, net of cash and cash equivalents 10,318 (2,607 ) 7,711 12,135 (1,278 ) 10,857 6,489 (4,898 ) 1,591



(€ million)    December 31, 2010 December 31, 2009 December 31, 2008
      Non-current Current Total Non-current Current Total Non-current Current Total
Bond issues    5,879 92    5,971 5,236    1,982    7,218 2,418    488 2,906
Other bank borrowings    771 402 1,173 678    529    1,207    670    262 932
Commercial paper    —    735 735 —    —    —    —    717 717
Finance lease obligations    19 6 25 15    9    24    21    4 25
Other borrowings    14 57 71 14    16    30    14    11 25
Bank credit balances    —    273 273 —    317    317    —    299 299
Interest rate and currency derivatives used to hedge debt    (194 ) 2 (192 ) (53 ) 61    8    19    3 22
Credit facility drawdowns    —    —    —    —    —    —    1,000    34 1,034
Total debt
   6,489 1,567 8,056 5,890 2,914 8,804 4,142    1,818 5,960
Cash and cash equivalents    —    (6,465 ) (6,465 ) —    (4,692 ) (4,692 ) —    (4,226 ) (4 226 )
Debt, net of cash and
cash equivalents
   6,489 (4,898 ) 1,591 5,890 (1,778 ) 4,112 4,142    (2,408 ) 1,734
Bond issues ~~made~~carried out by Sanofi under the ~~EMTN (Euro~~Euro Medium Term ~~Notes)~~Notes (EMTN) program comprise:
•
June 2008 issue of ¥15 billion (€~~138~~132 million), maturing June 2013, bearing interest at a floating rate indexed to 3-month JPY Libor, and swapped into euros at a floating rate indexed to 3-month Euribor;

•
May 2009 issue [ISIN: XS0428037666] of €1.5 billion, maturing May 2013, bearing annual interest at 3.5%;

•
May 2009 issue [ISIN: XS0428037740] of €1.5 billion, maturing May 2016, bearing annual interest at 4.5%;

•
October 2009 issue [ISIN: XS0456451938] of €1.2 billion (including supplementary tranche issued in April 2010), maturing October 2014, bearing annual interest at 3.125%;

•
October 2009 issue [ISIN: XS0456451771] of €800 million, maturing October 2019, bearing annual interest at 4.125%.
;

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
•
November 2012 issue [ISIN: FR0011355791] of €750 million, maturing November 2017, bearing annual interest at 1%.
Bond issues ~~made~~carried out by Sanofi under the public bond issue program (shelf registration statement) registered with the U.S. Securities and Exchange Commission (SEC) comprise:
•
March 2011 issue [ISIN: US80105NAE58] of $1 billion, maturing March 2013, bearing interest at the USD 3-month Libor rate +0.20%;

•
March 2011 issue [ISIN: US80105NAC92] of $750 million, maturing March 2014, bearing interest at the USD 3-month Libor rate +0.31%;

•
March 2011 issue [ISIN: US80105NAB10] of $750 million, maturing March 2014, bearing annual interest at 1.625%;

•
March 2011 issue [ISIN: US80105NAD75] of $1.5 billion, maturing March 2016, bearing annual interest at 2.625%;

•
March 2011 issue [ISIN: US80105NAG07] of $2 billion, maturing March 2021, bearing annual interest at 4%;

•
September 2011 issue [ISIN: US801060AA22] of $1 billion, maturing September 2014, bearing annual interest at 1.2%.
        The U.S. dollar issues have been retained in this currency and have not been swapped into euros.
        Bond issues carried out by Sanofi outside the EMTN ~~(Euro Medium Term Notes)~~ program ~~comprise:~~
and the U.S. shelf registration statement program consist of the December 2007 and February 2008 issues [ISIN: CH0035703070] of CHF400 million (€~~320~~331 million), maturing December 2015, bearing annual interest at 3.375%, and swapped into euros at a fixed rate of 4.867%;.

~~December 2008 and January 2009~~Bond issues made by Genzyme Corp. comprise:
•
June 2010 issue [ISIN: ~~CH0048787532] amounting to CHF525~~US372917AQ70] of $500 million, ~~(€420 million),~~ maturing ~~December 2012,~~June 2015, bearing annual interest at ~~3.26%, and swapped into euros as follows: CHF275~~3.625%;

•
June 2010 issue [ISIN: US372917AS37] of $500 million, maturing June 2020, bearing annual interest at ~~a fixed rate of 4.894%, and CHF250 million at a floating rate indexed to 3-month Euribor.~~
5%.

The line ~~“Other borrowings”~~"Other borrowings" mainly includes:
~~Participating~~
•
participating shares issued between 1983 and 1987, of which ~~96,983~~82,698 remain outstanding (after cancellation in 2012 of 11,205 shares repurchased during 2012), valued at ~~€14.8 million. These 96,983 participating shares include 3,080 1983 participating shares repurchased by sanofi-aventis in 2010, which will be cancelled in 2011.~~
€13 million;

•
Series A participating shares issued in 1989, of which 3,271 remain outstanding, valued at €0.2 million.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~

~~Sanofi-aventis has put in place the following arrangements~~In order to manage its liquidity ~~needs:~~needs for current operations, the Group now has:
•
A syndicated credit facility of €6€3 billion, ~~of which €0.2 billion expires on March 31, 2011 and €5.8 billion expires on March 31, 2012, and which may be drawn down~~drawable in euros, ~~or U.S. dollars.~~
initially expiring December 26, 2012, but extended to December 25, 2013 following the exercise of an initial one-year extension option on July 16, 2012. This facility has a further one-year extension option remaining.

•
A syndicated credit facility of €7 billion, ~~expiring on July 6, 2015, which may also be drawn down~~drawable in euros or U.S. dollars.
The expiry date of this facility was extended in September 2012 following the exercise of an extension option, and in October 2012 by amendment. This facility now expires July 6, 2015 (€0.25 billion) and July 3, 2017 (€6.75 billion).

~~These confirmed facilities are used in particular to back~~The Group also has two commercial paper programs of €6 billion in France and $6$10 billion in the United States. In ~~2010,~~2012, only the U.S. program was used, with an average drawdown ~~under these programs was €0.9~~of €2.3 billion ~~(maximum €1.7 billion). A total~~and a maximum drawdown of ~~€0.7 billion~~€3.3 billion. Nothing was drawn down under either of these ~~facilities~~programs as of December 31, ~~2010.~~2012.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

~~Apart from the Genzyme acquisition financing (see below), the~~The financing in place atas of December 31, ~~2010~~2012 at the level of the ~~sanofi-aventis parent~~holding company (which manages ~~the bulk~~most of the ~~Group’s~~Group's financing needs centrally) is not subject to ~~covenants regarding~~any financial ~~ratios,~~covenants, and contains no clauses linking credit spreads or fees to the credit ~~rating of sanofi-aventis.~~
In connection with the launch of a public tender offer for Genzyme, sanofi-aventis contracted on October 2, 2010 two credit facilities totaling $15 billion, which may be drawn down in U.S. dollars up to and including July 2, 2011:
~~Facility A is a $10 billion facility expiring April 2, 2012, with an optional six-month extension.~~
~~Facility B is a $5 billion amortizable facility expiring April 2, 2014.~~
~~These acquisition facilities are not subject to any financial covenants. The margin of Facility B will depend on the long-term credit rating of sanofi-aventis, subsequent to the acquisition.~~
rating.
c) Debt by maturity, at value on redemption

Current
Non-current

December 31, 2012
(€ million)
Total
2013
2014
2015
2016
2017
2018
and later

Bond issues 12,395 2,509 3,094 710 2,637 750 2,695
Other bank borrowings 1,472 994 5 6 7 434 26
Commercial paper — — — — — — —
Finance lease obligations 78 13 13 14 13 14 11
Other borrowings 55 42 — — — — 13
Bank credit balances 254 254 — — — — —
Interest rate and currency derivatives used to hedge debt (164 ) (40 ) — (87 ) — (3 ) (34 )

Total debt 14,090 3,772 3,112 643 2,657 1,195 2,711

Cash and cash equivalents (6,381 ) (6,381 ) — — — — —
Interest rate and currency derivatives used to hedge cash and cash equivalents 2 2 — — — — —

Debt, net of cash and cash equivalents 7,711 (2,607 ) 3,112 643 2,657 1,195 2,711

   Current Non-current
December 31, 2010
(€ million)
   Total 2011 2012 2013 2014    2015
2016
and later

Bond issues    5,971 92 420 1,638 1,200    321 2,300
Other bank borrowings    1,173 402 203 555 6    7 —
Commercial paper⁽¹⁾    735 735 —    —    —       —    —
Finance lease obligations    25 6 6 5 3    3 2
Other borrowings    71 57 —    —    —       —    14
Bank credit balances    273 273 —    —    —       —    —
Interest rate and currency derivatives used to hedge debt    (192 ) 2 (73 ) (46 ) —       (75 ) —
Total debt
   8,056 1,567 556 2,152 1,209    256 2,316
Cash and cash equivalents    (6,465 ) (6,465 ) —    —    —       —    —
Debt, net of cash and cash equivalents
   1,591 (4,898 ) 556 2,152 1,209    256 2,316
⁽¹⁾
~~Commercial paper had a maturity of no more than six months as of December 31, 2010.~~

Current
Non-current

December 31, 2011
(€ million)
Total
2012
2013
2014
2015
2016
2017
and later

Bond issues 12,986 1,324 2,423 3,133 720 2,659 2,727
Other bank borrowings 1,084 562 482 15 8 9 8
Commercial paper ⁽¹⁾ 695 695 — — — — —
Finance lease obligations 92 12 14 13 14 14 25
Other borrowings 76 62 — — — — 14
Bank credit balances 282 282 — — — — —
Interest rate and currency derivatives used to hedge debt (258 ) (115 ) (58 ) — (85 ) — —

Total debt 14,957 2,822 2,861 3,161 657 2,682 2,774

Cash and cash equivalents (4,124 ) (4,124 ) — — — — —
Interest rate and currency derivatives used to hedge cash and cash equivalents 24 24 — — — — —

Debt, net of cash and cash equivalents 10,857 (1,278 ) 2,861 3,161 657 2,682 2,774

⁽¹⁾
Commercial paper had a maturity of no more than four months as of December 31, 2011.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Current
Non-Current

December 31, 2010
(€ million)
Total
2011
2012
2013
2014
2015
2016
and later

Bond issues 5,971 92 420 1,638 1,200 321 2,300
Other bank borrowings 1,173 402 203 555 6 7 —
Commercial paper ⁽¹⁾ 735 735 — — — — —
Finance lease obligations 25 6 6 5 3 3 2
Other borrowings 71 57 — — — — 14
Bank credit balances 273 273 — — — — —
Interest rate and currency derivatives used to hedge debt (192 ) 2 (73 ) (46 ) — (75 ) —

Total debt 8,056 1,567 556 2,152 1,209 256 2,316

Cash and cash equivalents (6,465 ) (6,465 ) — — — — —

Debt, net of cash and cash equivalents 1,591 (4,898 ) 556 2,152 1,209 256 2,316

~~Year ended~~⁽¹⁾
Commercial paper had a maturity of no more than six months as of December 31, ~~2010~~
2010.


   Current Non-current
December 31, 2009
(€ million)
   Total 2010 2011    2012 2013 2014    2015
and later
Bond issues    7,218 1,982 —       354 1,613 700    2,569
Other bank borrowings    1,207 529 11    225 433 7    2
Commercial paper    —    —    —       —    —    —       —
Finance lease obligations    24 9 3    3 3 3    3
Other borrowings    30 16 —       —    —    —       14
Bank credit balances    317 317 —       —    —    —       —
Interest rate and currency derivatives used to hedge debt    8 61 —       (7 ) (20 ) —       (26 )
Total debt
   8,804 2,914 14    575 2,029 710    2,562
Cash and cash equivalents    (4,692 ) (4,692 ) —       —    —    —       —
Debt, net of cash and cash equivalents
   4,112 (1,778 ) 14    575 2,029 710    2,562

   Current Non-current
December 31, 2008
(€ million)
   Total 2009 2010    2011    2012 2013
2014
and later

Bond issues    2,906 488 1,845       —       185 119 269
Credit facility drawdowns⁽¹⁾    1,034 34 —       —       1,000 —    —
Other bank borrowings    932 262 13    7    208 439 3
Commercial paper⁽²⁾    717 717 —       —       —    —    —
Finance lease obligations    25 4 3    6    2 3 7
Other borrowings    25 11 —       —       —    —    14
Bank credit balances    299 299 —       —       —    —    —
Interest rate and currency derivatives used to hedge debt    22 3 76    —       (5 ) (27 ) (25 )
Total debt
   5,960 1,818 1,937    13    1,390 534 268
Cash and cash equivalents    (4,226 ) (4,226 ) —       —       —    —    —
Debt, net of cash and cash equivalents
   1,734 (2,408 ) 1,937    13    1,390 534 268
⁽¹⁾
~~Maturities used for credit facility drawdowns are those~~As of December 31, 2012, the ~~facility, not the drawdown.~~
⁽²⁾
~~Commercial paper had a maturity of no more than three months as of December 31, 2008.~~
~~The~~ main undrawn confirmed general-purpose credit facilities ~~(excluding the Genzyme acquisition facilities) not allocated to outstanding commercial paper drawdowns~~ at holding company level were as follows:
Year of expiry
Undrawn confirmed
credit facilities available
(€ million)

2013 3,000
2015 250
2017 6,750

Total 10,000

        As of December 31, ~~2010 break down as follows:~~2012, no single counterparty represented more than 7% of undrawn confirmed credit facilities.

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Year of expiry    Undrawn confirmed
credit facilities available
(€ million)
2011    245
2012    5,755
2015    6,238
Total
   12,238

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
~~These confirmed credit facilities comprise:~~
~~a syndicated credit facility of €6 billion expiring in 2011 (€0.2 billion) and in 2012 (€5.8 billion);~~
~~a syndicated credit facility of €7 billion expiring in 2015.~~
~~As of December 31, 2010, no single counterparty represented more than 10% of undrawn confirmed credit facilities.~~
d) Debt by interest rate, ~~type,~~ at value on redemption

The tables below split debt, net of cash and cash equivalents between fixed and floating rate, and by maturity or contractual repricing date, atas of December 31, ~~2010.~~2012. The figures shown are the value on redemption, before the effects of derivative instruments:

December 31, 2012

(€ million)
Total
2013
2014
2015
2016
2017
2018
and later

Fixed-rate debt 11,506 1,884 2,526 623 2,637 1,175 2,661
EUR 6,468
USD 4,783
% fixed-rate 82%

Floating-rate debt (maturity based on contractual repricing date) 2,584 2,584 — — — — —
EUR 241
USD 1,493
% floating-rate 18%

Total debt 14,090 4,468 2,526 623 2,637 1,175 2,661

Cash and cash equivalents (6,379 ) (6,379 ) — — — — —
EUR (5,050 )
USD (890 )
% floating-rate 100%

Debt, net of cash and cash equivalents 7,711 (1,911 ) 2,526 623 2,637 1,175 2,661



      December 31, 2010
(€ million)    Total 2011 2012    2013    2014    2015    2016
and later
Fixed-rate debt    6,050 —    547    1,758    1,200    245    2,300
% fixed-rate
   75%
Floating-rate debt (maturity based on contractual repricing date)    2,006    2,006 —       —       —       —       —
% floating-rate
   25%
Total debt
   8,056 2,006 547    1,758    1,200    245    2,300
Cash and cash equivalents    (6 465 ) (6,465 ) —       —       —       —       —
% floating-rate
   100%
Debt, net of cash and cash equivalents
   1,591 (4,459 ) 547    1,758    1,200    245    2,300
~~Floating-rate interest on~~Since the financing of the Genzyme acquisition in 2011, the Group has managed its net debt ~~is usually indexed to~~in two currencies, the euro ~~zone interbank offered rate (Euribor). Floating-rate~~and the U.S. dollar. The floating-rate portion of this debt exposes the Group to rises in interest ~~on cash and cash equivalents is usually indexed to~~rates, primarily in the Eonia ~~rate.~~and Euribor benchmark rates (for the euro) and in the U.S. Libor and Federal Fund Effective rates (for the U.S. dollar).

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In order to reduce the amount and/or volatility of the cost of debt, ~~sanofi-aventis~~the Group has contracted derivative instruments ~~(swaps,~~(interest rate swaps, cross-currency swaps and ~~in some cases caps or combinations of purchases of caps and sales of floors)~~interest rate options). ~~This has~~These have the effect of altering the fixed/floating split and the maturity based on contractual repricing dates:

December 31, 2012

(€ million)
Total
2013
2014
2015
2016
2017
2018
and later

Fixed-rate debt 6,819 1,842 947 623 1,137 375 1,895
EUR 2,411
USD 4,400
% fixed-rate 48%

Floating-rate debt 7,271 7,271 — — — — —
EUR 4,639
USD 1,876
% floating-rate 52%

Total debt 14,090 9,113 947 623 1,137 375 1,895

Cash and cash equivalents (6,379 ) (6,379 ) — — — — —
EUR (5,920 )
USD (20 )
% floating-rate 100%

Debt, net of cash and cash equivalents 7,711 2,734 947 623 1,137 375 1,895



      December 31, 2010
(€ million)    Total 2011 2012    2013    2014    2015    2016
and later
Fixed-rate debt    5,350 —    347    1,758    1,200    245    1,800
% fixed-rate
   66%
Floating-rate debt    2,706 2,706 —       —       —       —       —
% floating-rate
   34%
Total debt
   8,056 2,706 347    1,758    1,200    245    1,800
Cash and cash equivalents    (6,465 ) (6,465 ) —       —       —       —       —
% floating-rate
   100%
Debt, net of cash and cash equivalents
   1,591 (3,759 ) 347    1,758    1,200    245    1,800
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The table below shows the fixed/floating rate split at redemption value after taking account of derivative instruments as of December 31, ~~2009~~2011 and ~~2008:~~2010:
(€ million)
2011
%
2010
%

Fixed-rate debt 6,726 45% 5,350 66%
Floating-rate debt 6,299 42% 2,706 34%
Capped-rate debt 1,932 13% — —

Total debt 14,957 100% 8,056 100%

Cash and cash equivalents (4,100 ) (6,465 )

Debt, net of cash and cash equivalents 10,857 1,591



(€ million) 2009 % 2008 %
Fixed-rate debt 5,940 67%    3,421 57%
Floating-rate debt 2,864 33%    2,539 43%
Total debt
8,804 100%    5,960 100%
Cash and cash equivalents (4,692 ) (4,226 )
Debt, net of cash and cash equivalents
4,112 1,734
The weighted average interest rate on debt atas of December 31, ~~2010~~2012 was ~~3.6% both~~3.0% before derivative instruments and 2.4% after derivative instruments. All cash and cash equivalents were invested at an average rate of ~~1.1% at~~0.3% as of December 31, ~~2010.~~2012.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Based on the ~~Group’s~~Group's level of debt, and taking account of derivative instruments in place atas of December 31, ~~2010,~~2012, sensitivity to movements in market interest rates over a full year would be as follows in the year ending December 31, ~~2011:~~2013:

Change in 3-month Euribor interest rate assumptions    Impact on pre-tax
net income
(€ million) Impact on income/(expense)
recognized directly in
equity, before tax
(€ million)
+ 100 bp    41 13
+ 25 bp    10 1
- 25 bp    (10 ) (6 )
- 100 bp    (41 ) (18 )
Change in 3-month Euribor interest rate assumptions
Impact on pre-tax
net income
(€ million)
Impact on income/(expense)
recognized directly in
equity, before tax
(€ million)

                        +100 bp (10 ) (3 )
                          +25 bp (2 ) (1 )
  -25 bp 2 1
-100 bp 10 3

e) Debt, net of cash and cash equivalents by currency, at value on redemption

The table below shows debt, net of cash and cash equivalents by currency at December 31, ~~2010,~~2012, before and after ~~taking account of~~ derivative instruments contracted to convert third-party debt into the functional currency of the borrower entity:

December 31, 2012

(€ million)
Before derivative
instruments
After derivative
instruments

EUR 1,659 1,129
USD 5,386 6,256
BRL 368 368
CHF 244 —
JPY 93 —
Other currencies (39 ) (42 )

Debt, net of cash and cash equivalents 7,711 7,711



      December 31, 2010
(€ million)    Before derivative
instruments After derivative
instruments
EUR    703 1,581
USD    37 37
JPY    141 3
CHF    738 (2 )
GBP    (65 ) (65 )
Other currencies    37 37
Debt, net of cash and cash equivalents
   1,591 1,591
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The table below shows debt, net of cash and cash equivalents by currency at December 31, ~~2009~~2011 and ~~2008,~~2010, after ~~taking account of~~ derivative instruments contracted to convert third-party debt into the functional currency of the borrower entity:

(€ million)    2009 2008
EUR    4,312 1,625
USD    (22 ) (19 )
GBP    (58 ) (64 )
Other currencies    (120 ) 192
Debt, net of cash and cash equivalents
   4,112 1,734
(€ million)
December 31,
2011
December 31,
2010

EUR 3,084 1,581
USD 7,717 37
Other currencies 56 (27 )

Debt, net of cash and cash equivalents 10,857 1,591

f) Market value of debt, net of cash and cash equivalents

The market value of debt, net of cash and cash equivalents atas of December 31, ~~2010~~2012 was €8,566 million (versus €11,596 million as of December 31, 2011 and €1,887 million ~~(December 31, 2009: €4,349 million;~~as of December 31, ~~2008: €1,801 million), versus~~2010); this compares with a value on redemption of €7,711 million as of December 31, 2012 (versus €10,857 million as of December 31, 2011 and €1,591 million ~~(December 31, 2009: €4,112 million;~~as of December 31, ~~2008: €1,734 million)~~2010).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
g) Future contractual cash flows relating to debt and debt hedging instruments

The table below shows the amount of future contractual undiscounted cash flows (principal and interest) relating to debt and to derivative instruments designated as hedges of debt as atof December 31, ~~2010:~~2012:

December 31, 2012

Contractual cash flows by maturity

(€ million)
Total
2013
2014
2015
2016
2017
2018
and later

Debt 15,590 4,047 3,421 882 2,855 1,314 3,071
– principal
13,988 3,667 3,124 637 2,650 1,192 2,718
– interest ⁽¹⁾
1,602 380 297 245 205 122 353
Net cash flows related to derivative instruments (307 ) (88 ) (84 ) (54 ) (50 ) (13 ) (18 )

Total 15,283 3,959 3,337 828 2,805 1,301 3,053

⁽¹⁾
Interest cash flows are estimated on the basis of forward interest rates applicable as of December 31, 2012.


      December 31, 2010
      Contractual cash flows by maturity
(€ million)    Total 2011 2012 2013 2014    2015
2016
and later

Debt
   9,354 1,699 875 2,418 1,360    462 2,540
– principal
   8,150 1,447 632 2,200 1,208    347 2,316
– interest⁽¹⁾
   1,204 252 243 218 152    115 224
Net cash flows related to derivative instruments
   (229 ) (5 ) (83 ) (49 ) 3    (89 ) (6 )
Total
   9,125 1,694 792 2,369 1,363    373 2,534
⁽¹⁾
~~Interest cash flows are estimated on the basis of forward interest rates applicable as of December 31, 2010.~~
Future contractual cash flows are shown on the basis of the carrying amount in the balance sheet at the reporting date, without reference to any subsequent management decision that might materially alter the structure of the ~~Group’s~~Group's debt or its hedging policy.

Maturities used for credit facility drawdowns are those of the facility, not the drawdown.

The ~~table~~tables below ~~shows~~show the amount of future contractual undiscounted cash flows (principal and interest) relating to debt and to derivative instruments designated as hedges of debt as atof December 31, ~~2009~~2011 and ~~2008:~~2010:

December 31, 2011

Contractual cash flows by maturity

(€ million)
Total
2012
2013
2014
2015
2016
2017
and later

Debt 16,726 3,193 3,184 3,426 877 2,852 3,194
– principal
14,748 2,783 2,814 3,134 639 2,654 2,724
– interest ⁽¹⁾
1,978 410 370 292 238 198 470
Net cash flows related to derivative instruments (231 ) (72 ) (66 ) (48 ) (21 ) (28 ) 4

Total 16,495 3,121 3,118 3,378 856 2,824 3,198

⁽¹⁾
Interest cash flows are estimated on the basis of forward interest rates applicable as of December 31, 2011.

December 31, 2010

Contractual cash flows by maturity

(€ million)
Total
2011
2012
2013
2014
2015
2016
and later

Debt 9,354 1,699 875 2,418 1,360 462 2,540
– principal
8,150 1,447 632 2,200 1,208 347 2,316
– interest ⁽¹⁾
1,204 252 243 218 152 115 224
Net cash flows related to derivative instruments (229 ) (5 ) (83 ) (49 ) 3 (89 ) (6 )

Total 9,125 1,694 792 2,369 1,363 373 2,534

⁽¹⁾
Interest cash flows are estimated on the basis of forward interest rates applicable as of December 31, 2010.

Table of Contents

      December 31, 2009
      Contractual cash flows by maturity
(€ million)    Total 2010    2011    2012 2013 2014
2015
and later

Debt
   10,118 3,049       231       797 2,254 844       2,943
– principal
   8,681 2,737       6       570 2,052 709       2,607
– interest⁽¹⁾
   1,437 312       225       227 202 135       336
Net cash flows related to derivative instruments
   (14 ) 51       8       (9 ) (24 ) 2       (42 )
Total
   10,104 3,100       239       788 2,230 846       2,901
⁽¹⁾
~~Interest cash flows are estimated on the basis of forward interest rates applicable as of December 31, 2009.~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~

      December 31, 2008
      Contractual cash flows by maturity
(€ million)    Total    2009    2010    2011    2012 2013
2014
and later

Debt
   6,468       1,957    2,004       88    1,470 591 358
– principal
   5,921       1,784    1,851       6    1,407 562 311
– interest⁽¹⁾
   547       173    153       82    63 29 47
Net cash flows related to derivative instruments
   16       17    77       7    (9 ) (35 ) (41 )
Total
   6,484       1,974       2,081       95       1,461    556    317
⁽¹⁾
~~Interest cash flows are estimated on the basis of forward interest rates applicable as of December 31, 2008.~~
D.18. Liabilities related to business combinations and non-controlling interests
For a description of the nature of liabilities reported in the line itemLiabilities related to business combinations and to non-controlling interests, refer to Note B.8.5. The principal acquisitions are described in Note D.1.

Obligations relating to business combinations mainly comprise contingent consideration in the form of milestone payments payable to the vendor and linked to development on projects conducted by the acquiree. The accounting treatment of contingent consideration is described in Note B.3.1. With effect from January 1, 2010, the fair value of contingent consideration in respect of products under development factors in (i) the probability that the project will succeed and (ii) the time value of money.
Movements in liabilities related to business combinations and to non-controlling interests were as follows:

Liabilities related to business combinations

(€ million)
Liabilities
related to
non-controlling
interests ⁽¹⁾
CVRs issued in
connection with
the acquisition
of Genzyme ⁽²⁾
Bayer
contingent
consideration
arising from
the Genzyme
acquisition
Other
Total ⁽⁶⁾

Balance at January 1, 2011 134 — — 352 486

New business combinations — 481 585 75 1,141
Payments made — (2 ) (53 ) (44 ) (99 )
Fair value remeasurements through profit or loss (including unwinding of discount) — (211 ) 127 69 (15 )
Other movements (4 ) — — (5 ) (9 )
Currency translation differences 3 — 35 14 52

Balance at December 31, 2011 133 268 694 461 1,556

New business combinations 64 — — 18 82
Payments made — (54 )⁽³⁾ (101 ) (33 ) (188 )
Fair value remeasurements through profit or loss (including unwinding of discount) ⁽⁴⁾ — 127 44 21 192
Other movements (5 ) — — (154 )⁽⁵⁾ (159 )
Currency translation differences — (20 ) (5 ) (8 ) (33 )

Balance at December 31, 2012 192 321 632 305 1,450

⁽¹⁾
Put options granted to non-controlling interests, and commitment to future buyout of non-controlling interests held by BMS.
⁽²⁾
Based on the quoted market price per CVR of $1.70 as of December 31, 2012 and $1.20 as of December 31, 2011.
⁽³⁾
Repurchase of 40 million CVRs ($70 million) via a public tender offer.
⁽⁴⁾
Amounts reported in the income statement line itemFair value remeasurement of contingent consideration liabilities.
⁽⁵⁾
Reversal of the contingent consideration relating to the Fovea acquisition (see description below).
⁽⁶⁾
Portion due after more than one year: €1,350 million as of December 31, 2012 (versus €1,336 million as of December 31, 2011 and €388 million as of December 31, 2010); portion due within less than one year: €100 million as of December 31, 2012 (versus €220 million as of December 31, 2011 and €98 million as of December 31, 2010).


(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009
Balance, beginning of period
   151 —
split as follows:
• non-current
   75 —
• current
   76 —
New business combinations    219 153
Payments made    (52 ) —
Fair value remeasurement (including unwinding of discount)    5 2
Other movements⁽¹⁾    155
Translation differences    8 (4 )
Balance, end of period
   486 151
split as follows:
• non-current
   388 75
• current
   98 76
⁽¹⁾
~~Contingent consideration on the acquisition of Fovea, payment of which was regarded as probable in 2010.~~
The Bayer contingent consideration liability was assumed on the acquisition of Genzyme in 2011.
~~The balance~~        In a business combination completed in May 2009, prior to Sanofi's acquisition of ~~these liabilities at~~control over Genzyme, Genzyme acquired from Bayer Schering Pharma A.G. (Bayer) the ~~end~~worldwide development and marketing rights to alemtuzumab (under the brand name Lemtrada^TM), a molecule currently under development for multiple sclerosis, as well as the rights to the products Campath®, Fludara® and Leukine®. In exchange, Bayer is entitled to receive the following payments:
–
a percentage of ~~each~~sales of alemtuzumab up to a maximum of $1,250 million or over a maximum period ~~breaks down~~of ten years, whichever is achieved first;

–
a percentage of aggregate sales of Campath®, Fludara® and Leukine® up to a maximum of $500 million (of which $230 million had been paid as ~~follows:~~of the acquisition date) or over a maximum period of eight years, whichever is achieved first;

Table of Contents

(€ million)    December 31,
2010    December 31,
2009
Put options granted to non-controlling interests    134       —
Liabilities related to business combinations    352       151
Balance, end of period
   486       151

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
–
milestone payments of up to $150 million based on annual sales of Campath®, Fludara® and Leukine® from 2011 through 2013;

–
milestone payments based on specified levels of worldwide sales of alemtuzumab beginning in 2021, unless Genzyme exercises its right to buy out these milestone payments by making a one-time payment not exceeding $900 million.
~~Year ended~~        The fair value of this liability was measured at €632 million as of December 31, ~~2010~~
2012, compared with €694 million as of December 31, 2011.

The put options reported above were granted to non-controlling interests in connection with acquisitions completed during 2010, and relate to sanofi-aventis Vostok and Hangzhou Sanofi Minsheng Consumer Healthcare Co. Ltd (see Note D.1.).
~~Liabilities~~As of December 31, 2012, the other liabilities related to business combinations ~~as of December 31, 2010~~ mainly ~~comprise~~comprised contingent consideration related to the acquisitions of TargeGen (€~~94 million),~~156 million, versus €159 million as of December 31, 2011 and €94 million as of December 31, 2010) and of BiPar (€73 million, versus €74 million as of December 31, 2011 and €70 million as of December 31, 2010). Having reviewed the results of the Phase IIb trial of FOV-1101, which led to a reassessment of its commercial prospects, Sanofi decided to pursue development of this product via a sub-licensing agreement with an as yet unidentified third party. Consequently, the Fovea contingent consideration liability (€~~155 million), and BiPar (€70 million).~~151 million as of December 31, 2011, €155 million as of December 31, 2010) was reversed during 2012 as an adjustment to goodwill, in accordance with the pre-revision IFRS 3.

The table below sets forth the maximum amount of contingent consideration ~~payable:~~payable and firm commitments to buy out non-controlling interests:
December 31, 2012

Payments due by period

(€ million) Total Less than
1 year From 1 to
3 years From 3 to
5 years More than
5 years

Commitments relating to contingent consideration in connection with business combinations ⁽¹⁾ and buyouts of non-controlling interests ⁽²⁾ 4,993 341 1,135 560 2,957

⁽¹⁾
Includes €1.7 billion for the Bayer contingent consideration (versus €1.9 billion as of December 31, 2011) and €2.5 billion for the CVRs issued in connection with the Genzyme acquisition (versus €2.9 billion as of December 31, 2011).
⁽²⁾
This line does not include put options granted to non-controlling interests.
        These commitments amounted to €5,578 million as of December 31, 2011. The reduction in the commitment during 2012 was mainly attributable to the repurchase of 40 million CVRs.

Table of Contents

   December 31, 2010
   Payments due by period
(€ million)    Total    Less than
1 year    From 1 to 3
years    From 3 to 5
years    More than
5 years
Obligations related to business combinations    739       87       79       438       135

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.19. Provisions and other liabilities

Provisions and other non-current liabilities break down as follows:
(€ million)
Provisions for
pensions and
other benefits
(D.19.1.)
Restructuring
provisions
(D.19.2.)
Other
provisions
(D.19.3.)
Other
non-current
liabilities
Total

January 1, 2010 4,342 257 3,533 104 8,236

Changes in scope of consolidation 21 — 27 — 48
Increases in provisions and other liabilities 442 731 857 ⁽²⁾ 11 2,041
Provisions utilized (587 ) (65 ) (386 ) (41 ) (1,079 )
Reversals of unutilized provisions (82 ) (56 ) (259 )⁽³⁾ — (397 )
Transfers⁽¹⁾ (305 ) 119 81 (7 ) (112 )
Unwinding of discount — 27 34 1 62
Unrealized gains and losses — — (35 ) 33 (2 )
Currency translation differences 96 4 108 5 213
Actuarial gains/losses on defined-benefit plans ⁽⁴⁾ 316 — — — 316

December 31, 2010 4,243 1,017 3,960 106 9,326

Merial ⁽⁵⁾ 64 — 48 4 116
Changes in scope of consolidation 35 — 150 20 205
Increases in provisions and other liabilities 414 500 470 ⁽²⁾ 15 1,399
Provisions utilized (510 ) (29 ) (138 ) — (677 )
Reversals of unutilized provisions (97 ) (19 ) (363 )⁽³⁾ — (479 )
Transfers ⁽¹⁾ (3 ) (327 ) (23 ) (9 ) (362 )
Unwinding of discount 1 38 40 — 79
Unrealized gains and losses — — 1 (27 ) (26 )
Currency translation differences 68 2 13 5 88
Actuarial gains/losses on defined-benefit plans ⁽⁴⁾ 677 — — — 677

December 31, 2011 4,892 1,182 4,158 114 10,346

Increases in provisions and other liabilities 449 554 744 ⁽²⁾ — 1,747
Provisions utilized (803 ) (24 ) (240 ) (4 ) (1,071 )
Reversals of unutilized provisions (186 ) (5 ) (636 )⁽³⁾ — (827 )
Transfers^(1)/(6) (108 ) (292 ) (324 ) (11 ) (735 )
Unwinding of discount — 45 42 — 87
Currency translation differences (26 ) 1 (33 ) (1 ) (59 )
Actuarial gains/losses on defined-benefit plans ⁽⁴⁾ 1,548 — — — 1,548

December 31, 2012 5,766 1,461 3,711 98 11,036

⁽¹⁾
This line includes transfers between current and non-current provisions, and in 2010 the reclassification of social security charges and "Fillon" levies on early retirement plans in France (see Note D.19.1.).
⁽²⁾
Amounts charged during the period mainly comprise provisions to cover tax exposures in various countries; changes to estimates of future expenditure on environmental risks; and recognition of the provision relating to the ramipril litigation in 2012 (see Note D.26.).
⁽³⁾
Reversals relate mainly to provisions for tax exposures, reversed either because (i) the risk exposure became time-barred during the reporting period or (ii) the tax dispute was settled during the period and the outcome proved more favorable than expected for Sanofi.
⁽⁴⁾
Amounts recognized as other comprehensive income (see Note D.15.7.).
⁽⁵⁾
This line includes the provisions and other non-current liabilities of Merial, previously presented inLiabilities related to assets held for sale or exchange, which were reclassified following the announcement of the decision to maintain two separate entities (Merial and Intervet/Schering-Plough) operating independently (see note D.2).
⁽⁶⁾
Includes a €101 million transfer to restructuring provisions following the announcement of measures to adapt the Group's resources in France (see Note D.19.2.)


(€ million)    Provisions for
pensions and
other long-term
benefits (D.19.1.) Restructuring
provisions
(D.19.2.) Other
provisions
(D.19.3.) Other
non-current
liabilities    Total
January 1, 2008
   3,398    188    3,126 145    6,857
Changes in scope of consolidation    —    —    33 —       33
Increases in provisions and other liabilities    334    290    828 ⁽²⁾ —       1,452
Provisions utilized    (365 ) (33 ) (223 ) (3 )    (624 )
Reversals of unutilized provisions    (65 ) —    (531 )⁽³⁾ —       (596 )
Transfers⁽¹⁾    1    (84 ) (176 ) 51    (208 )
Unwinding of discount    —    5    31 1    37
Unrealized gains and losses    —    —    —    14    14
Translation differences    (59 ) —    (4 ) 4    (59 )
Actuarial gains/losses on defined-benefit plans⁽⁴⁾    824    —    —    —       824
December 31, 2008
   4,068    366    3,084 212    7,730
Changes in scope of consolidation    13    —    228 9    250
Increases in provisions and other liabilities    683    183    1,256 ⁽²⁾ —       2,122
Provisions utilized    (603 ) (61 ) (251 ) (10 )    (925 )
Reversals of unutilized provisions    (130 ) (1 ) (753 )⁽³⁾ (24 )    (908 )
Transfers⁽¹⁾    133    (232 ) (104 ) (70 )    (273 )
Unwinding of discount    —    3    36 1    40
Unrealized gains and losses    —    —    —    (12 )    (12 )
Translation differences    9    (1 ) 37 (2 )    43
Actuarial gains/losses on defined-benefit plans⁽⁴⁾    169    —    —    —       169
December 31, 2009
   4,342    257    3,533 104    8,236
Changes in scope of consolidation    21    —    27 —       48
Increases in provisions and other liabilities    442    731    857 ⁽²⁾ 11    2,041
Provisions utilized    (587 ) (65 ) (386 ) (41 )    (1,079 )
Reversals of unutilized provisions    (82 ) (56 ) (259 )⁽³⁾ —       (397 )
Transfers⁽¹⁾    (305 ) 119    81 (7 )    (112 )
Unwinding of discount    —    27    34 1    62
Unrealized gains and losses    —    —    (35 ) 33    (2 )
Translation differences    96    4    108 5    213
Actuarial gains/losses on defined-benefit plans⁽⁴⁾    316    —    —    —       316
December 31, 2010
   4,243    1,017    3,960 106    9,326
⁽¹⁾
This line includes transfers between current and non-current provisions, and in 2010 the reclassification of social security charges and “Fillon” levies on early retirement plans in France (see Note D.19.1.).
⁽²⁾
~~Amounts charged during the period mainly comprise provisions to cover tax exposures in various countries and changes to estimate of future expenditure on environmental risks.~~
⁽³⁾
Reversals relate mainly to provisions for tax exposures, reversed either because (i) the risk exposure became time-barred during the reporting period or (ii) the tax dispute was settled during the period and the outcome proved more favorable than expected for sanofi-aventis.
⁽⁴⁾
~~Amounts recognized directly in equity (see Note D.15.7.).~~
Other current liabilities are described in Note D.19.4.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.19.1. Provisions for pensions and other benefits

The Group and its subsidiaries have a significant number of pension plans covering the majority of their employees. The specific features (benefit formulas, funding policies and types of assets held) of the plans vary depending on laws and regulations in the particular country in which the employees work. Several of these plans are defined-benefit plans and cover some members of the Board of Directors as well as employees.

Actuarial valuations of the ~~Group’s~~Group's benefit obligations were computed by management with assistance from external actuaries as of December 31, ~~2010, 2009~~2012, 2011 and ~~2008.~~2010. These calculations incorporate the following elements:
•
Assumptions on staff turnover and life expectancy, specific to each country.

•
A retirement age of 6061 to 67 for a total working life allowing for full-rate retirement rights for employees of French companies, and retirement assumptions reflecting local economic and demographic factors specific to employees of foreign companies.

•
A salary inflation rate for the principal countries ranging from 3% to 5% at December 31, ~~2010, 2009,~~2012, 2011 and ~~2008.~~
2010.

•
An annuity inflation rate for the principal countries ranging from 2% to 5% at December 31, ~~2010~~2012, 2011 and ~~2009, and from 2% to 3% at December 31, 2008.~~
2010.

•
A weighted average long-term healthcare cost inflation rate of 4.56% at December 31, 2012, versus 4.58% at December 31, 2011 and 4.51% at December 31, 2010, ~~4.34% at December 31, 2009, and 4.53% at December 31, 2008,~~ applied to post-employment benefits.

•
Inflation rate assumptions, as shown in the table below:

Inflation rate    2010    2009    2008
– Euro zone
   2%       2%       2%
– United States
   2.75%       3%       3%
– United Kingdom
   3.25%       3.1%       3.1%
Inflation rate
2012
2011
2010

– Euro zone
2% 2% 2%
– United States
2.75% 2.75% 2.75%
– United Kingdom
2.8% 3% 3.25%

•
Discount rates used to determine the present value of defined benefit obligations at the balance sheet date, as shown in the table below:

Pensions and other long-term benefits
Other post-employment
benefits

Year ended December 31,
Year ended December 31,

Discount rate
2012
2011
2010
2012
2011
2010

Weighted average for all regions: 3.31% 4.61% 4.97% 3.78% 4.62% 5.45%
– Euro zone
2.25% or 3% ⁽¹⁾ 4.25% or 4.75% 4.25% or 4.75% 3% 4.75% 4.75%
– United States
3.75% 4.5% 5.5% 3.75% 4.5% 5.5%
– United Kingdom
4.25% 5% 5.5% 4.25% 5% 5.5%

⁽¹⁾
Depends on the term of the plan: 2.25% medium-term, 3% long-term.


   Pensions and other long-term benefits Other post-employment
benefits
   Year ended December 31 Year ended December 31
Discount rate 2010 2009 2008 2010 2009 2008
Weighted average for all regions: 4.97%    5.34%    5.98%    5.45%    5.76%    6.01%
– Euro zone
4.25% or 4.75% ⁽¹⁾ 4.5% or 5.25%    5.75% or 6%    4.75%    5.25%    6%
– United States
5.5%    5.75%    6%    5.5%    5.75%    6%
– United Kingdom
5.5%    5.75%    6.5%    5.5%    5.75%    6.5%
⁽¹⁾
~~Depends on the term of the plan: 4.25% medium-term, 4.75% long-term.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The discount rates used are based on market rates for high quality corporate bonds ~~(AA) the term of which approximates that of~~with a duration close to the expected benefit payments of the plans. The ~~principal benchmark indices~~benchmarks used ~~are~~to determine these discount rates were the ~~Iboxx Corporate € index for the euro zone, the Iboxx Corporate £ index for the United Kingdom,~~same in 2012, 2011 and ~~the Citigroup Pension Liability Index for the United States.~~2010.

Sensitivity analysis of pension plans and other post-employment benefits in the principal countries shows that a 0.5% reduction in discount rates would increase the ~~Group’s~~Group's obligation by approximately ~~€560~~€789 million, of which approximately ~~€160~~€248 million would relate to the United Kingdom, ~~€160~~€214 million to Germany, ~~€120~~€168 million to France and ~~€120~~€159 million to the United States.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
•
Assumptions about the expected long-term rates of return ~~for~~on plan assets. The majority of fund assets are invested in Germany, the United ~~States~~Kingdom and the United ~~Kingdom.~~States. The expected long-term rates of return used are as follows:

Pensions and other long-term benefits
Other post-employment benefits

Year ended December 31,
Year ended December 31,

Long-term rate of return on plan assets
2012
2011
2010
2012
2011
2010

Range of rates of return 1.7% - 12.5% 1.7% - 14% 2% - 13.5% 6.75% 7.5% 8%

Weighted average for all regions: 6.24% 6.48% 6.86% 6.75% 7.5% 8%
– Germany
6.25% 6.25% 6.75% — — —
– United States
6.75% 7.5% 8% 6.75% 7.5% 8%
– United Kingdom
6% 6.25% 6.5% — — —



      Pensions and other long-term benefits    Other post-employment benefits
      Year ended December 31    Year ended December 31
Expected long-term rate of return on
plan assets    2010    2009    2008    2010    2009    2008
Range of rates of return:
   1.7% – 14%       2% – 13.5%    2.5% – 13.5%       7.5%       8%       8%
Weighted average for all regions:    6.48%       6.86%    6.97%       7.5%       8%       8%
– Germany
   6.25%       6.75%    6.75%       —       —       —
– United States
   7.5%       8%    8%       7.5%       8%       8%
– United Kingdom
   6.25%       6.5%    7%       —       —       —
The average long-term rates of return on plan assets were determined on the basis of actual long-term rates of return in the financial markets. These returns vary according to the asset category (equities, bonds, real estate, other). As a general rule, ~~sanofi-aventis~~Sanofi applies the risk premium concept in assessing the return on equities relative to bond yields.

An analysis of the sensitivity of the benefit cost to changes in the expected long-term rate of return on plan assets shows that a 0.5% reduction in the rate of return would increase the benefit cost by approximately ~~€30~~€34 million.

The weighted average allocation of funds invested in Group pension plans is shown below:

Funds invested

Asset category (percentage)
2012
2011
2010

Equities 48% 47% 50%
Bonds 44% 49% 47%
Real estate 4% 2% 2%
Cash and other 4% 2% 1%

Total 100% 100% 100%



      Funds invested
Asset category (percentage)    2010    2009 2008
Equities    50%       51 % 46%
Bonds    47%       46 % 49%
Real estate    2%       1 % 2%
Cash    1%       2 % 3%
Total
   100%       100 % 100%
The target allocation of funds invested as of December 31, ~~2010~~2012 is not materially different from the actual allocation as of December 31, ~~2009~~2011 and December 31, ~~2008.~~2010.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The table below reconciles the net obligation in respect of the ~~Group’s~~Group's pension plans and other employee benefits with the amounts recognized in the consolidated financial statements:

      Pensions and other
long-term benefits Other post-employment
benefits (healthcare cover)
(€ million)    2010 2009 2008 2010    2009 2008
Valuation of obligation:

Beginning of period    8,924    7,742    8,481    376    368    339
Service cost    240    218    228    14    16    12
Contributions from plan members    5    4    4    —       —    —
Interest cost    454    446    435    22    21    19
Actuarial (gain)/loss    593    759    (579 ) 22    1    5
Plan amendments    15    219    71    —       —    —
Translation differences    259    64    (336 ) 27    (6 ) 8
Plan curtailments/settlements    (69 ) (131 ) (68 ) (13 )    (4 ) —
Changes in scope of consolidation, transfers    (283 )⁽¹⁾ 145    34    1    —    2
Benefits paid    (579 ) (542 ) (528 ) (20 )    (20 ) (17 )
Obligation at end of period
   9,559    8,924    7,742    429    376    368
Fair value of plan assets:

Beginning of period    4,876    3,957    5,362    44    41    51
Expected return on plan assets    347    278    362    4    3    4
Difference between actual and expected return on plan assets    252    547    (1,348 ) 3    6    (12 )
Translation differences    185    49    (270 ) 4    (2 ) 2
Contributions from plan members    5    4    4    —       —    —
Employer’s contributions    400    405    175    1    1    —
Plan settlements    (1 ) (5 ) (2 ) —       —    —
Changes in scope of consolidation, transfers    5    —    25    —       —    —
Benefits paid    (408 ) (359 ) (351 ) (5 )    (5 ) (4 )
Fair value of plan assets at end of period
   5,661    4,876    3,957    51    44    41
Net amount shown in the balance sheet:

Net obligation    3,898    4,048    3,785    378    332    327
Unrecognized past service cost    (45 ) (49 ) (55 ) 7    6    6
Effect of asset ceiling    1    2    4    —       —    —
Net amount shown in the balance sheet
   3,854    4,001    3,734    385    338    333
Amounts recognized in the balance sheet:

Pre-funded obligations (see Note D.7.)    (4 ) (3 ) (1 ) —       —    —
Obligations provided for⁽²⁾    3,858    4,004    3,735    385    338    333
Net amount recognized
   3,854    4,001    3,734    385    338    333
Benefit cost for the period:

Service cost    240    218    228    14    16    12
Interest cost    454    446    435    22    21    19
Expected return on plan assets    (347 ) (278 ) (362 ) (4 )    (3 ) (4 )
Amortization of past service cost    20    224    42    —       —    —
Recognition of actuarial (gains)/losses    44    38    (38 ) —       —    —
Effect of plan curtailments    (69 ) (122 ) (38 ) (13 )    (4 ) —
Effect of plan settlements    —    (3 ) (27 ) —       —    —
Benefit cost for the period
   342    523    240    19    30    27
⁽¹⁾
Includes a reduction of €322 million in respect of social security charges and “Fillon” levies due on early retirement plans in France, which were provided for as part of the pension obligation at December 31, 2009 but were reclassified as restructuring provisions at December 31, 2010; these provisions also include the portion relating to annuities (see Note D.19.2.).
⁽²⁾
Long-term benefits awarded to employees prior to retirement (mainly discretionary bonuses, long service awards and deferred compensation plans) accounted for €445 million of these obligations at December 31, 2010, €371 million at December 31, 2009, and €346 million at December 31, 2008. The expense associated with these obligations totaled €106 million in 2010, €84 million in 2009, and €31 million in 2008.

Pensions and other
long-term benefits
Other post-employment
benefits (healthcare cover)

(€ million)
2012
2011
2010 ⁽¹⁾
2012
2011
2010 ⁽¹⁾

Valuation of obligation:
Beginning of period 10,475 9,559 8,924 470 429 376
Merial — 207 — — 1 —
Service cost 262 265 240 24 13 14
Contributions from plan members — — 5 — — —
Interest cost 462 458 454 21 22 22
Actuarial (gain)/loss 1,911 366 593 53 23 22
Plan amendments 6 — 15 1 — —
Currency translation differences (17 ) 169 259 (9 ) 13 27
Plan curtailments/settlements (455 ) (80 ) (69 ) — (8 ) (13 )
Changes in scope of consolidation, transfers (18 ) 105 (283 )⁽²⁾ — — 1
Benefits paid (605 ) (574 ) (579 ) (21 ) (23 ) (20 )

Obligation at end of period 12,021 10,475 9,559 539 470 429

Fair value of plan assets:
Beginning of period 5,995 5,661 4,876 50 51 44
Merial — 144 — — — —
Expected return on plan assets 378 367 347 3 3 �� 4
Difference between actual and expected return on plan assets 357 (290 ) 252 3 (2 ) 3
Currency translation differences — 113 185 (1 ) 1 4
Contributions from plan members 5 9 5 — — —
Employer's contributions 582 331 400 — 3 1
Plan settlements (166 ) (4 ) (1 ) — — —
Changes in scope of consolidation, transfers (10 ) 73 5 — — —
Benefits paid (401 ) (409 ) (408 ) (4 ) (6 ) (5 )

Fair value of plan assets at end of period 6,740 5,995 5,661 51 50 51

Net amount shown in the balance sheet:
Net obligation 5,281 4,480 3,898 488 420 378
Unrecognized past service cost (15 ) (23 ) (45 ) 6 8 7
Effect of asset ceiling — 1 1 — — —

Net amount shown in the balance sheet 5,266 4,458 3,854 494 428 385

Amounts recognized in the balance sheet:
Pre-funded obligations (see Note D.7.) (6 ) (6 ) (4 ) — — —
Obligations provided for ⁽³⁾ 5,272 4,464 3,858 494 428 385

Net amount recognized 5,266 4,458 3,854 494 428 385

Benefit cost for the period:
Service cost 257 256 240 24 13 14
Interest cost 462 458 454 21 22 22
Expected return on plan assets (378 ) (367 ) (347 ) (3 ) (3 ) (4 )
Amortization of past service cost 13 21 20 (1 ) — —
Recognition of actuarial (gains)/losses 55 4 44 — — —
Effect of plan curtailments (229 ) (77 ) (69 ) — (8 ) (13 )
Effect of plan settlements (60 ) 1 — — — —

Benefit cost for the period 120 296 342 41 24 19

⁽¹⁾
Excluding Merial, for which the net amounts recognized in the balance sheet were presented as assets/liabilities held for sale or exchange as of December 31, 2010.
⁽²⁾
Includes a reduction of €322 million in respect of social security charges and "Fillon" levies due on early retirement plans in France, which were provided for as part of the pension obligation at December 31, 2009 but were reclassified as restructuring provisions at December 31, 2010; these provisions also include the portion relating to annuities (see Note D.19.2.).
⁽³⁾
Long-term benefits awarded to employees prior to retirement (mainly discretionary bonuses, long service awards and deferred compensation plans) amounted to €532 million at December 31, 2012, €483 million at December 31, 2011 and €445 million at December 31, 2010. The expense associated with these obligations totaled €125 million in 2012, €56 million in 2011, and €106 million in 2010.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Actuarial gains and losses on pensions, other long-term and ~~other~~ post-employment benefits break down as follows:
(€ million)
2012
2011
2010
2009
2008

Actuarial gains/(losses) arising during the period ⁽¹⁾ (1,604 ) (681 ) (360 ) (207 ) (786 )

Comprising:
• gains/(losses) on experience adjustments
319 (266 ) 169 531 (1,326 )
• gains/(losses) on changes in assumptions ⁽²⁾
(1,923 ) (415 ) (529 ) (738 ) 540

Breakdown of experience adjustments:
• gains/(losses) on plan assets ⁽³⁾
360 (292 ) 255 553 (1,360 )
• gains/(losses) on obligations
(41 ) 26 (86 ) (22 ) 34

Amount of obligations at the balance sheet date 12,560 10,945 9,988 9,300 8,110
Fair value of plan assets at the balance sheet date 6,791 6,045 5,712 4,920 3,998

⁽¹⁾
Includes losses recognized in equity of €1,555 million in 2012, €677 million in 2011, and €316 million in 2010 (see Note D.15.7.), and losses recognized directly in profit or loss of €50 million in 2012, €4 million in 2011 and €44 million in 2010.
⁽²⁾
Changes in assumptions relate mainly to changes in discount rates.
⁽³⁾
Experience adjustments are due to trends in the financial markets.


(€ million)    2010 2009 2008 2007 2006
Actuarial gain/(loss) arising during the period⁽¹⁾    (360 ) (207 ) (786 ) 289 359
Comprising:
• gain/(loss) on experience adjustments
   169 531 (1,326 ) (135 ) 126
• gain/(loss) on changes in assumptions⁽²⁾
   (529 ) (738 ) 540 424 233
Breakdown of experience adjustments:
• gain/(loss) on plan assets⁽³⁾
   255 553 (1,360 ) (160 ) 191
• gain/(loss) on obligations
   (86 ) (22 ) 34 25 (65 )
Amount of obligations at the balance sheet date    9,988 9,300 8,110 8,820 9,508
Fair value of plan assets at the balance sheet date    5,712 4,920 3,998 5,413 5,631
⁽¹⁾
For 2010, comprises a loss of €316 million recognized in equity (see Note D.15.7.) and a loss of €44 million taken directly to the income statement; for 2009, comprises a loss of €169 million recognized in equity (see Note D.15.7.) and a loss of €38 million taken directly to the income statement.
⁽²⁾
~~Changes in assumptions relate mainly to changes in discount rates.~~
⁽³⁾
~~Experience adjustments are due to trends in the financial markets.~~
The net pre-tax actuarial loss recognized directly in equity (excluding associates and joint ~~ventures~~ventures) was €3,693 million at December 31, 2012, versus €2,145 million at December 31, 2011 and ~~Merial) was~~ €1,459 million at December 31, ~~2010, versus €1,143 million at~~2010.
        At December 31, ~~2009 and €974 million at December 31, 2008.~~
~~As of December 31, 2010,~~2012, the present value of obligations in respect of pensions and ~~similar~~other long-term benefits under wholly or partially funded plans was ~~€7,589~~€9,672 million, and the present value of unfunded obligations was ~~€1,969~~€2,349 million (versus ~~respectively, €6,897~~€8,913 million and ~~€2,027~~€1,562 million at December 31, ~~2009,~~2011, and ~~€5,924~~€7,589 million and ~~€1,817~~€1,969 million at December 31, ~~2008)~~2010, respectively).
In Germany, ~~sanofi-aventis~~Sanofi is a member of aPensionskasse multi-employer plan. This is a defined-benefit plan accounted for as a defined-contribution plan in accordance with the accounting policy described in Note B.23. Plan contributions cover the current level of annuities. However, the obligation arising from future increases in annuity rates is recognized as part of the overall pension obligation; it amounted to €655 million at December 31, 2012, versus €489 million at December 31, 2011 and €487 million at December 31, ~~2010, €449 million at December 31, 2009, and €393 million at December 31, 2008.~~2010.

The table below shows the sensitivity of (i) the benefit cost recognized in the consolidated income statement, and (ii) the obligation in the consolidated balance sheet, to changes in healthcare costs associated with other post-employment benefits.
(€ million)
Sensitivity of
assumptions
~~2010~~2012

1% increase in healthcare costs
• Impact on benefit cost for the period
3
• Impact on obligation in the balance sheet
3738
1% reduction in healthcare costs
• Impact on benefit cost for the period
(36 )
• Impact on obligation in the balance sheet
(2947 )

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The total cost of pensions and other benefits, which amounted to ~~€361~~€161 million in ~~2010,~~2012, is split as follows:

(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009
• Cost of sales    121 111
• Research and development expenses    98 98
• Selling and general expenses    155 195
• Other operating expenses    51 59
• Financial expenses⁽¹⁾    9 13
• Restructuring costs    (73 )⁽²⁾ 77
Total
   361 553
⁽¹⁾

(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010 ⁽¹⁾

•  Cost of sales 122 117 121
•  Research and development expenses 74 81 98
•  Selling and general expenses 65 160 155
•  Other operating (income)/expenses, net (20 ) 43 51
•  Financial expenses ⁽²⁾ 10 — 9
•  Other gains and losses, and litigation ⁽³⁾ — (4 ) —
•  Restructuring costs (90 ) (77 ) (73 )⁽⁴⁾

Total 161 320 361

⁽¹⁾
Excluding Merial.
⁽²⁾
This line comprises actuarial gains and losses on deferred compensation plans funded by assets recognized under the fair value option (see Note D.7.). These actuarial gains and losses are offset by changes in the fair value ~~of those assets.~~
⁽²⁾
~~Impact of plan curtailments following the redundancy programs announced in 2010 (see Note D.19.2.).~~
~~The total cost~~ of ~~pensions and other benefits (excluding~~those assets.
⁽³⁾
Relates to the ~~effect~~sale of Dermik (see Note D.28.)
⁽⁴⁾
Impact of plan curtailments following the redundancy programs announced in 2010 (see Note D.19.2.).
        The timing of estimated future benefit payments on unfunded pension and ~~settlements) for 2008 was €332 million, split~~post-employment plans as of December 31, 2012 is as follows:
(€ million)
Total
Less than
1 year
From 1 to
3 years
From 3 to
5 years
More than
5 years

Estimated payments 1,741 60 115 133 1,433


•
~~Cost of sales~~~~: €91��million~~
•
~~Research and development expenses~~~~: €61 million~~
•
~~Selling and general expenses~~~~: €180 million~~
The table below shows the expected cash outflows on pensions, other long-term benefits and ~~other~~ post-employment benefits over the next ten years:

(€ million)    Pensions and
other benefits
Estimated employer’s contribution in 2011    281
Estimated benefit payments:
2011    575
2012    572
2013    607
2014    610
2015    646
2016 through 2020    3,449
(€ million)
Pensions and
other benefits

Estimated employer's contribution in 2013 268

Estimated benefit payments:
2013 651
2014 602
2015 602
2016 624
2017 680
2018 to 2022 3,528

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
D.19.2. Restructuring provisions

The table below shows movements in restructuring provisions classified innon-current liabilities and current ~~liabilities~~:liabilities:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Balance, beginning of period 1,930 1,611 1,018
of which:
• Classified in non-current liabilities
1,182 1,017 257
• Classified in current liabilities
748 594 761

Change in provisions recognized in profit or loss for the period 857 861 1,073
Provisions utilized (728 ) (592 ) (839 )
Transfers 109 ⁽²⁾ 1 322 ⁽¹⁾
Unwinding of discount 45 38 27
Currency translation differences — 11 10

Balance, end of period 2,213 1,930 1,611

of which:
• Classified in non-current liabilities
1,461 1,182 1,017
• Classified in current liabilities
752 748 594

⁽¹⁾
Reclassification of social security charges and "Fillon" levies relating to early retirement plans in France (see Note D.19.1.).
⁽²⁾
Includes a €101 million transfer from provisions for pensions and other long-term benefits following the announcement of measures to adapt the Group's resources in France (see Note D.19.1.)


(€ million)    December 31,
2010 December 31,
2009 December 31,
2008
Balance, beginning of period
   1,018 678 395
of which:
• Classified in non-current liabilities
   257 366 188
• Classified in current liabilities
   761 312 207
Change in provisions recognized in profit or loss for the period    1,073 837 510
Provisions utilized    (839 ) (388 ) (228 )
Transfers    322 ⁽¹⁾ (110 ) (3 )
Unwinding of discount    27 3 5
Translation differences    10 (2 ) (1 )
Balance, end of period
   1,611 1,018 678
of which:
• Classified in non-current liabilities
   1,017 257 366
• Classified in current liabilities
   594 761 312
⁽¹⁾
~~Reclassification of social security charges and “Fillon” levies relating to early retirement plans in France (see Note D.19.1.).~~
~~Provision~~Provisions for employee termination benefits at December 31, ~~2010~~2012 amounted to ~~€1,265~~€1,982 million ~~mainly covering the~~(versus €1,672 million at December 31, 2011), and primarily covered redundancy programs announced as part of the adaptation of sales forces, R&D and industrial operations in France, the United States, and some other European countries. The provision relating to France ~~(€889~~was €1,515 million at December 31, ~~2010) mainly comprises~~2012, versus €933 million at December 31, 2011. Charges to provisions during the period included €646 million for the adaptation of the Group's resources in France (see Note D.27.).
        The provision for France includes the present value of gross annuities under early retirement plans (including those already in place, and those provided for in 2012) not outsourced as of ~~that~~the balance sheet date, plus social security charges and ~~“Fillon”~~"Fillon" levies on those annuities and on outsourced annuities. The average residual period of carry under these plans was 3.5 years as of December 31, ~~2010 was 3.6 years. The amount~~2012 (3.3 years as of ~~premium~~December 31, 2011). In 2012, premiums paid in connection with the outsourcing of annuities ~~during 2010 was €241 million.~~amounted to €7 million (most of which related to an increase in the period of carry for existing annuities in response to the raising of the statutory retirement age); this compares with €6 million in 2011.

The timing of future termination benefit payments is as follows:

   Year ended December 31, 2010
   Benefit payments by period
(€ million)    Total    Less than
1 year    From 1 to 3
years    From 3 to 5
years    More than 5
years
Employee termination benefits
– France
   889       233       263       217       176
– Other countries
   376       226       127       13       10
Total
   1,265       459       390       230       186
Year ended December 31, 2012

Benefit payments by period

(€ million) Total Less than
1 year From 1 to
3 years From 3 to
5 years More than
5 years

Employee termination benefits
• France
1,515 400 644 382 89
• Other countries
467 257 179 24 7

Total 1,982 657 823 406 96

Table of Contents
Movements during 2010 recognized in profit or loss for the period mainly comprise expenses relating to measures taken to adapt chemical industrial activities in France, and sales and R&D functions in Western Europe and North America. This item also includes a remeasurement of previously-recognized obligations under early retirement plans following the pension reforms in France. Movements in restructuring provisions during 2010 also include the job protection guarantee made to Covance in connection with the divestment of the Alnwick and Porcheville sites (see Note D.27).
~~An analysis of restructuring costs by type is provided in Note D.27.~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Year ended December 31, 2011

Benefit payments by period

(€ million) Total Less than
1 year From 1 to
3 years From 3 to
5 years More than
5 years

Employee termination benefits
• France
933 189 231 339 174
• Other countries
739 465 235 21 18

Total 1,672 654 466 360 192

D.19.3. Other provisions

Other provisions include provisions for risks and litigation relating to environmental, tax, commercial and product liability ~~risks, and for litigation.~~matters.
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Tax exposures 2,114 2,409 2,228
Environmental risks and remediation 728 764 781
Product liability risks, litigation and other 869 985 951

Total 3,711 4,158 3,960



(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Tax exposures    2,228       2,009       1,770
Environmental risks and remediation    781       695       589
Product liability risks, litigation and other    951       829       725
Total
   3,960       3,533       3,084
Provisions for tax exposures are recorded if the Group is exposed to a probable risk resulting from a tax position adopted by the Group or a subsidiary, and the risk has been quantified at the balance sheet date.

Provisions for ~~“Environmental~~environmental risks and ~~remediation”~~remediation mainly relate to contingencies arising from business ~~divestments. The movement during 2010 includes €105 million charged to restructuring costs in connection with the adaptation of chemical industrial facilities in France (see Note D.27.).~~divestitures.

Identified environmental risks are covered by provisions estimated on the basis of the costs ~~sanofi-aventis~~Sanofi believes it will be obliged to meet over a period not exceeding (other than in exceptional cases) 30 years. ~~Sanofi-aventis~~The Group expects that ~~€119~~€99 million of these provisions will be utilized in ~~2011~~2013, and ~~€386~~€286 million over the period from ~~2012~~2014 through ~~2015.~~2017.

~~“Product~~"Product liability risks, litigation and ~~other”~~other" mainly comprises provisions for risks relating to product liability (including ~~“IBNR”~~IBNR provisions as described in Note B.12.), government investigations, regulatory or ~~competition~~antitrust law claims, or contingencies arising from business ~~divestments~~divestitures (other than environmental risks).

The main pending legal and arbitral proceedings and government investigations are described in Note D.22.

A full risk and litigation assessment is performed with the assistance of the ~~Group’s~~Group's legal advisers, and provisions are recorded as required by circumstances in accordance with the principles described in Note B.12.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.19.4. Other current liabilities

Other current liabilities break down as follows:
(€ million)
December 31,
2012
December 31,
2011
December 31,
2010

Taxes payable 935 1,060 785
Employee-related liabilities 1,909 1,957 1,411
Restructuring provisions (see Note D.19.2.) 752 748 594
Interest rate derivatives (see Note D.20.) 2 27 3
Currency derivatives (see Note D.20.) 40 218 104
Amounts payable for acquisitions of non-current assets 222 191 267
Other liabilities 2,898 3,020 2,460

Total 6,758 7,221 5,624



(€ million)    December 31,
2010    December 31,
2009    December 31,
2008
Taxes payable    785       631       664
Employee-related liabilities    1,411       1,458       1,366
Restructuring provisions (see Note D.19.2.)    594       761       312
Interest rate derivatives (see Note D.20.)    3       62       —
Currency derivatives (see Note D.20.)    104       119       249
Amounts payable for acquisitions of non-current assets    267       251       292
Other liabilities    2,460       2,087       1,838
Total
   5,624       5,369       4,721
This item includes the current portion of provisions for litigation, sales returns and other ~~risks;~~risks, amounts due to associates and joint ventures (see Note D.6.), and amounts due to governmental agencies and ~~the~~ healthcare authorities (see Note D.23.).
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
D.20. Derivative financial instruments and market risks

The table below shows the fair value of derivative instruments as of December 31, ~~2010:~~2012:

(€ million) Non-current
assets Current
assets Total
assets Non-
current
liabilities Current
liabilities Total
liabilities Fair value at
Dec. 31,
2010 (net) Fair value at
Dec. 31,
2009 (net) Fair value at
Dec. 31,
2008 (net)
Currency derivatives
—    27    27    (27 ) (104 ) (131 ) (104 ) 132 139
• operational
—    14    14    —    (41 ) (41 ) (27 ) (46 ) 201
• financial
—    13    13    (27 ) (63 ) (90 ) (77 ) 178 (62 )
Interest rate derivatives 220    1    221    —    (3 ) (3 ) 218 7 (22 )
Total
220    28    248    (27 ) (107 ) (134 ) 114 139 117
(€ million)
Non-
current
assets
Current
assets
Total
assets
Non-
current
liabilities
Current
liabilities
Total
liabilities
Fair value at
Dec. 31,
2012 (net)
Fair value at
Dec. 31,
2011 (net)
Fair value at
Dec. 31,
2010 (net)

Currency derivatives 1 82 83 — (40 ) (40 ) 43 (169 ) (104 )
• operational
1 30 31 — (14 ) (14 ) 17 (89 ) (27 )
• financial
— 52 52 — (26 ) (26 ) 26 (80 ) (77 )
Interest rate derivatives 393 40 433 — (2 ) (2 ) 431 456 218

Total 394 122 516 — (42 ) (42 ) 474 287 114

Objectives of the use of derivative financial instruments

~~Sanofi-aventis~~Sanofi uses derivative instruments ~~primarily~~ to manage operational exposure to movements in exchange rates, and financial exposure to movements in interest rates and exchange rates (where the debt or receivable is not contracted in the functional currency of the borrower or lender entity). Less frequently, ~~sanofi-aventis~~Sanofi uses equity derivatives in connection with the management of its portfolio of equity investments.

~~Sanofi-aventis~~Sanofi performs periodic reviews of its transactions and contractual agreements in order to identify any embedded derivatives, which are accounted for separately from the host contract in accordance with IAS 39. ~~As of December 31, 2010, sanofi-aventis~~Sanofi had no material embedded ~~derivatives.~~
derivatives as of December 31, 2012, 2011 and 2010.
Counterparty risk

As of December 31, ~~2010,~~2012, all currency and interest rate hedges were contracted with leading banks, and no single counterparty accounted for more than ~~12%~~13% of the notional amount of the ~~Group’s~~Group's overall currency and interest rate positions.

Table of Contents
~~D.20.1. Currency and interest rate derivatives~~
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
a) Currency derivatives used to manage operational risk exposures

~~Sanofi-aventis~~Sanofi operates a foreign exchange risk hedging policy to reduce the exposure of operating income to fluctuations in foreign currencies, in particular the U.S. dollar. This policy involves regular assessments of the ~~Group’s~~Group's worldwide foreign currency exposure, based on budget estimates of foreign-currency transactions to be carried out by the parent company and its subsidiaries. These transactions mainly comprise sales, purchases, research costs, co-marketing and co-promotion expenses, and royalties. To reduce the exposure of these transactions to exchange rate movements, ~~sanofi-aventis~~Sanofi contracts ~~economic~~ hedges using liquid ~~financial~~derivative instruments, ~~such as~~primarily forward purchases and sales of currency ~~call~~ and ~~put options,~~currency swaps.
        The table below shows operational currency hedging instruments in place as of December 31, 2012, with the notional amount translated into euros at the relevant closing exchange rate:
As of December 31, 2012

Of which derivatives
designated
as cash flow hedges

Of which derivatives not eligible
for hedge accounting

(€ million)
Notional
amount
Fair
value

Notional
amount
Fair
value
Of which
recognized
in equity

Notional
amount
Fair
value

Forward currency sales 2,972 21 — — — 2,972 21
• of which U.S. dollar
972 6 — — — 972 6
• of which Japanese yen
485 15 — — — 485 15
• of which Russian rouble
368 (3 ) — — — 368 (3 )
• of which Singapore dollar
271 — — — — 271 —
• of which Chinese yuan renminbi
255 1 — — — 255 1

Forward currency purchases 944 (4 ) — — — 944 (4 )
• of which Singapore dollar
231 (4 ) — — — 231 (4 )
• of which Hungarian forint
166 (3 ) — — — 166 (3 )
• of which Swiss franc
110 — — — — 110 —
• of which Chinese yuan renminbi
94 — 94 —
• of which U.S. dollar
69 — — — — 69 —

Total 3,916 17 — — — 3,916 17

        As of December 31, 2012, none of these instruments had an expiry date after February 28, 2013, with the exception of a forward purchase of GBP 33 million expiring between 2013 and ~~combinations~~2015.
        These positions mainly hedge material future foreign-currency cash flows arising after the balance sheet date in relation to transactions carried out during the year ended December 31, 2012 and recognized in the balance sheet at that date. Gains and losses on these hedging instruments (forward contracts) are calculated and recognized in parallel with the recognition of ~~currency options (collars).~~gains and losses on the hedged items. Consequently, we do not expect the commercial foreign exchange gain or loss recognized on these items (hedges and hedged instruments) in 2013 to be material.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended~~        The table below shows operational currency hedging instruments in place as of December 31, ~~2010~~2011, with the notional amount translated into euros at the relevant closing exchange rate:
As of December 31, 2011

Of which derivatives
designated
as cash flow hedges

Of which derivatives not eligible
for hedge accounting

(€ million)
Notional
amount
Fair
value

Notional
amount
Fair
value
Of which
recognized
in equity

Notional
amount
Fair
value

Forward currency sales 3,446 (96 ) — — — 3,446 (96 )
• of which U.S. dollar
1,779 (59 ) — — — 1,779 (59 )
• of which Japanese yen
685 (22 ) — — — 685 (22 )
• of which Russian rouble
310 (5 ) — — — 310 (5 )
• of which Singapore dollar
71 — — — — 71 —
• of which Australian dollar
63 (2 ) — — — 63 (2 )

Forward currency purchases 1,077 7 — — — 1,077 7
• of which Singapore dollar
357 4 — — — 357 4
• of which Swiss franc
165 2 — — — 165 2
• of which Japanese yen
124 3 — — — 124 3
• of which Hungarian forint
107 (4 ) — — — 107 (4 )
• of which U.S. dollar
69 — — — — 69 —

Total 4,523 (89 ) — — — 4,523 (89 )


The table below shows operational currency hedging instruments in place as of December 31, 2010, with the notional amount translated into euros at the relevant closing exchange ~~rate.~~rate:
As of December 31, 2010

Of which derivatives
designated
as cash flow hedges

Of which derivatives not eligible
for hedge accounting

(€ million)
Notional
amount
Fair
value

Notional
amount
Fair
value
Of which
recognized
in equity

Notional
amount
Fair
value

Forward currency sales 2,444 (25 ) — — — 2,444 (25 )
• of which U.S. dollar
1,380 (12 ) — — — 1,380 (12 )
• of which Russian rouble
248 (7 ) — — — 248 (7 )
• of which Japanese yen
202 (4 ) — — — 202 (4 )
• of which Pound sterling
95 2 — — — 95 2
• of which Australian dollar
60 (1 ) — — — 60 (1 )

Forward currency purchases 257 (2 ) — — — 257 (2 )
• of which Hungarian forint
84 (1 ) — — — 84 (1 )
• of which U.S. dollar
51 (1 ) — — — 51 (1 )
• of which Canadian dollar
31 — — — — 31 —
• of which Russian rouble
30 — — — — 30 —
• of which Japanese yen
18 — — — — 18 —

Total 2,701 (27 ) — — — 2,701 (27 )

Table of Contents

December 31, 2010                Of which derivatives designated
as cash flow hedges    Of which derivatives not eligible
for hedge accounting
(€ million)    Notional
amount    Fair
value    Notional
amount    Fair
value    Of which
recognized
in equity    Notional
amount    Fair value
Forward currency sales
   2,444       (25 )    —       —       —       2,444       (25 )
• of which U.S. dollar
   1,380       (12 )    —       —       —       1,380       (12 )
• of which Russian rouble
   248       (7 )    —       —       —       248       (7 )
• of which Japanese yen
   202       (4 )    —       —       —       202       (4 )
• of which Pound sterling
   95       2       —       —       —       95       2
• of which Australian dollar
   60       (1 )    —       —       —       60       (1 )
Forward currency purchases
   257       (2 )    —       —       —       257       (2 )
• of which Hungarian forint
   84       (1 )    —       —       —       84       (1 )
• of which U.S. dollar
   51       (1 )    —       —       —       51       (1 )
• of which Canadian dollar
   31       —       —       —       —       31       —
• of which Russian rouble
   30       —       —       —       —       30       —
• of which Japanese yen
   18       —       —       —       —       18       —
Total
   2,701       (27 )    —       —       —       2,701       (27 )
~~As of December 31, 2010, none of these instruments had an expiry date after March 31, 2011.~~
These positions mainly hedge material future foreign-currency cash flows arising after the balance sheet date in relation to transactions carried out during the year ended December 31, 2010 and recognized in the balance sheet at that date. Gains and losses on hedging instruments (forward contracts) are calculated and recognized in parallel with the recognition of gains and losses on the hedged items. Consequently, the commercial foreign exchange gain or loss to be recognized on these items (hedges and hedged instruments) in 2011 is not expected to be material.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
~~The table below shows operational currency hedging instruments in place as of December 31, 2009, with the notional amount translated into euros at the relevant closing exchange rate.~~

December 31, 2009                Of which derivatives designated
as cash flow hedges    Of which derivatives not eligible
for hedge accounting
(€ million)    Notional
amount    Fair
value    Notional
amount    Fair
value Of which
recognized
in equity    Notional
amount    Fair value
Forward currency sales
   2,800       (51 )    583       (7 ) (7 )    2,217       (44 )
• of which U.S. dollar
   1,757       (41 )    367       (5 ) (5 )    1,390       (36 )
• of which Japanese yen
   269       1       150       (1 ) (1 )    119       2
• of which Russian rouble
   132       (4 )    —       —    —       132       (4 )
• of which Pound sterling
   111       —       —       —    —       111       —
• of which Hungarian forint
   104       (1 )    —       —    —       104       (1 )
Forward currency purchases
   377       6       —       —    —       377       6
• of which Hungarian forint
   114       3       —       —    —       114       3
• of which U.S. dollar
   69       —       —       —    —       69       —
• of which Pound sterling
   68       1       —       —    —       68       1
• of which Canadian dollar
   42       1       —       —    —       42       1
• of which Swiss franc
   20       —       —       —    —       20       —
Put options purchased
   448       14       20       1    —       428       13
• of which U.S. dollar
   278       8       —       —    —       278       8
Call options written
   881       (17 )    20       (1 ) —       861       (16 )
• of which U.S. dollar
   555       (10 )    —       —    —       555       (10 )
Put options written
   278       (8 )    —       —    —       278       (8 )
• of which U.S. dollar
   278       (8 )    —       —    —       278       (8 )
Call options purchased
   555       10       —       —    —       555       10
• of which U.S. dollar
   555       10       —       —    —       555       10
Total
   5,339       (46 )    623       (7 ) (7 )    4,716       (39 )
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~The table below shows operational currency hedging instruments in place as of December 31, 2008, with the notional amount translated into euros at the relevant closing exchange rate.~~

December 31, 2008
               Of which derivatives designated
as cash flow hedges    Of which derivatives not eligible
for hedge accounting
(€ million)    Notional
amount    Fair
value    Notional
amount    Fair
value    Of which
recognized
in equity    Notional
amount    Fair value
Forward currency sales
   3,305       219       1,562       121       123       1,743       98
• of which U.S. dollar
   2,461       182       1,358       108       111       1,103       74
• of which Japanese yen
   191       (5 )    95       3       2       96       (8 )
• of which Russian rouble
   134       15       —       —       —       134       15
• of which Pound sterling
   104       6       —       —       —       104       6
• of which Saudi Arabian riyal
   58       5       4       —       —       54       5
• of which Polish zloty
   53       6       33       5       6       20       1
Forward currency purchases
   601       (11 )    —       —       —       601       (11 )
• of which Hungarian forint
   175       (1 )    —       —       —       175       (1 )
• of which U.S. dollar
   140       3       —       —       —       140       3
• of which Pound sterling
   75       (6 )    —       —       —       75       (6 )
• of which Russian rouble
   72       (6 )    —       —       —       72       (6 )
• of which Canadian dollar
   51       (1 )    —       —       —       51       (1 )
Put options purchased
   24       —       2       —       —       22       —
Call options written
   48       (7 )    2       —       —       46       (7 )
Total
   3,978       201       1,566       121       123       2,412       80
b) Currency and interest rate derivatives used to manage financial risk exposures

Cash pooling arrangements for foreign subsidiaries outside the euro zone, and some of the ~~Group’s~~Group's financing activities, expose certain entities to financial foreign exchange risk. This is the risk of changes in the value of borrowings and loans denominated in a currency other than the functional currency of the borrower or lender. This risk is hedged by the Sanofi parent company using currency swaps or forward contracts, ~~and mainly affects the sanofi-aventis parent company.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
which are contracted with banks.

The table below shows financial currency hedging instruments ~~used to manage financial risk exposures~~in place as of December 31, ~~2010,~~2012, with the notional amount translated into euros at the relevant closing exchange ~~rate.~~rate:

2012
2011
2010

(€ million)
Notional
amount
Fair
value
Expiry
Notional
amount
Fair
value
Expiry
Notional
amount
Fair
value
Expiry

Forward currency sales 3,970 38 4,900 (104 ) 2,728 (64 )
• of which U.S. dollar
1,897 1 2013 2,964 (89 ) 2012 862 (26 ) 2012
• of which Japanese yen
1,272 34 2013 993 (17 ) 2012 904 (24 ) 2011
• of which Czech koruna
191 — 2013 251 4 2012 359 (7 ) 2011
Forward currency purchases 2,638 (12 ) 2,719 24 2,086 (13 )
• of which Pound sterling
549 (3 ) 2013 843 5 2012 565 (11 ) 2011
• of which U.S. dollar
521 1 2013 828 10 2012 814 (8 ) 2011
• of which Singapore dollar
492 (4 ) 2013 191 5 2012 20 — 2011
Total 6,608 26 7,619 (80 ) 4,814 (77 )



      2010    2009    2008
(€ million)    Notional
amount    Fair
value Expiry    Notional
amount    Fair
value Expiry    Notional
amount    Fair
value Expiry
Forward currency purchases
   2,086       (13 ) —       6,760       185    —       8,492       (40 ) —
• of which U.S. dollar
   814       (8 ) 2011       5,634       180    2010       7,538       (26 ) 2009
• of which Pound sterling
   565       (11 ) 2011       433       2    2010       235       (4 ) 2009
• of which Japanese yen
   169       —    2011       121       (2 ) 2010       105       —    2009
Forward currency sales
   2,728       (64 ) —       3,169       (7 ) —       1,954       (22 ) —
• of which Japanese yen
   904       (24 ) 2011       837       18    2010       665       (7 ) 2009
• of which U.S. dollar
   862       (26 ) 2012       1,634       (28 ) 2010       1,043       (23 ) 2009
• of which Czech koruna
   359       (7 ) 2011       394       7    2010       22       1    2009
Total
   4,814       (77 )    9,929       178       10,446       (62 )
These forward contracts generate a net financial foreign exchange gain or loss arising from the interest rate ~~gap~~differential between the hedged currency and the euro, given that the foreign exchange gain or loss on the foreign-currency ~~liabilities~~borrowings and ~~receivables~~loans is offset by the change in the intrinsic value of the hedging instruments. In addition, the Group may hedge some future foreign-currency cash flows relating to investment or divestment transactions.

Since the financing of the Genzyme acquisition, the Group has managed its net debt in two currencies, the euro and the U.S. dollar (see Note D.17). The ~~Group’s~~floating-rate portion of this debt exposes the Group to rises in interest ~~rate exposure arises from (i) fixed-rate debt (primarily bond issues),~~rates, primarily in the ~~fair value of which moves in line with fluctuations in market interest rates;~~Eonia and (ii) floating-rate or adjustable-rate debt and cash investments (credit facilities, commercial paper, floating rate notes, funds placed in collective investment schemes), on which interest outflows and inflows are exposed to fluctuations inEuribor benchmark rates ~~(principally Eonia,~~(for the euro) and in the U.S. Libor and ~~Euribor)~~Federal Fund Effective rates (for the U.S. dollar). ToIn order to reduce the ~~cost~~amount and/or volatility of ~~its short-term and medium-term~~the cost of debt, ~~we use~~the Group uses interest rate swaps, cross-currency swaps and ~~in certain circumstances~~ interest rate options ~~(purchases of caps, or combined purchases of caps and sales of floors)~~ that alter the fixed/floating ~~structure~~split of ~~our~~ debt.
~~During 2010, sanofi-aventis contracted hedges of net investments~~ These derivative instruments are denominated partially in ~~foreign operations relating to financial assets~~euros and partially in U.S. ~~dollars ($3,672 million) and in Canadian dollars (CAD 405 million). These hedges had expired as~~dollars.

Table of ~~December 31, 2010.~~Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The table below shows instruments of this type in place atas of December 31, ~~2010:~~2012:

Notional amounts by expiry date
as of December 31, 2012

Of which derivatives
designated as
fair value hedges

Of which derivatives
designated as
cash flow hedges

(€ million)

2013
2014
2015
2016
2017
2019
Total

Fair
value

Notional
amount
Fair
value

Notional
amount
Fair
value
Of which
recognized
in equity

Interest rate swaps
– Pay floating/receive 2.73% — — — 500 — — 500 45 500 45 — — —
– Pay floating/receive 2.38% — 1,200 — 1,000 — 800 3,000 251 3,000 251 — — —
– Pay floating/receive 0.57% — — — — 375 — 375 2 375 2 — — —
– Pay floating/receive 1.15% — — — — 428 — 428 2 — — — — —
– Pay floating/receive 0.34% — 379 — — — — 379 2 379 2 — — —
Cross-currency swaps
– Pay € floating/receive JPY floating 92 — — — — — 92 40 — — — — —
– Pay € 4.87%/receive CHF 3.38% — — 244 — — — 244 91 — — 244 91 4
Currency swaps hedging USD investments
– Pay USD/receive € 872 — — — — — 872 (2 ) — — — — —

Total 964 1,579 244 1,500 803 800 5,890 431 4,254 300 244 91 4




Notional amounts by expiry date
as of December 31, 2010
   Of which derivatives
designated as fair
value hedges
Of which derivatives
designated as
cash flow hedges

(€ million) 2011 2012 2013 2015 2016 Total Fair
value Notional
amount Fair
value Notional
amount Fair
value Of which
recognized
in equity
Interest rate swaps

pay floating⁽¹⁾ / receive 2.73% —    —    —    —    500    500    12    500    12    —    —    —
Cross currency Swaps

– pay€ floating⁽²⁾/ receive JPY floating⁽³⁾ —    —    92    —    —    92    47    —    —    —    —    —
– pay€4.89% / receive CHF 3.26% —    180    —    —    —    180    41    —    —    180    41    1
– pay€ 4.87% / receive CHF 3.38% —    —    —    244    —    244    82    —    —    244    82    6
– pay€ floating⁽²⁾/ receive CHF 3.26% —    167    —    —    —    167    38    167    38    —    —    —
Currency swaps

– pay€/ receive USD⁽⁴⁾ 489    —    —    —    —    489    (2 ) —    —    —    —    —
Total
489    347    92    244    500    1,672    218    667    50    424    123    7
⁽¹⁾
~~Floating: benchmark rate 1-month Euribor~~
⁽²⁾
~~Floating: benchmark rate 3-month Euribor~~
⁽³⁾
~~Floating: benchmark rate 3-month Libor JPY~~
⁽⁴⁾
~~Swaps on U.S. commercial paper~~
The table below shows instruments of this type in place atas of December 31, ~~2009:~~2011:

Notional amounts by expiry date
as of December 31, 2011

Of which derivatives
designated as
fair value hedges

Of which derivatives
designated as
cash flow hedges

(€ million)

2012
2013
2014
2015
2016
2019
2021
Total

Fair
value

Notional
amount
Fair
value

Notional
amount
Fair
value
Of which
recognized
in equity

Caps
– Purchases of caps 0.50% 1,932 — — — — — — 1,932 1 — — 1,932 1 (1 )
Interest rate swaps
– Pay floating/receive 2.73% — — — — 500 — — 500 34 500 34 — — —
– Pay floating/receive 2.38% — — 1,200 — 1,000 800 — 3,000 204 3,000 204 — — —
– Pay floating/receive 1.86% — — — — — — 232 232 (1 ) 232 (1 ) — — —
– Pay floating/receive 0.34% — — 386 — — — — 386 1 386 1 — — —
Cross-currency swaps
– Pay € floating/receive JPY floating — 92 — — — — — 92 58 — — — — —
– Pay € 4.89%/receive CHF 3.26% 180 — — — — — — 180 48 — — 180 48 1
– Pay € 4.87%/receive CHF 3.38% — — — 244 — — — 244 96 — — 244 96 11
– Pay € floating/receive CHF 3.26% 167 — — — — — — 167 42 167 42 — — —
Currency swaps hedging USD investments
– Pay USD/receive € 1,404 — — — — — — 1,404 (27 ) — — — — —

Total 3,683 92 1,586 244 1,500 800 232 8,137 456 4,285 280 2,356 145 11

Table of Contents


Notional amounts by expiry date
as of December 31, 2009
   Of which derivatives
designated as fair
value hedges Of which derivatives
designated as
cash flow hedges
(€ million) 2010 2012 2013 2015 Total Fair
value Notional
amount Fair
value Notional
amount Fair
value Of which
recognized
in equity
Interest rate swaps

Pay floating⁽¹⁾ / receive 1.27% 1,000    —    —    —    1,000    2    1,000    2    —    —    —
Cross currency swaps

– pay € floating ⁽²⁾ / receive £ 5.50% 299    —    —    —    299    (62 ) 299    (62 ) —    —    —
– pay € floating ⁽²⁾ / receive JPY floating⁽³⁾ —    —    92    —    92    21    —    —    —    —    —
– pay € floating⁽⁴⁾ / receive CHF 2.75% 122    —    —    —    122    16    122    16    —    —    —
– pay € 4.89% / receive CHF 3.26% —    180    —    —    180    3    —    —    180    3    (2 )
– pay € 4.87% / receive CHF 3.38% —    —    —    244    244    23    —    —    244    23    (2 )
– pay € floating ⁽²⁾/ receive CHF 3.26% —    167    —    —    167    4    167    4    —    —    —
Total
1,421    347    92    244    2,104    7    1,588    (40 ) 424    26    (4 )
⁽¹⁾
~~Floating: benchmark rate 1-month Euribor~~
⁽²⁾
~~Floating: benchmark rate 3-month Euribor~~
⁽³⁾
~~Floating: benchmark rate 3-month Libor JPY~~
⁽⁴⁾
~~Floating: benchmark rate 6-month Euribor~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
The table below shows instruments of this type in place ~~at December 31, 2008:~~

   Notional amounts by expiry date as
of December 31, 2008    Of which derivatives
designated as fair
value hedges
Of which derivatives
designated as
cash flow hedges

(€ million) 2009 2010 2012 2013 2015 Total Fair
value Notional
amount Fair
value Notional
amount Fair
value Of which
recognized
in equity
Interest rate swaps

Pay € 3.69% / receive € floating⁽¹⁾ —    1,000    —    —    —    1,000    (12 ) —    —    1,000    (12 ) (14 )
Cross currency swaps

– pay €floating ⁽¹⁾ /receive £ 5.50% —    299    —    —    —    299    (74 ) 299    (74 ) —    —    —
– pay €floating ⁽¹⁾ /receive JPY 0.22% 116    —    —    —    —    116    33    116    33    —    —    —
– pay € floating ⁽¹⁾ / receive JPY floating⁽²⁾ —    —    —    92    —    92    27    —    —    —    —    —
– pay€ floating⁽³⁾ / receive CHF 2.75% —    122    —    —    —    122    16    122    16    —    —    —
– pay€ 4.89% / receive CHF 3.26% —    —    180    —    —    180    5    —    —    180    5    —
– pay€ 4.87% / receive CHF 3.38% —    —    —    —    244    244    23    —    —    244    23    (1 )
Currency swaps

– pay€/ receive USD⁽⁴⁾ 718    —    —    —    —    718    (40 ) —    —    —    —    —
Total
834    1,421    180    92    244    2,771    (22 ) 537    (25 ) 1,424    16    (15 )
⁽¹⁾
~~Floating: benchmark rate 3-month Euribor~~
⁽²⁾
~~Floating: benchmark rate 3-month Libor JPY~~
⁽³⁾
~~Floating: benchmark rate 6-month Euribor~~
⁽⁴⁾
~~Swaps on U.S. commercial paper~~
~~The change in the structure of the Group’s debt arising from these financial instruments is described in Note D.17., which also includes an analysis of the Group’s sensitivity to interest rates.~~
~~D.20.2. Equity derivatives~~
~~The Group did not hold any equity derivatives~~ as of December 31, ~~2010, December 31, 2009 or December 31, 2008.~~2010:
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~

Notional amounts by expiry date
as of December 31, 2010

Of which derivatives
designated as
fair value hedges

Of which derivatives
designated as
cash flow hedges

(€ million)

2011
2012
2013
2015
2016
Total

Fair
value

Notional
amount
Fair
value

Notional
amount
Fair
value
Of which
recognized
in equity

Interest rate swaps
– Pay floating/receive 2.73% — — — — 500 500 12 500 12 — — —
Cross-currency swaps
– Pay € floating/receive JPY floating — — 92 — — 92 47 — — — — —
– Pay € 4.89%/receive CHF 3.26% — 180 — — — 180 41 — — 180 41 1
– Pay € 4.87%/receive CHF 3.38% — — — 244 — 244 82 — — 244 82 6
– Pay € floating/receive CHF 3.26% — 167 — — — 167 38 167 38 — — —
Currency swaps
– pay €/receive USD 489 — — — — 489 (2 ) — — — — —

Total 489 347 92 244 500 1,672 218 667 50 424 123 7

D.21. Off balance sheet commitments
        The off balance sheet commitments presented below are shown at their nominal value.
D.21.1. Off balance sheet commitments relating to operating activities

The ~~Group’s~~Group's off balance sheet commitments ~~(excluding Merial, see~~break down as follows:
December 31, 2012
Payments due by period

(€ million)
Total
Under
1 year
From 1 to 3
years
From 3 to 5
years
Over 5
years

• Operating lease obligations 1,296 250 367 220 459
• Irrevocable purchase commitments ⁽¹⁾
– given
2,913 1,513 651 368 381
– received
(209 ) (106 ) (67 ) (14 ) (22 )
• Research and development license agreements
– future service commitments ⁽²⁾
767 181 286 276 24
– potential milestone payments ⁽³⁾
2,201 149 267 295 1,490
Firm commitment under the agreement with BMS ⁽⁴⁾ 82 — — — 82

Total 7,050 1,987 1,504 1,145 2,414

⁽¹⁾
These comprise irrevocable commitments to suppliers of (i) property, plant and equipment, net of down payments (see Note ~~D.8.1.~~D.3.) ~~comprise:~~and (ii) goods and services. Comparable amounts as of December 31, 2011 were €3,041 million (commitments given) and (€247) million (commitments received).
⁽²⁾
Future service commitments under research and development license agreements mainly comprise research financing commitments, but also include consideration for access to technologies. Future service commitments as of December 31, 2011 amounted to €944 million.
⁽³⁾
This line includes only potential milestone payments on projects regarded as reasonably possible, i.e. on projects in the development phase. Potential milestone payments as of December 31, 2011, amounted to €2,822 million.
⁽⁴⁾
See note C.1.

December 31, 2010
Payments due by period

(€ million)    Total Under
1 year From 1 to 3
years From 3 to 5
years Over 5
years
• Operating lease obligations    1,291 260    337 217 477
• Irrevocable purchase commitments⁽¹⁾
– given
   2,658 1,566 498 207 387
– received
   (176 ) (74 ) (35 ) (16 ) (51 )
• Research and development license agreements
– future service commitments⁽²⁾
   1,073 199 312 252 310
– potential milestone payments⁽³⁾
   2,015 101 378 238 1,298
Total
   6,861 2,052 1,490 898 2,421
⁽¹⁾Table of Contents
~~These comprise irrevocable commitments to suppliers of (i) property, plant and equipment, net of down payments (see Note D.3.) and (ii) goods and services.~~
⁽²⁾
~~Future service commitments relating to research and development license agreements mainly comprise research financing commitments, but also include consideration for access to technologies.~~
⁽³⁾
This line includes all potential milestone payments on projects regarded as reasonably possible, i.e. on projects in the development phase. Payments contingent upon the attainment of sales targets once a product is on the market are excluded.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Operating leases

~~Sanofi-aventis~~The Group leases certain of its properties and equipment used in the ordinary course of business under operating leases. Future minimum lease payments due under non-cancelable operating leases at December 31, ~~2010 amounted to €1,291~~2012 were €1,296 million ~~(€1,197~~(versus €1,456 million at December 31, ~~2009; €1,192~~2011 and €1,291 million at December 31, ~~2008)~~2010).

Total rental expense recognized in the year ended December 31, ~~2010~~2012 was ~~€264~~€294 million ~~(€273~~(versus €324 million in ~~the year ended December 31, 2009; €282~~2011 and €281 million in ~~the year ended December 31, 2008)~~2010).

Research and development license agreements

In pursuance of its strategy, ~~sanofi-aventis~~the Group may acquire technologies and rights to products. Such acquisitions may be made in various contractual forms: acquisitions of shares, loans, license agreements, joint development, and co-marketing. These contracts usually involve upfront payments on signature of the agreement, development milestone payments, and royalties. Some of these complex agreements include undertakings to finance research programs in future years and payments contingent upon specified development milestones, the granting of approvals or licenses, or the attainment of sales targets once a product is on the market.

The ~~item “Research~~"Research and development license ~~agreements”~~agreements" line comprises future service commitments to finance research and development or technology, and potential milestone payments regarded as reasonably possible (i.e. all potential milestone payments relating to projects in the development ~~phase)~~phase, for which the future financial consequences are known and considered as probable and for which there is a sufficiently reliable estimate). This item excludes commitments relating to projects in the research phase (€~~4.1~~5 billion in ~~2010)~~2012, €4.2 billion in 2011) and payments contingent upon the attainment of sales targets once a product is on the market (€~~3.3~~4.7 billion in ~~2010)~~2012, €4.4 billion in 2011).
~~The main collaboration agreements relating to development projects in the Pharmaceuticals segment are described below.~~        Potential milestone payments relating to Pharmaceuticals segment development projects ~~under these agreements amounted~~amount to €2 billion, of which €1.4 billion relates to the principal collaboration agreements described below.
•
Since acquiring Genzyme in ~~2010.~~
~~In June 2010, sanofi-aventis~~2011, the Group has a commitment to Isis Pharmaceuticals Inc. under a collaboration agreement signed in January 2008. Under the agreement, Sanofi has an exclusive license to develop and ~~Metabolex signed~~market Mipomersen, a ~~global~~lipopenic treatment for severe familial hypercholesterolemia.

•
On May 13, 2011, Sanofi announced the signature of a license agreement with Glenmark Pharmaceuticals S.A., a subsidiary of Glenmark Pharmaceuticals Limited India (GPL), for ~~MBX-2982, an oral agent~~the development and commercialization of GBR500, a novel monoclonal antibody for the treatment of ~~type 2 diabetes.~~
Crohn's Disease and other chronic autoimmune disorders.

•
In ~~May~~June 2010, ~~sanofi-aventis~~Sanofi signed an exclusive global collaboration and license agreement with Ascenta Therapeutics, a U.S. biopharmaceutical company, on a number of molecules that could restore apoptosis (cell death) in tumor cells.

•
At the end of April 2010, Sanofi signed a license agreement with Glenmark Pharmaceuticals S.A. ~~(GPSA)~~for the development and commercialization of novel agents to treat chronic pain. These are vanilloid receptor (TRPV3) antagonist molecules, including ERC 15300, a first-in-class clinical compound.

•
In April 2010, Sanofi signed a global license agreement with CureDM Group Holdings, LLC (CureDM) for Pancreate^TM, a ~~wholly-owned subsidiary of Glenmark Pharmaceuticals Limited India (GLP).~~
novel human peptide which could restore a patient's ability to produce insulin and other pancreatic hormones in both type 1 and type 2 diabetes.~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~

•
~~Year ended December 31, 2010~~
•
~~In April 2010, sanofi-aventis signed a global license agreement with CureDM Group Holdings, LLC (CureDM) for Pancreate~~^TM~~, a novel human peptide which could restore a patient’s ability to produce insulin and other pancreatic hormones in both type 1 and type 2 diabetes.~~
In December 2009, ~~sanofi-aventis~~Sanofi and the U.S. biotechnology company Alopexx Pharmaceuticals, ~~(LLC)~~LLC simultaneously signed (i) a collaboration agreement, and (ii) an option for a license on an antibody for the prevention and treatment of infections originating in the bacterium that causes plague and other serious infections.
~~End~~

•
At the end of September 2009, ~~sanofi-aventis~~Sanofi and Merrimack Pharmaceuticals Inc. signed an exclusive global licensing and collaboration agreement covering the MM-121 molecule for the management of solid ~~malignancies.~~tumors.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
•
In May 2009, ~~sanofi-aventis~~Sanofi signed a global license agreement with Exelixis, Inc. for XL147 and XL765, and simultaneously signed an exclusive research collaboration agreement for the discovery of inhibitors of Phosphoinositide-3-Kinase (PI3K) for the management of malignant tumors.
On December 22, 2011, Sanofi and Exelixis, Inc. agreed to end this collaboration agreement.

•
In May 2009, Sanofi signed a collaboration and licensing agreement with Kyowa Hakko Kirin Co., Ltd., under which Sanofi obtained the worldwide rights to the anti-LIGHT fully human monoclonal antibody. This anti-LIGHT antibody is expected to be first-in-class in the treatment of ulcerative colitis and Crohn's disease.

•
In September 2003, ~~sanofi-aventis~~Sanofi signed a collaboration agreement in oncology with Regeneron Pharmaceuticals, Inc. (Regeneron) (see Note C.2.) to develop the Vascular Endothelial Growth Factor (VEGF) Trap program. ~~Sanofi-aventis will pay~~Under the terms of this agreement, Sanofi is responsible for funding 100% of the development costs, ~~of the VEGF Trap. Once a VEGF Trap product starts~~and Regeneron agreed to ~~be marketed, Regeneron will~~ repay 50% of these costs. As of December 31, 2012, the balance of the development costs ~~(originally paid~~initially funded by ~~sanofi-aventis) in accordance with a formula based on Regeneron’s share of the profits.~~
Sanofi amounted to €0.6 billion.

•
In November 2007, ~~sanofi-aventis~~Sanofi signed a collaboration agreement with Regeneron to discover, develop and commercialize fully-human therapeutic antibodies. This agreement was broadened, and its term extended, on November 10, 2009. Under the terms of the development agreement, ~~sanofi-aventis~~Sanofi committed to fund 100% of the development costs of ~~Regeneron’s~~Regeneron's antibody research program until ~~2017.~~2017 (see Note C.2.). Once a product begins to be marketed, Regeneron will repay out of its profits (provided they are sufficient) half of the development costs borne by ~~sanofi-aventis.~~
Sanofi. As of December 31, 2012, the balance of the development costs initially funded by Sanofi amounted to €0.8 billion.

~~Sanofi-aventis~~Sanofi has also entered into the following major agreements, ~~which are~~ currently in a less advanced research phase:
•
On November 27, 2012, Sanofi and the U.S. biotechnology company Selecta Biosciences signed a collaboration agreement to identify and develop food allergy treatments using a technology based on nanoparticles.

•
On June 28, 2011, Sanofi signed an exclusive international research collaboration agreement and license option with Rib-X Pharmaceuticals, Inc. for novel classes of antibiotics resulting from Rib-X's RX-04 program for the treatment of infections caused by resistant Gram-positive and resistant Gram-negative pathogens.

•
December 2010: a global licensing and patent transfer agreement with Ascendis Pharma (Ascendis) on the proprietary Transcon Linker and Hydrogel Carrier technology developed by Ascendis for precise, time-controlled release of therapeutic active ingredients into the body. The agreement will enable ~~sanofi-aventis~~Sanofi to develop, manufacture and commercialize products combining this technology with active molecules for the treatment of diabetes and related disorders.
•

•
December 2010: alliance with Avila Therapeutics^TM Inc. (Avila) to discover target covalent drugs for the treatment of cancers, directed towards six signaling proteins that are critical in tumor cells. Under the terms of the agreement, Sanofi will have access to Avila's proprietary Avilomics^TM platform offering "protein silencing" for these pathogenic proteins.

•
~~December 2010: alliance with Avila Therapeutics~~^TM Inc. (Avila) to discover target covalent drugs for the treatment of cancers, directed towards six signaling proteins that are critical in tumor cells. Under the terms of the agreement, sanofi-aventis will have access to Avila’s proprietary Avilomics^TM ~~platform offering “protein silencing” for these pathogenic proteins.~~
December 2010: an exclusive global licensing option with Oxford BioTherapeutics for three existing antibodies, plus a research and collaboration agreement to discover and validate new targets in oncology.

•
September 2010: alliance with the Belfer Institute of Applied Cancer Science at the Dana-Farber Cancer Institute (DFCI) to identify novel targets in oncology for the development of new therapeutic agents directed towards these targets and their associated biomarkers. Under the terms of the agreement, ~~sanofi-aventis~~Sanofi will have access to the Belfer ~~Institute’s~~Institute's anticancer target identification and validation platform and to its translational medicine resources. ~~Sanofi-aventis~~Sanofi also has an option over an exclusive license to develop, manufacture and commercialize novel molecules directed towards the targets identified and validated under this research collaboration.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
•
June 2010: alliance with Regulus Therapeutics Inc. to discover, develop and commercialize novel micro-RNA therapeutics, initially in fibrosis. ~~Sanofi-aventis~~Sanofi also received an option which, if exercised, would provide access to the technology to develop and commercialize other micro-RNA based therapeutics, beyond the first four targets.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
        In June 2012, Sanofi decided to discontinue the BiTE® antibody project and terminate its collaboration with Micromet.

June 2010: exclusive global collaboration and license agreement with Ascenta Therapeutics, a U.S. biopharmaceutical company, on a number of molecules that could restore apoptosis (cell death) in tumor cells.
•
~~October 2009: agreement with Micromet, Inc. to develop a BiTE~~^® ~~antibody against a tumor antigen present at the surface of carcinoma cells.~~
May 2009: collaboration and licensing agreement with Kyowa Hakko Kirin Co., Ltd., under which sanofi-aventis obtained the worldwide rights to the anti-LIGHT fully human monoclonal antibody. This anti-LIGHT antibody is presently at preclinical development stage, and is expected to be first-in-class in the treatment of ulcerative colitis and Crohn’s disease.
Sanofi Pasteur has entered into a number of collaboration agreements. Milestone payments relating to development projects under those agreements amounted to ~~€0.3~~€0.2 billion in ~~2010.~~2012.

In December 2009, ~~sanofi pasteur~~Sanofi Pasteur signed a donation letter to the World Health Organization (WHO). The terms of the agreement committed ~~sanofi pasteur~~Sanofi Pasteur to donate 10% of its future output of vaccines against A(H1N1), A(H5N1) or any other influenza strain with pandemic potential, up to a maximum of 100 million doses. Since this agreement was put in place, ~~sanofi pasteur~~Sanofi Pasteur has already donated to the WHO some of the doses covered by the commitment.
D.21.2. Off balance sheet commitments related to the financing of the Group
Credit facilities

~~The table below shows undrawn~~Undrawn credit facilities ~~by maturity:~~break down as follows:
December 31, 2012
Payments due by period

(€ million)
Total
Under
1 year
From 1 to
3 years
From 3 to
5 years
Over
5 years

General-purpose credit facilities 10,021 3,020 250 6,750 1

        As of December 31, 2012, total credit facilities amounted to €10,021 million (versus €10,046 million as of December 31, 2011 and €23,464 million as of December 31, 2010 including Genzyme acquisition facilities).

December 31, 2010    Undrawn amounts by expiry date
(€ million)    Total    Under
1 year    From 1 to
3 years    From 3 to 5
years    Over 5
years
General-purpose facilities    12,238       245       5,755       6,238       —
Acquisition facilities available in connection with the Genzyme acquisition⁽¹⁾    11,226       11,226       —       —       —
Total
   23,464       11,471       5,755       6,238       —
⁽¹⁾
~~The maturities shown reflect the latest possible drawdown date of each facility (see Note D.17.).~~
Guarantees

Guarantees given and received (mainly surety bonds) are as follows:

(€ million)    2010 2009 2008
Guarantees given    2,558    2,358    1,524
Guarantees received    (185 ) (171 ) (218 )
(€ million)
2012
2011
2010

Guarantees given 4,311 3,296 2,558
Guarantees received (185 ) (224 ) (185 )

D.21.3. Off balance sheet commitments relating to the scope of consolidation

~~Merial~~
On March 8, 2010, sanofi-aventis exercised its contractual right to combine Merial with Intervet/Schering-Plough, Merck’s animal health business, to form a new joint venture equally owned by Merck and sanofi-aventis. Formation of the new joint venture is subject to signature of final agreements, antitrust review in the United States, Europe and other countries, and other customary closing conditions. Merial and Intervet/Schering-Plough will continue to operate independently until closing of the transaction, which is expected to take place during 2011. Sanofi-aventis will be required to make a true-up payment of $250 million to Merck to establish parity in the joint venture, in addition to the $750 million payment stipulated in the agreement signed on July 29, 2009.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~For a description of the treatment of Merial in the consolidated financial statements of sanofi-aventis for the year ended December 31, 2010, refer to Note D.8.1.~~
~~Genzyme~~
On January 24, 2011, sanofi-aventis extended to February 15, 2011 its tender offer for all outstanding shares of common stock of Genzyme Corporation at $69.00 per share, net to the seller in cash, without interest and less any required withholding taxes. The ~~offer amounts to approximately $18.5 billion. The tender offer was originally made on October 4, 2010, and was initially due to expire on December 10, 2010.~~
~~BMP Sunstone~~
On October 28, 2010, sanofi-aventis and BMP Sunstone Corporation signed an agreement under which sanofi-aventis was to acquire BMP Sunstone for $10.00 per share in cash, equivalent to a total consideration of $520.6 million on a fully-diluted basis. Under the terms of the agreement, BMP Sunstone would be merged into a wholly-owned subsidiary of sanofi-aventis. This acquisition would enable sanofi-aventis to reinforce its consumer health operations in China, building on BMP Sunstone’s substantial positions in coughs, colds, and women’s health.
~~Closing of this transaction is expected in February 2011.~~
~~For disclosures about the~~ maximum amount of contingent consideration ~~payable in connection with completed~~related to business combinations ~~refer to~~is presented in Note D.18.
D.22. Legal and Arbitral Proceedings

~~Sanofi-aventis~~Sanofi and its affiliates are involved in litigation, arbitration and other legal proceedings. These proceedings typically are related to product liability claims, intellectual property rights (particularly claims against generic companies seeking to limit the patent protection of ~~sanofi-aventis~~Sanofi products), competition law and trade practices, commercial claims, employment and wrongful discharge claims, tax assessment claims, waste disposal and pollution claims, and claims under warranties or indemnification arrangements relating to business divestitures. Provisions related to legal and arbitral proceedings are recorded in accordance with the principles described in Note B.12.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Most of the issues raised by these claims are highly complex and subject to substantial uncertainties; therefore, the probability of loss and an estimation of damages are difficult to ascertain. ~~Consequently,~~Contingent liabilities are cases for ~~a majority of these claims,~~which either we are unable to make a reasonable estimate of the expected financial effect that will result from ultimate resolution of the ~~proceeding.~~proceeding, or a cash outflow is not probable. In ~~those cases, we have not accrued~~either case, a ~~reserve for the potential outcome, but disclose information with respect to~~brief description of the nature of the ~~contingency.~~contingent liability is disclosed and, where practicable, an estimate of its financial effect, an indication of the uncertainties relating to the amount and timing of any outflow, and the possibility of any reimbursement are provided in application of paragraph 86 of IAS 37.

In the cases that have been settled or adjudicated, or where quantifiable fines and penalties have been assessed, we have indicated our losses or the amount of provision accrued that is the estimate of the probable loss.

In a limited number of ongoing cases, while we are able to make a reasonable estimate of the expected loss or range of the possible loss and have accrued a provision for such loss, we believe that publication of this information on a case-by-case basis or by class would seriously prejudice the ~~Company’s~~Company's position in the ongoing legal proceedings or in any related settlement discussions. Accordingly, in those cases, we have disclosed information with respect to the nature of the contingency but have not disclosed our estimate of the range of potential loss, in accordance with paragraph 92 of IAS 37.

These assessments can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Our assessments are based on estimates and assumptions that have been deemed reasonable by management. We believe that the aggregate provisions recorded for the above matters are adequate
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
based upon currently available information. However, given the inherent uncertainties related to these cases and involved in estimating contingent liabilities, we could in the future incur judgments that could have a material adverse effect on our net income in any particular period.

Long term provisions other than provisions for pensions and other ~~long-term~~ benefits and restructuring provisions are disclosed in Note D.19.3.
•
Provisions for product liability risks, litigation and other amount to ~~€951~~€869 million in ~~2010.~~2012. These provisions are mainly related to product liabilities, government investigations, competition law, regulatory claims, warranties in connection with certain contingent liabilities arising from business divestitures other than environmental matters and other claims.

•
Provisions for environmental risks and remediation amount to ~~€781~~€728 million in ~~2010,~~2012, the majority of which are related to contingencies that have arisen from business divestitures.
When a legal claim involves a challenge to the patent protection of a pharmaceutical product, the principal risk to sanofi-aventis is that the sales of the product might decline following the introduction of a competing generic product in the relevant market. In cases where the product rights have been capitalized as an asset on the balance sheet (~~i.e.~~, assets acquired through a separate acquisition or through a business combination — see Note B.4.), such a decline in sales could negatively affect the value of the intangible asset. In those cases, the Company performs impairment tests in accordance with the principles disclosed in Note B.6.1., based upon the best available information and, where appropriate, records an impairment loss to reduce the carrying amount of the related intangible asset to its estimated fair value. The amounts of such impairments are disclosed in Note D.5.
~~The principal ongoing legal and arbitral proceedings are described below:~~
a) Products
• Sanofi Pasteur Hepatitis B Vaccine Product Litigation
Since 1996, more than 180 lawsuits have been filed in various French civil courts against Sanofi Pasteur SA and/or Sanofi Pasteur MSD S.N.C., the former a French subsidiary of ~~sanofi-aventis,~~Sanofi, and the latter a ~~joint-venture~~joint venture company with Merck & Co., Inc. In such lawsuits, the plaintiffs allege that they suffer from a variety of neurological disorders and autoimmune diseases, including multiple sclerosis and Guillain-Barré syndrome as a result of receiving the hepatitis B vaccine. The French Supreme Court (Cour de Cassation), in July 2009, upheld a decision of the Court of ~~Appeal~~Appeals of Lyon ordering Sanofi Pasteur MSD S.N.C. to pay damages of €120,000 to a claimant whose multiple sclerosis appeared shortly after her vaccination against the hepatitis B virus; however, in ~~September~~several cases before and after the July 2009 ~~and in November 2010,~~decision, theCour de Cassation upheld several decisions of various Courts of Appeals (including the Court of ~~Appeal~~Appeals of ~~Metz and Paris respectively,~~Paris), rejecting claims alleging such causal link. Nevertheless, it is difficult to provide an opinion on the evolution and final outcome of these cases. A number of claims remain to be adjudicated and there can be no assurance that cases decided to date will be representative of future decisions and that additional claims will not be filed in France or other countries.

In January 2008, both the legal entity Sanofi Pasteur MSD S.N.C., and a corporate officer of this company, as well as a former corporate officer of Sanofi Pasteur, ~~S.A.,~~ were placed under investigation in an ongoing criminal inquiry in France relating to alleged side effects caused by the hepatitis B vaccine.
• Since March 2012, Sanofi Pasteur ~~Inc. Thimerosal Product Litigation~~
~~Since early 2001,~~and the former chief executive officer of Sanofi Pasteur ~~Inc., a U.S. subsidiary~~have been placed under an "advised witness" status.

Table of sanofi-aventis, has been a defendant in lawsuits filed in several federal and state courts in the United States alleging that serious personal injuries resulted from the presence of mercury in the preservative thimerosal, trace amounts of which are contained in vaccines manufactured by Sanofi Pasteur Inc.Contents
~~Currently, there are 172 such cases pending. Several of the cases seek certification to proceed as class actions.~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Sanofi Pasteur Inc. believes that under U.S. law, all of these claims must first be filed in the U.S. Court of Federal Claims to determine whether the claim qualifies for compensation by the National Vaccine Injury Compensation Program (VICP) before the claimants may bring direct actions against the company. The U.S. Court of Federal Claims (Claims Court) has established a process designed to facilitate the handling of the almost 5,000 thimerosal claims within the VICP. The process involves a committee of petitioners’ representatives and representatives of the U.S. Department of Justice, who represent the government in the VICP. As originally planned, the process called for petitioners’ representatives to designate three “test cases” in each of the three different theories of general causation advanced by the petitioners. Hearings on two of the theories were completed in 2007 and 2008 and the petitioners decided that there was no need to proceed with the last theory.
In 2010, the U.S. Court of Appeals for the Federal Circuit affirmed the 2009 decisions of the U.S. Court of Federal Claims, in the test cases under the first of the two causation theories, which held that the petitioners failed to establish that their claimed injuries were caused by thimerosal-containing vaccines and the MMR vaccine, and no compensation was awarded to any of them under the VICP. The petitioners may choose to file civil actions against the manufacturers.
In March 2010, in the test cases under the second of the two causation theories, concerning vaccines containing only thimerosal, the U.S. Court of Federal Claims held that the petitioners failed to establish that their claimed injuries were caused by thimerosal-containing vaccines, and no compensation was awarded to any of the petitioners under the VICP. The petitioners chose not to seek re-hearings on these cases, but instead have filed elections to file civil actions against the manufacturers.
The remainder of the 172 cases are either in the preliminary response stage, in the discovery process, have been stayed pending adjudication by the Claims Court, or have pending plaintiffs’ requests for reconsideration of preliminary determinations to stay proceedings pending such adjudication by the Claims Court.
• ~~Agreal~~^®Plavix® Product Litigation

~~The Group faces administrative, criminal, and civil claims~~Around 444 lawsuits, involving ~~several hundred~~approximately 2,857 claimants ~~primarily in Spain, from women alleging that the menopause treatment Agreal~~^® ~~(veralipride) has caused a range of neurological and psychological harm. In the majority of the civil cases to date, the decisions~~ have been favorable to sanofi-aventis, generally on the basis of a finding that causation was not proven by the claimants and/or that the leaflet gave adequate notice of potential side effects. A small number of the civil cases have been decided adversely to sanofi-aventis and sanofi-aventis has appealed each of these. The Administrative Court decisions (approximately 60 resolutions), issued in 2009 and 2010, have dismissed all these administrative claims. All the criminal actions submitted have been dismissed to date. Any amounts awarded to date have not been material to the Group on a consolidated basis. A number of claims remain to be adjudicated and there can be no assurance that cases decided to date will be representative of future decisions and that additional claims will not be filed ~~in Spain or other countries.~~
~~In France approximately 85 claimants have filed a motion (~~~~référé~~) in order to appoint one or more expert(s) to conduct certain studies, in particular, concerning the alleged injury and causal link with the ingestion of the medication concerned. A hearing before the First Instance Court (~~Tribunal de Grande Instance~~~~) is scheduled to be held in February 2011.~~
~~•  Plavix~~^® ~~Product Litigation~~
~~Affiliates~~against affiliates of the Group and Bristol-Myers Squibb ~~are named in a number of individual actions~~ seeking recovery under state law for personal injuries allegedly sustained in connection with the use of ~~Plavix~~^®Plavix®. The actions are ~~primarily~~ venued in several jurisdictions, including the ~~U.S. District Court for the District~~federal and/or state courts of New Jersey, ~~which had administratively stayed~~New York, California, Pennsylvania, and Illinois. The defendants have exercised their right to terminate the proceedings pending a U.S. Supreme Court decision in the Levine case (which presented issues of federal preemption relevant to state law claims). Following the March 2009 decision rendered by the U.S. Supreme Court in this case, 23 of these cases were reactivated, while a tolling agreement (agreement which tolls
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
or suspends the running of the statute of limitations) ~~remains in effect for~~, effective September 1, 2012, with respect to unfiled claims by potential additional ~~potential~~ plaintiffs. ~~On October 15, 2010, an action involving multiple plaintiffs was filed in Saint Clair County, Illinois State Court, and was subsequently removed to the U.S. District Court of Illinois. This action~~It is not ~~subject~~possible, at this stage, to assess reliably the ~~above-referenced tolling agreement.~~
outcome of these lawsuits or the potential financial impact on the Company.
b) Patents
• ~~Plavix~~^®Ramipril Canada Patent Litigation
        Sanofi is involved in a number of legal proceedings involving companies which market generic Altace® (ramipril) in Canada. Notwithstanding proceedings initiated by Sanofi, eight manufacturers obtained marketing authorizations from the Canadian Minister of Health for generic versions of ramipril in Canada. Following the marketing of these products, Sanofi filed patent infringement actions against all those companies. In a patent infringement action, the Federal Court of Canada ruled on June 29, 2009 that the patent asserted by Sanofi was invalid. Sanofi's leave to appeal the judgment was denied in 2012. Each of Teva, Apotex and Riva initiated Section 8 damages claims against Sanofi, seeking compensation for their alleged inability to market a generic ramipril during the time taken to resolve the proceedings against the Canadian Ministry of Health. The Teva and Apotex Section 8 trials were heard early 2012 respectively and the Court issued its decision on May 11, 2012 setting down the parameters for calculating total damages owed. Sanofi and Teva reached an agreement in June 2012 on a confidential amount to satisfy Teva's claim and in November 2012, Apotex was awarded CAD 221 million. Sanofi has appealed the Court's decisions in both the Apotex and Teva Section 8 cases to the Federal court of Appeal. The Riva Section 8 trial has been stayed until the Apotex and Teva cases are decided on appeal.
~~United States.~~On March 21, 2002, sanofi-aventis, Sanofi-Synthélabo Inc. and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership (or “BMS Sanofi Holding”, our partnership with Bristol-Myers Squibb) filed suit• Plavix® Patent Litigation in ~~the U.S. District Court for the Southern District of New York against Apotex Inc. and Apotex Corp. (hereinafter “Apotex”) for the infringement of U.S. patent rights relating to Plavix~~^® ~~as a result of an ANDA filed by Apotex including a Paragraph IV challenge to U.S. Patent No. 4,847,265 (the “ ‘265 Patent”), expiring in 2011, which discloses and claims~~~~inter alia~~Australia ~~the clopidogrel bisulfate compound, the active ingredient in Plavix~~^®~~. Apotex asserted antitrust counterclaims.~~

~~On January 24, 2006, sanofi-aventis learned that the FDA had granted final approval to the Apotex ANDA.~~
~~Following unsuccessful efforts by sanofi-aventis, Bristol-Myers Squibb and Apotex to settle the patent infringement lawsuit, on~~In August, 8, 2006, Apotex announced the launch “at risk” of its generic product in the United States. Apotex was enjoined from further marketing and sale of its generic product on August 31, 2006. After extensive litigation, the Federal Circuit Court of Appeals decision to uphold the lower U.S. District Court ruling upholding the validity and enforceability of the principal Plavix^® ~~patent was confirmed in November 2009, when the U.S. Supreme Court declined to hear the petition by Apotex in the Plavix~~^® ~~patent litigation.~~
Pursuant to Apotex’s request for a reexamination of the ‘265 Patent, in March 2010, the USPTO concluded that all of the original claims were patentable. In October 2010, the USPTO denied Apotex’s request for a second reexamination.
In parallel, sanofi-aventis and Bristol-Myers Squibb are seeking damages from Apotex, in reparation of harm caused by that company’s “at risk” marketing and sale of an infringing generic version of Plavix^® in 2006. In October 2010, the U.S. District Court awarded sanofi-aventis and Bristol-Myers Squibb damages in the amount of $442,209,362, plus $107,930,857 in pre-judgment interest, as well as costs and post-judgment interest as set by statute. Apotex has secured the amount of the award by cash deposit and has filed a notice of appeal. The appeal will likely be decided in 2011.
~~Australia~~~~. On August 17,~~ 2007, GenRX a(a subsidiary of ~~Apotex~~Apotex) obtained registration of a generic clopidogrel bisulfate product on the Australian Register of Therapeutic ~~Goods and sent notice to sanofi-aventis that it had in parallel applied to~~Goods. At the same time, GenRX filed a patent invalidation action with the Federal Court of Australia, ~~for an order revoking the~~seeking revocation of Sanofi's Australian enantiomer patent claiming clopidogrel ~~salts. On~~salts (a "nullity action"). In September ~~21,~~ 2007, ~~sanofi-aventis~~Sanofi obtained a preliminary injunction from the Federal Court preventing commercial launch of this generic clopidogrel bisulfate product until judgment on the substantive issues of patent validity and infringement. In February 2008, Spirit Pharmaceuticals Pty. Ltd. also ~~introduced~~filed a nullity action against ~~the~~Sanofi's Australian enantiomer patent. The Spirit proceeding was consolidated with the Apotex proceeding.

OnIn August, ~~12,~~ 2008, the Australian Federal Court confirmed that the claim in Sanofi's Australian enantiomer patent directed to clopidogrel bisulfate (the salt form in Plavix®) was valid and ~~infringed. Claims covering the hydrochloride, hydrobromide and taurocholate salts also were found valid. However claim 1 of~~ the patent ~~directed to clopidogrel and its pharmaceutical salts was found to be invalid. All parties appealed. In September 2009,~~infringed. On appeal, the Full Federal Court of Australia held in September 2009 that all claims in the ~~Australian~~ patent ~~covering clopidogrel~~are invalid. Sanofi's appeal to ~~be invalid. Sanofi-aventis filed an appeal~~the Australia Supreme Court was denied in March 2010. The security bond posted by Sanofi in connection with the ~~Supreme Court~~preliminary injunction obtained in ~~November 2009. In March 2010, the Supreme Court refused special leave~~2007 was subsequently increased from Australian $40 million to ~~appeal.~~Australian $204 million (€160 million as of December 31, 2012). Apotex is now seeking damages for having been subject to an injunction.
        The ~~case is in~~Australia Department of Health and Ageing (the "Department") has notified Sanofi that it claims to be entitled to money damages from Sanofi related to the ~~early stages.~~Apotex preliminary injunction. The Department has not yet taken any formal legal action associated with this claim.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
~~•  Allegra~~^® ~~Patent Litigation~~
~~United States.~~~~Sanofi-aventis has been engaged in patent infringement actions concerning Allegra~~^® ~~since the first ANDA referring to this product was submitted to the FDA in 2001.~~
Patent infringement suits against Ranbaxy and Sandoz were dismissed in February 2007 and January 2010 respectively when each independently withdrew their respective Paragraph IV certifications and converted their respective ANDA applications for fexofenadine products to Paragraph III certifications.
~~Sanofi-aventis U.S. continues to be involved in ongoing U.S. patent litigation against other parties in relation to the Allegra~~^® ~~single entity formulation (Mylan, Dr. Reddy’s, Sun, Wockhardt and Aurolife/Aurobindo), Allegra-D~~^® ~~12 Hour (Impax, Mylan, Dr. Reddy’s, Sun, and Wockhardt), Allegra~~^® ~~oral suspension (Actavis), as well as Allegra-D~~^® ~~24 Hour (Dr. Reddy’s).~~
In June 2010, the United States District Court for the District of New Jersey granted a motion for a preliminary injunction brought by sanofi-aventis US and its licensor, Albany Molecular Research, Inc. (Albany), against Dr. Reddy’s Laboratories to enjoin the marketing of unlicensed generic versions of Allegra-D^® 24 Hour tablets. On January 13, 2011, the District Court ruled that the claims of Albany’s U.S. Patent No. 7,390,906 are limited to the use of 98% pure para-cyclopropyl ketone compounds in the manufacture of fexofenadine. On January 28, 2011, sanofi-aventis and Albany filed a stipulation stating their objection to the District Court ruling which limited the claims of Albany’s patent as described above and stating that sanofi-aventis could not meet its burden of proving at trial infringement of the Albany patent by Dr. Reddy’s generic version of Allegra-D^® 24 Hour under the District Court’s claim construction ruling. The filing of the stipulation preserves all objections of sanofi-aventis and Albany to the District Court ruling and provides for an immediate appeal to the United States Court for the Federal Circuit. On January 28, 2011, the District Court lifted the preliminary injunction prohibiting Dr. Reddy’s from commercializing its generic version of Allegra-D^® 24 Hour. However, the Court also ordered that there shall be no application for a decision on the $40 million security, posted by sanofi-aventis in connection with the June 2010 preliminary injunction, without prior approval of the District Court, until after resolution by the Federal Circuit of sanofi-aventis’ appeal of the District Court’s claim construction ruling.
~~•  Actonel~~^® ~~Patent Litigation~~
~~Actonel~~^® was originally marketed by the Alliance for Better Bone Health, an alliance between Procter & Gamble Company and P&G Pharmaceuticals (together P&G) and Aventis Pharmaceuticals Inc. (API). On October 30, 2009, P&G sold its pharmaceutical business to Warner Chilcott, succeeding to P&G’s rights and obligations in the alliance. P&G had filed a patent infringement suit in 2004 against Teva Pharmaceuticals USA in the U.S. District Court for the District of Delaware in response to Teva’s application to market a generic version of Actonel^® (risedronate sodium) tablets in the United States. Sanofi-aventis is not a party to this action. On February 28, 2008, the U.S. District Court for the District of Delaware held P&G’s U.S. Patent No. 5,538,122 (the “ ‘122 Patent”) claiming the active ingredient of Actonel^® ~~to be valid and enforceable.~~
~~P&G filed additional patent infringement actions against Teva in 2008 in response to Teva’s applications to market a generic version of Actonel~~^® ~~75mg tablets and Actonel~~^® plus Calcium. In May 2008, the District Court judge entered an order of final judgment in favor of P&G, in both cases, and Teva appealed all three final judgments. The three appeals were consolidated by the Federal Circuit and a hearing was held December 2, 2008. In May 2009, the U.S. Court of Appeals ruled in favor of P&G and confirmed the validity of the ‘122 Patent.
In September 2008, January and March 2009, and April 2010, P&G (Warner Chilcott) and Roche brought suit in the U.S. District Court of Delaware in response to respectively Teva’s, Sun Pharma Global’s, Apotex’s and Mylan’s applications to market a generic version of the 150mg Actonel^® ~~tablets.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~•  Ramipril Canada Patent Litigation~~
~~Sanofi-aventis is involved in a number of legal proceedings involving companies which market generic Altace~~^® (ramipril) in Canada. Notwithstanding proceedings initiated by sanofi-aventis, the following eight manufacturers: Apotex (in 2006), Teva (formerly Novopharm), Sandoz and Cobalt (in 2007), and Riva, Genpharm, Ranbaxy and Pro Doc (in 2008), obtained marketing authorizations from the Canadian Minister of Health for generic versions of ramipril in Canada. Following the marketing of these products, sanofi-aventis filed patent infringement actions against all eight companies. In the patent infringement actions against Apotex and Teva, the Federal Court of Canada ruled on June 29, 2009 that the asserted patent was invalid. Each of Teva, Apotex and Riva have initiated Section 8 damages claims against sanofi-aventis, seeking compensation for their alleged inability to market a generic ramipril during the time taken to resolve the proceedings against the Canadian Ministry of Health. The Apotex and Teva trials have been scheduled for the first quarter of 2012 while the Riva trial has not yet been scheduled. Sanofi-aventis has filed appeals of the Federal Court of Canada decisions on the patent invalidity before the Federal Court of Appeal. Neither appeal suspends the advancement of the existing damages claims.
~~•  Taxotere~~^® ~~Patent Litigation~~
~~United States.~~Sanofi-aventis received notifications from Hospira, Apotex and Sun in 2007 and 2008 who have filed 505 (b) (2) applications, and from Sandoz in 2009 and Accord Pharmaceuticals in 2010 who each filed an ANDA with the U.S. Food and Drug Administration (FDA) seeking to market generic versions of Taxotere^®. In response to these notifications, sanofi-aventis has filed patent infringement lawsuits against Hospira and Apotex (2007), Sun (2008), Sandoz (2009), and Accord (January 2011). The lawsuits are pending in the U.S. District Court for the District of Delaware. None of the applications contested U.S. Patent No. 4,814,470 claiming the active ingredient, which expired in May 2010. The cases against Hospira and Apotex were consolidated for trial held between October 26, 2009 and November 2, 2009. In September 2010, the U.S. District Court for the District of Delaware ruled against sanofi-aventis in the consolidated Hospira/Apotex trial, finding the disputed patents both invalid and unenforceable. Subsequently, in October 2010, sanofi-aventis appealed to the United States Court of Appeals for the Federal Circuit. Based on the District Court’s judgment in the consolidated Hospira/Apotex action, judgments were entered against sanofi-aventis in the Sun and Sandoz actions. Sanofi-aventis has appealed the Sun and Sandoz judgments to the United States Court of Appeals for the Federal Circuit. All three appeals are pending. The proceedings against Accord are in the early stages.
~~Canada~~. In October 2007, sanofi-aventis learned that Hospira Healthcare Corporation had filed an application with Canadian authorities for a marketing authorization for a proposed docetaxel product which is the active ingredient of Taxotere^®, alleging that Aventis Pharma SA’s Canadian Patent Nos. 2,102,777 and 2,102,778 (the “ ‘778 Patent”) for docetaxel were invalid and not infringed. On November 29, 2007, sanofi-aventis’ Canadian subsidiary and Aventis Pharma SA commenced an application for judicial review in the Federal Court of Canada. On October 22, 2009, the Federal Court of Canada dismissed the lawsuit after finding the ‘778 Patent invalid. Sanofi-aventis decided not to appeal the decision. In Canada, the compound patent relating to this product has expired.
~~Europe.~~ ~~In several European countries, in particular Germany and France, the generic manufacturers have requested the revocation of some formulation and combination patents regarding Taxotere~~^® ~~either before the patent office or courts. Certain proceedings are ongoing.~~
~~•  Eloxatin~~^® ~~(oxaliplatin) Patent Litigation~~
~~United States.~~ ~~Starting in February 2007, over a dozen ANDA certifications relating to Eloxatin~~^® (oxaliplatin) solution and/or lyophilized products were filed contesting part or all of the Orange Book patents under Paragraph IV. Each of the generic manufacturers was sued for infringement of one or more of the Orange-Book listed patents before the U.S. District Court for the District of New Jersey. U.S. regulatory data exclusivity expired in February 2008.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
In June 2009, the U.S. District Court for the District of New Jersey granted a summary judgment motion in favor of certain generic manufacturers. The District Court held that the generic oxaliplatin products that would be introduced by these generic challengers would not infringe the U.S. Patent No. 5,338,874 (the “ ‘874 Patent”). While sanofi-aventis obtained appellate reversal of the District Court’s judgment, a number of generic oxaliplatin products were launched “at risk” in the United States over the second half of 2009. Sanofi-aventis had been unsuccessful in obtaining injunctive relief. On December 2, 2009, the court asked all the parties to consider settlement.
In April 2010, sanofi-aventis and Debiopharm, licensor of the patents rights concerned, signed settlement agreements with all but one of the generic manufacturers, Sun Pharmaceuticals, thus resolving the litigation over certain formulations of Eloxatin^® ~~(oxaliplatin) in the U.S. District Court for the District of New Jersey and the U.S. District Court for the District of Columbia.~~
Under the terms of the settlement agreements, the generic manufacturers would cease selling their unauthorized generic oxaliplatin products in the U.S. starting from June 30, 2010, to August 9, 2012, at which time the generic manufacturers would be authorized to sell generic oxaliplatin products under a license, before expiry of the patents at issue. The settlement provisions, including the market exit and re-entry dates noted above, are subject to contingencies. The settlement agreements are subject to review by the Federal Trade Commission, the U.S. Department of Justice and the Attorney General for the State of Michigan.
In addition, the court decided that the above-described obligation to cease selling unauthorized generic oxaliplatin in the U.S. market also applied to Sun Pharmaceuticals and issued an injunction against Sun Pharmaceuticals. Sun Pharmaceuticals appealed that decision. On December 22, 2010, the Court of Appeals for the Federal Circuit ruled in favor of Sun Pharmaceuticals, vacating the U.S. District Court of New Jersey decision and injunction requiring Sun Pharmaceuticals to cease selling its “at risk” generic product on June 30, 2010. On January 21, 2011, sanofi-aventis filed a request for reconsideration of the Federal Circuit Court’s December 2010 decision. On February 7, 2011, the U.S. Court of Appeals for the Federal Circuit denied sanofi-aventis’ petition for an en banc hearing to reconsider the U.S. District Court’s December 2010 decision. Sanofi-aventis is pursuing its legal options.
~~•  Ambien~~^® ~~CR Patent Litigation~~
Starting in 2007, sanofi-aventis filed suits for infringement of U.S. Patent No. 6,514,531 (the “ ‘531 Patent”) in the U.S. District Court for the District of New Jersey based on ANDAs for a generic version of Ambien^® CR filed by Watson, Barr, Mutual and Sandoz. Watson subsequently converted to a Paragraph III certification, and Barr and Mutual have withdrawn their ANDAs, leaving suit in New Jersey ongoing only against Sandoz.
~~In 2007, sanofi-aventis also filed suit for infringement of the ‘531 Patent in the U.S. District Court for the Middle District of North Carolina based on an ANDA for a generic version of Ambien~~^® CR filed by Synthon. That case was transferred to the Eastern District of North Carolina, and subsequently was stayed pending a USPTO reexamination of the ‘531 Patent. On December 22, 2009, Synthon provided sanofi-aventis with 120 days notice of its intention to launch its generic version of Ambien^® CR. In August 2010, the USPTO issued a final rejection of the ‘531 Patent, which sanofi-aventis appealed to the Patent Office Board of Appeals in November 2010. The proceedings against Synthon remain stayed pending the decision of the Patent Office Board of Appeals.
Sanofi-aventis did not bring suit against Anchen, which was the first to notify sanofi-aventis of its Paragraph IV ANDA on the 12.5mg strength, or against Abrika (now Actavis), which was the first to notify sanofi-aventis on its Paragraph IV ANDA on the 6.25mg strength. Sanofi-aventis also did not bring suit against four other subsequent Paragraph IV filers: Lupin, Andrx, PTS Consulting and Apotex. Marketing exclusivities in the United States for Ambien^® ~~CR expired in March 2009.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~•  Xatral~~^® ~~Patent Litigation~~
~~Starting in August 2007, sanofi-aventis has received several ANDA certifications relating to Xatral~~^® in the United States under Paragraph IV. Each of the generic manufacturers has been sued for infringement of one or both of the Orange Book listed patents before the U.S. District Court for the District of Delaware. Trial against Mylan (who was the only remaining defendant) took place in May 2010. The U.S. District Court ruled in favour of sanofi-aventis, finding infringement on the part of Mylan and later finding that the invention of U.S. Patent No. 4,661,491 (the “ ‘491 Patent”) is not obvious. Mylan’s period to appeal has expired. Sanofi-aventis was granted pediatric exclusivity on August 9, 2010 and the patent will now expire on July 18, 2011. Generic versions of Xatral^® ~~cannot launch until the patent expires.~~
~~Glossary of Patent Terminology~~
~~A number of technical terms used above in Note D.22.b), are defined below for the convenience of the reader.~~
~~ANDA or Abbreviated New Drug Application (United States)~~: An application by a drug manufacturer to receive authority from the U.S. FDA to market a generic version of another company’s approved product, by demonstrating that the purportedly generic version has the same properties (bioequivalence) as the original approved product. As a result of data exclusivity, the ANDA may be filed only several years after the initial market authorization of the original product.
~~Paragraph III and Paragraph IV Certifications~~: ANDAs relating to approved products for which a patent has been listed in the FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the “Orange Book”, must specify whether final FDA approval of the ANDA is sought only~~after~~ ~~expiration of the listed patent(s) (this is known as a Paragraph III certification under the Hatch-Waxman Act) or whether final FDA approval is sought~~~~prior~~ ~~to expiration of one or more listed patents (a Paragraph IV certification). ANDAs including a Paragraph IV certification may be subject to the 30-Month Stay defined below.~~
~~Section 505(b)(2) application~~: A section 505(b)(2) application may be used to seek FDA approval for, among other things, combination products, different salts of listed drugs, products that do not demonstrate bioequivalence to a listed drug and over-the-counter versions of prescription drugs.
~~Summary judgment~~: A judgment granted on a claim or defense about which there is no genuine issue of material fact and upon which the movant is entitled to prevail as a matter of law. This procedural device allows the speedy disposition of a controversy without the need for trial.
~~30-Month Stay (United States)~~: If patent claims cover a product listed in the FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, also known as the “Orange Book”, and are owned by or licensed to the manufacturer of the original version, the FDA is barred from granting a final approval to an ANDA during the 30 months following the patent challenge, unless, before the end of the 30 months, a court decision or settlement has determined either that the ANDA does not infringe the listed patent or that the listed patent is invalid and/or unenforceable. FDA approval of an ANDA after this 30-month period does not resolve outstanding patent disputes, which may continue to be litigated in the courts.
c) Government Investigations, Competition Law and Regulatory Claims
• ~~Government Investigations — Pricing and Marketing Practices~~
~~Lovenox~~^® ~~Marketing.~~ ~~The U.S. Attorney’s Office in Chicago, Illinois conducted a civil and criminal investigation with regard to Lovenox~~^® sales and marketing practices for a period starting January 1, 1999. Without prejudice to its right to pursue any further investigation in the future, the U.S. government has declined to intervene in a Federal False Claims Act case related to the facts under investigation brought by two
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
former employees, and the matter proceeded against sanofi-aventis as civil litigation in Illinois Federal Court. In June 2010, the parties in the civil action reached a settlement, and the case was subsequently dismissed.
~~Ambien~~^® ~~and Ambien~~^® ~~CR Marketing.~~On August 11, 2008, sanofi-aventis U.S. received a subpoena issued by the U.S. Department of Health & Human Services Office of Inspector General and the U.S. Attorney’s Office in San Francisco, California. The subpoena requested information regarding Ambien^® ~~and Ambien~~^® CR sales and marketing practices in connection with an investigation of possible false or otherwise improper claims for payment under Medicare and Medicaid. Sanofi-aventis U.S. provided documents in response to this subpoena. In November 2010, the US District Court for the Northern District of California entered an order dismissing without prejudice a Federal False Claims Act case related to the facts under investigation.
~~•  Civil Suits — Pricing and Marketing Practices~~
~~Average Wholesale Prices (AWP) Class Actions.~~ Aventis Pharmaceuticals Inc. (API) is a defendant in several U.S. lawsuits seeking damages on behalf of multiple putative classes of individuals and entities that allegedly overpaid for certain pharmaceuticals as a result of the AWP pricing which were used to set Medicare and Medicaid reimbursement levels. Aventis Behring and Sanofi-Synthelabo Inc. were also defendants in some of these cases. These suits allege violations of various statutes, including state unfair trade, unfair competition, consumer protection and false claim statutes.
A group of eleven defendants, including sanofi-aventis defendants, reached a tentative global settlement of the claims of the insurers and consumers, for a total of $125 million. This settlement was granted preliminary approval by the U.S. District Court in Boston in early July 2008. Subject to the final approval hearing which is expected in 2011, all the class action suits against API before the U.S District Court in Boston will be resolved consistent with the settlement. Sanofi-aventis share of the global settlement is fully covered by existing reserves. One additional purported class action remains in New Jersey and is in the discovery phase.
~~AWP Public Entity Suits.~~U.S. subsidiaries of the Group, together with several dozen other pharmaceutical companies, are defendants in lawsuits brought starting in 2002 by certain states for AWP pricing issues described above. Sanofi-aventis U.S. has resolved many such suits, but continues to defend claims brought by the states of Alaska, Florida, Idaho, Illinois, Kentucky, Louisiana, Oklahoma and Wisconsin.
~~§ 340B Suit.~~ On August 18, 2005, the County of Santa Clara, California filed a suit against Aventis Pharmaceuticals Inc. and fourteen other pharmaceutical companies originally in the Superior Court of the State of California, County of Alameda, alleging that the defendants had overcharged Public Health Service entities for their pharmaceutical products in breach of pharmaceutical pricing agreements between the defendants and the Secretary of Health and Human Services. Subsequently, the case was removed to the United States District for the Northern District of California. In May 2009, the Court denied the plaintiffs’ motion for class certification without prejudice. All proceedings in the District Court are stayed pending a decision of the Supreme Court concerning whether plaintiffs have a private right of action. A hearing before the Supreme Court on this issue is scheduled in the first quarter of 2011.
~~•  Pharmaceutical Industry~~Cipro® Antitrust Litigation

Approximately 135 cases remain pending of the numerous complaints that were filed in the mid-1990’s by retail pharmacies in both federal and state court. These complaints shared the same basic allegations: that the defendant pharmaceutical manufacturers and wholesalers, including sanofi-aventis predecessor companies, violated the Sherman Act, the Robinson Patman Act, and various state antitrust and unfair competition laws by conspiring to deny all pharmacies, including chains and buying groups, discounts off the list prices of brand-name drugs. Shortly before a November 2004 trial in the U.S. District Court for the Eastern District of New York, sanofi-aventis and the remaining manufacturer defendants settled the Sherman Act claims of the majority of the remaining plaintiffs. These settlements did not dispose of the remaining plaintiffs’ Robinson Patman Act claims.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~•  European Commission Sector Inquiry~~
In January 2008, the European Commission’s Directorate General for Competition opened a sector inquiry into the functioning of the market to investigate what it considered to be a low level of competition in the pharmaceuticals industry in the European Union. The inquiry commenced with unannounced information-gathering inspections at a number of companies including sanofi-aventis. According to the Commission, the sector inquiry ultimately involved information gathering from 43 originator companies and 27 generic companies. The final report was released on July 8, 2009. The Commission announced that the pharmaceutical industry remains under scrutiny. In January 2010, the European Commission initiated a monitoring exercise on patent settlements between originator companies and generic companies for the periods 2008 and 2009. The European Commission announced that it will repeat the monitoring exercise in 2011.
~~•  European Commission generics investigation~~
On October 6, 2009, the European Commission conducted surprise inspections in the offices of several pharmaceutical companies, including sanofi-aventis, under suspicion of infringing antitrust rules of the European Union with respect to their activities concerning so-called “generic products”. Sanofi-aventis continues to cooperate with the European Commission in this matter.
~~•  Cipro~~^® ~~Antitrust Litigation~~
Since August 2000, Aventis Pharmaceuticals Inc. (API) has been a defendant in several related cases in U.S. state and federal courts alleging that API and certain other pharmaceutical manufacturers violated U.S. antitrust laws and various state laws by settling a patent dispute regarding the brand-name prescription drug ~~Cipro~~^®Cipro® in a manner which allegedly delayed the arrival of generic competition.
        In March 2005, the U.S. District Court for the Eastern District of New York granted ~~sanofi-aventis’~~Sanofi's summary judgment motions, and issued a judgment in favor of API and the other defendants in this litigation. By ~~order~~Order entered October 15, 2008, the U.S. Court of Appeals for the Federal Circuit affirmed the District ~~Court’s~~Court's ruling in the appeal by indirect purchaser plaintiffs; the direct purchaser ~~plaintiffs’~~plaintiffs' appeal was heard by the U.S. Court of Appeals for the Second Circuit in April 2009. InOn April 29, 2010, the Federal Circuit affirmed the District ~~Court’s~~Court's ruling dismissing the direct ~~purchasers’~~purchasers' case on summary judgment. The direct purchaser plaintiffs requested a rehearing en banc, which was denied by the Federal Circuit in September 2010. ~~The direct purchaser plaintiffs have appealed~~Following an appeal to the U.S. Supreme ~~Court.~~Court by the direct purchaser plaintiffs, on March 7, 2011, the U.S. Supreme Court denied the direct purchaser plaintiff's petition for a writ of certiori, thus ending the federal litigation relating to Cipro®.There is one case remaining in California which is stayed pending the decision of the US Supreme Court in
In re. K-Dur Antitrust Litigation.
• ~~DDAVP~~^®DDAVP® Antitrust Litigation

Subsequent to the decision of the U.S. District Court for the Southern District of New York in February 2005 holding the patent rights at issue in the ~~DDAVP~~^®DDAVP® tablet litigation to be unenforceable as a result of inequitable conduct, eight putative class actions have been filed claiming injury as a result of Ferring B.V. and Aventis Pharmaceuticals Inc.’s's alleged scheme to monopolize the market for ~~DDAVP~~^®DDAVP® tablets in violation of the Sherman Act and the antitrust and deceptive trade practices statutes of several states. ~~On November 6, 2006,~~In August 2011, Aventis Pharmaceuticals and Ferring reached an agreement with direct purchaser plaintiffs resolving their claims. Aventis Pharmaceuticals Inc. agreed to resolve these claims for U.S. $3.5 million. In December 2012, Aventis Pharmaceuticals reached a settlement with the ~~District Court dismissed these claims. Oral argument on plaintiffs’ appeal of the decision to dismiss was heard by the~~indirect purchasers for U.S. Court of Appeals for the Second Circuit in 2008. By order dated October 16, 2009, the appellate court reversed and remanded the case back to the District Court. Petitions for rehearing and rehearing en banc were denied.
$800 000.
• ~~Plavix~~^® ~~Antitrust Claim~~
On March 23, 2006, the U.S. retailer The Kroger Co. filed an antitrust complaint in the District Court for the Southern District of Ohio against sanofi-aventis, Bristol-Myers Squibb Co. and Apotex Corp. alleging antitrust violations by the defendants in relation to their tentative agreement to settle the U.S. Plavix^® ~~patent litigation (see “~~~~Plavix~~^® ~~Patent Litigation — United States~~~~,” above, for a description of the transaction). Seventeen other complaints have since been filed by direct and indirect purchasers of Plavix~~^® ~~on the same or similar grounds. Plaintiffs seek relief including injunctive relief and monetary damages. Defendants have moved to dismiss the~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
consolidated direct and indirect purchasers’ complaints. By orders entered in October 2009, and in January 2011, the Court dismissed the claims of the direct purchasers and indirect purchasers respectively. Appeals are expected.
~~•  Lovenox~~^®Lovenox® Antitrust Litigation

In August 2008, Eisai Inc. ~~(“Eisai”)~~(Eisai) brought suit against ~~sanofi-aventis~~Sanofi U.S. LLC and ~~sanofi-aventis~~Sanofi U.S. Inc. in the U.S. District Court for the District of New Jersey alleging that certain contracting practices for ~~Lovenox~~^®Lovenox® violate federal and state antitrust laws. The proceedings are ~~ongoing.~~in the discovery phase. An estimate of the financial effect of this case is not practicable at this stage of the litigation.

~~•  Lovenox~~^® ~~Regulatory Litigation~~
~~In July 2010, sanofi-aventis learned~~Sanofi U.S. LLC and Sanofi U.S. Inc. filed a separate state court lawsuit against Eisai and two individuals who are current employees of Eisai and former employees of Sanofi U.S. and/or its predecessors. Sanofi U.S. alleges that the ~~Food~~individuals took confidential information from Sanofi U.S. predecessors to Eisai in breach of their employment agreements with Sanofi, and ~~Drug Administration (FDA) had approved a generic enoxaparin ANDA filed~~that such confidential information has been utilized by ~~Sandoz. Sanofi-aventis subsequently filed suit against~~them and by Eisai to the ~~FDA in the~~detriment of Sanofi U.S. District Court for the District of Columbia and requested preliminary injunctive relief against the FDA. In August 2010, the U.S. District Court denied this request. As a result of this ruling, the generic version of enoxaparin can continue to be marketed in the United States. The Court has not yet ruled on the merits of sanofi-aventis’ suit against the FDA regarding the approval of the Sandoz enoxaparin ANDA.
This litigation is stayed.
d) Other litigation and arbitration
• Hoechst Shareholder Litigation

On December 21, 2004, the extraordinary general meeting of ~~sanofi-aventis’~~Sanofi's German subsidiary Hoechst AG (now Hoechst GmbH) approved a resolution transferring the shares held by minority shareholders to ~~sanofi-aventis~~Sanofi for compensation of €56.50 per share. Certain minority shareholders filed claims contesting the validity of the resolution, preventing its registration with the commercial register of Frankfurt and its entry into effect.

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On July 12, 2005, this litigation was settled. As a consequence, the squeeze out has been registered in the commercial register making ~~sanofi-aventis~~Sanofi the sole shareholder of Hoechst AG.
According to the settlement agreement, the cash compensation has been increased to €63.80 per share. The cash compensation was further increased by another €1.20 per share for those outstanding shareholders whointer alia waived in advance any increase of the cash compensation obtained through a judicial appraisal proceeding(Spruchverfahren) brought by former minority shareholders. Minority shareholders representing approximately 5 million shares did not accept such offer.
        Subsequently, a number of former minority shareholders of Hoechst initiated a judicial appraisal proceeding with the ~~local~~District Court of Frankfurt ~~court,~~(Landgericht ~~Frankfurt am Main~~Frankfurt-am-Main,) contesting the amount of the cash compensation paid in the squeeze out. ~~The~~In its decision dated January 27, 2012, the District Court of Frankfurt ruled in favor of Sanofi, confirming the amount ~~sought has not been specified. The proceedings are ongoing.~~of €63.80 per share as adequate cash compensation. A number of opt-out shareholders have filed an appeal with the Appeals Court of Frankfurt.
• ~~Apotex Settlement Claim~~
On November 13, 2008, Apotex filed a complaint before a state court in New Jersey against sanofi-aventis and Bristol-Myers Squibb claiming the payment of a $60 million break-up fee, pursuant to the terms of the initial settlement agreement of March 2006 relating to the U.S. Plavix^® ~~patent litigation (see “Patents — Plavix~~^® ~~Patent Litigation — United States”). The proceedings are ongoing.~~
~~•  Zimulti~~^® ~~/Acomplia~~^®Zimulti®/Acomplia® (rimonabant) Class Action

In November 2007, a purported class action was filed in the U.S. District Court for the Southern District of New York on behalf of purchasers of ~~sanofi-aventis~~Sanofi shares. The complaint charged ~~sanofi-aventis~~Sanofi and certain of its current and former officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleged that ~~defendants’~~defendants' statements regarding rimonabant (a product withdrawn from the market, formerly registered under the trademark Acomplia® in Europe and Zimulti® in the US) were materially false and misleading when made because defendants allegedly concealed data concerning ~~rimonabant’s propensity to cause~~certain alleged secondary effects of rimonabant, in particular, suicidality in patients suffering from depression. In September 2009, the motion was dismissed with prejudice. The plaintiffs filed a motion for reconsideration. On
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
July 27, 2010, the U.S. District Court for the Southern District of New York granted ~~plaintiff’s~~plaintiff's motion to reconsider and authorized plaintiffs to submit an amended complaint. In November 2010, the District Court heard arguments on ~~sanofi-aventis’~~Sanofi's motion to dismiss ~~plaintiffs~~plaintiffs' amended complaint. ~~The~~By Order dated March 31, 2011, the U.S. District ~~Court’s decision on~~Court for the ~~motion~~Southern District of New York dismissed a number of individual defendants, however, denied Sanofi's request to dismiss the company, as well as one of its current officers and one of its former officers. On November 11, 2011, plaintiffs filed a motion for class certification. Oral argument on plaintiff's motion for class certification took place on September 19, 2012. Discovery is ~~pending.~~
on-going. A reliable measure of potential liabilities arising from this purported class action is not possible at this stage of the litigation.
• Merial ~~Heartgard~~Heartgard® Advertisement Claim

On August 31, 2009, a ~~purported~~putative class action lawsuit was filed against Merial before the U.S. District Court for the Northern District of Mississippi, alleging that Merial engaged in false and misleading advertising of ~~Heartgard~~^®Heartgard® and ~~Heartgard~~^®Heartgard® Plus by claiming 100% efficacy in the prevention of heartworm disease, as well as the prevention of zoonotic diseases. Plaintiffs also request punitive damages and a permanent injunction with respect to the alleged advertising. The proceedings are ongoing and the class has not been certified yet. Merial filed a motion for summary judgment. A reliable measure of potential liabilities arising from this putative class action is not possible at this stage of the litigation.
• Merial Frontline® Advertisement Claim
        From October 2011 through January 2012, ten putative class actions were filed against Merial in various U.S. federal courts, each alleging that the plaintiffs sustained damages after purchasing defendants' products (Merial's Frontline® and /or Certifect® brands and Bayer's Advantage® and Advantix® brands) for their pets' flea problems. These actions have been transferred to the U.S. District Court for the Northern District of Ohio and consolidated in a multi-district litigation.
        The complaints seek injunctive relief and contain counts for violations of consumer protection or deceptive trade practices acts, false advertising, breach of implied and express warranty and violations of the

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Magnuson-Moss Warranty Act. Four of the complaints seek U.S.$32 billion in damages, two complaints seek greater than U.S.$4 billion in damages, and the remaining four complaints seek damages in excess of U.S.$5 million. No class has been certified yet. In October 2012, defendants filed a motion for summary judgment. Discovery is ongoing. A reliable measure of potential liabilities arising from this putative class action litigation is currently not possible.
e) Contingencies arising from certain Business Divestitures

~~Sanofi-aventis~~Sanofi and its subsidiaries, Hoechst and Aventis Agriculture, divested a variety of mostly chemical, including agro-chemical, businesses as well as certain health product businesses in previous years. As a result of these divestitures, the Group is subject to a number of ongoing contractual and legal obligations regarding the state of the sold businesses, their assets, and their liabilities.
• Aventis Behring Retained Liabilities

The divestment of Aventis Behring and related protein therapies assets became effective on March 31, 2004. The purchase agreement contained customary representations and warranties running from ~~sanofi-aventis~~Sanofi as seller to CSL Limited as purchaser. ~~Sanofi-aventis~~Sanofi has indemnification obligations that generally expired on March 31, 2006 (the second anniversary of the closing date). However, some indemnification obligations, having a longer duration, remain in effect, for example, indemnification obligations relating to the due organization, capital stock and ownership of Aventis Behring Companies runs through March 31, 2014, and product liability indemnification through March 31, 2019, subject to an extension for claims related to certain types of product liability notified before such date. Furthermore, for tax-related issues, the indemnification obligation of ~~sanofi-aventis~~Sanofi covers all taxable periods that end on or before the closing date and expires thirty days after the expiration of the applicable statute of limitations. In addition, the indemnification obligations relating to certain specified liabilities, including HIV liability, survive indefinitely.

Under the indemnification agreement, ~~sanofi-aventis~~Sanofi is generally obligated to indemnify CSL Limited, only to the extent indemnifiable, losses exceeding ~~$10~~U.S.$10 million and up to a maximum aggregate amount of ~~$300~~U.S.$300 million. For environmental claims, the indemnification due by ~~sanofi-aventis~~Sanofi equals 90% of the indemnifiable losses. Product liability claims are generally treated separately, and the aggregate indemnification is capped at ~~$500~~U.S.$500 million. Certain indemnification obligations, including those related to HIV liability, as well as tax claims, are not capped in amount.
• Aventis CropScience Retained Liabilities

The sale by Aventis Agriculture S.A. and Hoechst GmbH (both ~~predecessor~~legacy companies of ~~sanofi-aventis)~~Sanofi) of their aggregate 76% participation in Aventis CropScience Holding (ACS) to Bayer and Bayer CropScience AG (BCS), the wholly owned subsidiary of Bayer which holds the ACS shares, was effective on June 3, 2002. The stock purchase agreement dated October 2, 2001, contained customary representations and warranties with respect to the sold business, as well as a number of indemnifications, in particular with respect to: environmental liabilities (the representations and warranties and the environmental indemnification are subject to a cap of €836 million, except for certain legal representations and warranties and specific environmental liabilities, notably third-party site claims such as (i) the natural resources damages (NRD) claim filed by the state of New Jersey against BCS in 2007 in relation to the Factory Lane site, and (ii) a remediation and NRD project underway in Portland, Oregon)liabilities); taxes; certain legal proceedings; claims related to ~~StarLink~~^®StarLink® corn; and certain pre-closing
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
liabilities, in particular, product liability cases (which are subject to a cap of €418 million). There are various periods of limitation depending upon the nature or subject of the indemnification claim. Further, Bayer and BCS are subject to a number of obligations regarding mitigation and cooperation.

Starting with a first settlement agreement signed in December 2005, Aventis Agriculture and Hoechst GmbH have resolved a substantial number of disputes with Bayer and BCS, ~~AG,~~ including the termination of arbitration proceedings initiated in August 2003 for an alleged breach of a financial statement-related representation contained in the stock purchase agreement, and numerous other warranty and indemnification claims asserted under the stock purchase agreement, including claims relating to certain environmental and product liabilities. A number of other outstanding claims remain unresolved.

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LLRICE601 and LLRICE604 — U.S. ~~Litigation~~Litigation::    BCS has sent ~~sanofi-aventis~~Sanofi notice of potential claims for indemnification under various provisions of the stock purchase agreement. These potential claims relate to several hundred individual complaints that have been filed since August 2006 by rice growers, millers, and distributors in U.S. state and federal courts against a number of current and former subsidiaries (collectively the ~~“CropScience Companies”~~"CropScience Companies") which were part of the ACS group prior to ~~Bayer’s~~Bayer's acquisition of the ACS shares.
        Plaintiffs in these cases seek to recover damages in connection with the detection of trace amounts of the genetically modified rice called ~~“Liberty Link~~^®"Liberty Link® Rice ~~601”~~601" (also known as ~~“LLRICE601”~~"LLRICE601") or ~~“Liberty Link~~^®"Liberty Link® Rice ~~604”~~604" (also known as ~~“LLRICE604”~~"LLRICE604") in samples of commercial long-grain rice. LLRICE601 and LLRICE604, each a variety of long grain rice genetically altered to resist ~~Liberty~~^®Liberty® Herbicide, were grown in field tests in the United States from the years 1998 to 2001. Plaintiffs assert a number of causes of action, alleging that the CropScience Companies failed to take adequate measures to prevent cross-pollination or commingling of LLRICE601 and/or LLRICE604 with conventional rice.
        In ~~six~~July 2011, BCS reached settlement agreements with attorneys representing U.S. long-grain rice growers at a total amount of U.S.$750 million, thus settling cases that ~~have been tried to verdict in~~were part of the U.S. federal ormulti-district litigation, as well as those cases before state courts. The settlement agreement with state court ~~compensatory damages of approximately $11.5 million,~~grower plaintiffs does not include certain cases which reached verdicts in the aggregate, have been awarded. Two state court juries have also awarded punitive damages in the amount of $500,000 in one case and $42 million in another. The CropScience Companies have appealed or intend to appeal the judgments in these cases. Other cases have been settled by Bayer, including threeArkansas State Court, as well as certain grower cases that were settled ~~shortly before~~separately from the global settlement, where BCS has paid in judgement or ~~after trial began. Federal and~~settlement a collective total of approximately U.S.$67 million.
        With respect to one of those cases, the Arkansas Supreme Court upheld the state court ~~proceedings~~jury award of U.S.$42 million in punitive damages, ruling that the statutory cap on punitive damages is unconstitutional. BCS has reached settlement with a number of non-grower plaintiffs, primarily millers and European importers, for a total of approximately U.S.$203 million. In March 2011, an Arkansas State Court jury awarded Riceland Foods U.S.$11.8 million in compensatory damages and U.S.$125 million in punitive damages. In June 2011 (prior to the above-mentioned Arkansas Supreme Court decision) punitive damages were reduced to U.S.$1 million in application of the statutory cap. Both BCS and Riceland appealed the decision, and in January 2013, reached a settlement resolving Riceland's claims. Non-grower trials are scheduled ~~through 2011.~~for 2013.

~~Sanofi-aventis~~Sanofi denies direct or indirect liability for these cases, and has so notified BCS.

In a related development, the FDA has concluded that the presence of LLRICE601 in the food and feed supply poses no safety concerns and, on November 24, 2006, the United States Department of Agriculture (USDA) announced it would deregulate LLRICE601. With respect to LLRICE 604, the USDA announced, in March 2007, that the PAT protein contained in LLRICE604 has a long history of safe use and is present in many deregulated products. Further to an investigation regarding the causation chain that led to contamination, in October 2007, the USDA declined to pursue enforcement against BCS.
• Aventis Animal Nutrition Retained Liabilities

Aventis Animal Nutrition S.A. and Aventis (both ~~predecessor~~legacy companies of ~~sanofi-aventis)~~Sanofi) signed an agreement for the sale to Drakkar Holdings S.A. of the Aventis Animal Nutrition business effective in April 2002. The sale agreement contained customary representations and warranties. ~~Sanofi-aventis’~~Sanofi's indemnification obligations ran through April 2004, except for environmental indemnification obligations (which run through April 2012), tax indemnification obligations (which run through the expiration of the applicable statutory limitation period), and antitrust indemnification obligations (which extend indefinitely). The indemnification undertakings are subject to an overall cap of €223 million, with a lower cap for certain environmental claims. Indemnification obligations for antitrust and tax claims are not capped.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
• Celanese AG Retained Liabilities

The demerger of the specialty chemicals business from Hoechst to Celanese AG (now trading as "Celanese GmbH") became effective on October 22, 1999. Under the demerger agreement between Hoechst and

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Celanese, Hoechst expressly excluded any representations and warranties regarding the shares and assets demerged to Celanese. However, the following obligations of Hoechst are ongoing:

While all obligations of Hoechst (i) resulting from public law or (ii) pursuant to current or future environmental laws or (iii) vis-à-vis third parties pursuant to private or public law related to contamination (as defined) have been transferred to Celanese in full, Hoechst splits with Celanese any such cost incurred under these obligations applying a 2:1 ratio. The liability for indemnification of Hoechst under the demerger agreement is with Celanese and an affiliate.

To the extent Hoechst is liable to purchasers of certain of its divested businesses (as listed in the demerger agreement), Celanese ~~must~~and an affiliate are liable to indemnify Hoechst, as far as environmental damages are concerned, for aggregate liabilities up to €250 million, liabilities exceeding such amount will be borne by Hoechst alone up to €750 million, and amounts exceeding €750 million will be borne 2/3 by Hoechst and 1/3 by Celanese without any further caps.

Compensation paid to third parties by Celanese ~~under the aforementioned clause,~~ through December 31, ~~2010,~~2012, was significantly below the first threshold of €250 million.
• Rhodia Retained Liabilities

In connection with the initial public offering of Rhodia in 1998, Rhône-Poulenc (later named Aventis, to which ~~sanofi-aventis~~Sanofi is the legal successor in interest) entered into an environmental indemnification agreement with Rhodia on May 26, 1998 under which, subject to certain conditions, Rhodia was entitled to claim indemnification from Aventis with respect to direct losses resulting from third-party claims or public authority injunctions for environmental damages. Aventis and Rhodia entered into a settlement agreement on March 27, 2003 under the terms of which the parties settled all environmental claims in connection with the environmental indemnification agreement.
        Notwithstanding this settlement agreement, Rhodia and certain of its subsidiaries have unsuccessfully sought indemnification for environmental costs in the United States and Brazil. In both instances, the suits were decided in favor of ~~sanofi-aventis,~~Sanofi, with the court holding that the settlement precluded the indemnification claims. The decision in Brazil ~~is currently~~was under appeal by Rhodia.
On September 6, 2011, the Court of Appeals rendered a decision favorable to Sanofi, confirming that the Environmental Settlement concluded in March 2003 precludes any claim from Rhodia in these matters. In 2012, Rhodia filed a motion for reconsideration of this decision before the Court of Appeals in Sao Paulo.
On April 13, 2005, Rhodia initiated anad hoc arbitration procedure seeking indemnification from ~~sanofi-aventis~~Sanofi for the financial consequences of the environmental liabilities and pension obligations that were allocated to Rhodia through the various operations leading to the formation of Rhodia in 1997, amounting respectively to €125 million and €531 million. Rhodia additionally sought indemnification for future costs related to transferred environmental liabilities and coverage of all costs necessary to fully fund the transfer of pension liabilities out of ~~Rhodia’s~~Rhodia's accounts.
        The arbitral tribunal determined that it has no jurisdiction to rule on pension claims and that ~~Rhodia’s~~Rhodia's environmental claims are without merit. In May 2008, the Paris Court of Appeals rejected the action initiated by Rhodia to nullify the 2006 arbitral award in favor of ~~sanofi-aventis.~~
Sanofi.
On July 10, 2007, ~~sanofi-aventis~~Sanofi was served with a civil suit brought by Rhodia before the Commercial Court of Paris (Tribunal de Commerce de Paris) seeking indemnification on the same grounds as described above. The allegations before the Commercial Court of Paris are comparable to those asserted in ~~Rhodia’s~~Rhodia's arbitration demand. On February 10, 2010, Rhodia submitted its pleadings brief (conclusions récapitulatives) in which it has asked the Court to hold that ~~sanofi-aventis~~Sanofi was at fault in failing to provide Rhodia with sufficient capital to meet its pension obligations and environmental liabilities, and has claimed indemnification in the amount of €1.3 billion for retirement commitments and approximately €311 million for environmental liabilities. ~~The procedure is still pending.~~On December 14, 2011, the

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Commercial Court of Paris ruled in favor of Sanofi, rejecting all of Rhodia's allegations and claims. Rhodia has appealed this decision.
• Rhodia Shareholder Litigation
In January 2004, two minority shareholders of Rhodia and their respective investment vehicles filed two claims before the Commercial Court of Paris (Tribunal de Commerce de Paris) against Aventis, to which ~~sanofi-~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~aventis~~Sanofi is successor in interest, together with other defendants including former directors and statutory auditors of Rhodia from the time of the alleged events. The claimants seek a judgment holding the defendants collectively liable for alleged management errors and for alleged publication of misstatements between 1999 and 2002, andinter alia regarding ~~Rhodia’s~~Rhodia's acquisition of the companies Albright & Wilson and ChiRex. These shareholders seek a finding of joint and several liability for damages to be awarded to Rhodia in an amount of €925 million for alleged harm to the Company (a derivative action), as well as personal claims of €4.3 million and €125.4 million for their own alleged individual losses. ~~Sanofi-aventis~~Sanofi contests both the substance and the admissibility of these claims.
~~Sanofi-aventis~~        Sanofi is also aware of three criminal complaints filed in France by the same plaintiffs and of a criminal investigation order issued by the Paris public prosecutor following the submission of the report issued by theAutorité des Marchés Financiers regarding ~~Rhodia’s~~Rhodia's financial communications. In 2006, the Commercial Court of Paris accepted ~~sanofi-aventis~~Sanofi and the other ~~defendants’~~defendants' motion to stay the civil litigation pending the conclusion of the criminal proceedings. The ~~plaintiffs’~~plaintiffs' appeals against this decision, first before the Court of Appeals, and then before the French Supreme Court (Cour de Cassation), were both rejected.
• Clariant Retained Liabilities — Specialty Chemicals Business

Hoechst conveyed its specialty chemicals business to Clariant AG (Clariant) pursuant to a 1997 agreement. While Clariant has undertaken to indemnify Hoechst for all costs incurred for environmental matters relating to purchased sites, certain ongoing indemnification obligations of Hoechst for environmental matters in favor of Clariant can be summarized as follows:
•
Costs for environmental matters at the sites taken over, directly or indirectly, by Clariant and not attributable to a specific activity of Hoechst or of a third party not related to the business transferred to Clariant are to be borne by Clariant to the extent the accumulated costs since the closing in any year do not exceed a threshold amount for the then-current year. The threshold increases annually from approximately €102 million in 1997/98 to approximately €816 million in the fifteenth year after the closing. Only the amount by which ~~Clariant’s~~Clariant's accumulated costs exceed the then-current ~~year’s~~year's threshold must be compensated by Hoechst. No payments have yet become due under this rule.

•
Hoechst must indemnify Clariant indefinitely (i) with respect to sites taken over by Clariant, for costs which relate to environmental pollutions attributable to certain activities of Hoechst or of third parties, (ii) for costs attributable to four defined waste deposit sites in Germany which are located outside the sites taken over by Clariant (to the extent exceeding an indexed amount of approximately €20.5 million), (iii) for costs from certain locally concentrated pollutions in the sites taken over by Clariant but not caused by specialty chemicals activities in the past, and (iv) for 75% of the costs relating to a specific waste deposit site in Frankfurt, Germany.
• ~~InfraServ~~Infraserv Höchst Retained Liabilities

By the Asset Contribution Agreement dated December 19/20, 1996, as amended in 1997, Hoechst contributed all lands, buildings, and related assets of the Hoechst site at Frankfurt-Höchst to ~~InfraServ Höchst~~Infraserv GmbH & Co. Höchst KG. ~~InfraServ~~Infraserv Höchst undertook to indemnify Hoechst against environmental liabilities at the Höchst site and with respect to certain landfills. As consideration for the indemnification undertaking, Hoechst transferred to ~~InfraServ~~Infraserv Höchst approximately €57 million to fund reserves. In 1997, Hoechst also agreed it would reimburse current and future ~~InfraServ~~Infraserv Höchst environmental expenses up to €143 million. As a former owner of the land and as a former user of the landfills, Hoechst may ultimately be liable for costs of remedial action in excess of this amount.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.23. Provisions for discounts, rebates and sales returns

Adjustments between gross sales and net sales, as described in Note B.14., are recognized either as provisions or as reductions in accounts receivable, depending on their nature.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The table below shows movements in these items:

(€ million)    Government
and State
programs⁽¹⁾ Managed Care
and GPO
programs⁽²⁾ Charge-
back
incentives Rebates and
discounts Sales
returns Other
deductions    Total
January 1, 2008
   242 136 60 437 196 69       1,140
Current provision related to current period sales    466 366 751 1,516 173 135    3,407
Net change in provision related to prior period sales    10 (3 ) (8 ) 5 4 (3 )    5
Payments made    (442 ) (324 ) (725 ) (1,678 ) (193 ) (146 )    (3,508 )
Translation differences    10 10 4 (19 ) 3 (3 )    5
December 31, 2008
   286 185 82 261 183 52    1,049
Current provision related to current period sales    566 433 904 2,036 204 128    4,271
Net change in provision related to prior period sales    19 7 —    12 (7 ) —       31
Payments made    (477 ) (431 ) (903 ) (1,893 ) (175 ) (136 )    (4,015 )
Translation differences    (8 ) (7 ) (3 ) 9 (3 ) 2    (10 )
December 31, 2009
   386 187 80 425 202 46    1,326
Current provision related to current period sales    937 ⁽³⁾ 410 1,246 3,058 357 127    6,135
Net change in provision related to prior period sales    (4 ) (11 ) 8 14 12 (4 )    15
Payments made    (663 ) (400 ) (1,225 ) (2,719 ) (255 ) (126 )    (5,388 )
Translation differences    16 15 6 35 17 5    94
December 31, 2010
   672 201 115 813 333 48    2,182
(€ million)
Government
and State
programs ⁽²⁾
Managed Care
and GPO
programs ⁽³⁾
Charge-
back
incentives
Rebates and
discounts
Sales
returns
Other
deductions
Total

January 1, 2010 386 187 80 415 190 46 1,304

Current provision related to current period sales 937 410 1,246 3,058 357 127 6,135
Net change in provision related to prior period sales (4 ) (11 ) 8 14 12 (4 ) 15
Payments made (670 ) (400 ) (1,225 ) (2,804 ) (261 ) (126 ) (5,486 )
Currency translation differences 17 15 6 36 19 5 98

December 31, 2010 666 201 115 719 317 48 2,066

Merial ⁽¹⁾ — — 1 69 1 8 79
Genzyme 7 — 4 132 39 12 194
Current provision related to current period sales 1,224 496 1,569 4,159 349 152 7,949
Net change in provision related to prior period sales (5 ) (35 ) 13 22 (5 ) (2 ) (12 )
Payments made (1,132 ) (466 ) (1,548 ) (4,135 ) (322 ) (125 ) (7,728 )
Currency translation differences 20 7 6 9 11 3 56

December 31, 2011 780 203 160 975 390 96 2,604

Current provision related to current period sales 1,713 522 2,368 4,574 432 261 9,870
Net change in provision related to prior period sales (56 ) (34 ) (22 ) 9 (23 ) 1 (125 )
Payments made (1,422 ) (517 ) (2,345 ) (4,807 ) (347 ) (260 ) (9,698 )
Currency translation differences (15 ) (3 ) (3 ) 3 (10 ) (3 ) (31 )

Balance at December 31, 2012 1,000 171 158 754 442 95 2,620

⁽¹⁾
Includes provisions for Merial customer rebates and returns, previously presented inLiabilities related to assets held for sale or exchange, reclassified following the announcement of the decision to maintain two separate entities (Merial and Intervet/Schering-Plough) operating independently (see notes D.2. and D.8.2.).
⁽²⁾
Primarily the U.S. government's Medicare and Medicaid programs.
⁽³⁾
Rebates and other price reductions, primarily granted to healthcare authorities in the United States.

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⁽¹⁾

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Primarily the U.S. government’s Medicare and Medicaid programs.~~
⁽²⁾
~~Rebates and other price reductions, primarily granted to healthcare authorities in the United States.~~
⁽³⁾
~~The movement during 2010 is mainly due to the impact of U.S. healthcare reforms.~~
D.24. Personnel costs

Total personnel costs break down as follows:
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010 ⁽¹⁾

Salaries 6,151 5,940 5,121
Social security charges (including defined-contribution pension plans) 1,883 1,716 1,555
Stock options and other share-based payment expense 155 143 133
Defined-benefit pension plans 212 358 340
Other employee benefits 267 262 238

Total 8,668 8,419 7,387

⁽¹⁾
Excluding Merial.


(€ million)    Year ended
December 31,
2010    Year ended
December 31,
2009    Year ended
December 31,
2008
Salaries    5,121       5,019       4,774
Social security charges (including defined-contribution pension plans)    1,555       1,510       1,451
Stock options and other share-based payment expense    133       114       125
Defined-benefit pension plans    340       404       305
Other employee benefits    238       233       259
Total
   7,387       7,280       6,914
The total number of employees at December 31, ~~2010~~2012 was ~~101,575,~~111,974, compared with ~~104,867~~113,719 at December 31, ~~2009~~2011 and ~~98,213~~101,575 at December 31, ~~2008~~2010 (these employee numbers are unaudited).
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
Employee numbers by function ~~(excluding Merial)~~ as of December 31 are shown below (unaudited):

      December 31,
2010    December 31,
2009    December 31,
2008
Production    37,504       36,849       31,903
Research and development    16,983       19,132       18,976
Sales force    32,686       34,292       33,507
Marketing and support functions    14,402       14,594       13,827
Total
   101,575       104,867       98,213
~~Merial had a total of 5,581 employees as of December 31, 2010 (unaudited).~~

December 31,
2012
December 31,
2011
December 31,
2010 ⁽¹⁾

Production 45,035 44,415 37,504
Research and development 17,066 18,823 16,983
Sales force 32,270 32,874 32,686
Marketing and support functions 17,603 17,607 14,402

Total 111,974 113,719 101,575

⁽¹⁾
Excluding Merial.
D.25. Other operating income

Other operating income ~~amounted to €359~~totaled €562 million in ~~2010,~~2012, compared with ~~€866~~€319 million in ~~2009~~2011 and ~~€556~~€369 million in ~~2008.~~2010.

This line includes income arising under alliance agreements in the Pharmaceuticals segment (€~~315~~258 million in ~~2010,~~2012, versus ~~€646~~€202 million in ~~2009~~2011 and ~~€472~~€315 million in ~~2008)~~2010), in particular the agreement on the worldwide development and marketing of ~~Actonel~~^®Actonel® (see Note ~~C.2.~~C.3.) and the ~~Group’s~~Group's share of profits on ~~Copaxone~~^®Copaxone®. ~~The €331 million fall in 2010 relative~~
        In 2012, it also included the impact of the favorable outcome of litigation relating to ~~2009 was mainly due to the discontinuation in the second quarter of royalty payments from Teva~~a license.
        Other items recorded on ~~North American sales of Copaxone~~^®.
~~It also includes operating~~this line include net foreign exchange gains and losses ~~representing a~~(representing net ~~loss~~losses of €41 million in 2012, €5 million in 2011 and €141 million in ~~2010, compared with a net gain of €40 million in 2009 and a net loss of €94 million in 2008;~~2010) and proceeds from disposals related to ongoing operations ~~which amounted to~~(€59 million in 2012, versus €56 million in 2011 and €54 million in ~~2010, €56 million in 2009, and €24 million in 2008.~~
2010).
D.26. Other operating expenses

Other operating expenses amounted to ~~€276~~€454 million in ~~2010, versus €481~~2012, €315 million in ~~2009~~2011 and ~~€353~~€292 million in ~~2008.~~2010. This item includes shares of profits due to alliance partners (other than BMS and the Alliance Partner under the ~~Actonel~~^®Actonel® agreement) under product marketing agreements, primarily in Europe, Japan, the United States and Canada (€~~169~~66 million in ~~2010,~~2012, versus ~~€186~~€121 million in ~~2009~~2011 and ~~€178~~€169 million in ~~2008)~~2010).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
        In 2012, Sanofi paid $109 million in an out-of-court settlement with the office of the Massachusetts District Attorney, the U.S. Department of Justice and various other U.S. states to resolve all claims arising from the investigation into the distribution of samples of Hyalgan®, a former Sanofi product.
~~In 2009,~~        Also included on this ~~item included~~line is an additional provision of €116 million (before taxes) relating to litigation in Canada in respect of ramipril, recognized in 2012.
        Finally, this line includes an expense of ~~€69~~€40 million arising from changes to estimates of future expenditure on environmental risks at sites formerly operated by sanofi-aventis or sold to third parties (see note D.22. (e) “Contingencies arising from certain Business Divestitures”). Reversals of these provisions are classified in~~Other operating income(see Note D.25.).~~
~~This item also includes, for 2010, an expense of €51~~ 2012 (versus €43 million ~~(2009: €59 million)~~in 2011) relating to pensions and other benefits for Group retirees.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
D.27. Restructuring costs

Restructuring costs ~~recognized in 2010~~ amounted to ~~€1,372 million (€1,080~~€1,141 million in ~~2009; €585~~2012, versus €1,314 million in ~~2008),~~2011 and €1,384 million in 2010, and break down as follows:
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Employee-related expenses 860 840 817
Expenses related to property, plant and equipment 221 422 184
Compensation for early termination of contracts (other than contracts of employment) 7 27 35
Decontamination costs 2 22 105
Other restructuring costs 51 3 243

Total 1,141 1,314 1,384

        These restructuring costs reflect measures announced by the Group as part of the major transformation project initiated in 2009 to adapt the Group's structures to meet future challenges.

(€ million)    Year ended
December 31,
2010    Year ended
December 31,
2009    Year ended
December 31,
2008
Employee-related expenses    817       869       498
Expenses related to property, plant and equipment    184       146       —
Compensation for early termination of contracts (other than contracts of employment)    35       19       —
Decontamination costs    105       30       50
Other restructuring costs    231       16       37
Total
   1,372       1,080       585
        In 2012, these costs include provisions of €646 million recognized in the year ended December 31, 2012 following the announcement of a realignment of the Group's resources in France. These measures cover changes in the scope of activities of the Group's Research and Development sites during the next three years, the reorganization of industrial facilities in the Vaccines segment, and the streamlining of the Group's support functions. The restructuring costs recognized during the year also reflect the ongoing transformation of industrial facilities in Europe, adjustments to sales forces worldwide, and the integration of Genzyme. In addition, an impairment loss of €107 million was recognized against property, plant and equipment in France in connection with the reorganization of Research and Development operations.
The restructuring costs recognized in ~~2010 mainly related to:~~2011 primarily reflected the transformation and reorganization of Research and Development operations, measures taken to adapt the Group's industrial facilities in Europe, adjustments to the sales forces in the United States and Europe, the implementation of multi country organizations (MCOs) in Europe, and the integration of Genzyme entities worldwide.

–
the transformation of Research & Development operations, in particular the financial impact of the agreement with Covance which, in addition to the divestment of the Alnwick and Porcheville sites, also committed sanofi-aventis to partially funding the operation of these sites for a limited period in return for a job protection guarantee;
–
~~measures announced by sanofi-aventis in~~In 2010, intended to migrate the Group’s chemical industrial facilities in France towards biotechnologies and vaccine production, and to anticipate the fall in production volumes following the expiry of patent protection for major pharmaceutical products;
–
~~ongoing measures to adjust the Group’s sales forces in France, other European countries, and the United States;~~
–
~~the impact of pension reforms on existing early retirement plans in France.~~
~~In 2009,~~ restructuring costs related primarily to measures announced by ~~sanofi-aventis in June 2009 aimed at transforming~~the Group to continue transformation of its Research and Development operations, upgrade its chemical manufacturing sites to ~~encourage innovation,~~biotech and ~~adapting central support functions so as to streamline the organizational structure. These costs mainly comprised employee-related expenses,~~vaccine production, and reorganize its sales forces in the form of early retirement benefits and of termination benefits under voluntary redundancy plans. In France, these plans affected approximately 1,000 jobs in Research and Development and 450 jobs in central support functions.
Restructuring costs for 2009 also included amounts relating to transformation plans announced in other countries. The Research and Development transformation plan is a global project, which also affects the United States and Europe. These costs also included the ~~United Kingdom~~impact of pension reforms on existing early retirement plans in France.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.28. Other gains and ~~Japan.~~losses, and litigation
        Other gains and losses for the year ended December 31, 2011 included:
To
•
an expense resulting primarily from the backlog of depreciation and amortization charged against the Merial property, plant and equipment and intangible assets for the period from September 18, 2009 through December 31, 2010, which amounted to €519 million (see Note D.2.);

•
the net pre-tax loss of €18 million on the sale of the Dermik dermatology business;

•
a ~~lesser extent, restructuring costs~~gain of €210 million in compensation for ~~2009 reflected ongoing measures taken~~loss caused by ~~sanofi-aventis to adapt its industrial facilities in Europe and adjust its sales forces.~~
~~In 2008, restructuring costs related primarily to adaptation~~the sale of industrial facilities in France and to measures taken by sanofi-aventis to adjust its sales force to reflect changing pharmaceutical market conditions in various European countries — mainly France, Italy, Spain and Portugal — anda counterfeit generic version of Plavix® in the United ~~States.~~
States in 2006.

~~D.28. Gains and losses on disposals, and litigation~~
In 2010, this line ~~item reported~~showed an expense of €138 million, relating to an adjustment to ~~vendor’s~~vendor's guarantee provisions in connection with past ~~divestments.~~divestitures.

~~Sanofi-aventis~~The Group made no major ~~divestments during 2010, 2009~~divestitures in either 2012 or ~~2008.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
In 2008, this item included €76 million of reversals of provisions in respect of litigation in the United States on pricing and market practices (see Note D.22.c) “Government Investigations, Competition Law and Regulatory Claims”).
2010.
D.29. Financial income and expenses

Financial income and expenses break down as follows:
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Cost of debt ⁽¹⁾ (417 ) (425 ) (385 )
Interest income 68 100 61

Cost of debt, net of cash and cash equivalents (349 ) (325 ) (324 )

Non-operating foreign exchange gains/(losses) (17 ) 10 (20 )
Unwinding of discount on provisions ⁽²⁾ (87 ) (83 ) (68 )
Gains/(losses) on disposals of financial assets 37 25 61
Impairment losses on financial assets, net of reversals ⁽³⁾ (30 ) (58 ) (6 )
Other items (14 ) 19 (5 )

Net financial income/(expenses) (460 ) (412 ) (362 )

comprising:  Financial expenses (553 ) (552 ) (468 )
                     Financial income 93 140 106

⁽¹⁾
Includes gains/losses on interest rate derivatives used to hedge debt: €79 million gain in 2012, €47 million gain in 2011, €7 million gain in 2010.
⁽²⁾
Primarily provisions for environmental risks and restructuring provisions (see Note D.19.).
⁽³⁾
Primarily available-for-sale financial assets, including (€6) million for Greek government bonds in 2012 (versus (€49) million in 2011).


(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Cost of debt⁽¹⁾    (385 ) (310 ) (315 )
Interest income    61    88    132
Cost of debt, net of cash and cash equivalents
   (324 ) (222 ) (183 )
Non-operating foreign exchange gains/(losses)    (20 ) (67 ) (74 )
Unwinding of discount on provisions⁽²⁾    (68 ) (42 ) (37 )
Gains/(losses) on disposals of financial assets    61    1    41 ⁽³⁾
Impairment losses on financial assets, net of reversals⁽⁴⁾    (6 ) (2 ) (8 )
Other items    (5 ) 32    29
Net financial income/(expenses)
   (362 ) (300 ) (232 )
comprising: Financial expenses
   (467 ) (324 ) (335 )
                    Financial income
   105    24    103
⁽¹⁾
~~Includes gains/losses on interest rate derivatives used to hedge debt: €7 million gain in~~In 2012, 2011 and 2010, ~~€25 million gain in 2009, €2 million loss in 2008.~~
⁽²⁾
~~Primarily provisions for environmental risks.~~
⁽³⁾
~~Includes €38 million from~~ the ~~sale of the investment in Millennium in 2008 (see Note D.7.).~~
⁽⁴⁾
~~Primarily available-for-sale financial assets.~~
~~The~~ impact of the ineffective portion of hedging relationships was not ~~material in 2010, 2009 or 2008.~~material.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.30. Income tax expense

The Group has opted for tax consolidations in a number of countries, principally France, Germany, the United Kingdom and the United States.

The table below shows the split of income tax expense between current and deferred taxes:
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Current taxes (2,050 ) (2,359 ) (2,929 )
Deferred taxes 916 1,904 1,499

Total (1,134 ) (455 ) (1,430 )



(€ million)    Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Current taxes    (2,758 ) (2,531 ) (2,140 )
Deferred taxes    1,516    1,167 1,458
Total
   (1,242 ) (1,364 ) (682 )
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
The difference between the effective tax rate and the standard corporate income tax rate applicable in France is explained as follows:

(as a percentage)    Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Standard tax rate applicable in France    34    34 34
Impact of reduced-rate income tax on royalties in France    (11 ) (9 ) (12 )
Impact of change in net deferred tax liabilities as a result of changes in tax rates⁽¹⁾    —    1 —
Impact of the ratification of the Franco-American treaty on deferred tax liabilities relating to tax cost of distributions made from reserves    —    (2 ) —
Impact of tax borne by BMS for the territory managed by sanofi-aventis (see Note D.32.)    (2 ) (3 ) (4 )
Other items    1    1 (2 )
Effective tax rate
   22    22 16
⁽¹⁾
~~In 2009, mainly the reform of local business taxes in France.~~
(as a percentage)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Standard tax rate applicable in France 34 34 34
Difference between French tax rates and tax rates applicable to foreign subsidiaries ⁽¹⁾ (6 ) (3 ) (2 )
Impact of reduced-rate income tax on royalties in France (6 ) (11 ) (10 )
Impact of change in net deferred tax liabilities as a result of changes in tax laws and rates ⁽²⁾ — (4 ) —
Tax rate differential on intragroup margin in inventory ⁽³⁾ (1 ) (1 ) —
Impact of the Franco-American Advance Pricing Agreement (APA) 2006-2010 ⁽⁴⁾ — (7 ) —
Impact of tax borne by BMS for the territory managed by Sanofi (see Note D.32.) (1 ) (1 ) (2 )
Other items ⁽⁵⁾ (1 ) 2 3

Effective tax rate 19 9 23

~~Changes~~⁽¹⁾
In 2012, this line includes the effects of an Advance Pricing Agreement (APA) with the competent Japanese authorities covering the period from 2012 through 2014. The APA procedure is one in which tax authorities from one or more countries negotiate and conclude an agreement for a prospective period to determine transfer pricing methods applicable to transactions between subsidiaries of the same parent company.
⁽²⁾
In 2011, this mainly involved changes to tax legislation in the United Kingdom.
⁽³⁾
When internal margin included in inventory is eliminated, a deferred tax asset is recognized on the basis of the tax rate applicable to the subsidiary that holds the inventory, which may differ from the tax rate of the subsidiary that generated the eliminated intragroup margin.
⁽⁴⁾
In December 2011, the French and U.S. governments signed an APA covering the period from 2006 through 2011.
⁽⁵⁾
The "Other" line ~~“Impact of reduced-rate income tax on royalties~~includes in ~~France” are mainly due to significant year-on-year fluctuations in pre-tax profits in 2010, 2009 and 2008. The year-on-year change in 2010 also reflects~~particular the impact of ~~the strong performance of Plavix~~^® ~~in the United States, and the resulting increase in royalty income.~~
~~The “Other items” line includes~~ (i) ~~the effect of differences between tax rates applicable in France and those applicable in other jurisdictions; (ii) the impact of~~ the new CVAE ~~valued added business~~(Cotisation sur la Valeur Ajoutée des Entreprises) tax in France ~~from~~effective January 1, ~~2010; (iii)~~2010, and (ii) the ~~impact~~reassessment of ~~reassessing certain~~some of the ~~Group’s~~Group's tax ~~exposures;~~risks.
        For the periods presented, the amount of deferred tax assets recognized in profit or loss that were initially subject to impairment losses on a business combination is immaterial.
        Article 6 of the French Amending Finance Bill for 2012, enacted August 16, 2012, introduced an additional corporate income tax contribution of 3% on amounts distributed by French or foreign companies and ~~(iv)~~entities that are subject to corporate income tax in France. This contribution, the ~~impact on~~trigger point for which is the ~~effective~~decision by the shareholders' general meeting to make the distribution, has not been taken into account in measuring the Group's deferred tax ~~rate~~assets and liabilities. It will apply to future distributions of ~~amortization and impairment charged against intangible assets.~~dividends by Sanofi.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.31. Share of profit/loss of associates and joint ventures

This item mainly comprises the share of co-promotion profits attributable to ~~sanofi-aventis~~Sanofi for territories covered by entities majority-owned by BMS (see Note C.1.). The impact of the BMS alliance in ~~2010~~2012 was ~~€1,551~~€643 million, before deducting the tax effect of €223 million (versus €1,671 million with a tax effect of €601 million in 2011, and €1,551 million with a tax effect of €571 million ~~(2009: €1,229 million, tax effect €444 million; 2008: €984 million, tax effect €361 million)~~in 2010).

It also includes the share of profits or losses from other associates and joint ventures, ~~(€2 million loss~~the amount of which was immaterial in ~~2010, €29 million profit in 2009, €69 million profit in 2008). These figures include the effects of the Aventis acquisition (amortization~~2012, 2011 and ~~impairment of intangible assets).~~
~~In accordance with IFRS 5, the share of profits from Merial for 2008 has been retrospectively reclassified to the line~~~~Net income from the held-for-exchange Merial business~~ ~~(see Note D.8. “Assets held for sale or exchange”).~~
2010.
D.32. Net income attributable to non-controlling interests

This line includes the share of co-promotion profits attributable to BMS for territories covered by entities majority-owned by ~~sanofi-aventis~~Sanofi (see Note C.1.). The amount involved was €149 million in 2012, €226 million in 2011, and €237 million in ~~2010, €405 million in 2009, and €422 million in 2008.~~2010. There is no tax effect, because BMS receives its share before tax.

It also includes the share of net income attributable to other non-controlling interests (€1720 million in ~~2010, €21~~2012, €15 million in ~~2009,~~2011, and ~~€19~~€17 million in ~~2008)~~2010).
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
D.33. Related party transactions

The principal related parties of ~~sanofi-aventis~~Sanofi are companies over which the Group has control or significant influence, joint ventures, key management personnel, and principal shareholders.

The Group has not entered into any transactions with any key management personnel. Financial relations with the ~~Group’s~~Group's principal shareholders, in particular the Total group (until September 2012), fall within the ordinary course of business and were immaterial in the years ended December 31, ~~2010,~~2012, December 31, ~~2009~~2011 and December 31, ~~2008.~~2010.

~~Details~~A list of ~~transactions with related~~the principal companies the Group controls is presented in Note F.1. These companies are ~~disclosed~~fully consolidated (as described in Note B.1.). Transactions between these companies, and between the parent company and its subsidiaries, are eliminated when preparing the consolidated financial statements.
        Transactions with companies over which the Group has significant influence and with joint ventures are presented in Note D.6.

Key management personnel include corporate officers (including two directors during 2012 and 2011, and three directors ~~during~~in 2010, ~~and 2009, and four directors during 2008,~~who were covered by supplementary pension ~~plans:~~plans, see Item 6.B.) and the members of the Executive Committee (9 members during ~~2010~~2012, 2011 and ~~2009, and 7 during 2008.)~~2010).

The table below shows, by type, the compensation paid to key management personnel:

(€ million)    Year ended
December 31,
2010    Year ended
December 31,
2009    Year ended
December 31,
2008
Short-term benefits⁽¹⁾    23       22       18
Post-employment benefits⁽²⁾    12       11       12
Share-based payment⁽³⁾    6       5       7
Total recognized in the income statement
   41       38       37
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Short-term benefits ⁽¹⁾ 24 21 23
Post-employment benefits 10 10 12
Share-based payment ⁽²⁾ 8 5 6

Total recognized in the income statement 42 36 41

⁽¹⁾
Compensation, employer's social security contributions, directors' attendance fees, and termination benefits where applicable (net of reversals of obligation the case of termination benefits).
⁽²⁾
Stock option expense computed using the Black-Scholes model.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

⁽¹⁾
~~Compensation, employer’s social security contributions, directors’ attendance fees, and any termination benefits.~~
⁽²⁾
~~Estimated pension cost, calculated in accordance with IAS 19.~~
⁽³⁾
~~Stock option expense computed using the Black-Scholes model.~~
The aggregate amount of supplementary pension obligations to certain corporate officers and to members of the Executive Committee was €162 million at December 31, 2012, compared with €121 million at December 31, 2011 and €130 million at December 31, 2010 (the increase is mainly due to a fall in discount rates during 2012). The aggregate amount of retirement benefits payable to certain corporate officers and key management personnel was ~~€130~~€5 million at December 31, ~~2010, versus €149 million at December 31, 2009~~2012, 2011 and €157 million at December 31, 2008. The aggregate amount of lump-sum retirement benefits payable to corporate officers and key management personnel at December 31, 2010 was €5 million, versus €10 million at December 31, 2009 and €8 million at December 31, 2008.
2010.
D.34. Split of net sales

Credit risk is the risk that customers (wholesalers, distributors, pharmacies, hospitals, clinics or government agencies) may fail to pay their debts. The Group manages credit risk by pre-vetting customers in order to set credit limits and risk levels and asking for guarantees or insurance where necessary, performing controls, and monitoring qualitative and quantitative indicators of accounts receivable balances such as the period of credit taken and overdue payments.

Customer credit risk also arises as a result of the concentration of the ~~Group’s~~Group's sales with its largest customers, in particular certain wholesalers in the United States. The ~~Group’s~~Group's three largest customers respectively accounted for approximately ~~7.6%~~6.5%, ~~7.0%~~5.3% and ~~6.0%~~5.2% of gross ~~sales~~revenues in ~~2010.~~2012.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Net sales

~~Net~~The net sales of ~~sanofi-aventis~~Sanofi comprise net sales generated by the Pharmaceuticals segment, ~~and net sales generated by~~ the Vaccines segment and the Animal Health segment. The table below shows ~~net~~ sales of flagship products and other major pharmaceutical products:

Year ended December 31,

(€ million)
2012
2011
2010

Lantus® 4,960 3,916 3,510
Apidra® 230 190 177
Amaryl® 421 436 478
Insuman® 135 132 133
Other diabetes products 36 10 —

Total: Diabetes 5,782 4,684 4,298

Taxotere® 563 922 2,122
Eloxatine® 956 1,071 427
Jevtana® 235 188 82
Zaltrap® 25 — —
Mozobil® 96 59 —
Other Oncology products ⁽¹⁾ 519 389 59

Total: Oncology 2,394 2,629 2,690

Lovenox® 1,893 2,111 2,806
Plavix® 2,066 2,040 2,083
Aprovel®/CoAprovel® 1,151 1,291 1,327
Allegra® 553 580 607
Stilnox®/Ambien®/Ambien® CR/Myslee® 497 490 819
Copaxone® 24 436 513
Depakine® 410 388 372
Tritace® 345 375 410
Multaq® 255 261 172
Xatral® 130 200 296
Actonel® 134 167 238
Nasacort® 71 106 189
Renagel®/Renvela® ⁽¹⁾ 653 415 —
Synvisc®/Synvisc-One® ⁽¹⁾ 363 256 —

Aubagio® 7 — —

Total: Multiple Sclerosis 7 — —

Cerezyme® ⁽¹⁾ 633 441 —
Myozyme®/Lumizyme® ⁽¹⁾ 462 308 —
Fabrazyme® ⁽¹⁾ 292 109 —
Other Rare Diseases products ⁽¹⁾ 391 264 —

Total: Rare Diseases ⁽¹⁾ 1,778 1,122 —

Total: New Genzyme ⁽¹⁾ 1,785 1,122 —

Other Products 5,513 5,927 6,005
Consumer Health Care 3,008 2,666 2,217
Generics 1,844 1,746 1,534

Total: Pharmaceuticals 28,871 27,890 26,576

⁽¹⁾
In 2011, net sales of Genzyme products were recognized from the acquisition date (April 2011).

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


      Year ended December 31
(€ million)    2010    2009    2008
Lantus^®    3,510       3,080       2,450
Apidra^®    177       137       98
Amaryl^®    478       416       379
Insuman^®    133       131       143
Sub-total: Diabetes
   4,298       3,764       3,070
Lovenox^®    2,806       3,043       2,738
Taxotere^®    2,122       2,177       2,033
Plavix^®    2,083       2,623       2,609
Aprovel^®    1,327       1,236       1,202
Eloxatine^®    427       957       1,345
Multaq^®    172       25       —
Jevtana^®    82       —       —
Stilnox^®/ Ambien^®/ Ambien^® CR/ Myslee^®    819       873       822
Allegra^®    607       731       666
Copaxone^®    513       467       622
Tritace^®    410       429       491
Depakine^®    372       329       322
Xatral^®    296       296       319
Actonel^®    238       264       330
Nasacort^®    189       220       240
Other Products
   6,064       5,947       6,341
Consumer Health Care
   2,217       1,430       1,203
Generics
   1,534       1,012       354
Total Pharmaceuticals
   26,576       25,823       24,707
Net sales of the principal product ranges of the Vaccines segment are shown below:

Year ended December 31,

(€ million)
2012
2011
2010

Polio/Pertussis/Hib Vaccines 1,184 1,075 984
Influenza Vaccines 884 826 1,297
Meningitis/Pneumonia Vaccines 650 510 527
Adult Booster Vaccines 496 465 449
Travel and Endemics Vaccines 364 370 382
Other Vaccines 319 223 169

Total: Vaccines 3,897 3,469 3,808

        Net sales of the principal product ranges of the Animal Health segment are shown below:

      Year ended December 31
(€ million)    2010    2009    2008
Influenza Vaccines    1,297       1,062       736
of which seasonal vaccines
   845       597       610
of which pandemic vaccines
   452       465       126
Pediatric Combination and Poliomyelitis Vaccines    984       968       768
Meningitis/Pneumonia Vaccines    527       538       472
Adult Booster Vaccines    449       406       399
Travel and Endemics Vaccines    382       313       309
Other Vaccines    169       196       177
Total Vaccines
   3,808       3,483       2,861
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
(€ million)
2012
2011
2010

Frontline® and other fipronil-based products 775 764 774
Vaccines 730 662 627
Avermectin 423 372 355
Other Animal Health products 251 232 227

Total: Animal Health 2,179 2,030 1,983

D.35. Segment information

As indicated in Note B.26., ~~sanofi-aventis~~Sanofi has ~~two~~the following operating segments: ~~the~~ Pharmaceuticals, ~~segment and the~~ Human Vaccines (Vaccines) ~~segment.~~and Animal Health. All other activities are combined in a separate segment, Other.
        In March 2011, Sanofi and Merck announced the mutual termination of their agreement to create a new Animal Health joint venture. Following this announcement, the Animal Health business was identified as an operating segment on the basis of information now used internally by management to measure operational performance and to allocate resources.
The Pharmaceuticals segment covers research, development, production and marketing of ~~medicines.~~medicines, including those originating from Genzyme (see D.1.2.). The ~~sanofi-aventis~~Sanofi pharmaceuticals portfolio consists of flagship products, plus a broad range of prescription medicines, generic medicines, and consumer health products. This segment also includes all associates whose activities are related to pharmaceuticals, in particular the entities majority owned by BMS.

The ~~Human~~ Vaccines segment is wholly dedicated to vaccines, including research, development, production and marketing. This segment includes the Sanofi Pasteur MSD joint venture.
        The Animal Health segment comprises the research, development, production and marketing activities of Merial, which offers a complete range of medicines and vaccines for a wide variety of animal species.
The Other segment includes all ~~segments~~activities that ~~are~~do not qualify as reportable segments ~~within the meaning of~~under IFRS 8. This segment includes ~~the Group’s~~Sanofi's interest in the Yves Rocher group until the ~~Animal Health business (Merial)~~date of loss of significant influence (see Note D.6.), and the ~~impact~~effects of retained commitments in respect of divested activities.

Inter-segment transactions are not material.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.35.1. Segment results

~~Sanofi-aventis~~Sanofi reports segment results on the basis of ~~“Business~~"Business operating ~~income”~~income". This indicator ~~adopted in order to comply~~(compliant with IFRS 8,8) is used internally to measure operational performance and allocate resources.
“Business operating ~~income”~~income is derived from ~~operating~~Operating income, adjusted as follows:
•
the amounts reported in the line itemsRestructuring costs,Fair value remeasurement of contingent consideration liabilities andOther gains and losses, and litigation are eliminated;

•
amortization ~~charged against intangible assets is eliminated;~~
and impairment losses charged against intangible assets (other than software) are eliminated;
~~restructuring costs are eliminated;~~
~~gains and losses on disposals, and litigation, are eliminated;~~

•
the share of profits/losses of associates and joint ventures is ~~added, and~~ added;

•
net income attributable to non-controlling interests is deducted;

•
other acquisition-related effects (primarily the workdown of acquired inventories remeasured at fair value at the acquisition date, and the impact of acquisitions on investments in associates and joint ventures) are eliminated;

•
restructuring costs relating to associates and joint ventures are eliminated.
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~

Segment results are shown in the tables below:

      2010
(€ million)    Pharmaceuticals Vaccines Other Total
Net sales
   26,576    3,808    —    30,384
Other revenues    1,623    28    —    1,651
Cost of sales    (7,316 ) (1,371 ) —    (8,687 )
Research and development expenses    (3,884 ) (517 ) —    (4,401 )
Selling and general expenses    (6,962 ) (603 ) (2 ) (7,567 )
Other operating income and expenses    177    14    (108 ) 83
Share of profit/loss of associates and joint ventures⁽¹⁾    1,009    19    8    1,036
Net income from the held-for-exchange Merial business    —    —    418    418
Net income attributable to non-controlling interests    (258 ) 1    —    (257 )
Business operating income
   10,965    1,379    316    12,660
Financial income and expenses    (362 )
Income tax expense    (3,083 )
Business net income
   9,215

Year ended December 31, 2012

(€ million)
Pharmaceuticals
Vaccines
Animal Health
Other
Total

Net sales 28,871 3,897 2,179 — 34,947
Other revenues 933 44 33 — 1,010
Cost of sales (8,759 ) (1,635 ) (701 ) — (11,095 )
Research and development expenses (4,219 ) (539 ) (164 ) — (4,922 )
Selling and general expenses (7,666 ) (611 ) (669 ) (1 ) (8,947 )
Other operating income and expenses 98 (7 ) 3 14 108
Share of profit/(loss) of associates and joint ventures 432 (1 ) (7 ) — 424
Net income attributable to non-controlling interests (171 ) — (1 ) — (172 )

Business operating income 9,519 1,148 673 13 11,353

⁽¹⁾
~~Net of taxes~~

      2009
(€ million)    Pharmaceuticals Vaccines Other Total
Net sales
   25,823    3,483    —    29,306
Other revenues    1,412    31    —    1,443
Cost of sales    (6,527 ) (1,326 ) —    (7,853 )
Research and development expenses    (4,091 ) (491 ) (1 ) (4,583 )
Selling and general expenses    (6,762 ) (561 ) (2 ) (7,325 )
Other operating income and expenses    387    (3 ) 1    385
Share of profit/loss of associates and joint ventures⁽¹⁾    792    41    8    841
Net income from the held-for-exchange Merial business    —    —    241    241
Net income attributable to non-controlling interests    (426 ) (1 ) —    (427 )
Business operating income
   10,608    1,173    247    12,028
Financial income and expenses    (300 )
Income tax expense    (3,099 )
Business net income
   8,629
⁽¹⁾
~~Net of taxes~~

Year ended December 31, 2011

(€ million)
Pharmaceuticals
Vaccines
Animal Health
Other
Total

Net sales 27,890 3,469 2,030 — 33,389
Other revenues 1,622 25 22 — 1,669
Cost of sales (8,368 ) (1,404 ) (654 ) — (10,426 )
Research and development expenses (4,101 ) (564 ) (146 ) — (4,811 )
Selling and general expenses (7,376 ) (542 ) (617 ) (1 ) (8,536 )
Other operating income and expenses (13 ) — (7 ) 24 4
Share of profit/(loss) of associates and joint ventures 1,088 1 — 13 1,102
Net income attributable to non-controlling interests (246 ) — (1 ) — (247 )

Business operating income 10,496 985 627 36 12,144

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Year ended December 31, 2010

(€ million)
Pharmaceuticals
Vaccines
Animal Health
Other
Total

Net sales 26,576 3,808 1,983 — 32,367
Other revenues 1,623 28 18 — 1,669
Cost of sales (7,316 ) (1,371 ) (615 ) — (9,302 )
Research and development expenses (3,884 ) (517 ) (155 ) — (4,556 )
Selling and general expenses (6,962 ) (603 ) (604 ) (2 ) (8,171 )
Other operating income and expenses 177 14 (6 ) (108 ) 77
Share of profit/(loss) of associates and joint ventures 1,009 19 — 8 1,036
Net income attributable to non-controlling interests (258 ) 1 — — (257 )

Business operating income 10,965 1,379 621 (102 ) 12,863

~~Year ended December 31, 2010~~        The table below shows the reconciliation between "Business net income" andIncome before tax and associates and joint ventures:

      2008
(€ million)    Pharmaceuticals Vaccines Other Total
Net sales
   24,707    2,861    —    27,568
Other revenues    1,208    41    —    1,249
Cost of sales    (6,231 ) (1,104 ) —    (7,335 )
Research and development expenses    (4,150 ) (425 ) —    (4,575 )
Selling and general expenses    (6,662 ) (520 ) 14    (7,168 )
Other operating income and expenses    297    1    (95 ) 203
Share of profit/loss of associates and joint ventures⁽¹⁾    671    28    21    720
Net income from the held-for-exchange Merial business    —    —    170    170
Net income attributable to non-controlling interests    (441 ) —    —    (441 )
Business operating income
   9,399    882    110    10,391
Financial income and expenses    (270 )
Income tax expense    (2,807 )
Business net income
   7,314
⁽¹⁾
~~Net of taxes~~
~~“Business net income” is determined by taking “Business operating income”~~
(€ million)
Year ended
December 31,
2012
Year ended
December 31,
2011
Year ended
December 31,
2010

Business operating income 11,353 12,144 12,863

Share of profit/loss of associates and joint ventures ⁽¹⁾ (424 ) (1,102 ) (1,036 )
Net income attributable to non-controlling interests ⁽²⁾ 172 247 257
Amortization of intangible assets (3,291 ) (3,314 ) (3,529 )
Impairment of intangible assets (117 ) (142 ) (433 )
Fair value remeasurement of contingent consideration liabilities (192 ) 15 —
Expenses arising from the impact of acquisitions on inventories ⁽³⁾ (23 ) (476 ) (142 )
Restructuring costs (1,141 ) (1,314 ) (1,384 )
Other gains and losses, and litigation ⁽⁴⁾ — (327 ) (138 )
Impact of the discontinuation of depreciation of the property, plant and equipment of Merial (IFRS 5) — — 77

Operating income 6,337 5 731 6,535

Financial expense (553 ) (552 ) (468 )
Financial income 93 140 106

Income before tax and associates and joint ventures 5,877 5,319 6,173

⁽¹⁾
Excluding (i) restructuring costs of associates and ~~adding financial income~~joint ventures and ~~deducting financial~~(ii) expenses ~~including~~arising from the ~~related income tax effects.~~
~~“Business net income” is defined as~~~~Net income attributable to equity holders of sanofi-aventis~~~~excluding (i) amortization of intangible assets; (ii) impairment of intangible assets; (iii) other impacts associated with acquisitions (including impacts~~impact of acquisitions on associates and joint ~~ventures); (iv)~~ventures.
⁽²⁾
Excluding the share attributable to non-controlling interests of (i) restructuring costs ~~(including restructuring costs relating to associates~~ and ~~joint ventures), gains and losses on disposals~~(ii) other adjustments.
⁽³⁾
This lines record the impact of ~~non-current assets, and costs or provisions associated with litigation; (v)~~ the ~~tax effect related to~~workdown of acquired inventories remeasured at fair value at the ~~items listed in (i) through (iv), as well as (vi) effects~~acquisition date.
⁽⁴⁾
See Note D.28.

Table of major tax disputes and (vii) the share of non-controlling interests in items (i) through (vi). The items listed in (iv) — except for restructuring costs related to associates and joint ventures — correspond to those reported in the line items~~Restructuring costsand~~ ~~Gains and losses on disposals, and litigation~~~~, as defined in Note B.20. to the consolidated financial statements.~~Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
~~A reconciliation of “Business net income” to~~~~Net income attributable to equity holders of sanofi-aventis~~ ~~is set forth below:~~

(€ million)
   Year ended
December 31,
2010 Year ended
December 31,
2009 Year ended
December 31,
2008
Business net income
   9,215    8,629    7,314
(i) Amortization of intangible assets    (3,529 ) (3,528 ) (3,483 )
(ii) Impairment of intangible assets    (433 ) (372 ) (1,554 )
(iii) Expenses arising from the impact of acquisitions on inventories⁽¹⁾    (30 ) (27 ) (2 )
(iv) Restructuring costs    (1,372 ) (1,080 ) (585 )
(iii)/(iv) Other items⁽²⁾    (138 ) —    114
(v) Tax effects of:    1,841    1,629    1,904
– amortization of intangible assets    1,181    1,126    1,189
– impairment of intangible assets    143    136    537

– expenses arising on the workdown of acquired inventories
   9    7    1
– restructuring costs    462    360    196
– other items    46    —    (19 )
(iii)/(vi) Other tax items⁽³⁾    —    106    221
(vii) Share of items listed above attributable to non-controlling interests    3    1    —
(iii) Expenses arising from the impact of the Merial acquisition ⁽⁴⁾    (32 ) (66 ) (50 )
(iii)/(iv) Restructuring costs of associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures⁽⁵⁾    (58 ) (27 ) (28 )
Net income attributable to equity holders of sanofi-aventis
   5,467    5,265    3,851
⁽¹⁾
~~Workdown of inventories remeasured at fair value at the acquisition date.~~
⁽²⁾
~~Other items comprise:~~
     ~~Gain on sale of investment in Millennium~~ 38
     ~~Reversals of/(charges to) provisions for risks~~ ~~(138~~ ) 76
⁽³⁾
~~Other tax items comprise:~~
     ~~Provisions for/settlements of tax disputes~~ ~~221~~
     ~~Reversal of deferred taxes following ratification of the Franco-American Treaty (see Note D.30.)~~ ~~106~~
⁽⁴⁾
This line comprises: until September 17, 2009, amortization and impairment charged against the intangible assets of Merial; and from September 18, 2009, (i) the impact of the discontinuation of depreciation of the property, plant and equipment of Merial in accordance with IFRS 5 (see Note B.7.) and (ii) the expense arising from the workdown of inventories remeasured at fair value at the acquisition date.
⁽⁵⁾
This line shows the portion of major restructuring costs incurred by associates and joint ventures, and expenses arising from the impact of acquisitions on associates and joint ventures (workdown of acquired inventories, amortization and impairment of intangible assets, and impairment of goodwill).
D.35.2. Other segment information

The tables below show the split by operating segment of (i) the carrying amount of investments in associates and joint ventures, (ii) acquisitions of property, plant and equipment, and (iii) acquisitions of intangible assets.

The principal associates and joint ventures are: for the Pharmaceuticals segment, the entities majority owned by BMS (see Note C.1.), Handok ~~InfraServ,~~(divested October 30, 2012), Infraserv GmbH & Co. Höchst KG, and ~~(in 2008) Zentiva;~~ for the Vaccines segment, Sanofi Pasteur ~~MSD; and for the~~MSD. The Other segment ~~Merial and~~includes the associate Yves Rocher, ~~in 2008, and Yves Rocher in 2009 and 2010.~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
which ceased to be accounted for by the equity method effective November 2011 (see note D.6.).

Acquisitions of intangible assets and property, plant and equipment correspond to acquisitions made during the period.

      2010
(€ million)    Pharmaceuticals    Vaccines    Other    Total
Investments in associates and joint ventures    446       350       128       924
Acquisitions of property, plant and equipment    779       416       —       1,195
Acquisitions of intangible assets    335       43       —       378

2012

(€ million)
Pharmaceuticals
Vaccines
Animal
Health
Other
Total

Investments in associates and joint ventures 192 292 3 — 487
Acquisitions of property, plant and equipment 1,024 216 79 — 1,319
Acquisitions of intangible assets 276 9 8 — 293

      2009
(€ million)    Pharmaceuticals    Vaccines    Other    Total
Investments in associates and joint ventures    420       412       123       955
Acquisitions of property, plant and equipment    940       465       —       1,405
Acquisitions of intangible assets    364       16       —       380

      2008
(€ million)    Pharmaceuticals    Vaccines    Other    Total
Investments in associates and joint ventures    706       431       1,322       2,459
Acquisitions of property, plant and equipment    967       375       —       1,342
Acquisitions of intangible assets    225       39       —       264

2011

(€ million)
Pharmaceuticals
Vaccines
Animal
Health
Other
Total

Investments in associates and joint ventures 488 319 — — 807
Acquisitions of property, plant and equipment 1,136 323 77 — 1,536
Acquisitions of intangible assets 223 8 15 — 246

2010

(€ million)
Pharmaceuticals
Vaccines
Animal
Health
Other
Total

Investments in associates and joint ventures 446 350 — 128 924
Acquisitions of property, plant and equipment 779 416 88 — 1,283
Acquisitions of intangible assets 335 43 1 — 379

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
D.35.3. Information by geographical region

The geographical information on net sales provided below is based on the geographical location of the customer.

In accordance with IFRS 8, the non-current assets reported below exclude financial instruments, deferred tax assets, and pre-funded pension obligations.

2012

(€ million)
Total
Europe
of which
France
North
America
of which
United States
Other
countries

Net sales 34,947 11,056 2,846 11,440 10,873 12,451
Non-current assets:
• property, plant and equipment
10,578 6,707 4,073 2,696 2,285 1,175
• intangible assets
20,192 4,417 11,400 4,375
• goodwill
38,073 15,025 15,994 7,054

            2010
(€ million)    Total    Europe    Of which
France    North
America    Of which
United States    Other
countries
Net sales    30,384       11,609       2,922       9,484       8,968       9,291
Non-current assets:
•  property, plant and equipment
   8,155       5,764       3,603       1,510       1,091       881
•  intangible assets
   12,479       3,773          �� 5,835          2,871
•  goodwill
   31,932       13,718          13,264          4,950

2011

(€ million)
Total
Europe
of which
France
North
America
of which
United States
Other
countries

Net sales 33,389 11,796 3,106 10,511 9,957 11,082
Non-current assets:
• property, plant and equipment
10,750 6,857 4,128 2,768 2,374 1,125
• intangible assets
23,639 5,537 15,422 2,680
• goodwill ⁽¹⁾
38,582 15,238 16,365 6,979

⁽¹⁾
In accordance with IFRS 3 (Business Combinations), Sanofi made adjustments during the Genzyme purchase price allocation period to some of the provisional amounts recognized in 2011 (see Note D.1.2.).

2010

(€ million)
Total
Europe
of which
France
North
America
of which
United States
Other
countries

Net sales 32,367 12,198 3,092 10,333 9,790 9,836
Non-current assets:
• property, plant and equipment
8,155 5,764 3,603 1,510 1,091 881
• intangible assets
12,479 3,773 5,835 2,871
• goodwill
31,932 13,718 13,264 4,950



            2009
(€ million)    Total    Europe    Of which
France    North
America    Of which
United States    Other
countries
Net sales    29,306       12,059       3,206       9,870       9,426    7,377
Non-current assets:
•  property, plant and equipment
   7,830       5,734       3,436       1,375       1,018    721
•  intangible assets
   13,747       4,636          5,930          3,181
•  goodwill
   29,733       13,528          11,419          4,786
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~

            2008
(€ million)    Total    Europe    Of which
France    North
America    Of which
United States    Other
countries
Net sales    27,568       12,096       3,447       9,042       8,609    6,430
Non-current assets:
•  property, plant and equipment
   6,961       5,174       3,181       1,320       1,042    467
•  intangible assets
   15,260       4,573          7,429          3,258
•  goodwill
   28,163       12,414          11,750          3,999
~~As described in Note~~In accordance with Notes B.6.1. and D.5. to the consolidated financial statements, France is not a cash-generating unit. Consequently, information about goodwill is provided for Europe.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
E. PRINCIPAL ~~ACCOUNTANTS’~~ACCOUNTANTS' FEES AND SERVICES

PricewaterhouseCoopers Audit and Ernst & Young ~~Audit~~et Autres served as independent auditors of ~~sanofi-aventis~~Sanofi for the year ended December 31, ~~2010~~2012 and for all other reporting periods covered by this annual report on Form 20-F. The table below shows fees charged by these firms and member firms of their networks to ~~sanofi-aventis~~Sanofi and other consolidated ~~companies~~subsidiaries in the years ended December 31, ~~2010~~2012 and ~~2009.~~2011.

      Ernst & Young PricewaterhouseCoopers
      2010       2009       2010    2009
(€ million)    Amount    % Amount    % Amount % Amount %
Audit

Audit opinion, review of statutory and consolidated financial statements⁽¹⁾    12.8       92 % 13.1       93 % 13.5 93 % 14.1 95 %
- of which sanofi-aventis S.A.
   3.7       4.1       3.7 4.0
- of which consolidated subsidiaries
   9.1       9.0       9.8 ⁽³⁾ 10.1 ⁽³⁾
Other audit-related services⁽²⁾
   1.0       7 % 1.0       7 % 0.7 5 % 0.8 5 %
- of which sanofi-aventis S.A.
   —       0.1       —    0.1
- of which consolidated subsidiaries
   1.0       0.9       0.7 0.7
Sub-total
   13.8       99 % 14.1       100 % 14.2 98 % 14.9 100 %
Non-audit services

Tax    0.1       —       0.3 —
Other    —       —       —    —
Sub-total
   0.1       1 % —       0.3 2 % —
TOTAL
   13.9       100 % 14.1       100 % 14.5 100 % 14.9 100 %
⁽¹⁾
Professional services rendered for the audit and review of the consolidated financial statements of sanofi-aventis, statutory audits of the financial statements of sanofi-aventis and its subsidiaries, compliance with local regulations, and review of documents filed with the AMF and the SEC (including services normally provided by independent experts of the audit firms in connection with the audit).
⁽²⁾
~~Services that are normally performed by the independent accountants, ancillary to audit services.~~
⁽³⁾
~~Includes audit fees of €1.8 million relating to Merial for 2010, and €1.7 million for 2009.~~

Ernst & Young
PricewaterhouseCoopers

2012
2011
2012
2011

(€ million)
Amount
%
Amount
%
Amount
%
Amount
%

Audit:
Audit opinion, review of statutory and consolidated financial statements ⁽¹⁾ 15.4 96% 13.6 92% 15.6 92% 17.9 91%
– Sanofi S.A.
3.9 3.5 4.0 4.1
– fully consolidated
               subsidiaries
11.5 10.1 11.6 13.8
Other audit-related services ⁽²⁾ 0.5 3% 1.0 7% 1.2 7% 1.3 7%
– Sanofi S.A.
— 0.3 0.3 0.9
– fully consolidated
               subsidiaries
0.5 0.7 0.9 0.4
Sub-total ⁽³⁾ 15.9 99% 14.6 99% 16.8 99% 19.2 98%

Non-audit services:
Tax 0.1 0.1 0.1 0.4
Other — — — —
Sub-total 0.1 1% 0.1 1% 0.1 1% 0.4 2%

TOTAL 16.0 100% 14.7 100% 16.9 100% 19.6 100%

⁽¹⁾
Professional services rendered for the audit and review of the consolidated financial statements of Sanofi and statutory audits of the financial statements of Sanofi and its subsidiaries, compliance with local regulations, and review of documents filed with the AMF and the SEC (including services provided by independent experts to the audit firms in connection with the audit).
⁽²⁾
Services that are normally performed by the independent accountants, ancillary to audit services.
⁽³⁾
Does not include contractual audit fees for U.S. pension plans ((401 k plans), which amounted to €0.4 million in 2012).
Audit Committee Pre-approval and Procedures

The Group Audit Committee has adopted a policy and established certain procedures for the ~~pre-approval~~approval of audit and other permitted audit-related services, and for the pre-approval of permitted non-audit services to be provided by the independent auditors. In ~~2010,~~2012, the Audit Committee established a budget breaking down permitted audit-related services and non-audit services by type of service, and the related fees to be paid.

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
F. LIST OF PRINCIPAL COMPANIES INCLUDED IN THE CONSOLIDATION FOR THE YEAR ENDED DECEMBER 31, ~~2010~~2012
F.1. Principal ~~fully-consolidated~~fully consolidated companies

The principal companies in the ~~Group’s~~Group's areas of operations and business segments are:
Europe

Financial interest
%
Aventis Beteiligungsverwaltung GmbH Germany
~~Financial interest~~
%
100
Sanofi-Aventis Deutschland GmbH Germany 100
Hoechst GmbH Germany 100
Winthrop Arzneimittel GmbH Germany 100
Zentiva Inhalationsprodukte GmbH Germany 100
Merial GmbH Germany 100
Genzyme GmbH Germany 100
Sanofi-Aventis ~~Gmbh /~~GmbH Bristol-Myers Squibb GesmbH OHG⁽¹⁾ Austria 50.1
Sanofi-Aventis GmbH Austria 100
Sanofi-Aventis Belgium S.A.N.V. Belgium 100
Sanofi European Treasury Center Belgium 100
Genzyme Flanders BVBA Belgium 100
Merial Norden A/S Denmark 100
Sanofi-Aventis Denmark A/S Denmark 100
Sanofi Winthrop BMS partnership (JV DK)⁽¹⁾ Denmark 50.1
~~Sanofi-Aventis SA (Spain)~~ Merial Laboratorios S.A. Spain 100
Sanofi-Aventis SA Spain 100
~~Sanofi Winthrop BMS OY~~Sanofi-aventis Bms Ay ⁽¹⁾ Finland 50.1
Sanofi-Aventis OY Finland 100
Sanofi-Aventis Europe ~~S.A.S.~~ France 100
Sanofi-Aventis Participations ~~S.A.S.~~ France 100
Sanofi Pasteur Participations ~~S.A.~~ France 100
Sanofi-Aventis Amérique du Nord ~~S.A.S.~~ France 100
Sanofi Pasteur Holding ~~S.A.~~ France 100
Aventis Pharma S.A. France 100
Sanofi Pasteur ~~S.A.~~ France 100
Aventis Agriculture ~~S.A.~~ France 100
Fovea Pharmaceuticals ~~S.A.~~ France 100
Francopia ~~S.A.R.L.~~ France 100
Winthrop Médicaments ~~S.A.~~ France 100
Sanofi Chimie ~~S.A.~~ France 100
Sanofi Participations ~~S.A.S.~~ France 100
Sanofi Pharma Bristol-Myers Squibb ~~S.N.C.~~⁽¹⁾ France 50.1
~~Sanofi-Aventis S.A.~~ Sanofi France 100
Sanofi-Aventis France ~~S.A.~~ France 100
Sanofi-Aventis Groupe ~~S.A.~~ France 100
Sanofi-Aventis Recherche et Développement ~~S.A.~~ France 100
Sanofi Winthrop Industrie ~~S.A.~~ France 100
~~Laboratoire Oenobiol S.A.S.~~ Merial SAS France 100
Genzyme SAS France 100
Genzyme Polyclonals France 100
Chattem Greece S.A. Greece 100
~~Sanofi-Aventis~~sanofi-aventis A.E.B.E. Greece 100 ~~100~~
⁽¹⁾
Partnership with Bristol-Myers Squibb (see Note C.1.).

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Europe

Financial interest
%

Chinoin Private Co. Ltd Hungary 99.6
~~Sanofi-Aventis~~SANOFI-AVENTIS Private Co. Ltd Hungary 99.6
Chattem Global Consumer Products Limited Ireland 100
Carraig Insurance Ltd Ireland 100
Sanofi-Aventis Ireland ~~Ltd~~ Limited Ireland 100
~~Sanofi-Aventis SpA~~Genzyme Ireland Limited ~~Italy~~ Ireland 100
~~Sanofi-Aventis~~Merial Italia S.p.A. Italy 100
sanofi-aventis SpA Italy 100
Sanofi-aventis Norge AS Norway 100
Sanofi Winthrop BMS partnership ~~ANS~~Ans (NO) ⁽¹⁾ Norway 50.1
~~Sanofi-Aventis~~sanofi-aventis Netherlands B.V. Netherlands 100
Sanofi Winthrop ~~BMS VOF~~Bms Vof (Netherlands) ⁽¹⁾ Netherlands 50.1
~~Sanofi-Aventis Sp z.o.o.~~Genzyme Europe BV ~~Poland~~ Netherlands 100
⁽¹⁾
~~Partnership with Bristol-Myers Squibb (see Note C.1.).~~
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~Europe~~
~~Financial interest~~
%
~~Nepentes S.A.~~Sanofi-Aventis Sp z.o.o. Poland 100
Winthrop Farmaceutica Portugal, ~~LDA~~Lda Portugal 100
~~Sanofi-Aventis~~Sanofi — Produtos ~~Farmaceuticos LDA~~Pharmaceuticos Lda Portugal 100
Sanofi Winthrop BMS — AEIE (Portugal) ⁽¹⁾ Portugal 50.1
Sanofi-Aventis, s.r.o. Czech Republic 100
Zentiva Group, a.s. Czech Republic 100
Zentiva k.s. Czech Republic 100
Sanofi-Aventis Romania SRL Romania 100
Aventis Pharma ~~Ltd~~Limited United Kingdom 100
Chattem Limited (U.K.)
United Kingdom 100
Sanofi-Aventis UK Holdings Limited
United Kingdom 100
Sanofi Pasteur Holding Ltd United Kingdom 100
~~Sanofi-Synthélabo Ltd~~Sanofi-Synthelabo Limited United Kingdom 100
~~Sanofi-Synthélabo~~Sanofi-Synthelabo UK ~~Ltd~~Limited United Kingdom 100
Winthrop Pharmaceuticals UK ~~Ltd~~Limited United Kingdom 100
Fisons Limited United Kingdom 100
May and Baker Limited United Kingdom 100
Genzyme Limited United Kingdom 100
Merial Limited United Kingdom 100
Merial Animal Health Ltd United Kingdom 100
ZAO Aventis Pharma ~~ZAO~~ Russia 100
~~Sanofi-Aventis~~Sanofi-aventis Vostok Russia 51
~~Sanofi-Aventis~~Zentiva Pharma o.o.o. Russia 100
sanofi-aventis Pharma Slovakia s.r.o. Slovakia 100
Zentiva a.s., Hlohovec Slovakia 98.8
Sanofi-Aventis AB Sweden 100
Sanofi ~~SA-AG~~SA Switzerland 100
Sanofi-Aventis (Suisse) SA Switzerland 100
Sanofi-Aventis Ilaclari ~~Limited~~ Sirketi Turkey 100
Winthrop Ilac Anonim Sirketi Turkey 100
~~Sanofi-Synthélabo~~Sanofi-Synthelabo Ilac ASAs Turkey 100
~~Sanofi-Synthélabo BMS ADI Ortakligi partnership~~⁽¹⁾Zentiva Saglik Urunleri Turkey ~~50.1~~100
~~Sanofi-Aventis~~Limited Liability Company Sanofi-aventis Ukraine ~~LLC~~ Ukraine 100
⁽¹⁾
~~Partnership with Bristol-Myers Squibb (see Note C.1.).~~
⁽¹⁾
Partnership with Bristol-Myers Squibb (see Note C.1.).

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
United States

Financial interest
%
%

Armour Pharmaceutical ~~Co.~~Company (US) United States 100
Aventis Inc. (US) United States 100
Aventisub Inc. (US) United States 100
Aventis Holdings Inc. (US) United States 100
Aventis Pharmaceuticals Inc. (US) United States 100
BiPar Sciences ~~Inc~~Inc. United States 100
Carderm Capital L.P. (US) United States 100
Chattem Inc. United States 100
~~Chattem (Canada) Holdings, Inc.~~Merial, Limited United States 100
~~HBA Indemnity Insurance, Ltd~~Merial Select, Inc. United States 100
Sanofi US Services Inc. United States 100
Sanofi-Aventis US ~~Inc.~~ ~~United States~~ ~~100~~
~~Sanofi-Aventis US LLC.~~LLC United States 100
Sanofi Pasteur Biologics, ~~Co.~~LLC United States 100
Sanofi Pasteur Inc. (US) United States 100
~~Sanofi-Synthélabo~~Sanofi-Synthelabo Inc. United States 100
~~Signal Investment & Management Co.~~ ~~United States~~ ~~100~~
~~SunDex,~~Sundex, LLC United States 100
TargeGen Inc. United States 100
Sanofi Pasteur VaxDesign Corporation
United States 100
~~Vaxserve Inc.~~BMP Sunstone Corporation (US) United States 100
Genzyme Corporation United States 100
Sanofi-Topaz Inc. United States 100
VaxServe, Inc. (US) United States 100

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Year ended December 31, 2010~~
Other countries

Financial interest
%

Sanofi-Aventis South Africa (Pty) Ltd South Africa 100
Winthrop Pharmaceuticals (Pty) ~~Ltd~~Limited South Africa 100
Winthrop Pharma Saïdal S.P.A. Algeria 70
Sanofi-Aventis Algérie Algeria 100
Merial Argentina S.A. Argentina 100
Sanofi-Aventis Argentina S.A. Argentina 100
Quimica Medical ~~S.A.~~Argentina Sociedad Anonima Comercial E Industrial Argentina 100
Sanofi-Aventis Australia Pty Limited Australia 100
~~Sanofi-Aventis~~Sanofi-aventis Healthcare Holdings Pty Ltd Australia 100
~~Sanofi-Aventis~~Sanofi-aventis Healthcare Pty Ltd Australia 100
~~Bullivant’s~~Bullivant's Natural Health Products (International) Pty Ltd Australia 100
~~Bullivant’s~~Bullivant's Natural Health Products Pty Ltd Australia 100
~~Cenovis~~CENOVIS Pty Ltd Australia 100
MCP Direct Pty Ltd Australia 100
Carlson Health Pty Ltd Australia 100
Merial Australia Pty, Ltd Australia 100
MERIAL SAUDE ANIMAL LTDA Brazil 100
Sanofi-Aventis Comercial e Logistica Ltda Brazil 100
Sanofi-Aventis Farmaceutica Ltda Brazil 100
Medley Comercial e Logistica Ltda Brazil 100
Medley ~~S.A.~~ Industria Farmaceutica Ltda Brazil 100
~~Sanofi Pasteur Limited~~Merial Canada, Inc. Canada 100
Sanofi ~~Pharma General Partnership~~Pasteur Limited (Canada) Canada 100
Sanofi-Aventis Canada Inc. Canada 100
~~Chattem (Canada) Corp.~~ ~~Canada~~ ~~100~~
~~Chattem Canada ULC~~ ~~Canada~~ ~~100~~
~~Chattem Canada~~Sanofi Consumer Health Inc./Sanofi Santé Grand Public Inc. Canada 100
Sanofi-Aventis de Chile SA Chile 100
~~Sanofi-Aventis Pharma Beijing~~Sanofi China Investment Co., Ltd. China 100
Sanofi (Beijing) Pharmaceuticals Co., Ltd China 100
~~Sanofi-Aventis~~Sanofi (Hangzhou) Pharmaceuticals Co. Ltd China 100
Shenzhen Sanofi Pasteur Biological Products Co. Ltd China 100
Hangzhou Sanofi Minsheng Consumer Healthcare Co., Ltd China 60
MERIAL ANIMAL HEALTH CO. LTD China 99
Sunstone Fulai (Tangshan) Pharmaceutical Co., Ltd. China 100
Winthrop Pharmaceuticals de Colombia SA Colombia 100
Sanofi-Aventis de Colombia SAS.A Colombia 100
~~Sanofi-Aventis~~sanofi-aventis Korea ~~Co. Ltd~~ Korea 91100
Sanofi-Aventis Gulf F.Z.E. United Arab Emirates 100
~~Sanofi-Aventis~~Sanofi Egypt ~~SAE~~S.A.E Egypt ~~100~~99.8
Sanofi-Aventis del Ecuador ~~S.A.~~S.A Ecuador 100
~~Sanofi-Aventis~~sanofi-aventis de Guatemala S.A. Guatemala 100
~~Sanofi-Aventis~~Sunstone China limited Hong Kong 100
Sanofi-aventis Hong Kong Limited Hong Kong 100
~~Sanofi-Synthélabo~~Sanofi-Synthelabo (India) Ltd India 100
~~Aventis Pharma Ltd~~Sanofi India Limited India 60.4
Shantha Biotechnics ~~Ltd~~ India ~~96.4~~97
PT ~~Sanofi-Aventis Indonesia~~SANOFI AVENTIS INDONESIA Indonesia 100
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
~~Other countries~~ ~~Financial interest~~
%
PT Aventis Pharma Indonesia 75
~~Sanofi-Aventis~~Sanofi K.K. Japan 100
~~Sanofi-Aventis Meiji Pharmaceuticals Co Ltd~~ ~~Japan~~ 51

Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
~~Winthrop Pharmaceutical Japan Co Ltd~~ ~~Japan~~ ~~100~~
Other countries

Financial interest
%

Sanofi-Aventis ~~Yamanouchi Pharmaceutical Inc.~~Meiji Pharmaceuticals Co., Ltd Japan 51
Sanofi Pasteur ~~K.K.~~Kabushiki Kaisha Japan 100
Merial JAPAN LTD Japan 80
Genzyme JP KK Japan 100
Winthrop Pharmaceuticals (Malaysia) ~~SDN.BHD~~SDN-BHD Malaysia 100
Sanofi-Aventis (Malaysia) ~~SDN.BHD~~Sdn Bhd Malaysia 100
Maphar Morocco 80.6
Sanofi-Aventis ~~(Maroc)~~Maroc Morocco 100
Merial de Mexico S.A. de C.V. Mexico 100
Sanofi Pasteur SA de CV (Mexico) Mexico 100
Sanofi-Aventis de Mexico SAS.A de CV Mexico 100
Sanofi-Aventis Winthrop SA de CV Mexico 100
~~Winthrop Pharmaceuticals de Mexico SA de CV~~Laboratorios Kendrick S.A. Mexico 100
~~Laboratorios Kendrick S.A.~~ ~~Mexico~~ ~~100~~
~~Sanofi-Aventis~~Sanofi Aventis Pakistan ~~Ltd~~ Pakistan 5352.9
Sanofi-Aventis de Panama S.A. Panama 100
Sanofi-Aventis Latin America SA Panama 100
~~Sanofi-Aventis~~sanofi-aventis del Peru ~~S.A.~~SA Peru 100
Chattem Peru S.R.L. Peru 100
Sanofi-Aventis Philippines ~~Inc.~~Inc Philippines 100
Sanofi-Aventis de la ~~Rep.~~Republica Dominicana S.A. Dominican Rep. 100
Aventis Pharma (Manufacturing) Pte. Ltd Singapore 100
Sanofi-Aventis Singapore ~~Pte.~~Pte Ltd Singapore 100
~~Sanofi-Aventis~~Sanofi Taiwan ~~Co.~~Co Ltd Taiwan 100
Sanofi-Synthélabo (Thailand) Ltd Thailand 100
~~Sanofi-Aventis~~sanofi-aventis (Thailand) ~~Ltd~~ltd Thailand 100
Sanofi-Aventis Pharma Tunisie Tunisia 100
Winthrop Pharma Tunisie Tunisia 100
Sanofi-Aventis de Venezuela SA Venezuela 100
Sanofi-Synthélabo Vietnam Pharmaceutical Shareholding CoCompany Vietnam 70
~~Sanofi-Aventis~~sanofi-aventis Vietnam ~~Co. Ltd~~Company Limited Vietnam 100

The Group has also consolidated Merial and its subsidiaries since September 18, 2009, the date on which control was acquired (see Note ~~D.8.1.~~D.8.2.).
~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)~~
~~Year ended December 31, 2010~~
F.2. Principal associates and joint ventures

Financial interest
%

~~InfraServ~~Infraserv GmbH & Co Höchst KG Germany 31.2
Bristol-Myers ~~Squibb /~~ Squibb/Sanofi Canada Partnership Canada 49.9
Bristol-Myers ~~Squibb /~~ Squibb/Sanofi Pharmaceuticals Holding Partnership United States 49.9
Bristol-Myers ~~Squibb /~~ Squibb/Sanofi Pharmaceuticals Partnership United States 49.9
Bristol-Myers ~~Squibb /~~ Squibb/Sanofi Pharmaceuticals Partnership Puerto Rico United States 49.9
Bristol-Myers ~~Squibb /~~ Squibb/Sanofi-Synthélabo Partnership United States 49.9
Bristol-Myers ~~Squibb /~~ Squibb/Sanofi-Synthélabo Puerto Rico Partnership United States 49.9
Sanofi Pasteur MSD ~~S.N.C.~~ France 50
~~Société Financière des Laboratoires de Cosmétologie Yves Rocher~~ ~~France~~ ~~39.1~~
~~F-126~~

¨ OR
o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		Date of event requiring this shell company report. . . . . . . . . . . . . . . . .
		For the transition period from to


	Title of each class:		Name of each exchange on which registered:
American Depositary Shares, each representing one half of one ordinary share, par value €2 per share		New York Stock Exchange

Ordinary shares, par value €2 per share		New York Stock Exchange (for listing purposes only)
Contingent Value Rights		NASDAQ Global Market


Part I
~~Item 1.~~	Item 1.	Identity of Directors, Senior Management and Advisers	1
~~Item 2.~~	Item 2.	Offer Statistics and Expected Timetable	1
~~Item 3.~~	Item 3.	Key Information	1
		A. Selected Financial Data	1
		B. Capitalization and Indebtedness	3
		C. Reasons for Offer and Use of Proceeds	3
		D. Risk Factors	4
~~Item 4.~~	Item 4.	Information on the Company	14 19
		A. History and Development of the Company	15 21
		B. Business Overview	16 22
		C. Organizational Structure	66 83
		D. Property, Plant and Equipment	66 84
~~Item 4A.~~	Item 4A.	Unresolved Staff Comments	69 89
~~Item 5.~~	Item 5.	Operating and Financial Review and Prospects	70 90
~~Item 6.~~	Item 6.	Directors, Senior Management and Employees	~~118~~ 148
		A. Directors and Senior Management	~~118~~ 148
		B. Compensation	~~130~~ 167
		C. Board Practices	~~141~~ 181
		D. Employees	~~145~~ 187
		E. Share Ownership	~~148~~ 189
~~Item 7.~~	Item 7.	Major Shareholders and Related Party Transactions	~~152~~ 194
		A. Major Shareholders	~~152~~ 194
		B. Related Party Transactions	~~154~~ 195
		C. Interests of Experts and Counsel	~~154~~ 196
~~Item 8.~~	Item 8.	Financial Information	~~155~~ 197
		A. Consolidated Financial Statements and Other Financial Information	~~155~~ 197
		B. Significant Changes	~~156~~ 201
~~Item 9.~~	Item 9.	The Offer and Listing	~~157~~ 202
		A. Offer and Listing Details	~~157~~ 202
		B. Plan of Distribution	~~158~~ 203
		C. Markets	~~158~~ 203
		D. Selling Shareholders	~~159~~ 203
		E. Dilution	~~159~~ 203
		F. Expenses of the Issue	~~159~~ 203
~~Item 10.~~	Item 10.	Additional Information	~~160~~ 204
		A. Share Capital	~~160~~ 204
		B. Memorandum and Articles of Association	~~160~~ 204
		C. Material Contracts	~~176~~ 221
		D. Exchange Controls	~~179~~ 223
		E. Taxation	~~179~~ 223
		F. Dividends and Paying Agents	~~185~~ 228
		G. Statement by Experts	~~185~~ 228
		H. Documents on Display	~~185~~ 228
		I. Subsidiary Information	~~185~~ 228
~~Item 11.~~	Item 11.	Quantitative and Qualitative Disclosures about Market Risk	~~186~~ 229
~~Item 12.~~	Item 12.	Description of Securities other than Equity Securities	~~191~~ 234
Part II
~~Item 13.~~	Item 13.	Defaults, Dividend Arrearages and Delinquencies	~~198~~ 242
~~Item 14.~~	Item 14.	Material Modifications to the Rights of Security Holders	~~198~~ 242
~~Item 15.~~	Item 15.	Controls and Procedures	~~198~~ 242
~~Item 16.~~	~~[Reserved]~~Item 16.	~~198~~
~~Item 16A.~~ [Reserved]	242
	Item 16A.	Audit Committee Financial Expert	~~198~~ 242
~~Item 16B.~~	Item 16B.	Code of Ethics	~~199~~ 243
~~Item 16C.~~	Item 16C.	Principal ~~Accountants’~~Accountants' Fees and Services	~~199~~ 243
~~Item 16D.~~	Item 16D.	Exemptions from the Listing Standards for Audit Committees	~~199~~ 243
~~Item 16E.~~	Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	~~199~~ 243
~~Item 16F.~~	Item 16F.	Change in ~~Registrant’s~~Registrant's Certifying Accountant	~~199~~ 244
~~Item 16G.~~	Item 16G.	Corporate Governance	~~199~~ 244
	Item 16H.	Mine Safety Disclosure	245
Part III
~~Item 17.~~	Item 17.	Financial Statements	~~201~~ 246
~~Item 18.~~	Item 18.	Financial Statements	~~201~~ 246
~~Item 19.~~	~~Exhibits~~Item 19.	~~201~~ Exhibits	246


	Therapeutic Area / Product Name			~~2010~~2012 Net Sales *(€ million)*	Drug Category / Main Areas of Use

Diabetes Solutions
~~Diabetes~~
~~Lantus~~^®Lantus® (insulin glargine)		~~3,510~~	4,960	Long-acting analog of human insulin
				• Type 1 and 2 diabetes mellitus
~~Apidra~~^®Apidra® (insulin glulisine)		~~177~~	230	Rapid-acting analog of human insulin
				• Type 1 and 2 diabetes mellitus
~~Amaryl~~^® ~~(glimepiride)~~		~~478~~		~~Sulfonylurea~~
				~~• Type 2 diabetes mellitus~~
~~Insuman~~^®Insuman® (insulin)		~~133~~	135	Human insulin (rapid and intermediate acting)
				• Type 1 and 2 diabetes mellitus
~~Oncology~~
~~Taxotere~~^® ~~(docetaxel)~~Amaryl® (glimepiride)		~~2,122~~421		~~Cytotoxic agent~~
				~~• Breast cancer~~ ~~• Non small cell lung cancer~~ ~~• Prostate cancer~~ ~~• Gastric cancer~~ ~~• Head and Neck cancer~~
~~Eloxatine~~^® ~~(oxaliplatin)~~		~~427~~		~~Cytotoxic agent~~
				~~• Colorectal cancer~~
~~Jevtana~~^® ~~(cabazitaxel)~~		82		~~Cytotoxic agent~~
				~~• Prostate cancer~~
~~Other Flagship products~~
~~Lovenox~~^® ~~(enoxaparin sodium)~~		~~2,806~~		~~Low molecular weight heparin~~
				~~• Treatment and prevention of deep vein thrombosis~~ ~~• Treatment of acute coronary syndromes~~
~~Plavix~~^® ~~(clopidogrel bisulfate)~~		~~2,083~~		~~Platelet adenosine disphosphate receptor antagonist~~
				~~• Atherothrombosis~~ ~~• Acute coronary syndrome with and without ST segment elevation~~
~~Aprovel~~^® ~~(irbesartan) / CoAprovel~~^® ~~(irbesartan & hydrochlorothiazide)~~		~~1,327~~		~~Angiotensin II receptor antagonist~~
				~~• Hypertension~~
~~Multaq~~^® ~~(dronedarone)~~		~~172~~		~~Anti-arrhythmic drug~~
				~~• Atrial Fibrillation~~
~~Others~~
~~Stilnox~~^® ~~/Ambien~~^®~~/Myslee~~^® ~~(zolpidem tartrate)~~		~~819~~		~~Hypnotic~~
				~~• Sleep disorders~~
~~of which Ambien~~^® CR		~~378~~
~~Allegra~~^® ~~(fexofenadine hydrochloride)~~		~~607~~		~~Anti-histamine~~
				~~• Allergic rhinitis~~ ~~• Urticaria~~


~~Therapeutic Area / Product Name~~	~~2010~~ ~~Net Sales~~ ~~(€ million)~~			~~Drug Category / Main Areas of Use~~
~~Copaxone~~^® ~~(glatiramer acetate)~~		~~513~~		~~Non-interferon immunomodulating agent~~
				~~• Multiple sclerosis~~
~~Tritace~~^® ~~(ramipril)~~		~~410~~		~~Angiotensin Converting Enzyme Inhibitor~~
				~~• Hypertension~~ ~~• Congestive heart failure~~ ~~• Nephropathy~~
~~Depakine~~^® ~~(sodium valproate)~~		~~372~~		~~Anti-epileptic~~
				~~• Epilepsy~~
~~Xatral~~^® ~~(alfuzosin hydrochloride)~~		~~296~~		~~Uroselective alpha1-blocker~~
				~~• Benign prostatic hypertrophy~~
~~Actonel~~^® ~~(risedronate sodium)~~		~~238~~		~~Biphosphonate~~
				~~• Osteoporosis~~ ~~• Paget’s Disease~~
~~Nasacort~~^® ~~(triamcinolone acetonide)~~		~~189~~		~~Local corticosteroid~~Sulfonylurea
			• Type 2 diabetes mellitus
Rare Diseases
Cerezyme® (imiglucerase for injection)		633	Enzyme replacement therapy
			• ~~Allergic rhinitis~~Gaucher disease
Fabrazyme® (agalsidase beta)		292	Enzyme replacement therapy
			• Fabry disease
Myozyme®/Lumizyme® (alglucosidase		462	Enzyme replacement therapy
alpha)			• Pompe disease
Multiple Sclerosis
Aubagio® (teriflunomide)		7	Oral immunomodulating agent
			• Multiple Sclerosis
Oncology
Taxotere® (docetaxel)		563	Cytotoxic agent
			• Breast cancer • Non small cell lung cancer • Prostate cancer • Gastric cancer • Head and neck cancer
Eloxatine® (oxaliplatin)		956	Cytotoxic agent
			• Colorectal cancer
Jevtana® (cabazitaxel)		235	Cytotoxic agent
			• Prostate cancer
Mozobil® (plerixafor)		96	Hematopoietic stem cell mobilizer
			• Hematologic maligancies
Zaltrap® (aflibercept)		25	Recombinant fusion protein
			• Oxaliplatin resistant metastatic colorectal cancer

¨
(Mark One)
o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

x OR
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012

¨ OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer xý		Accelerated filer ¨o		Non-accelerated filer¨o

	As of and for the year ended December 31,


(€ million, except per share data)	2012			2011			2010		2009		2008

IFRS Income statement data ^(a)
Net sales		34,947			33,389			32,367		29,785		27,568
Gross profit		24,839			24,156			24,638		23,125		21,480
Operating income		6,337			5,731			6,535		6,435		4,394
Net income attributable to equity holders of Sanofi		4,967			5,693			5,467		5,265		3,851
Basic earnings per share (€) ^(a)/(b) :
Net income attributable to equity holders of Sanofi		3.76			4.31			4.19		4.03		2.94
Diluted earnings per share (€) ^(a)/(c) :
Net income attributable to equity holders of Sanofi		3.74			4.29			4.18		4.03		2.94
IFRS Balance sheet data
Goodwill and other intangible assets		58,265			62,221	^(g)		44,411		43,480		43,423
Total assets		100,407			100,668	^(g)		85,264		80,251		71,987
Outstanding share capital		2,646			2,647			2,610		2,618		2,611
Equity attributable to equity holders of Sanofi		57,338			56,203	^(g)		53,097		48,322		44,866
Long term debt		10,719			12,499			6,695		5,961		4,173
Cash dividend paid per share (€) ^(d)		2.77	^(e)		2.65			2.50		2.40		2.20
Cash dividend paid per share ($) ^(d)(f)		3.65	^(e)		3.43			3.34		3.46		3.06


	As of and for the year ended December 31,
(€ million, except per share data)	2010			2009			2008		2007		2006
IFRS Income statement data
Net sales		30,384			29,306			27,568		28,052		28,373
Gross profit		23,318			22,869			21,480		21,636		21,902
Operating income		5,961			6,366			4,394		5,911		4,828
Net income excluding the held-for-exchange Merial business attributable to equity holders of sanofi-aventis^(a)		5,081			5,090			3,731		5,112		3,918
Net income attributable to equity holders of sanofi-aventis		5,467			5,265			3,851		5,263		4,006
Basic earnings per share (€)^(b) :
Net income excluding the held-for-exchange Merial business attributable to equity holders of sanofi-aventis^(a)		3.89			3.90			2.85		3.80		2.91
Net income attributable to equity holders of sanofi-aventis		4.19			4.03			2.94		3.91		2.97
Diluted earnings per share (€)^(c):
Net income excluding the held-for-exchange Merial business attributable to equity holders of sanofi-aventis^(a⁾		3.88			3.90			2.85		3.78		2.88
Net income attributable to equity holders of sanofi-aventis		4.18			4.03			2.94		3.89		2.95
IFRS Balance sheet data
Goodwill and other intangible assets		44,411			43,480			43,423		46,381		52,210
Total assets		85,264			80,251	^(g)		71,987		71,914		77,763
Outstanding share capital		2,610			2,618			2,611		2,657		2,701
Equity attributable to equity holders of sanofi-aventis		53,097			48,322	^(g)		44,866		44,542		45,600
Long-term debt		6,695			5,961			4,173		3,734		4,499
Cash dividend paid per share (€)^(d)		2.50	^(e)		2.40			2.20		2.07		1.75
Cash dividend paid per share ($) ^(d)(f)		3.34	^(e)		3.46			3.06		3.02		2.31

	Period- end Rate


	(U.S. dollar per euro)
2008		1.39	1.47	1.60	1.24
2009		1.43	1.40	1.51	1.25
2010		1.33	1.32	1.45	1.20
2011		1.30	1.40	1.49	1.29
2012		1.32	1.29	1.35	1.21
Last 6 months
2012
September		1.29	1.29	1.31	1.26
October		1.30	1.30	1.31	1.29
November		1.30	1.28	1.30	1.27
December		1.32	1.31	1.33	1.29
2013
January		1.36	1.33	1.36	1.30
February		1.31	1.33	1.37	1.31
March ⁽²⁾		1.30	1.30	1.30	1.30


	Period- end Rate		Average Rate⁽¹⁾		High		Low
	(U.S. dollar per euro)
2006		1.32		1.27		1.33		1.19
2007		1.46		1.38		1.49		1.29
2008		1.39		1.47		1.60		1.24
2009		1.43		1.40		1.51		1.25
2010		1.33		1.32		1.45		1.20
Last 6 months
2010
August		1.27		1.29		1.33		1.27
September		1.36		1.31		1.36		1.27
October		1.39		1.39		1.41		1.37
November		1.30		1.37		1.42		1.30
December		1.33		1.32		1.34		1.31
2011
January		1.37		1.34		1.37		1.29
February ⁽²⁾		1.38		1.36		1.38		1.35

Therapeutic Area / Product Name			Drug Category / Main Areas of Use


Other Prescription Drugs
Lovenox® (enoxaparin sodium)	1,893		Low molecular weight heparin
			• Treatment and prevention of deep vein thrombosis • Treatment of acute coronary syndromes
Plavix® (clopidogrel bisulfate)	2,066		Platelet adenosine disphosphate receptor antagonist
			• Atherothrombosis • Acute coronary syndrome with and without ST segment elevation
Aprovel® (irbesartan) / CoAprovel®	1,151		Angiotensin II receptor antagonist
(irbesartan & hydrochlorothiazide)			• Hypertension
Multaq® (dronedarone)	255		Anti-arrhythmic drug
			• Atrial Fibrillation
Renagel® (sevelamer hydrochloride) /	653		Oral phosphate binders
Renvala® (sevelamer carbonate)			• High phosphorus levels in patients with chronic kidney disease (CKD) on dialysis
Synvisc® / Synvisc-One®	363		Viscosupplements
(hylan G-F 20)			• Pain associated with osteoarthritis of the knee
Stilnox® /Ambien®/Myslee® (zolpidem	497		Hypnotic
tartrate)			• Sleep disorders
Allegra® (fexofenadine hydrochloride)	553	⁽¹⁾	Anti-histamine
			• Allergic rhinitis • Urticaria
Depakine® (sodium valproate)	410		Anti-epileptic
			• Epilepsy
Consumer Health Care
Total	3,008
Generics
Total	1,844


	*(€ million)*		~~2010~~2012 Net Sales

Polio/Pertussis/Hib Vaccines		1,184
Influenza Vaccines *		~~1,297~~
~~Polio/Pertussis/Hib Vaccines~~		~~984~~884
Meningitis/Pneumonia Vaccines		~~527~~650
Adult Booster Vaccines		~~449~~496
Travel and Other Endemics Vaccines		~~382~~364
Other Vaccines		~~169~~319

Total Human Vaccines		~~3,808~~3,897

	Phase I		Phase II		Phase III /registration


Diabetes Solutions		~~Phase I~~		~~Phase II~~		~~Phase III~~
~~Diabetes~~	~~SAR101099~~		~~SAR260093~~ ~~SAR236553~~		~~Lixisenatide~~
~~Oncology~~	~~SAR3419~~ ~~SAR103168~~ ~~SAR153192~~ ~~SAR245409 (XL765)~~ ~~SAR302503 (TG101348)~~ ~~SAR566658~~ ~~SAR650984~~		~~SAR245408 (XL147)~~ ~~SAR256212 (MM-121)~~		~~aflibercept~~ ~~ombrabulin (AVE8062)~~ ~~SAR240550 (BSI-201)~~
~~Ophthalomlogy~~	~~RetinoStat~~^®		~~FOV1101~~ ~~FOV2302~~ ~~FOV2304~~			lixisenatide(AVE0010)
~~TSU Aging~~
Cardiovascular diseases	~~SAR110894~~ ~~SAR113945~~ ~~SAR114137~~ ~~SAR152954~~ ~~SAR292833~~ SAR164653				SAR236553
	GZ402669				mipomersen
	SAR126119				otamixaban(XRP0673)
	SAR127963
~~TSU Fibrosis & Wound Repair~~
Oncology	~~SAR100842~~ ~~SAR302532~~ SAR125844		SAR245408		iniparib(BSI-201)
	SAR153192		SAR245409		SAR302503
	SAR260301		SAR256212
	SAR307746		SAR3419
	GZ402674
~~TSU Infectious Diseases~~	~~SAR97276~~ ~~SAR279356~~ SAR405838
	SAR566658
	SAR650984

Immune Mediated diseases	SAR100842		SAR156597		alemtuzumab
(including MS)	SAR113244		SAR339658		teriflunomide
	SAR252067		dupilumab		sarilumab(SAR153191)

Age related degenerative	SAR228810		SAR110894
diseases	SAR391786		SAR113945
	SAR399063		SAR292833
	SAR404460

Infectious Diseases			ferroquine
~~TSU Immuno-Inflammation~~	~~SAR231893~~		~~SAR153191~~SAR97276
~~DPUs~~	~~SAR104772~~ ~~SAR411298~~		~~SSR125543~~ ~~celivarone~~ SAR279356		~~semuloparin~~ ~~otamixaban~~ ~~teriflunomide~~

Rare Diseases	GZ402665				eliglustat tartrate
	GZ402671
	GZ404477

Ophtalmology	GZ402663		FOV1101
	StarGen™
	UhsStat™
	RetinoStat®

Phase III	Entry into Phase III ⁽¹⁾	Compound Patent Term ⁽²⁾						Comments


	(month/year)	U.S.		E.U.		Japan

Lyxumia® (lixisenatide) ⁽³⁾	May 2008 ⁽⁴⁾		2020		2020		2020	Dossier approved in Europe in February 2013 and submitted in the U.S. in December 2012. The FDA accepted the file for review on February 19, 2013

Zaltrap® (aflibercept)	July 2006		2020		2020		2020	2^nd line colorectal cancer, approved and launched in the U.S. in August 2012, and approved in the E.U. in February 2013

iniparib (BSI-201)	June 2009		2013		2014		N/A	Phase III program ongoing in 1^st line squamous Non Small Cell Lung Cancer
								Phase II program in 2^nd line ovarian cancer ongoing


	Phase I		Phase ~~IIa~~II		~~Phase IIb~~			Phase III	Submitted

Streptococcus pneumonia * Meningitis & pneumonia vaccine Tuberculosis * Recombinant subunit vaccine Rotavirus ~~(Shantha)~~ Live ~~Attenuated Tetravalent Rotavirus~~attenuated tetravalent rotavirus oral vaccine Pseudomonas aeruginosa * Antibody fragment product Prevention of ventilator-associated pneumonia		Rabies * ~~mAb post exposure prophylaxis~~ Meningitis A,C,Y,W conj. 2^nd generation ~~generation~~ ~~Meningococcal~~ meningococcal conjugate ~~Infant~~infant vaccine Rabies VRVg Purified vero rabies vaccine ~~DTP-HepB-Polio-Hib vaccine~~⁽¹⁾ ACAM C. diff * Clostridium difficile Toxoid vaccine		~~Hexaxim™~~ ~~DTP-HepB-Polio-Hib vaccine~~ Quadracel® DTP ⁽¹⁾ ~~Quadracel~~^® ~~DTP~~⁽¹⁾ IPV vaccine 4-6 years U.S. Dengue * Mild-to-severe dengue fever vaccine ~~Fluzone~~Fluzone® QIV IM^® ~~QIV~~ Quadrivalent inactivated influenza vaccine Vaxigrip® QIV IM Quadrivalent inactivated influenza vaccine DTP-HepB-Polio- Hib ⁽¹⁾ Pediatric hexavalent vaccine		Hexaxim®/New hexavalent vaccine DTP-HepB-Polio- Hib vaccine ⁽¹⁾ Fluzone® QIV ID Quadrivalent inactivated influenza vaccine intradermal
							~~Menactra~~^® ~~Meningococcal conjugate vaccine for Infants/Toddlers at 9-12 months~~ ~~Fluzone~~^® ID ~~Seasonal influenza vaccine. intradermal micro-injection U.S.~~


			*~~Lantus~~^®Lantus® (insulin glargine)*

U.S.	E.U.	Japan
Compound: August 2014,¹ protection extended to February 2015 by Pediatric extension	Compound: November 2014 in most of ~~the EU; no compound patent in force in much of Eastern~~Western Europe requests for pediatric exclusivity until May 2015 are pending	Compound: November 2014 ~~Regulatory exclusivity: October 2011~~


			*~~Apidra~~^®Apidra® (insulin glulisine)*

U.S.	E.U.	Japan
Compound: June 2018	Compound: September 2019 in most of the EU	Compound: May 2022
Later filed patent: ranging through January 2023	~~Compound: May~~Later filed patent: March 2022	Later filed patent: July 2022
~~Later filed improvement patents: formulation March 2022 and January 2023~~	Regulatory exclusivity: September 2014	~~Later filed improvement patent: formulation July 2022~~ Regulatory exclusivity: April 2017


			*~~Taxotere~~^®Taxotere® (docetaxel)*

U.S.	E.U.	Japan
Compound: expired ~~in May 2010~~	²Compound: expired	Compound: expired
Generics on the market	~~Compound: expired in November 2010 in most of~~Generics on the EUmarket	~~Compound: June 2012~~
~~No generic products presently~~Generics on the ~~market.~~	~~Later filed improvement patents: additional patent coverage (2012 to 2013)~~ ~~Genericized~~	~~Later filed improvement patents: formulation running through November 2013~~ market


				*~~Eloxatine~~Eloxatine® (oxaliplatin) ^® ~~(oxaliplatin)~~³⁽¹⁾***

U.S.	E.U.		Japan
Compound: expired	Compound: expired		Compound: N/A
		⁽³⁾
~~Later filed improvement patents: coverage ranging through August 2016~~Generics on the market ⁴⁽²⁾	~~Genericized~~Generics on the market


				*~~Jevtana~~^®Jevtana® (cabazitaxel)*

U.S.	E.U.		Japan
Compound: March 2016 (up to March 2021 if PTE is granted)	Compound: March 2016 ~~(patent term extension to be determined once product is approved in Europe)~~		Compound: March 2016 (patent term extension to be determined once product is approved in Japan)
Later filed ~~improvement~~ patents: coverage ranging through December 2025	Later filed patents: coverage ranging through September 2024
		Later filed patents: coverage ranging through September 2024
Regulatory exclusivity: June 2015	Regulatory exclusivity: March 2021		Regulatory exclusivity: to be determined upon approval of a product in Japan


			*~~Lovenox~~^®Lovenox® (enoxaparin sodium)*

U.S.	E.U.	Japan
Compound: no compound patent coverage ~~Genericized~~	Compound: expired	Compound: expired
Generics on the market	~~Compound: June 2011 in part of the EU; exceptions: no compound patent in force in France, Germany, Spain, Portugal, Finland, Norway, Greece and much of Eastern Europe~~	~~Compound: expired~~ Regulatory exclusivity: January 2016


			*~~Plavix~~^®Plavix® (clopidogrel bisulfate)*

U.S.	E.U.	Japan
Compound: ~~November 2011~~*Expired*	¹Generics on the market	Compound: expired
Generics on the market	~~Genericized (other clopidogrel salts)~~	~~Compound: 2013~~
		Regulatory exclusivity: January 2014

*Aprovel® (irbesartan)*


*~~Aprovel~~^® ~~(irbesartan)~~*
U.S.	E.U.	Japan
Compound: ~~September 2011~~²expired	Compound: ~~August 2012~~expired in most of the EU; exceptions: ~~expires March 2011 in the Czech Republic, Hungary, Romania, Slovakia and~~May 2013 in ~~Lithuania and Latvia.~~Lithuania. No compound patent in force in Spain, Portugal, Finland, Norway and much of Eastern Europe	Compound: March 2016
Generics on the market	~~Compound:~~Generics on the market	Regulatory exclusivity: April 2016


			*Tritace® (ramipril)*
				~~Later filed improvement patents: formulation coverage ranging through 2016~~ ~~Generics on the market in some EU countries~~	~~Later filed improvement patent: formulation (2021)~~ ~~Regulatory exclusivity: 2016~~

*~~Tritace~~^® ~~(ramipril)~~*
U.S.	E.U.	Japan
N/A⁽¹⁾	Compound: expired	Compound: expired
	~~Compound: expired~~Generics on the market	~~Compound: expired~~

	~~Genericized~~


			*~~Multaq~~^®Multaq® (dronedarone hydrochloride)*

U.S.	E.U.	Japan
Compound: July ~~2011~~ (2013 with interim petition granted (July 2016 if PTE petition is granted)	Compound: expired	Compound: expired
Later filed ~~improvement~~ patent: formulation ~~(2018)~~ (June 2018)	Later filed patent: formulation June 2018 extended with SPC up to June 2023 in most of the countries
Regulatory exclusivity: July 2014	~~Compound: August 2011~~ ~~Later filed improvement patent: formulation (2018; 2023 if SPC granted)~~ Regulatory exclusivity: November 2019	~~Compound: August 2011~~


			*~~Stilnox~~^®Stilnox® (zolpidem tartrate)*

U.S.	E.U.	Japan
Compound patent: expired	Compound patent: expired	Compound patent: expired
Generics on the market	~~Compound patent: expired~~Generics on the market	~~Compound patent:~~
		Regulatory exclusivity: expired
		Later filed patent: Ambien® CR formulation (December 2019); not commercialized.


	~~Later filed improvement patent; Ambien~~^®*Depakine® (sodium valproate)* ~~CR formulation (2019)~~

~~Genericized~~		~~Genericized~~	~~Regulatory exclusivity: expired.~~ ~~Later filed improvement patent: Ambien~~^® ~~CR formulation (2019); not commercialized.~~

*~~Copaxone~~^® ~~(glatiramer acetate)~~¹*
U.S.		E.U.	Japan
Compound: N/A⁽¹⁾		Compound: N/A ⁽¹⁾	Compound: N/A ⁽¹⁾
		~~Compound: 2015~~Later filed patent: Depakine® Chronosphere formulation (October 2017)	~~N/A~~Later filed patent: Depakine® Chronosphere formulation (October 2017)

*Allegra® (fexofenadine hydrochloride)*


*~~Depakine~~U.S.*	E.U.	Japan^®(1) ~~(sodium valproate)~~
Compound: expired	Compound: expired	Compound: expired
Generics on the market	Generics on the market	Generics on the market
Converted to Over-the-Counter		Converted to over-the counter
		Later filed patents: coverage ranging through January 2016


			*~~Xatral~~^®Xatral® (alfuzosin hydrochloride)*

U.S.	E.U.	Japan
Compound: expired	³Compound: expired	Compound: expired
Generics on the market	~~Compound: expired~~Generics on the market	~~Compound: expired~~

~~Genericized~~	~~Genericized~~	~~Genericized~~Generics on the market


				*~~Actonel~~^®Actonel® (risedronate sodium)⁽¹⁾*⁴

U.S.	E.U.		Japan
Compound: December 2013, Extended to June 2014 by Pediatric extension	Compound: expired ~~in December 2010 in Austria, Belgium, France, Germany, the Netherlands, the United Kingdom, Sweden, Switzerland and Italy; previously expired elsewhere~~		~~N/A~~
		Compound: Expired
Later filed ~~improvement~~ patents: coverage ranging through June 2018	Later filed ~~improvement~~ patents: coverage ranging through June 2018

*Amaryl® (glimepiride)*


3.U.S.	E.U.	Japan
Compound: expired	Compound: expired	Compound: expired

*Insuman® (human insulin)*


~~Pediatric exclusivity for Uroxatral~~^® ~~until~~U.S.	E.U.	Japan
Compound: N/A	Compound: N/A	Compound: N/A