Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 18, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Amgen Inc. | |
Entity Central Index Key | 318,154 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 647,272,067 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Total revenues | $ 6,059 | $ 5,810 | $ 11,613 | $ 11,274 |
Operating expenses: | ||||
Cost of sales | 1,024 | 1,024 | 1,968 | 2,020 |
Research and development | 869 | 873 | 1,629 | 1,642 |
Selling, general and administrative | 1,353 | 1,209 | 2,480 | 2,273 |
Other | (19) | 6 | (22) | 50 |
Total operating expenses | 3,227 | 3,112 | 6,055 | 5,985 |
Operating income | 2,832 | 2,698 | 5,558 | 5,289 |
Interest expense, net | 347 | 321 | 685 | 647 |
Interest and other income, net | 162 | 165 | 393 | 360 |
Income before income taxes | 2,647 | 2,542 | 5,266 | 5,002 |
Provision for income taxes | 351 | 391 | 659 | 780 |
Net income | $ 2,296 | $ 2,151 | $ 4,607 | $ 4,222 |
Earnings per share: | ||||
Basic (in usd per share) | $ 3.50 | $ 2.93 | $ 6.76 | $ 5.74 |
Diluted (in usd per share) | $ 3.48 | $ 2.91 | $ 6.73 | $ 5.71 |
Shares used in calculation of earnings per share: | ||||
Basic (in shares) | 656 | 734 | 682 | 736 |
Diluted (in shares) | 660 | 738 | 685 | 740 |
Dividends paid per share (in usd per share) | $ 1.32 | $ 1.15 | $ 2.64 | $ 2.3 |
Product sales [Member] | ||||
Revenues: | ||||
Product sales | $ 5,679 | $ 5,574 | $ 11,022 | $ 10,773 |
Other revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 380 | $ 236 | $ 591 | $ 501 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,296 | $ 2,151 | $ 4,607 | $ 4,222 |
Other comprehensive income (loss), net of reclassification adjustments and taxes: | ||||
(Losses) gains on foreign currency translation | (111) | 35 | (82) | 59 |
Gains (losses) on cash flow hedges | 223 | (201) | 229 | (274) |
Gains (losses) on available-for-sale securities | 9 | 80 | (334) | 238 |
Other | 0 | (1) | 2 | (1) |
Other comprehensive income (loss), net of taxes | 121 | (87) | (185) | 22 |
Comprehensive income | $ 2,417 | $ 2,064 | $ 4,422 | $ 4,244 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 10,131 | $ 3,800 |
Marketable securities | 19,264 | 37,878 |
Trade receivables, net | 3,504 | 3,237 |
Inventories | 3,063 | 2,834 |
Other current assets | 2,008 | 1,727 |
Total current assets | 37,970 | 49,476 |
Property, plant and equipment, net | 4,922 | 4,989 |
Intangible assets, net | 8,443 | 8,609 |
Goodwill | 14,724 | 14,761 |
Other assets | 1,625 | 2,119 |
Total assets | 67,684 | 79,954 |
Current liabilities: | ||
Accounts payable | 1,026 | 1,352 |
Accrued liabilities | 5,891 | 6,516 |
Current portion of long-term debt | 4,288 | 1,152 |
Total current liabilities | 11,205 | 9,020 |
Long-term debt | 30,209 | 34,190 |
Long-term deferred tax liabilities | 1,155 | 1,166 |
Long-term tax liabilities | 8,763 | 9,099 |
Other noncurrent liabilities | 1,443 | 1,238 |
Contingencies and commitments | ||
Stockholders’ equity: | ||
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 649.0 shares in 2018 and 722.2 shares in 2017 | 31,048 | 30,992 |
Accumulated deficit | (15,266) | (5,072) |
Accumulated other comprehensive loss | (873) | (679) |
Total stockholders’ equity | 14,909 | 25,241 |
Total liabilities and stockholders’ equity | $ 67,684 | $ 79,954 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock and additional paid-in capital, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock and additional paid-in capital, shares authorized | 2,750 | 2,750 |
Common stock and additional paid-in capital, shares outstanding | 649 | 722.2 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 4,607 | $ 4,222 |
Depreciation and amortization | 955 | 1,042 |
Share-based compensation expense | 147 | 156 |
Deferred income taxes | (114) | (180) |
Other items, net | 34 | 109 |
Changes in operating assets and liabilities, net of acquisition: | ||
Trade receivables, net | (348) | (391) |
Inventories | (135) | (90) |
Other assets | (232) | (194) |
Accounts payable | (329) | (43) |
Accrued income taxes, net | (314) | (120) |
Long-term tax liability | 134 | 186 |
Other liabilities | 424 | 14 |
Net cash provided by operating activities | 4,829 | 4,711 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (6,733) | (19,244) |
Proceeds from sales of marketable securities | 23,723 | 14,425 |
Proceeds from maturities of marketable securities | 993 | 3,284 |
Cash acquired in acquisition, net of cash paid | 197 | 0 |
Purchases of property, plant and equipment | (342) | (353) |
Other | 6 | (82) |
Net cash provided by (used in) investing activities | 17,844 | (1,970) |
Cash flows from financing activities: | ||
Net proceeds from issuance of debt | 0 | 3,485 |
Repayment of debt | (500) | (4,405) |
Net change in commercial paper | 0 | 959 |
Repurchases of common stock | (13,941) | (1,562) |
Dividends paid | (1,816) | (1,693) |
Other | (85) | (137) |
Net cash used in financing activities | (16,342) | (3,353) |
Increase (decrease) in cash and cash equivalents | 6,331 | (612) |
Cash and cash equivalents at beginning of period | 3,800 | 3,241 |
Cash and cash equivalents at end of period | $ 10,131 | $ 2,629 |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. Basis of presentation The financial information for the three and six months ended June 30, 2018 and 2017 , is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2017 , and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2018. Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $7.8 billion and $7.6 billion as of June 30, 2018 and December 31, 2017 , respectively. Revenues Adoption of new revenue recognition standard In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards require an entity to recognize revenue when control of promised goods or services is transferred to the customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted this new standard as of January 1, 2018, by applying the modified-retrospective method to those contracts that were not completed as of that date. The results for reporting periods beginning after January 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. See Note 1, Summary of significant accounting policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. Upon adoption, we recorded a net decrease of $25 million to Accumulated deficit due to the cumulative impact of adopting the new standard—with the impact related primarily to the acceleration of deferred revenue, net of related deferred tax impact. The adoption of this new standard had an immaterial impact on our reported total revenues and operating income as compared to what reported amounts would have been under the prior standard, and we expect the impact of adoption in future periods to be immaterial. Our accounting policies under the new standard were applied prospectively and are described below. See Note 4, Revenues. Product sales and sales deductions Revenue from product sales is recognized upon transfer of control of a product to a customer, generally upon delivery, based on an amount that reflects the consideration to which we expect to be entitled, net of accruals for estimated rebates, wholesaler chargebacks, discounts and other deductions (collectively, sales deductions) and returns established at the time of sale. We analyze the adequacy of our accruals for sales deductions quarterly. Amounts accrued for sales deductions are adjusted when trends or significant events indicate that an adjustment is appropriate. Accruals are also adjusted to reflect actual results. Accruals for sales deductions are based primarily on estimates of the amounts earned or to be claimed on the related sales. These estimates take into consideration current contractual and statutory requirements, specific known market events and trends, internal and external historical data and forecasted customer buying patterns. Sales deductions are substantially product specific and therefore, for any given period, can be affected by the mix of products sold. Included in sales deductions are immaterial net adjustments related to prior-period sales due to changes in estimates. Historically, such amounts have represented less than 1% of the aggregate sales deductions charged against product sales. Returns are estimated through comparison of historical return data to their related sales on a production lot basis. Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product, when appropriate. Historically, sales return provisions have amounted to less than 1% of gross product sales. Changes in estimates for prior-period sales return provisions have historically been insignificant. Taxes collected from customers and remitted to government authorities and that are related to sales of the Company’s products, primarily in Europe, are excluded from revenues. As a practical expedient, sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Income. Other revenues Other revenues consist primarily of royalty income and corporate partner revenues. Royalties from licensees are based on third-party sales of licensed products and are recorded when the related third-party product sale occurs. Royalty estimates are based on historical and forecasted sales trends. Corporate partner revenues are composed primarily of license fees and milestones earned and our share of commercial profits generated from collaborations. See Arrangements with multiple-performance obligations, discussed below. Arrangements with multiple-performance obligations From time to time, we enter into arrangements for the research and development (R&D), manufacture and/or commercialization of products and product candidates. Such arrangements may require us to deliver various rights, services and/or goods, including (i) intellectual property rights or licenses; (ii) R&D services; (iii) manufacturing services; and/or (iv) commercialization services. The underlying terms of these arrangements generally provide for consideration to Amgen in the form of nonrefundable, up-front license payments, R&D and commercial performance milestone payments, cost sharing and/or royalty payments. In arrangements involving more than one performance obligation, each required performance obligation is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract. The consideration under the arrangement is then allocated to each separate distinct performance obligation based on its respective relative stand-alone selling price. The estimated selling price of each deliverable reflects our best estimate of what the selling price would be if the deliverable was regularly sold by us on a stand-alone basis or using an adjusted market assessment approach if selling price on a stand-alone basis is not available. The consideration allocated to each distinct performance obligation is recognized as revenue when control of the related goods or services is transferred. Consideration associated with at-risk substantive performance milestones is recognized as revenue when it is probable that a significant reversal of the cumulative revenue recognized will not occur. Other recent accounting pronouncements In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision requiring that equity investments (except for investments accounted for under the equity method of accounting) be measured at fair value, with changes in fair value recognized in current earnings. With the exception of equity investments that were previously accounted for at cost, a modified-retrospective approach was used to reflect the cumulative effect of adoption as an adjustment to Accumulated deficit as of the beginning of the fiscal year. The new standard will be applied prospectively to investments that were previously accounted for at cost. Upon adoption, on January 1, 2018, we recorded an immaterial adjustment to Accumulated deficit from Accumulated other comprehensive income (loss) (AOCI), which represented the net unrealized gain on all equity investments with a readily determinable fair value as of December 31, 2017. The impact that this new standard has on our Condensed Consolidated Statements of Income after adoption will depend on changes in fair values of equity securities in our portfolio in the future. See Note 8, Investments. In October 2016, the FASB issued a new accounting standard that amends the income tax accounting guidance for intra-entity transfers of assets other than inventory. The new standard requires that entities recognize the income tax consequences of an intercompany transfer of an asset, other than inventory, in the period the transfer occurs. The current exception to defer the recognition of any tax impact on intercompany transfers of inventory until the inventory is sold to a third party remains unaffected. We adopted this standard as of January 1, 2018, and will apply it prospectively to any transaction occurring on or after the adoption date. The adoption of this standard did not have a material impact on our condensed consolidated financial statements, however the impact on our condensed consolidated financial statements in future periods will depend on the facts and circumstances of future transactions. In March 2018, the FASB issued a new accounting standard to incorporate Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 118 (SAB 118), which addresses accounting implications of major tax reform legislation Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the 2017 Tax Act), enacted on December 22, 2017. SAB 118 allows a company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date and was effective upon issuance. We continue to analyze the 2017 Tax Act, and in certain areas, have made reasonable estimates of the effects on our condensed consolidated financial statements and tax disclosures. See Note 5, Income taxes. In August 2017, the FASB issued a new accounting standard that amends the accounting and reporting of hedging activities, which we elected to adopt early during the second quarter of 2018. Among its provisions, the new standard: (i) eliminates the separate measurement and reporting of hedge ineffectiveness and (ii) permits an entity to recognize in earnings the initial fair value of an excluded component of a hedging instrument’s fair value under a systematic and rational method over the life of the derivative instrument. In accordance with the transition provisions of the new standard, the separate measurement of ineffectiveness for our cash flow hedging instruments existing as of the date of adoption is required to be eliminated through a cumulative-effect adjustment to Accumulated deficit as of January 1, 2018, the beginning of the fiscal year. The ineffective portions of our cash flow hedges were not material to our previously issued condensed consolidated financial statements. In addition, certain provisions in the guidance require modifications to existing presentation and disclosure requirements on a prospective basis. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. See Note 14, Derivative instruments. In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with the evaluation of when a set of assets acquired or disposed of should be considered a business. The new standard requires that an entity evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets; if so, the set of assets would not be considered a business. The new standard also requires that a business include at least one substantive process, and it narrows the definition of outputs. We adopted this standard as of January 1, 2018, and will apply it prospectively. Adoption of this new standard may result in more transactions being accounted for as asset acquisitions versus business combinations; however, the impact on our condensed consolidated financial statements in future periods will depend on the facts and circumstances of future transactions. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize on the balance sheet the assets and liabilities that arise from leases, including leases classified as operating leases under current GAAP, and disclose qualitative and quantitative information about leasing arrangements. The new standard requires a modified-retrospective approach to adoption and is effective for interim and annual periods beginning on January 1, 2019, but may be adopted earlier. We expect to adopt this standard beginning in the first quarter of 2019. We do not expect that this standard will have a material impact on our Condensed Consolidated Statements of Income, but we do expect that upon adoption, it will have a material impact on our assets and liabilities on our Condensed Consolidated Balance Sheets. The primary effect of adoption will be the requirement to record right-of-use assets and corresponding lease obligation liabilities for current operating leases. In addition, the standard requires that we update the systems, processes and controls we use to track, record and account for our lease portfolio. We have selected a lease accounting information system and engaged third-party consultants to provide system implementation services. System readiness, including the implementation and functionality of software procured from third-party providers, is essential to enable preparation of the financial information required for this standard. In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020, but may be adopted earlier, beginning on January 1, 2019. With certain exceptions, adjustments are to be applied by using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. We are currently evaluating the impact that this new standard will have on our condensed consolidated financial statements. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In 2014, we initiated a restructuring plan to invest in continuing innovation and the launch of our new pipeline molecules, while improving our cost structure. As part of the plan, we closed facilities in Washington State and Colorado and are reducing the number of buildings we occupy at our headquarters in Thousand Oaks, California, as well as at other locations. We estimate that we will incur $800 million to $900 million of pretax charges in connection with our restructuring, including (i) separation and other headcount-related costs of $540 million to $600 million with respect to staff reductions and (ii) asset-related charges of $260 million to $300 million that consist primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. Through June 30, 2018 , we incurred $549 million of separation costs and other headcount-related costs and $245 million of net asset-related charges. The amounts related to the restructuring recorded in the Condensed Consolidated Statements of Income during the three and six months ended June 30, 2018 and 2017 , were not significant. As of June 30, 2018 , the total restructuring liability was not significant. |
Business combinations
Business combinations | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Business combinations | Business combinations Kirin-Amgen, Inc. During the first quarter of 2018, we acquired the remaining 50% ownership of Kirin-Amgen, Inc. (K-A) from Kirin Holdings Company, Limited (Kirin), making K-A a wholly owned subsidiary of Amgen. Upon its acquisition, K-A’s operations have been included in our condensed consolidated financial statements commencing on the share acquisition date. The acquisition relieved Amgen of future royalty obligations to K-A. K-A is a corporation that was established in 1984 as a 50 - 50 joint venture with Kirin to fund the global development of EPOGEN ® (epoetin alfa). Over time, the scope of the collaboration was expanded to also include the products NEUPOGEN ® (filgrastim), Neulasta ® (pegfilgrastim), Aranesp ® (darbepoetin alfa), Nplate ® (romiplostim) and brodalumab. K-A held the intellectual property for each of these products and licensed the associated marketing rights in Asia to Kyowa Hakko Kirin (KHK), Kirin’s pharmaceutical subsidiary, and in most other territories to Amgen. In return, Amgen and KHK paid royalties to K-A, and K-A reimbursed Amgen and KHK’s R&D expenses. K-A had also given Johnson & Johnson (J&J) exclusive licenses to manufacture and market recombinant human erythropoietin for all geographic areas of the world outside the United States, China and Japan. Under this agreement, J&J pays royalties to K-A based on product sales. Prior to the share acquisition date, we owned 50% of K-A and accounted for our interest in K-A by using the equity method of accounting, which included recording our share of K-A’s profits or losses in Selling, general and administrative expenses in the Condensed Consolidated Statements of Income. The carrying value of our equity method investment in K-A was $570 million as of December 31, 2017, and was included in Other assets in the Condensed Consolidated Balance Sheet. The transaction was accounted for as a step acquisition of a business in which we were required to remeasure our existing 50% ownership interest at fair value. In addition, we were required to effectively settle our preexisting relationship with K-A, which resulted in a loss. Together the gain on the remeasurement of our existing ownership interest and the loss from the settlement of the preexisting relationship resulted in a net gain of $80 million , which was recorded in Interest and other income, net, in the Condensed Consolidated Statements of Income. The primary means of consideration for this transaction was a payment of $780 million in cash. The aggregate share acquisition date consideration to acquire the remaining 50% ownership in K-A and the fair value of Amgen’s preacquisition investment consisted of the following (in millions): Amount Total cash paid to Kirin $ 780 Fair value of contingent consideration obligation 45 Loss on settlement of preexisting relationship (168 ) Total consideration transferred to acquire K-A 657 Fair value of Amgen’s investment in K-A 825 Total acquisition date fair value $ 1,482 In connection with this acquisition, we are obligated to make single-digit-percentage royalty payments to Kirin contingent upon sales of brodalumab. The estimated fair value of this contingent consideration obligation was $45 million as of the share acquisition date. The fair values of assets acquired and liabilities assumed included cash of $977 million , licensing rights of $470 million , deferred tax liabilities of $102 million , other assets and liabilities of $131 million and goodwill of $6 million . The estimated fair value of acquired licensing rights was determined by using a probability-weighted-income approach, which discounts expected future cash flows to present value by using a discount rate that represents the estimated rate that market participants would use to value the assets. The projected cash flows were based on certain assumptions, including estimates of future revenues and expenses and the time and resources needed to maintain the assets through commercialization. The licensing rights will be amortized over a weighted-average period of four years by using the straight-line method. The excess of the share acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $6 million was recorded as goodwill, which is not deductible for tax purposes. The $131 million in other assets and liabilities represents primarily receivables for royalties earned by K-A but not yet received, offset partially by payables representing R&D expenses incurred but not yet reimbursed by K-A. The fair value estimates for the assets acquired and liabilities assumed were based on preliminary calculations and valuations, and our estimates and assumptions are subject to change as we obtain additional information during the measurement period (up to one year from the share acquisition date). The primary areas of those preliminary estimates that are not yet finalized relate to tax-related items. Pro forma results of operations for this acquisition have not been presented because this acquisition is not material to our consolidated results of operations. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Revenues by product and by geographic area We operate in one business segment: human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Revenues by product and by geographic area, based on customers’ locations, are presented below. Rest-of-world (ROW) revenues relate to products that are sold principally in Europe. Revenues were as follows (in millions): Three months ended June 30, 2018 2017 US ROW Total US ROW Total Enbrel ® 1,252 50 1,302 1,411 55 1,466 Neulasta ® 948 152 1,100 937 150 1,087 Prolia ® 396 214 610 326 179 505 Aranesp ® 241 231 472 288 247 535 Sensipar ® / Mimpara ® 330 90 420 342 85 427 XGEVA ® 339 113 452 292 103 395 EPOGEN ® 250 — 250 292 — 292 Other products 611 462 1,073 498 369 867 Total product sales (1) $ 4,367 $ 1,312 $ 5,679 $ 4,386 $ 1,188 $ 5,574 Other revenues 380 236 Total revenues (2) $ 6,059 $ 5,810 Six months ended June 30, 2018 2017 US ROW Total US ROW Total Enbrel ® 2,302 105 2,407 2,529 118 2,647 Neulasta ® 1,957 298 2,255 1,985 312 2,297 Prolia ® 716 388 1,104 605 325 930 Aranesp ® 466 460 926 566 480 1,046 Sensipar ® / Mimpara ® 739 178 917 679 169 848 XGEVA ® 671 226 897 590 207 797 EPOGEN ® 494 — 494 562 — 562 Other products 1,169 853 2,022 965 681 1,646 Total product sales (1) $ 8,514 $ 2,508 $ 11,022 $ 8,481 $ 2,292 $ 10,773 Other revenues 591 501 Total revenues (2) $ 11,613 $ 11,274 ____________ (1) Total product sales includes $20 million related to hedging losses and $33 million related to hedging gains for the three months ended June 30, 2018 and 2017 , respectively. Total product sales includes $54 million related to hedging losses and $90 million related to hedging gains for the six months ended June 30, 2018 and 2017 , respectively. (2) Prior-period amounts are not adjusted under the modified-retrospective method of adoption. Financing and payment Our payment terms vary by types and locations of customers and the products or services offered. Payment terms differ by jurisdiction and customer, but payment is generally required in a term ranging from 30 to 120 days from date of shipment or satisfaction of the performance obligation. For certain products or services and certain customer types, we may require payment before products are delivered or services are rendered to customers. Optional exemptions We do not disclose the value of unsatisfied performance obligations for (i) contracts with original expected lengths of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for the services performed. |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rates for the three and six months ended June 30, 2018 , were 13.3% and 12.5% , respectively, compared with 15.4% and 15.6% , respectively, for the corresponding periods of the prior year. The decrease in our effective tax rate for the three and six months ended June 30, 2018 , was due primarily to the impacts of U.S. corporate tax reform, offset partially by a prior year benefit associated with the effective settlement of certain state and federal tax matters. On December 22, 2017, the United States enacted the 2017 Tax Act, which imposes a repatriation tax on accumulated earnings of foreign subsidiaries, implements a hybrid territorial tax system together with a current tax on certain foreign earnings and lowers the general corporate income tax rate to 21%. In March 2018, the FASB issued a new accounting standard to incorporate SAB 118, which permits us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We continue to analyze the 2017 Tax Act and in certain areas have made reasonable estimates of the effects on our condensed consolidated financial statements and tax disclosures. The 2017 Tax Act includes U.S. taxation on certain foreign earnings, referred to as Global Intangible Low-Taxed Income (foreign intangible income), effective January 1, 2018. The FASB allows an entity to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as foreign intangible income in future years or provide for the tax expense related to the foreign intangible income as a period expense in the year it is incurred. We have recorded no provisional amount for deferred taxes on foreign intangible income because more time is needed to analyze the data in order to make an accounting policy election. We consider our key estimates on the repatriation tax, the net deferred tax remeasurement, the impact on our unrealized tax benefits and the accounting policy election on temporary basis differences related to foreign intangible income to be incomplete due to our continuing analysis of final year-end data and tax positions. We are still accumulating and processing data to update our underlying calculations, and we expect the U.S. Treasury and regulators may issue further guidance, among other things; therefore, our estimates may change during 2018. However, we expect to complete our analysis within the measurement period. The U.S. territory of Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. The rate of 4% is effective through December 31, 2027. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred. One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes may arise with authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and the interpretation of the relevant facts. As previously disclosed, we received a Revenue Agent Report (RAR) from the Internal Revenue Service (IRS) for the years 2010, 2011 and 2012. The RAR proposes to make significant adjustments that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. On November 29, 2017, we received a modified RAR that revised the IRS calculations but continued to propose substantial adjustments. We disagree with the proposed adjustments and are pursuing resolution through the IRS administrative appeals process, which we believe will likely not be concluded within the next 12 months. Final resolution of the IRS audit could have a material impact on our results of operations and cash flows if not resolved favorably, however, we believe our income tax reserves are appropriately provided for all open tax years. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009. We are currently under examination by a number of other state and foreign tax jurisdictions. During the three and six months ended June 30, 2018 , the gross amounts of our unrecognized tax benefits (UTBs) increased $80 million and $155 million , respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of June 30, 2018 , if recognized, would affect our effective tax rate. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include primarily shares that may be issued under our stock option, restricted stock and performance unit award programs, as determined by using the treasury stock method (collectively, dilutive securities). The computations for basic and diluted EPS were as follows (in millions, except per-share data): Three months ended Six months ended 2018 2017 2018 2017 Income (Numerator): Net income for basic and diluted EPS $ 2,296 $ 2,151 $ 4,607 $ 4,222 Shares (Denominator): Weighted-average shares for basic EPS 656 734 682 736 Effect of dilutive securities 4 4 3 4 Weighted-average shares for diluted EPS 660 738 685 740 Basic EPS $ 3.50 $ 2.93 $ 6.76 $ 5.74 Diluted EPS $ 3.48 $ 2.91 $ 6.73 $ 5.71 For the three and six months ended June 30, 2018 and 2017 , the number of anti-dilutive employee stock-based awards excluded from the computation of diluted EPS was not significant. |
Collaborations
Collaborations | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborations | Collaborations A collaborative arrangement is a contractual arrangement that involves a joint operating activity. Such arrangements involve two or more parties that are both (i) active participants in the activity and (ii) exposed to significant risks and rewards dependent on the commercial success of the activity. From time to time, we enter into collaborative arrangements for the R&D, manufacture and/or commercialization of products and/or product candidates. These collaborations generally provide for nonrefundable up-front license fees, development and commercial-performance milestone payments, cost sharing, royalty payments and/or profit sharing. Our collaboration arrangements are performed with no guarantee of either technological or commercial success, and each is unique in nature. The following describes a significant arrangement that had a material change since the filing of our Annual Report on Form 10-K for the year ended December 31, 2017. Novartis AG In April 2017, we expanded our existing migraine collaboration with Novartis AG (Novartis). In the United States, Amgen and Novartis jointly develop and collaborate on the commercialization of Aimovig TM (erenumab -aooe). Amgen, as the principal, recognizes product sales of Aimovig TM in the United States, shares U.S. commercialization costs with Novartis and pays Novartis a significant royalty on net sales in the United States. Novartis holds global co-development rights and exclusive commercial rights outside the United States and Japan for Aimovig TM and other specified migraine programs. Novartis pays Amgen double-digit royalties on net sales of the products in the Novartis exclusive territories and funds a portion of global R&D expenses. As a result of certain regulatory and commercial events, during the three months ended June 30, 2018, we received a milestone payment of $148 million from Novartis, which was recorded in Other revenues in the Condensed Consolidated Statement of Income. In addition, Novartis will make payments to Amgen that could collectively amount to approximately $250 million if certain commercial thresholds are achieved with respect to Aimovig TM in the United States. Amgen manufactures and supplies Aimovig TM worldwide. The migraine collaboration will continue for the commercial lives of the products unless terminated in accordance with its terms. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale investments by type of security were as follows (in millions): Types of securities as of June 30, 2018 Amortized cost Gross unrealized gains Gross unrealized losses Fair values U.S. Treasury securities $ 3,477 $ — $ (86 ) $ 3,391 Other government-related debt securities: U.S. 132 — (4 ) 128 Foreign and other 1,451 1 (62 ) 1,390 Corporate debt securities: Financial 4,091 1 (124 ) 3,968 Industrial 3,957 4 (122 ) 3,839 Other 699 — (23 ) 676 Residential-mortgage-backed securities 1,632 — (53 ) 1,579 Other mortgage- and asset-backed securities 672 — (20 ) 652 Money market mutual funds 7,341 — — 7,341 Other short-term interest-bearing securities 5,872 — — 5,872 Total available-for-sale investments $ 29,324 $ 6 $ (494 ) $ 28,836 Types of securities as of December 31, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Fair values U.S. Treasury securities $ 8,313 $ 1 $ (72 ) $ 8,242 Other government-related debt securities: U.S. 225 — (2 ) 223 Foreign and other 2,415 18 (11 ) 2,422 Corporate debt securities: Financial 10,089 17 (34 ) 10,072 Industrial 9,688 34 (52 ) 9,670 Other 1,393 3 (6 ) 1,390 Residential-mortgage-backed securities 2,198 — (30 ) 2,168 Other mortgage- and asset-backed securities 2,312 — (15 ) 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities 1,440 — — 1,440 Total interest-bearing securities 41,318 73 (222 ) 41,169 Equity securities 135 14 — 149 Total available-for-sale investments $ 41,453 $ 87 $ (222 ) $ 41,318 The fair values of available-for-sale investments by location in the Condensed Consolidated Balance Sheets were as follows (in millions): Condensed Consolidated Balance Sheets locations June 30, December 31, Cash and cash equivalents $ 9,572 $ 3,291 Marketable securities 19,264 37,878 Other assets — 149 Total available-for-sale investments $ 28,836 $ 41,318 Cash and cash equivalents in the above table excludes bank account cash of $559 million and $509 million as of June 30, 2018 and December 31, 2017 , respectively. Other assets as of December 31, 2017, consisted of equity securities, which are no longer classified as available-for-sale. As a result of the adoption of the new accounting standard related to the classification and measurement of financial instruments on January 1, 2018, equity investments (except for investments accounted for under the equity method of accounting) are now measured at fair value, with changes in fair value recognized in earnings. These investments were previously measured at fair value, with changes in fair value recognized in AOCI. Accordingly, these securities are no longer classified as available-for-sale and their presentation is not comparable to the presentation as of December 31, 2017. See Equity securities, discussed below, and Note 1, Summary of significant accounting policies. The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions): Contractual maturities June 30, December 31, Maturing in one year or less $ 13,265 $ 6,733 Maturing after one year through three years 4,066 12,820 Maturing after three years through five years 7,940 13,836 Maturing after five years through ten years 1,334 3,263 Maturing after ten years — 52 Mortgage- and asset-backed securities 2,231 4,465 Total interest-bearing securities $ 28,836 $ 41,169 For the three months ended June 30, 2018 and 2017 , realized gains on interest-bearing securities were $5 million and $34 million , respectively, and realized losses on interest-bearing securities were $120 million and $87 million , respectively. For the six months ended June 30, 2018 and 2017, realized gains on interest-bearing securities were $22 million and $65 million , respectively, and realized losses on interest-bearing securities were $271 million and $171 million , respectively. The cost of securities sold is based on the specific-identification method. The fair values and gross unrealized losses of available-for-sale investments in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position were as follows (in millions): Less than 12 months 12 months or more Types of securities as of June 30, 2018 Fair values Unrealized losses Fair values Unrealized losses U.S. Treasury securities $ 3,355 $ (85 ) $ 36 $ (1 ) Other government-related debt securities: U.S. 102 (3 ) 26 (1 ) Foreign and other 1,209 (56 ) 112 (6 ) Corporate debt securities: Financial 3,673 (115 ) 258 (9 ) Industrial 3,244 (110 ) 314 (12 ) Other 584 (20 ) 65 (3 ) Residential-mortgage-backed securities 1,267 (42 ) 303 (11 ) Other mortgage- and asset-backed securities 540 (16 ) 112 (4 ) Total $ 13,974 $ (447 ) $ 1,226 $ (47 ) Less than 12 months 12 months or more Types of securities as of December 31, 2017 Fair values Unrealized losses Fair values Unrealized losses U.S. Treasury securities $ 7,728 $ (70 ) $ 195 $ (2 ) Other government-related debt securities: U.S. 188 (1 ) 34 (1 ) Foreign and other 1,163 (9 ) 115 (2 ) Corporate debt securities: Financial 5,928 (28 ) 462 (6 ) Industrial 5,760 (43 ) 612 (9 ) Other 868 (4 ) 117 (2 ) Residential-mortgage-backed securities 1,838 (24 ) 276 (6 ) Other mortgage- and asset-backed securities 1,777 (12 ) 250 (3 ) Total $ 25,250 $ (191 ) $ 2,061 $ (31 ) The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer. We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell or whether we will more likely than not be required to sell the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to that particular security. As of June 30, 2018 and December 31, 2017 , we believe the cost bases for our available-for-sale investments were recoverable in all material respects. Equity securities We held investments in equity securities with readily determinable fair values of $200 million and $149 million as of June 30, 2018 and December 31, 2017 , respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. As a result of the adoption of the new accounting standard related to the classification and measurement of financial instruments on January 1, 2018, equity investments (except for investments accounted for under the equity method of accounting) are now measured at fair value, with changes in fair value recognized in earnings. These investments were previously measured at fair value, with changes in fair value recognized in AOCI. Accordingly, these securities are no longer classified as available-for-sale and their presentation is not comparable to the presentation as of December 31, 2017 . See Available-for-sale investments, discussed above, and Note 1, Summary of significant accounting policies. Gains and losses recognized on equity securities, including gains and losses recognized on sales, were not material for the three and six months ended June 30, 2018 and 2017. Limited partnership investments We held limited partnership investments of $266 million and $213 million as of June 30, 2018 and December 31, 2017 , respectively, which are included in Other assets in the Condensed Consolidated Balance Sheets. These investments are measured by using the net asset values of the underlying investments as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of June 30, 2018 , unfunded additional commitments to be made during the next several years for these investments were not material. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in millions): June 30, December 31, Raw materials $ 303 $ 232 Work in process 1,702 1,668 Finished goods 1,058 934 Total inventories $ 3,063 $ 2,834 |
Goodwill and other intangible a
Goodwill and other intangible assets | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill Changes in the carrying amount of goodwill were as follows (in millions): Six months ended Beginning balance $ 14,761 Addition from K-A acquisition 6 Currency translation adjustment (43 ) Ending balance $ 14,724 Other intangible assets Other intangible assets consisted of the following (in millions): June 30, 2018 December 31, 2017 Gross carrying amounts Accumulated amortization Intangible assets, net Gross carrying amounts Accumulated amortization Intangible assets, net Finite-lived intangible assets: Developed-product-technology rights $ 12,581 $ (7,139 ) $ 5,442 $ 12,589 $ (6,796 ) $ 5,793 Licensing rights 3,772 (1,810 ) 1,962 3,275 (1,601 ) 1,674 Marketing-related rights 1,303 (967 ) 336 1,319 (920 ) 399 R&D technology rights 1,155 (838 ) 317 1,161 (804 ) 357 Total finite-lived intangible assets 18,811 (10,754 ) 8,057 18,344 (10,121 ) 8,223 Indefinite-lived intangible assets: In-process research and development 386 — 386 386 — 386 Total other intangible assets $ 19,197 $ (10,754 ) $ 8,443 $ 18,730 $ (10,121 ) $ 8,609 Developed-product-technology rights consist of rights related to marketed products acquired in business combinations. Licensing rights consist primarily of contractual rights acquired in business combinations to receive future milestone, royalty and profit sharing payments; capitalized payments to third parties for milestones related to regulatory approvals to commercialize products; and up-front payments associated with royalty obligations for marketed products. During the six months ended June 30, 2018, licensing rights increased due to the K-A share acquisition. See Note 3, Business combinations. Marketing-related intangible assets consist primarily of rights related to the sale and distribution of marketed products. R&D technology rights consist of technology used in R&D with alternative future uses. In-process research and development (IPR&D) consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. As of June 30, 2018 , IPR&D consists primarily of the oprozomib project, acquired in the acquisition of Onyx Pharmaceuticals, Inc., in 2013. All IPR&D projects have major risks and uncertainties associated with the timely and successful completion of the development and commercialization of product candidates, including our ability to confirm safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. We are not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require the completion of clinical trials that demonstrate that a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans as well as competitive product launches, affect the revenues a product can generate. Consequently, the eventual realized value, if any, of acquired IPR&D projects may vary from their estimated fair values. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable and upon the establishment of technological feasibility or regulatory approval. During the three months ended June 30, 2018 and 2017 , we recognized amortization expense associated with our finite-lived intangible assets of $332 million and $371 million , respectively. During the six months ended June 30, 2018 and 2017, we recognized amortization expense associated with our finite-lived intangible assets of $652 million and $744 million , respectively. Amortization of intangible assets is included primarily in Cost of sales in the Condensed Consolidated Statements of Income. The total estimated amortization expense for our finite-lived intangible assets for the remaining six months ending December 31, 2018 , and the years ending December 31, 2019 , 2020 , 2021 , 2022 and 2023 , are $0.7 billion , $1.3 billion , $1.2 billion , $1.0 billion , $0.9 billion and $0.9 billion , respectively. |
Financing arrangements
Financing arrangements | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Financing arrangements | Financing arrangements Our borrowings consisted of the following (in millions): June 30, December 31, 6.15% notes due 2018 (6.15% 2018 Notes) $ — $ 500 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) 642 653 5.70% notes due 2019 (5.70% 2019 Notes) 1,000 1,000 1.90% notes due 2019 (1.90% 2019 Notes) 700 700 Floating Rate Notes due 2019 550 550 2.20% notes due 2019 (2.20% 2019 Notes) 1,400 1,400 2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) 789 810 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 750 750 Floating Rate Notes due 2020 300 300 2.20% notes due 2020 (2.20% 2020 Notes) 700 700 3.45% notes due 2020 (3.45% 2020 Notes) 900 900 4.10% notes due 2021 (4.10% 2021 Notes) 1,000 1,000 1.85% notes due 2021 (1.85% 2021 Notes) 750 750 3.875% notes due 2021 (3.875% 2021 Notes) 1,750 1,750 1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) 1,461 1,501 2.70% notes due 2022 (2.70% 2022 Notes) 500 500 2.65% notes due 2022 (2.65% 2022 Notes) 1,500 1,500 3.625% notes due 2022 (3.625% 2022 Notes) 750 750 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 707 719 2.25% notes due 2023 (2.25% 2023 Notes) 750 750 3.625% notes due 2024 (3.625% 2024 Notes) 1,400 1,400 3.125% notes due 2025 (3.125% 2025 Notes) 1,000 1,000 2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) 876 901 2.60% notes due 2026 (2.60% 2026 Notes) 1,250 1,250 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 627 642 3.20% notes due 2027 (3.20% 2027 Notes) 1,000 1,000 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 925 946 6.375% notes due 2037 (6.375% 2037 Notes) 552 552 6.90% notes due 2038 (6.90% 2038 Notes) 291 291 6.40% notes due 2039 (6.40% 2039 Notes) 466 466 5.75% notes due 2040 (5.75% 2040 Notes) 412 412 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 974 974 5.65% notes due 2042 (5.65% 2042 Notes) 487 487 5.375% notes due 2043 (5.375% 2043 Notes) 261 261 4.40% notes due 2045 (4.40% 2045 Notes) 2,250 2,250 4.563% notes due 2048 (4.563% 2048 Notes) 1,415 1,415 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 3,541 Other notes due 2097 100 100 Unamortized bond discounts, premiums, issuance costs and fair value adjustments, net (1,129 ) (929 ) Total carrying value of debt 34,497 35,342 Less current portion (4,288 ) (1,152 ) Total noncurrent debt $ 30,209 $ 34,190 There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563% 2048 Notes and the 4.663% 2051 Notes, which have effective interest rates of 6.3% and 5.6% , respectively. |
Stockholders' equity
Stockholders' equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders’ equity Stock repurchase program Activity under our stock repurchase program, on a trade date basis, was as follows (in millions): 2018 2017 Shares Dollars Shares Dollars First quarter 56.4 $ 10,787 3.4 $ 555 Second quarter 18.2 3,190 6.2 1,006 Total stock repurchases 74.6 $ 13,977 9.6 $ 1,561 In January 2018, our Board of Directors authorized an increase of $10.0 billion available under our stock repurchase program. Repurchase activity for the three months ended March 31, 2018, included 52.1 million shares of our common stock acquired under a tender offer at an aggregate cost of $10.0 billion . In April 2018, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $5.0 billion . As of June 30, 2018 , $5.4 billion remained available under our stock repurchase program. Dividends In March 2018 and December 2017, the Board of Directors declared quarterly cash dividends of $1.32 per share of common stock, which were paid in June 2018 and March 2018, respectively. Accumulated other comprehensive income (loss) The components of AOCI were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2017 $ (529 ) $ (6 ) $ (144 ) $ — $ (679 ) Cumulative effect of change in accounting principle, net of tax (1) — — (9 ) — (9 ) Foreign currency translation adjustments 29 — — — 29 Unrealized gains (losses) — 149 (482 ) — (333 ) Reclassification adjustments to income — (130 ) 134 — 4 Other — — — 2 2 Income taxes — (13 ) 5 — (8 ) Balance as of March 31, 2018 (500 ) — (496 ) 2 (994 ) Foreign currency translation adjustments (111 ) — — — (111 ) Unrealized losses — (34 ) (106 ) — (140 ) Reclassification adjustments to income — 318 115 — 433 Other — — — — — Income taxes — (61 ) — — (61 ) Balance as of June 30, 2018 $ (611 ) $ 223 $ (487 ) $ 2 $ (873 ) ____________ (1) See Note 1, Summary of significant accounting policies, for additional information regarding the adoption on January 1, 2018, of the new accounting standard related to the classification and measurement of financial instruments and the related cumulative effect from the change in accounting principle. Reclassifications out of AOCI and into earnings were as follows (in millions): Three months ended Components of AOCI 2018 2017 Condensed Consolidated Statements of Income locations Cash flow hedges: Foreign currency contract (losses) gains $ (20 ) $ 33 Product sales Cross-currency swap contract (losses) gains (298 ) 297 Interest and other income, net (318 ) 330 Income before income taxes 68 (117 ) Provision for income taxes $ (250 ) $ 213 Net income Available-for-sale securities: Net realized losses $ (115 ) $ (47 ) Interest and other income, net 1 (2 ) Provision for income taxes $ (114 ) $ (49 ) Net income Six months ended Components of AOCI 2018 2017 Condensed Consolidated Cash flow hedges: Foreign currency contract (losses) gains $ (54 ) $ 90 Product sales Cross-currency swap contract (losses) gains (134 ) 371 Interest and other income, net (188 ) 461 Income before income taxes 40 (164 ) Provision for income taxes $ (148 ) $ 297 Net income Available-for-sale securities: Net realized losses $ (249 ) $ (96 ) Interest and other income, net 2 (2 ) Provision for income taxes $ (247 ) $ (98 ) Net income |
Fair value measurement
Fair value measurement | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement To estimate the fair value of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access Level 2 — Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement. The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Quoted prices in Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of June 30, 2018, using: Total Assets: Interest-bearing securities: U.S. Treasury securities $ 3,391 $ — $ — $ 3,391 Other government-related debt securities: U.S. — 128 — 128 Foreign and other — 1,390 — 1,390 Corporate debt securities: Financial — 3,968 — 3,968 Industrial — 3,839 — 3,839 Other — 676 — 676 Residential-mortgage-backed securities — 1,579 — 1,579 Other mortgage- and asset-backed securities — 652 — 652 Money market mutual funds 7,341 — — 7,341 Other short-term interest-bearing securities — 5,872 — 5,872 Equity securities 200 — — 200 Derivatives: Foreign currency contracts — 106 — 106 Cross-currency swap contracts — 272 — 272 Total assets $ 10,932 $ 18,482 $ — $ 29,414 Liabilities: Derivatives: Foreign currency contracts $ — $ 65 $ — $ 65 Cross-currency swap contracts — 296 — 296 Interest rate swap contracts — 266 — 266 Contingent consideration obligations — — 72 72 Total liabilities $ — $ 627 $ 72 $ 699 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of December 31, 2017, using: Total Assets: Interest-bearing securities: U.S. Treasury securities $ 8,242 $ — $ — $ 8,242 Other government-related debt securities: U.S. — 223 — 223 Foreign and other — 2,422 — 2,422 Corporate debt securities: Financial — 10,072 — 10,072 Industrial — 9,670 — 9,670 Other — 1,390 — 1,390 Residential-mortgage-backed securities — 2,168 — 2,168 Other mortgage- and asset-backed securities — 2,297 — 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities — 1,440 — 1,440 Equity securities 149 — — 149 Derivatives: Foreign currency contracts — 6 — 6 Cross-currency swap contracts — 270 — 270 Interest rate swap contracts — 10 — 10 Total assets $ 11,636 $ 29,968 $ — $ 41,604 Liabilities: Derivatives: Foreign currency contracts $ — $ 204 $ — $ 204 Cross-currency swap contracts — 220 — 220 Interest rate swap contracts — 61 — 61 Contingent consideration obligations — — 69 69 Total liabilities $ — $ 485 $ 69 $ 554 Interest-bearing and equity securities The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets with no valuation adjustment. Most of our other government-related and corporate debt securities are investment grade and have maturity dates of five years or less from the balance sheet date. Our other government-related debt securities portfolio is composed of securities with weighted-average credit ratings of BBB+ or equivalent by Standard & Poor’s Financial Services LLC (S&P), and A- or equivalent by Moody’s Investors Service, Inc. (Moody’s) or Fitch Ratings, Inc. (Fitch); and our corporate debt securities portfolio has a weighted-average credit rating of A- or equivalent by Fitch, and BBB + or equivalent by S&P or Moody’s. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. The inputs include reported trades of and broker-dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. Our residential-mortgage-, other-mortgage- and asset-backed-securities portfolio is composed entirely of senior tranches, with credit ratings of AAA by S&P, Moody’s or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services use industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. The inputs include reported trades of and broker-dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment or default projections based on historical data; and other observable inputs. We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates. Derivatives All of our foreign currency forward and option derivative contracts have maturities of three years or less, and all are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency exchange rates, the London Interbank Offered Rate (LIBOR), swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts include implied volatility measures. These inputs, where applicable, are at commonly quoted intervals. See Note 14, Derivative instruments. Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. See Note 14, Derivative instruments. Our interest rate swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by using an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include LIBOR, swap rates and obligor credit default swap rates. See Note 14, Derivative instruments. Contingent consideration obligations As a result of our business acquisitions, we incurred contingent consideration obligations, as discussed below. The contingent consideration obligations are recorded at their fair values by using probability-adjusted discounted cash flows, and we revalue these obligations each reporting period until the related contingencies have been resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to licensing rights and product candidates acquired in business combinations, and are reviewed quarterly by management in our R&D and commercial sales organizations. These inputs include, as applicable, estimated probabilities and timing of achieving specified regulatory and commercial milestones and estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related regulatory and commercial events, or that shorten or lengthen the time required to achieve such events, or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the obligations, as applicable. Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income. Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Three months ended Six months ended 2018 2017 2018 2017 Beginning balance $ 110 $ 184 $ 69 $ 179 Addition from K-A acquisition — — 45 — Net changes in valuations (38 ) (2 ) (42 ) 3 Ending balance $ 72 $ 182 $ 72 $ 182 As a result of our acquisition of BioVex Group, Inc., in 2011, we are obligated to pay its former shareholders additional consideration contingent upon achieving certain sales-related milestones with regard to IMLYGIC ® (talimogene laherparepvec). As a result of our acquisition of K-A in 2018, we are obligated to make single-digit-percentage royalty payments to Kirin contingent upon sales of brodalumab. See Note 3, Business combinations. During the six months ended June 30, 2018 and 2017 , there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis. Summary of the fair values of other financial instruments Cash equivalents The fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments. Borrowings We estimated the fair values of our borrowings by using Level 2 inputs. As of June 30, 2018 and December 31, 2017 , the aggregate fair values of our borrowings were $36.0 billion and $38.6 billion , respectively, and the carrying values were $34.5 billion and $35.3 billion , respectively. |
Derivative instruments
Derivative instruments | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments | Derivative instruments The Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. To reduce our risks related to such exposures, we use or have used certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes. During the second quarter of 2018, we adopted early a new accounting standard that amends the accounting and reporting of hedging activities. Certain required disclosures have been made on a prospective basis in accordance with the guidance of the standard. See Note 1, Summary of significant accounting policies. Cash flow hedges We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates associated primarily with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are offset partially by corresponding increases and decreases in the cash flows from our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations with regard to our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales primarily over a three-year time horizon , with, at any given point in time, a higher percentage of nearer-term projected product sales being hedged than in successive periods. As of June 30, 2018 and December 31, 2017 , we had foreign currency forward contracts with notional amounts of $4.8 billion and $4.6 billion , respectively, and foreign currency option contracts with notional amounts of $21 million and $74 million , respectively. We have designated these foreign currency forward and foreign currency option contracts, which are primarily euro based, as cash flow hedges. Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of Income in the same periods during which the hedged transactions affect earnings. To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term debt denominated in foreign currencies, we enter into cross-currency swap contracts. Under the terms of such contracts, we paid euros, pounds sterling and Swiss francs and received U.S. dollars for the notional amounts at the inception of the contracts; and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S. dollars and receiving euros, pounds sterling and Swiss francs. In addition, we will pay U.S. dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged debt, thereby effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S. dollars. We have designated these cross-currency swap contracts as cash flow hedges. Accordingly, the unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and reclassified to Interest and other income, net, in the Condensed Consolidated Statements of Income in the same periods during which the hedged debt affects earnings. The notional amounts and interest rates of our cross-currency swaps as of June 30, 2018 , were as follows (notional amounts in millions): Foreign currency U.S. dollars Hedged notes Notional amounts Interest rates Notional amounts Interest rates 2.125% 2019 euro Notes € 675 2.125 % $ 864 2.6 % 1.25% 2022 euro Notes € 1,250 1.25 % $ 1,388 3.2 % 0.41% 2023 Swiss franc Bonds CHF 700 0.41 % $ 704 3.4 % 2.00% 2026 euro Notes € 750 2.00 % $ 833 3.9 % 5.50% 2026 pound sterling Notes £ 475 5.50 % $ 747 6.0 % 4.00% 2029 pound sterling Notes £ 700 4.00 % $ 1,111 4.5 % In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts in order to hedge the variability in cash flows due to changes in the applicable U.S. Treasury rate between the time we enter into these contracts and the time the related debt is issued. Gains and losses on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI i n the Condensed Consolidated Balance Sheets and are amortized into Interest expense, net, in the Condensed Consolidated Statements of Income over the lives of the associated debt issuances. Amounts recognized in connection with forward interest rate swaps during the six months ended June 30, 2018, and amounts expected to be recognized during the subsequent 12 months are not material. The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended Derivatives in cash flow hedging relationships 2018 2017 2018 2017 Foreign currency contracts $ 281 $ (203 ) $ 192 $ (250 ) Cross-currency swap contracts (315 ) 217 (77 ) 281 Forward interest rate contracts — 3 — 3 Total unrealized (losses) gains $ (34 ) $ 17 $ 115 $ 34 The locations in the Condensed Consolidated Statements of Income and the gains and losses reclassified out of AOCI and into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended Derivatives in cash flow hedging relationships Condensed Consolidated Statements of Income locations 2018 2017 2018 2017 Foreign currency contracts Product sales $ (20 ) $ 33 $ (54 ) $ 90 Cross-currency swap contracts Interest and other income, net (298 ) 297 (134 ) 371 Total realized (losses) gains $ (318 ) $ 330 $ (188 ) $ 461 No portions of our cash flow hedge contracts are excluded from the assessment of hedge effectiveness. As of June 30, 2018 , the amount expected to be reclassified out of AOCI and into earnings during the next 12 months is $119 million of net losses on our foreign currency and cross-currency swap contracts. Fair value hedges To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified for and were designated as fair value hedges. The terms of these interest rate swap contracts correspond to the related hedged debt and effectively converted fixed-rate coupons to floating-rate LIBOR-based coupons over the lives of the respective notes. As of June 30, 2018 and December 31, 2017 , we had interest rate swap contracts with an aggregate notional amount of $9.45 billion that hedge certain of our long-term debt issuances. The contracts have rates that range from three-month LIBOR plus 0.3% to three-month LIBOR plus 2.0% . For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the Condensed Consolidated Statements of Income the unrealized gain or loss on the derivative resulting from the change in fair value during the period, as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk. If a hedging relationship involving an interest rate swap contract is terminated, the gain or loss realized on contract termination is recorded as an adjustment to the carrying value of the debt and amortized into Interest expense, net, over the remaining life of the previously hedged debt. Net unrealized gains and losses on our outstanding interest rate swap contracts were as follows (in millions): Three months ended Six months ended Derivatives in fair value hedging relationships 2018 2017 2018 2017 Net unrealized (losses) gains recognized for interest rate swap contracts $ (51 ) $ 37 $ (215 ) $ 18 Net unrealized gains (losses) recognized for related hedged debt $ 51 $ (37 ) $ 215 $ (18 ) The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions): Carrying amounts of hedged liabilities (1) Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities (2) June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Current portion of long-term debt $ 2,398 $ 500 $ — $ 23 Long-term debt $ 7,905 $ 10,516 $ (217 ) $ (11 ) ____________ (1) Current portion of long-term debt includes $1.0 billion and $500 million of carrying value with discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. Long-term debt includes $137 million and $1.1 billion of carrying value with discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. (2) Current portion of long-term debt includes $11 million and $23 million of hedging adjustments on discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. Long-term debt includes $37 million and $40 million of hedging adjustments on discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. The following table summarizes the amounts of income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions): Three months ended June 30, 2018 Six months ended June 30, 2018 Product sales Interest and other income, net Interest (expense), net Product sales Interest and other income, net Interest (expense), net Total amounts of income and (expense) line items presented in the Condensed Consolidated Statements of Income $ 5,679 $ 162 $ (347 ) $ 11,022 $ 393 $ (685 ) The effects of cash flow and fair value hedging: Losses on cash flow hedging relationships reclassified out of AOCI: Foreign currency contracts $ (20 ) $ — $ — $ (54 ) $ — $ — Cross-currency swap contracts $ — $ (298 ) $ — $ — $ (134 ) $ — Gains (losses) on fair value hedging relationships—interest rate swap agreements: Hedged items (1) $ — $ — $ 58 $ — $ — $ 230 Derivatives designated as hedging instruments $ — $ — $ (51 ) $ — $ — $ (215 ) __________ (1) The amounts include benefits of $7 million and $15 million related to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships for the three and six months ended June 30, 2018 , respectively. Derivatives not designated as hedges To reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. These exposures are hedged on a month-to-month basis. As of June 30, 2018 and December 31, 2017 , the total notional amounts of these foreign currency forward contracts were $268 million and $757 million , respectively. The fair values of these derivatives as of June 30, 2018 and December 31, 2017, were not material. The location in the Condensed Consolidated Statements of Income and the amounts of gains recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions): Three months ended Six months ended Derivatives not designated as hedging instruments Condensed Consolidated Statements of Income location 2018 2017 2018 2017 Foreign currency contracts Interest and other income, net $ 26 $ 13 $ 33 $ 14 The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities June 30, 2018 Condensed Consolidated Balance Sheet locations Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other assets $ 106 Accrued liabilities/ Other noncurrent liabilities $ 65 Cross-currency swap contracts Other current assets/ Other assets 272 Accrued liabilities/ Other noncurrent liabilities 296 Interest rate swap contracts Other current assets/ Other assets — Accrued liabilities/ Other noncurrent liabilities 266 Total derivatives designated as hedging instruments $ 378 $ 627 Derivative assets Derivative liabilities December 31, 2017 Condensed Consolidated Balance Sheet locations Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other assets $ 6 Accrued liabilities/ Other noncurrent liabilities $ 204 Cross-currency swap contracts Other current assets/ Other assets 270 Accrued liabilities/ Other noncurrent liabilities 220 Interest rate swap contracts Other current assets/ Other assets 10 Accrued liabilities/ Other noncurrent liabilities 61 Total derivatives designated as hedging instruments $ 286 $ 485 Our derivative contracts that were in liability positions as of June 30, 2018 , contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our, or the surviving entity’s, creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement and amounts due either to or from a counterparty under the contracts may be offset against other amounts due either to or from the same counterparty only if an event of default or termination, as defined, were to occur. The cash flow effects of our derivative contracts are included within Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows. |
Contingencies and commitments
Contingencies and commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and commitments | Contingencies and commitments Contingencies In the ordinary course of business, we are involved in various legal proceedings, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. See our Annual Report on Form 10-K for the year ended December 31, 2017 , Part I, Item 1A. Risk Factors— Our business may be affected by litigation and government investigations. We describe our legal proceedings and other matters that are significant or that we believe could become significant in this footnote; in Note 18, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017 ; and in Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2018. We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously. Our legal proceedings involve various aspects of our business and a variety of claims—including but not limited to patent validity and infringement, regulatory standards, and other matters—some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing, in Note 18, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017, or in Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ending March 31, 2018, plaintiffs seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process, which in complex proceedings of the sort we face often extend for several years. As a result, none of the matters pending against us described in this filing, in Note 18, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017, or in Note 14, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ending March 31, 2018, have progressed sufficiently through discovery and/or the development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material. While it is not possible to accurately predict or determine the eventual outcomes of these matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows. Certain recent developments concerning our legal proceedings and other matters are discussed below: PCSK9 Antibody Patent Litigation U.S. Patent Litigation - Sanofi/Regeneron As previously disclosed, the U.S. Court of Appeals for the Federal Circuit denied Amgen’s petition for rehearing en banc and issued a March 2, 2018 mandate returning the case to the U.S. District Court for the District of Delaware (the Delaware District Court) for a new trial on two of the defendants’ challenges to the validity of Amgen’s patents (lack of written description and enablement of the claimed inventions) and for further consideration of a permanent injunction. On July 23, 2018, Amgen filed a petition for certiorari with the U.S. Supreme Court seeking review of the U.S. Court of Appeals for the Federal Circuit conclusion that the judgment affirming the validity of Amgen’s patents was based, in part, on an erroneous application of the law of written description. Sensipar ® (cinacalcet) Litigation Sensipar ® Abbreviated New Drug Application (ANDA) Patent Litigation As previously disclosed, the Delaware District Court held trial on the infringement claims and defenses in the Amgen Inc. v. Aurobindo Pharma Ltd. et al. consolidated lawsuit. Post-trial briefing on the infringement claims and defenses was completed on May 18, 2018. On June 12, 2018, the Delaware District Court entered an order dismissing the lawsuit filed in December 2017 against Torrent Pharmaceuticals Ltd. on stipulation between the parties and subject to the terms of a confidential settlement agreement. In June 2018, Amgen filed lawsuits in the Delaware District Court and the U.S. District Court for the Middle District of North Carolina, each against Accord Healthcare, Inc. and Intas Pharmaceuticals Ltd. (collectively, Accord) for infringement of our U.S. Patent No. 9,375,405 (the ’405 Patent). In each lawsuit, Amgen seeks an order making any U.S. Food and Drug Administration (FDA) approval of Accord’s generic version of Sensipar ® effective no earlier than the expiration of the ’405 Patent in 2026. Sensipar ® Pediatric Exclusivity Litigation As previously disclosed, on February 17, 2018, the U.S. District Court for the District of Columbia entered final judgment for the FDA in the lawsuit filed by Amgen seeking effectively to reverse the FDA’s May 22, 2017 rejection of Amgen’s request for pediatric exclusivity for cinacalcet hydrochloride (Sensipar ® / Mimpara ® ). A grant of pediatric exclusivity by the FDA would have provided Amgen with an additional six months of exclusivity (i.e., through September 8, 2018) following the March 8, 2018 expiration of Amgen’s U.S. composition of matter patent. Oral arguments in the U.S. Court of Appeals for the District of Columbia Circuit on Amgen’s appeal of the final judgment took place on May 17, 2018. KYPROLIS ® (carfilzomib) ANDA Patent Litigation During May, June and July of 2018, the Delaware District Court entered orders on stipulations between Onyx Therapeutics, Inc. (Onyx Therapeutics) and each of Fresenius Kabi, USA LLC and Fresenius Kabi USA, Inc.; Breckenridge Pharmaceutical, Inc.; Aurobindo Pharma USA, Inc.; Cipla Limited and Cipla USA, Inc. (collectively, Cipla); and Innopharma, Inc., respectively, that each defendant infringes U.S. Patent Nos. 7,417,042; 7,737,112 (the ’112 Patent); 8,207,125; 8,207,126; and 8,207,127. Onyx Therapeutics had previously provided those defendants a covenant that it would not assert patent infringement of U.S. Patent Nos. 7,232,818; 7,491,704; 8,129,346; and 8,207,297 against certain of the respective defendants’ ANDA applications and products. On June 4, 2018, the Delaware District Court also entered an order on a stipulation between Onyx Therapeutics and MSN Laboratories Private Limited and MSN Pharmaceuticals, Inc. (collectively, MSN), that MSN infringes the ’112 Patent. In June and July 2018, the Delaware District Court consolidated for purposes of discovery into the existing consolidated case Onyx Therapeutics, Inc. v. Cipla Limited, et al., the lawsuits that were filed against Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. in December 2017; against Apotex Corp. and Apotex Inc. in January 2018; against Breckenridge Pharmaceuticals, Inc. in February 2018; and against Cipla in April 2018, respectively . NEUPOGEN ® (filgrastim)/ Neulasta ® (pegfilgrastim) Litigation Adello NEUPOGEN ® Patent Litigation As previously disclosed, Amgen Inc. and Amgen Manufacturing Ltd. (collectively, Amgen) filed a patent infringement lawsuit in the U.S. District Court for the District of New Jersey against Adello Biologics, LLC (Adello). On May 17, 2018, Adello responded to the lawsuit, denying infringement and seeking judgment that the patents-in-suit are invalid and not infringed. Coherus Neulasta ® Patent Litigation As previously disclosed, the Delaware District Court entered final judgment dismissing Amgen’s complaint against Coherus BioSciences, Inc. (Coherus) for infringement of our U.S. Patent No. 8,273,707. On May 17, 2018, Amgen filed an appeal of the Delaware District Court’s judgment. Pfizer NEUPOGEN ® Patent Litigation On July 18, 2018, Amgen Inc. and Amgen Manufacturing Ltd. (collectively, Amgen) filed a lawsuit in the Delaware District Court against Pfizer Inc. and Hospira Inc. (collectively, Pfizer). This lawsuit stems from Pfizer’s submission of an application for FDA licensure of a filgrastim product as biosimilar to Amgen’s NEUPOGEN ® . Amgen has asserted infringement of U.S. Patent No. 9,643,997 and seeks, among other remedies, injunctive relief to prohibit Pfizer from practicing the patented invention prior to the expiry of this patent. ENBREL (etanercept) Litigation Coherus ENBREL Patent Challenge As previously disclosed, the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office denied Coherus’ petitions to institute inter partes review trial proceedings on U.S. Patent Nos. 8,163,522 and 8,063,182 and Coherus filed requests for rehearing on these two denied petitions. On July 13, 2018 the PTAB denied both requests for rehearing. MVASI ™ (bevacizumab-awwb) Patent Litigation As previously disclosed, Genentech, Inc. (Genentech) and City of Hope filed lawsuits in the Delaware District Court alleging infringement of a number of patents listed by Genentech in the Biologics Price Competition and Innovation Act (BPCIA) exchange by MVASI ™ , Amgen’s biosimilar version of Avastin ® (bevacizumab), and for non-compliance with certain provisions of the BPCIA. On June 5, 2018, Amgen responded to the complaint denying patent infringement and any violation of the BPCIA and seeking judgment that the patents-in-suit are invalid, unenforceable and/or not infringed by Amgen. On June 19, 2018, Genentech and City of Hope moved to dismiss all of Amgen’s counterclaims and certain of Amgen’s defenses. KANJINTI ™ (trastuzumab) Patent Litigation On June 21, 2018, Genentech and City of Hope filed a lawsuit in the Delaware District Court alleging Amgen’s infringement of 37 patents by Amgen’s submission of an application for FDA licensure of KANJINTI ™ , Amgen’s biosimilar version of Genentech’s Herceptin ® (trastuzumab). On July 19, 2018, Genentech, City of Hope and Amgen filed a joint stipulation to dismiss certain of the patents from the lawsuit and Genentech and City of Hope filed an amended complaint narrowing its allegations of infringement to 18 of the 37 patents. Among other remedies, Genentech and City of Hope seek injunctive relief prohibiting patent infringement. |
Summary of significant accoun22
Summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Business | Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. |
Basis of presentation | Basis of presentation The financial information for the three and six months ended June 30, 2018 and 2017 , is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2017 , and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2018. |
Principles of consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $7.8 billion and $7.6 billion as of June 30, 2018 and December 31, 2017 , respectively. |
Revenue from Contract with Customer | Revenues Adoption of new revenue recognition standard In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards require an entity to recognize revenue when control of promised goods or services is transferred to the customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We adopted this new standard as of January 1, 2018, by applying the modified-retrospective method to those contracts that were not completed as of that date. The results for reporting periods beginning after January 1, 2018, are presented in accordance with the new standard, although comparative information has not been restated and continues to be reported under the accounting standards and policies in effect for those periods. See Note 1, Summary of significant accounting policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. Upon adoption, we recorded a net decrease of $25 million to Accumulated deficit due to the cumulative impact of adopting the new standard—with the impact related primarily to the acceleration of deferred revenue, net of related deferred tax impact. The adoption of this new standard had an immaterial impact on our reported total revenues and operating income as compared to what reported amounts would have been under the prior standard, and we expect the impact of adoption in future periods to be immaterial. Our accounting policies under the new standard were applied prospectively and are described below. See Note 4, Revenues. Product sales and sales deductions Revenue from product sales is recognized upon transfer of control of a product to a customer, generally upon delivery, based on an amount that reflects the consideration to which we expect to be entitled, net of accruals for estimated rebates, wholesaler chargebacks, discounts and other deductions (collectively, sales deductions) and returns established at the time of sale. We analyze the adequacy of our accruals for sales deductions quarterly. Amounts accrued for sales deductions are adjusted when trends or significant events indicate that an adjustment is appropriate. Accruals are also adjusted to reflect actual results. Accruals for sales deductions are based primarily on estimates of the amounts earned or to be claimed on the related sales. These estimates take into consideration current contractual and statutory requirements, specific known market events and trends, internal and external historical data and forecasted customer buying patterns. Sales deductions are substantially product specific and therefore, for any given period, can be affected by the mix of products sold. Included in sales deductions are immaterial net adjustments related to prior-period sales due to changes in estimates. Historically, such amounts have represented less than 1% of the aggregate sales deductions charged against product sales. Returns are estimated through comparison of historical return data to their related sales on a production lot basis. Historical rates of return are determined for each product and are adjusted for known or expected changes in the marketplace specific to each product, when appropriate. Historically, sales return provisions have amounted to less than 1% of gross product sales. Changes in estimates for prior-period sales return provisions have historically been insignificant. Taxes collected from customers and remitted to government authorities and that are related to sales of the Company’s products, primarily in Europe, are excluded from revenues. As a practical expedient, sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Income. Other revenues Other revenues consist primarily of royalty income and corporate partner revenues. Royalties from licensees are based on third-party sales of licensed products and are recorded when the related third-party product sale occurs. Royalty estimates are based on historical and forecasted sales trends. Corporate partner revenues are composed primarily of license fees and milestones earned and our share of commercial profits generated from collaborations. See Arrangements with multiple-performance obligations, discussed below. Arrangements with multiple-performance obligations From time to time, we enter into arrangements for the research and development (R&D), manufacture and/or commercialization of products and product candidates. Such arrangements may require us to deliver various rights, services and/or goods, including (i) intellectual property rights or licenses; (ii) R&D services; (iii) manufacturing services; and/or (iv) commercialization services. The underlying terms of these arrangements generally provide for consideration to Amgen in the form of nonrefundable, up-front license payments, R&D and commercial performance milestone payments, cost sharing and/or royalty payments. In arrangements involving more than one performance obligation, each required performance obligation is evaluated to determine whether it qualifies as a distinct performance obligation based on whether (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available and (ii) the good or service is separately identifiable from other promises in the contract. The consideration under the arrangement is then allocated to each separate distinct performance obligation based on its respective relative stand-alone selling price. The estimated selling price of each deliverable reflects our best estimate of what the selling price would be if the deliverable was regularly sold by us on a stand-alone basis or using an adjusted market assessment approach if selling price on a stand-alone basis is not available. The consideration allocated to each distinct performance obligation is recognized as revenue when control of the related goods or services is transferred. Consideration associated with at-risk substantive performance milestones is recognized as revenue when it is probable that a significant reversal of the cumulative revenue recognized will not occur. |
Recent accounting pronouncement | Other recent accounting pronouncements In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision requiring that equity investments (except for investments accounted for under the equity method of accounting) be measured at fair value, with changes in fair value recognized in current earnings. With the exception of equity investments that were previously accounted for at cost, a modified-retrospective approach was used to reflect the cumulative effect of adoption as an adjustment to Accumulated deficit as of the beginning of the fiscal year. The new standard will be applied prospectively to investments that were previously accounted for at cost. Upon adoption, on January 1, 2018, we recorded an immaterial adjustment to Accumulated deficit from Accumulated other comprehensive income (loss) (AOCI), which represented the net unrealized gain on all equity investments with a readily determinable fair value as of December 31, 2017. The impact that this new standard has on our Condensed Consolidated Statements of Income after adoption will depend on changes in fair values of equity securities in our portfolio in the future. See Note 8, Investments. In October 2016, the FASB issued a new accounting standard that amends the income tax accounting guidance for intra-entity transfers of assets other than inventory. The new standard requires that entities recognize the income tax consequences of an intercompany transfer of an asset, other than inventory, in the period the transfer occurs. The current exception to defer the recognition of any tax impact on intercompany transfers of inventory until the inventory is sold to a third party remains unaffected. We adopted this standard as of January 1, 2018, and will apply it prospectively to any transaction occurring on or after the adoption date. The adoption of this standard did not have a material impact on our condensed consolidated financial statements, however the impact on our condensed consolidated financial statements in future periods will depend on the facts and circumstances of future transactions. In March 2018, the FASB issued a new accounting standard to incorporate Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 118 (SAB 118), which addresses accounting implications of major tax reform legislation Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the 2017 Tax Act), enacted on December 22, 2017. SAB 118 allows a company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date and was effective upon issuance. We continue to analyze the 2017 Tax Act, and in certain areas, have made reasonable estimates of the effects on our condensed consolidated financial statements and tax disclosures. See Note 5, Income taxes. In August 2017, the FASB issued a new accounting standard that amends the accounting and reporting of hedging activities, which we elected to adopt early during the second quarter of 2018. Among its provisions, the new standard: (i) eliminates the separate measurement and reporting of hedge ineffectiveness and (ii) permits an entity to recognize in earnings the initial fair value of an excluded component of a hedging instrument’s fair value under a systematic and rational method over the life of the derivative instrument. In accordance with the transition provisions of the new standard, the separate measurement of ineffectiveness for our cash flow hedging instruments existing as of the date of adoption is required to be eliminated through a cumulative-effect adjustment to Accumulated deficit as of January 1, 2018, the beginning of the fiscal year. The ineffective portions of our cash flow hedges were not material to our previously issued condensed consolidated financial statements. In addition, certain provisions in the guidance require modifications to existing presentation and disclosure requirements on a prospective basis. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. See Note 14, Derivative instruments. In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with the evaluation of when a set of assets acquired or disposed of should be considered a business. The new standard requires that an entity evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets; if so, the set of assets would not be considered a business. The new standard also requires that a business include at least one substantive process, and it narrows the definition of outputs. We adopted this standard as of January 1, 2018, and will apply it prospectively. Adoption of this new standard may result in more transactions being accounted for as asset acquisitions versus business combinations; however, the impact on our condensed consolidated financial statements in future periods will depend on the facts and circumstances of future transactions. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize on the balance sheet the assets and liabilities that arise from leases, including leases classified as operating leases under current GAAP, and disclose qualitative and quantitative information about leasing arrangements. The new standard requires a modified-retrospective approach to adoption and is effective for interim and annual periods beginning on January 1, 2019, but may be adopted earlier. We expect to adopt this standard beginning in the first quarter of 2019. We do not expect that this standard will have a material impact on our Condensed Consolidated Statements of Income, but we do expect that upon adoption, it will have a material impact on our assets and liabilities on our Condensed Consolidated Balance Sheets. The primary effect of adoption will be the requirement to record right-of-use assets and corresponding lease obligation liabilities for current operating leases. In addition, the standard requires that we update the systems, processes and controls we use to track, record and account for our lease portfolio. We have selected a lease accounting information system and engaged third-party consultants to provide system implementation services. System readiness, including the implementation and functionality of software procured from third-party providers, is essential to enable preparation of the financial information required for this standard. In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020, but may be adopted earlier, beginning on January 1, 2019. With certain exceptions, adjustments are to be applied by using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. We are currently evaluating the impact that this new standard will have on our condensed consolidated financial statements. |
Business combinations (Tables)
Business combinations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Aggregate acquisition date consideration to acquire an entity | The aggregate share acquisition date consideration to acquire the remaining 50% ownership in K-A and the fair value of Amgen’s preacquisition investment consisted of the following (in millions): Amount Total cash paid to Kirin $ 780 Fair value of contingent consideration obligation 45 Loss on settlement of preexisting relationship (168 ) Total consideration transferred to acquire K-A 657 Fair value of Amgen’s investment in K-A 825 Total acquisition date fair value $ 1,482 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue by product and by geographic area | Revenues were as follows (in millions): Three months ended June 30, 2018 2017 US ROW Total US ROW Total Enbrel ® 1,252 50 1,302 1,411 55 1,466 Neulasta ® 948 152 1,100 937 150 1,087 Prolia ® 396 214 610 326 179 505 Aranesp ® 241 231 472 288 247 535 Sensipar ® / Mimpara ® 330 90 420 342 85 427 XGEVA ® 339 113 452 292 103 395 EPOGEN ® 250 — 250 292 — 292 Other products 611 462 1,073 498 369 867 Total product sales (1) $ 4,367 $ 1,312 $ 5,679 $ 4,386 $ 1,188 $ 5,574 Other revenues 380 236 Total revenues (2) $ 6,059 $ 5,810 Six months ended June 30, 2018 2017 US ROW Total US ROW Total Enbrel ® 2,302 105 2,407 2,529 118 2,647 Neulasta ® 1,957 298 2,255 1,985 312 2,297 Prolia ® 716 388 1,104 605 325 930 Aranesp ® 466 460 926 566 480 1,046 Sensipar ® / Mimpara ® 739 178 917 679 169 848 XGEVA ® 671 226 897 590 207 797 EPOGEN ® 494 — 494 562 — 562 Other products 1,169 853 2,022 965 681 1,646 Total product sales (1) $ 8,514 $ 2,508 $ 11,022 $ 8,481 $ 2,292 $ 10,773 Other revenues 591 501 Total revenues (2) $ 11,613 $ 11,274 ____________ (1) Total product sales includes $20 million related to hedging losses and $33 million related to hedging gains for the three months ended June 30, 2018 and 2017 , respectively. Total product sales includes $54 million related to hedging losses and $90 million related to hedging gains for the six months ended June 30, 2018 and 2017 , respectively. (2) Prior-period amounts are not adjusted under the modified-retrospective method of adoption. |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Computation for basic and diluted earnings per share | The computations for basic and diluted EPS were as follows (in millions, except per-share data): Three months ended Six months ended 2018 2017 2018 2017 Income (Numerator): Net income for basic and diluted EPS $ 2,296 $ 2,151 $ 4,607 $ 4,222 Shares (Denominator): Weighted-average shares for basic EPS 656 734 682 736 Effect of dilutive securities 4 4 3 4 Weighted-average shares for diluted EPS 660 738 685 740 Basic EPS $ 3.50 $ 2.93 $ 6.76 $ 5.74 Diluted EPS $ 3.48 $ 2.91 $ 6.73 $ 5.71 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale investments by type of security were as follows (in millions): Types of securities as of June 30, 2018 Amortized cost Gross unrealized gains Gross unrealized losses Fair values U.S. Treasury securities $ 3,477 $ — $ (86 ) $ 3,391 Other government-related debt securities: U.S. 132 — (4 ) 128 Foreign and other 1,451 1 (62 ) 1,390 Corporate debt securities: Financial 4,091 1 (124 ) 3,968 Industrial 3,957 4 (122 ) 3,839 Other 699 — (23 ) 676 Residential-mortgage-backed securities 1,632 — (53 ) 1,579 Other mortgage- and asset-backed securities 672 — (20 ) 652 Money market mutual funds 7,341 — — 7,341 Other short-term interest-bearing securities 5,872 — — 5,872 Total available-for-sale investments $ 29,324 $ 6 $ (494 ) $ 28,836 Types of securities as of December 31, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Fair values U.S. Treasury securities $ 8,313 $ 1 $ (72 ) $ 8,242 Other government-related debt securities: U.S. 225 — (2 ) 223 Foreign and other 2,415 18 (11 ) 2,422 Corporate debt securities: Financial 10,089 17 (34 ) 10,072 Industrial 9,688 34 (52 ) 9,670 Other 1,393 3 (6 ) 1,390 Residential-mortgage-backed securities 2,198 — (30 ) 2,168 Other mortgage- and asset-backed securities 2,312 — (15 ) 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities 1,440 — — 1,440 Total interest-bearing securities 41,318 73 (222 ) 41,169 Equity securities 135 14 — 149 Total available-for-sale investments $ 41,453 $ 87 $ (222 ) $ 41,318 |
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale investments by type of security were as follows (in millions): Types of securities as of June 30, 2018 Amortized cost Gross unrealized gains Gross unrealized losses Fair values U.S. Treasury securities $ 3,477 $ — $ (86 ) $ 3,391 Other government-related debt securities: U.S. 132 — (4 ) 128 Foreign and other 1,451 1 (62 ) 1,390 Corporate debt securities: Financial 4,091 1 (124 ) 3,968 Industrial 3,957 4 (122 ) 3,839 Other 699 — (23 ) 676 Residential-mortgage-backed securities 1,632 — (53 ) 1,579 Other mortgage- and asset-backed securities 672 — (20 ) 652 Money market mutual funds 7,341 — — 7,341 Other short-term interest-bearing securities 5,872 — — 5,872 Total available-for-sale investments $ 29,324 $ 6 $ (494 ) $ 28,836 Types of securities as of December 31, 2017 Amortized cost Gross unrealized gains Gross unrealized losses Fair values U.S. Treasury securities $ 8,313 $ 1 $ (72 ) $ 8,242 Other government-related debt securities: U.S. 225 — (2 ) 223 Foreign and other 2,415 18 (11 ) 2,422 Corporate debt securities: Financial 10,089 17 (34 ) 10,072 Industrial 9,688 34 (52 ) 9,670 Other 1,393 3 (6 ) 1,390 Residential-mortgage-backed securities 2,198 — (30 ) 2,168 Other mortgage- and asset-backed securities 2,312 — (15 ) 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities 1,440 — — 1,440 Total interest-bearing securities 41,318 73 (222 ) 41,169 Equity securities 135 14 — 149 Total available-for-sale investments $ 41,453 $ 87 $ (222 ) $ 41,318 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | The fair values of available-for-sale investments by location in the Condensed Consolidated Balance Sheets were as follows (in millions): Condensed Consolidated Balance Sheets locations June 30, December 31, Cash and cash equivalents $ 9,572 $ 3,291 Marketable securities 19,264 37,878 Other assets — 149 Total available-for-sale investments $ 28,836 $ 41,318 |
Fair values of available-for-sale interest-bearing security investments by contractual maturity | The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions): Contractual maturities June 30, December 31, Maturing in one year or less $ 13,265 $ 6,733 Maturing after one year through three years 4,066 12,820 Maturing after three years through five years 7,940 13,836 Maturing after five years through ten years 1,334 3,263 Maturing after ten years — 52 Mortgage- and asset-backed securities 2,231 4,465 Total interest-bearing securities $ 28,836 $ 41,169 |
Available-for-sale securities, continuous unrealized loss position, fair value | The fair values and gross unrealized losses of available-for-sale investments in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position were as follows (in millions): Less than 12 months 12 months or more Types of securities as of June 30, 2018 Fair values Unrealized losses Fair values Unrealized losses U.S. Treasury securities $ 3,355 $ (85 ) $ 36 $ (1 ) Other government-related debt securities: U.S. 102 (3 ) 26 (1 ) Foreign and other 1,209 (56 ) 112 (6 ) Corporate debt securities: Financial 3,673 (115 ) 258 (9 ) Industrial 3,244 (110 ) 314 (12 ) Other 584 (20 ) 65 (3 ) Residential-mortgage-backed securities 1,267 (42 ) 303 (11 ) Other mortgage- and asset-backed securities 540 (16 ) 112 (4 ) Total $ 13,974 $ (447 ) $ 1,226 $ (47 ) Less than 12 months 12 months or more Types of securities as of December 31, 2017 Fair values Unrealized losses Fair values Unrealized losses U.S. Treasury securities $ 7,728 $ (70 ) $ 195 $ (2 ) Other government-related debt securities: U.S. 188 (1 ) 34 (1 ) Foreign and other 1,163 (9 ) 115 (2 ) Corporate debt securities: Financial 5,928 (28 ) 462 (6 ) Industrial 5,760 (43 ) 612 (9 ) Other 868 (4 ) 117 (2 ) Residential-mortgage-backed securities 1,838 (24 ) 276 (6 ) Other mortgage- and asset-backed securities 1,777 (12 ) 250 (3 ) Total $ 25,250 $ (191 ) $ 2,061 $ (31 ) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in millions): June 30, December 31, Raw materials $ 303 $ 232 Work in process 1,702 1,668 Finished goods 1,058 934 Total inventories $ 3,063 $ 2,834 |
Goodwill and other intangible28
Goodwill and other intangible assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amount of goodwill were as follows (in millions): Six months ended Beginning balance $ 14,761 Addition from K-A acquisition 6 Currency translation adjustment (43 ) Ending balance $ 14,724 |
Schedule of identifiable intangible assets | Other intangible assets consisted of the following (in millions): June 30, 2018 December 31, 2017 Gross carrying amounts Accumulated amortization Intangible assets, net Gross carrying amounts Accumulated amortization Intangible assets, net Finite-lived intangible assets: Developed-product-technology rights $ 12,581 $ (7,139 ) $ 5,442 $ 12,589 $ (6,796 ) $ 5,793 Licensing rights 3,772 (1,810 ) 1,962 3,275 (1,601 ) 1,674 Marketing-related rights 1,303 (967 ) 336 1,319 (920 ) 399 R&D technology rights 1,155 (838 ) 317 1,161 (804 ) 357 Total finite-lived intangible assets 18,811 (10,754 ) 8,057 18,344 (10,121 ) 8,223 Indefinite-lived intangible assets: In-process research and development 386 — 386 386 — 386 Total other intangible assets $ 19,197 $ (10,754 ) $ 8,443 $ 18,730 $ (10,121 ) $ 8,609 |
Financing arrangements (Tables)
Financing arrangements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Instruments | Our borrowings consisted of the following (in millions): June 30, December 31, 6.15% notes due 2018 (6.15% 2018 Notes) $ — $ 500 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) 642 653 5.70% notes due 2019 (5.70% 2019 Notes) 1,000 1,000 1.90% notes due 2019 (1.90% 2019 Notes) 700 700 Floating Rate Notes due 2019 550 550 2.20% notes due 2019 (2.20% 2019 Notes) 1,400 1,400 2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) 789 810 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 750 750 Floating Rate Notes due 2020 300 300 2.20% notes due 2020 (2.20% 2020 Notes) 700 700 3.45% notes due 2020 (3.45% 2020 Notes) 900 900 4.10% notes due 2021 (4.10% 2021 Notes) 1,000 1,000 1.85% notes due 2021 (1.85% 2021 Notes) 750 750 3.875% notes due 2021 (3.875% 2021 Notes) 1,750 1,750 1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) 1,461 1,501 2.70% notes due 2022 (2.70% 2022 Notes) 500 500 2.65% notes due 2022 (2.65% 2022 Notes) 1,500 1,500 3.625% notes due 2022 (3.625% 2022 Notes) 750 750 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 707 719 2.25% notes due 2023 (2.25% 2023 Notes) 750 750 3.625% notes due 2024 (3.625% 2024 Notes) 1,400 1,400 3.125% notes due 2025 (3.125% 2025 Notes) 1,000 1,000 2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) 876 901 2.60% notes due 2026 (2.60% 2026 Notes) 1,250 1,250 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 627 642 3.20% notes due 2027 (3.20% 2027 Notes) 1,000 1,000 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 925 946 6.375% notes due 2037 (6.375% 2037 Notes) 552 552 6.90% notes due 2038 (6.90% 2038 Notes) 291 291 6.40% notes due 2039 (6.40% 2039 Notes) 466 466 5.75% notes due 2040 (5.75% 2040 Notes) 412 412 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 974 974 5.65% notes due 2042 (5.65% 2042 Notes) 487 487 5.375% notes due 2043 (5.375% 2043 Notes) 261 261 4.40% notes due 2045 (4.40% 2045 Notes) 2,250 2,250 4.563% notes due 2048 (4.563% 2048 Notes) 1,415 1,415 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 3,541 Other notes due 2097 100 100 Unamortized bond discounts, premiums, issuance costs and fair value adjustments, net (1,129 ) (929 ) Total carrying value of debt 34,497 35,342 Less current portion (4,288 ) (1,152 ) Total noncurrent debt $ 30,209 $ 34,190 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Summary of activity under our stock repurchase program | Activity under our stock repurchase program, on a trade date basis, was as follows (in millions): 2018 2017 Shares Dollars Shares Dollars First quarter 56.4 $ 10,787 3.4 $ 555 Second quarter 18.2 3,190 6.2 1,006 Total stock repurchases 74.6 $ 13,977 9.6 $ 1,561 |
Components of accumulated other comprehensive income | The components of AOCI were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2017 $ (529 ) $ (6 ) $ (144 ) $ — $ (679 ) Cumulative effect of change in accounting principle, net of tax (1) — — (9 ) — (9 ) Foreign currency translation adjustments 29 — — — 29 Unrealized gains (losses) — 149 (482 ) — (333 ) Reclassification adjustments to income — (130 ) 134 — 4 Other — — — 2 2 Income taxes — (13 ) 5 — (8 ) Balance as of March 31, 2018 (500 ) — (496 ) 2 (994 ) Foreign currency translation adjustments (111 ) — — — (111 ) Unrealized losses — (34 ) (106 ) — (140 ) Reclassification adjustments to income — 318 115 — 433 Other — — — — — Income taxes — (61 ) — — (61 ) Balance as of June 30, 2018 $ (611 ) $ 223 $ (487 ) $ 2 $ (873 ) ____________ (1) See Note 1, Summary of significant accounting policies, for additional information regarding the adoption on January 1, 2018, of the new accounting standard related to the classification and measurement of financial instruments and the related cumulative effect from the change in accounting principle. |
Reclassifications out of accumulated other comprehensive income | Reclassifications out of AOCI and into earnings were as follows (in millions): Three months ended Components of AOCI 2018 2017 Condensed Consolidated Statements of Income locations Cash flow hedges: Foreign currency contract (losses) gains $ (20 ) $ 33 Product sales Cross-currency swap contract (losses) gains (298 ) 297 Interest and other income, net (318 ) 330 Income before income taxes 68 (117 ) Provision for income taxes $ (250 ) $ 213 Net income Available-for-sale securities: Net realized losses $ (115 ) $ (47 ) Interest and other income, net 1 (2 ) Provision for income taxes $ (114 ) $ (49 ) Net income Six months ended Components of AOCI 2018 2017 Condensed Consolidated Cash flow hedges: Foreign currency contract (losses) gains $ (54 ) $ 90 Product sales Cross-currency swap contract (losses) gains (134 ) 371 Interest and other income, net (188 ) 461 Income before income taxes 40 (164 ) Provision for income taxes $ (148 ) $ 297 Net income Available-for-sale securities: Net realized losses $ (249 ) $ (96 ) Interest and other income, net 2 (2 ) Provision for income taxes $ (247 ) $ (98 ) Net income |
Fair value measurement (Tables)
Fair value measurement (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis | The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Quoted prices in Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of June 30, 2018, using: Total Assets: Interest-bearing securities: U.S. Treasury securities $ 3,391 $ — $ — $ 3,391 Other government-related debt securities: U.S. — 128 — 128 Foreign and other — 1,390 — 1,390 Corporate debt securities: Financial — 3,968 — 3,968 Industrial — 3,839 — 3,839 Other — 676 — 676 Residential-mortgage-backed securities — 1,579 — 1,579 Other mortgage- and asset-backed securities — 652 — 652 Money market mutual funds 7,341 — — 7,341 Other short-term interest-bearing securities — 5,872 — 5,872 Equity securities 200 — — 200 Derivatives: Foreign currency contracts — 106 — 106 Cross-currency swap contracts — 272 — 272 Total assets $ 10,932 $ 18,482 $ — $ 29,414 Liabilities: Derivatives: Foreign currency contracts $ — $ 65 $ — $ 65 Cross-currency swap contracts — 296 — 296 Interest rate swap contracts — 266 — 266 Contingent consideration obligations — — 72 72 Total liabilities $ — $ 627 $ 72 $ 699 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of December 31, 2017, using: Total Assets: Interest-bearing securities: U.S. Treasury securities $ 8,242 $ — $ — $ 8,242 Other government-related debt securities: U.S. — 223 — 223 Foreign and other — 2,422 — 2,422 Corporate debt securities: Financial — 10,072 — 10,072 Industrial — 9,670 — 9,670 Other — 1,390 — 1,390 Residential-mortgage-backed securities — 2,168 — 2,168 Other mortgage- and asset-backed securities — 2,297 — 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities — 1,440 — 1,440 Equity securities 149 — — 149 Derivatives: Foreign currency contracts — 6 — 6 Cross-currency swap contracts — 270 — 270 Interest rate swap contracts — 10 — 10 Total assets $ 11,636 $ 29,968 $ — $ 41,604 Liabilities: Derivatives: Foreign currency contracts $ — $ 204 $ — $ 204 Cross-currency swap contracts — 220 — 220 Interest rate swap contracts — 61 — 61 Contingent consideration obligations — — 69 69 Total liabilities $ — $ 485 $ 69 $ 554 |
Changes in carrying amounts of contingent consideration obligations | Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Three months ended Six months ended 2018 2017 2018 2017 Beginning balance $ 110 $ 184 $ 69 $ 179 Addition from K-A acquisition — — 45 — Net changes in valuations (38 ) (2 ) (42 ) 3 Ending balance $ 72 $ 182 $ 72 $ 182 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts and interest rates for cross-currency swaps | The notional amounts and interest rates of our cross-currency swaps as of June 30, 2018 , were as follows (notional amounts in millions): Foreign currency U.S. dollars Hedged notes Notional amounts Interest rates Notional amounts Interest rates 2.125% 2019 euro Notes € 675 2.125 % $ 864 2.6 % 1.25% 2022 euro Notes € 1,250 1.25 % $ 1,388 3.2 % 0.41% 2023 Swiss franc Bonds CHF 700 0.41 % $ 704 3.4 % 2.00% 2026 euro Notes € 750 2.00 % $ 833 3.9 % 5.50% 2026 pound sterling Notes £ 475 5.50 % $ 747 6.0 % 4.00% 2029 pound sterling Notes £ 700 4.00 % $ 1,111 4.5 % |
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended Derivatives in cash flow hedging relationships 2018 2017 2018 2017 Foreign currency contracts $ 281 $ (203 ) $ 192 $ (250 ) Cross-currency swap contracts (315 ) 217 (77 ) 281 Forward interest rate contracts — 3 — 3 Total unrealized (losses) gains $ (34 ) $ 17 $ 115 $ 34 |
Location in the Condensed Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges | The locations in the Condensed Consolidated Statements of Income and the gains and losses reclassified out of AOCI and into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended Derivatives in cash flow hedging relationships Condensed Consolidated Statements of Income locations 2018 2017 2018 2017 Foreign currency contracts Product sales $ (20 ) $ 33 $ (54 ) $ 90 Cross-currency swap contracts Interest and other income, net (298 ) 297 (134 ) 371 Total realized (losses) gains $ (318 ) $ 330 $ (188 ) $ 461 |
Derivatives in fair value hedging relationships | Net unrealized gains and losses on our outstanding interest rate swap contracts were as follows (in millions): Three months ended Six months ended Derivatives in fair value hedging relationships 2018 2017 2018 2017 Net unrealized (losses) gains recognized for interest rate swap contracts $ (51 ) $ 37 $ (215 ) $ 18 Net unrealized gains (losses) recognized for related hedged debt $ 51 $ (37 ) $ 215 $ (18 ) The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions): Carrying amounts of hedged liabilities (1) Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities (2) June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Current portion of long-term debt $ 2,398 $ 500 $ — $ 23 Long-term debt $ 7,905 $ 10,516 $ (217 ) $ (11 ) ____________ (1) Current portion of long-term debt includes $1.0 billion and $500 million of carrying value with discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. Long-term debt includes $137 million and $1.1 billion of carrying value with discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. (2) Current portion of long-term debt includes $11 million and $23 million of hedging adjustments on discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. Long-term debt includes $37 million and $40 million of hedging adjustments on discontinued hedging relationships as of June 30, 2018 and December 31, 2017 , respectively. |
Summary of amounts of income and expense line items | The following table summarizes the amounts of income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions): Three months ended June 30, 2018 Six months ended June 30, 2018 Product sales Interest and other income, net Interest (expense), net Product sales Interest and other income, net Interest (expense), net Total amounts of income and (expense) line items presented in the Condensed Consolidated Statements of Income $ 5,679 $ 162 $ (347 ) $ 11,022 $ 393 $ (685 ) The effects of cash flow and fair value hedging: Losses on cash flow hedging relationships reclassified out of AOCI: Foreign currency contracts $ (20 ) $ — $ — $ (54 ) $ — $ — Cross-currency swap contracts $ — $ (298 ) $ — $ — $ (134 ) $ — Gains (losses) on fair value hedging relationships—interest rate swap agreements: Hedged items (1) $ — $ — $ 58 $ — $ — $ 230 Derivatives designated as hedging instruments $ — $ — $ (51 ) $ — $ — $ (215 ) __________ (1) The amounts include benefits of $7 million and $15 million related to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships for the three and six months ended June 30, 2018 , respectively. |
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for the derivative instruments not designated as hedging instruments | The location in the Condensed Consolidated Statements of Income and the amounts of gains recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions): Three months ended Six months ended Derivatives not designated as hedging instruments Condensed Consolidated Statements of Income location 2018 2017 2018 2017 Foreign currency contracts Interest and other income, net $ 26 $ 13 $ 33 $ 14 |
Fair values of derivatives included in the Condensed Consolidated Balance Sheets | The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities June 30, 2018 Condensed Consolidated Balance Sheet locations Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other assets $ 106 Accrued liabilities/ Other noncurrent liabilities $ 65 Cross-currency swap contracts Other current assets/ Other assets 272 Accrued liabilities/ Other noncurrent liabilities 296 Interest rate swap contracts Other current assets/ Other assets — Accrued liabilities/ Other noncurrent liabilities 266 Total derivatives designated as hedging instruments $ 378 $ 627 Derivative assets Derivative liabilities December 31, 2017 Condensed Consolidated Balance Sheet locations Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other assets $ 6 Accrued liabilities/ Other noncurrent liabilities $ 204 Cross-currency swap contracts Other current assets/ Other assets 270 Accrued liabilities/ Other noncurrent liabilities 220 Interest rate swap contracts Other current assets/ Other assets 10 Accrued liabilities/ Other noncurrent liabilities 61 Total derivatives designated as hedging instruments $ 286 $ 485 |
Summary of significant accoun33
Summary of significant accounting policies (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2018USD ($)segment | Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | segment | 1 | |
Accumulated depreciation and amortization on property, plant and equipment | $ 7,800 | $ 7,600 |
Prior period sales due to change in estimates as a percentage of aggregate sales deductions (less than) | 1.00% | |
Sales return provisions as a percentage of gross product sales (less than) | 1.00% | |
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Accumulated deficit | $ (15,266) | (5,072) |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||
New Accounting Pronouncement, Early Adoption [Line Items] | ||
Accumulated deficit | $ 25 |
Restructuring (Details)
Restructuring (Details) $ in Millions | Jun. 30, 2018USD ($) |
Separation and Other Headcount-related Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | $ 549 |
Asset-related Charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 245 |
Minimum [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Expected pre-tax accounting charges | 800 |
Separation and other headcount-related costs | 540 |
Accelerated depreciation and asset impairment and other related charges | 260 |
Maximum [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Expected pre-tax accounting charges | 900 |
Separation and other headcount-related costs | 600 |
Accelerated depreciation and asset impairment and other related charges | $ 300 |
Business combinations (Details
Business combinations (Details Textual) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 1984 | |
Business Acquisition [Line Items] | ||||
Net gain on remeasurement | $ 80 | |||
Goodwill | $ 14,724 | $ 14,761 | ||
Corporate Joint Venture [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash paid | $ 780 | |||
Kirin-Amgen, Inc. (K-A) [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 50.00% | |||
Ownership percentage | 50.00% | 50.00% | ||
Carrying value of equity method investment | $ 570 | |||
Kirin-Amgen, Inc. (K-A) [Member] | Kirin [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership percentage | 50.00% | |||
Kirin-Amgen, Inc. (K-A) [Member] | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 50.00% | |||
Ownership interest in acquiree prior to acquisition (as a percent) | 50.00% | |||
Cash paid | $ 780 | |||
Estimated fair values of contingent consideration obligations | 45 | |||
Fair value of assets acquired, cash | 977 | |||
Fair value of liabilities assumed, deferred tax liabilities | 102 | |||
Fair value of assets acquired and liabilities assumed, net other assets and liabilities | 131 | |||
Goodwill | 6 | |||
Kirin-Amgen, Inc. (K-A) [Member] | Licensing Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Fair value of assets acquired, licensing rights | $ 470 | |||
Weighted average period of amortization | 4 years |
Business combinations (Aggregat
Business combinations (Aggregate Consideration Paid) (Details) - Kirin-Amgen, Inc. (K-A) [Member] $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Business Acquisition [Line Items] | |
Total cash paid to Kirin | $ 780 |
Fair value of contingent consideration obligation | 45 |
Loss on settlement of preexisting relationship | (168) |
Total consideration transferred to acquire K-A | 657 |
Fair value of Amgen’s investment in K-A | 825 |
Total acquisition date fair value | $ 1,482 |
Revenues (Revenues by Product a
Revenues (Revenues by Product and by Geographic Area) (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Revenue from External Customer [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Total revenues | $ 6,059 | $ 5,810 | $ 11,613 | $ 11,274 |
Hedging gains (losses) | (20) | 33 | (54) | 90 |
Product sales [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 5,679 | 5,574 | 11,022 | 10,773 |
Product sales [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 4,367 | 4,386 | 8,514 | 8,481 |
Product sales [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 1,312 | 1,188 | 2,508 | 2,292 |
Enbrel [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 1,302 | 1,466 | 2,407 | 2,647 |
Enbrel [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 1,252 | 1,411 | 2,302 | 2,529 |
Enbrel [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 50 | 55 | 105 | 118 |
Neulasta® [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 1,100 | 1,087 | 2,255 | 2,297 |
Neulasta® [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 948 | 937 | 1,957 | 1,985 |
Neulasta® [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 152 | 150 | 298 | 312 |
Prolia® [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 610 | 505 | 1,104 | 930 |
Prolia® [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 396 | 326 | 716 | 605 |
Prolia® [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 214 | 179 | 388 | 325 |
Aranesp® [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 472 | 535 | 926 | 1,046 |
Aranesp® [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 241 | 288 | 466 | 566 |
Aranesp® [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 231 | 247 | 460 | 480 |
Sensipar® / Mimpara® [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 420 | 427 | 917 | 848 |
Sensipar® / Mimpara® [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 330 | 342 | 739 | 679 |
Sensipar® / Mimpara® [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 90 | 85 | 178 | 169 |
XGEVA® [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 452 | 395 | 897 | 797 |
XGEVA® [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 339 | 292 | 671 | 590 |
XGEVA® [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 113 | 103 | 226 | 207 |
EPOGEN® [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 250 | 292 | 494 | 562 |
EPOGEN® [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 250 | 292 | 494 | 562 |
EPOGEN® [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 0 | 0 | 0 | 0 |
Other products [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 1,073 | 867 | 2,022 | 1,646 |
Other products [Member] | US [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 611 | 498 | 1,169 | 965 |
Other products [Member] | ROW [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total product sales | 462 | 369 | 853 | 681 |
Other revenues [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | $ 380 | $ 236 | $ 591 | $ 501 |
Revenues (Details Textual)
Revenues (Details Textual) | 6 Months Ended |
Jun. 30, 2018 | |
Minimum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue payment term | 30 days |
Maximum [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue payment term | 120 days |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 13.30% | 15.40% | 12.50% | 15.60% |
Increase in unrecognized tax benefits resulting from tax positions taken during the current period | $ 80 | $ 155 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income (Numerator): | ||||
Net income for basic and diluted EPS | $ 2,296 | $ 2,151 | $ 4,607 | $ 4,222 |
Shares (Denominator): | ||||
Weighted-average shares for basic EPS (in shares) | 656 | 734 | 682 | 736 |
Effect of dilutive securities (in shares) | 4 | 4 | 3 | 4 |
Weighted-average shares for diluted EPS (in shares) | 660 | 738 | 685 | 740 |
Basic EPS (in usd per share) | $ 3.50 | $ 2.93 | $ 6.76 | $ 5.74 |
Diluted EPS (in usd per share) | $ 3.48 | $ 2.91 | $ 6.73 | $ 5.71 |
Collaborations (Details)
Collaborations (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 30, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenues | $ 6,059 | $ 5,810 | $ 11,613 | $ 11,274 | |
Other revenues [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenues | 380 | $ 236 | $ 591 | $ 501 | |
Collaborative arrangement with Novartis Pharma AG [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Potential future milestone payment | $ 250 | ||||
Collaborative arrangement with Novartis Pharma AG [Member] | Other revenues [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Revenues | $ 148 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Debt securities | ||
Amortized cost | $ 29,324 | |
Gross unrealized gains | 6 | |
Gross unrealized losses | (494) | |
Fair values | 28,836 | $ 41,169 |
Equity securities | ||
Amortized cost | 135 | |
Gross unrealized gains | 14 | |
Gross unrealized losses | 0 | |
Fair values | 149 | |
Amortized cost | 41,453 | |
Gross unrealized gains | 87 | |
Gross unrealized losses | (222) | |
Fair values | 41,318 | |
U.S. Treasury securities [Member] | ||
Debt securities | ||
Amortized cost | 3,477 | 8,313 |
Gross unrealized gains | 0 | 1 |
Gross unrealized losses | (86) | (72) |
Fair values | 3,391 | 8,242 |
Other government-related debt securities - U.S. [Member] | ||
Debt securities | ||
Amortized cost | 132 | 225 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (4) | (2) |
Fair values | 128 | 223 |
Other government-related debt securities - Foreign and other [Member] | ||
Debt securities | ||
Amortized cost | 1,451 | 2,415 |
Gross unrealized gains | 1 | 18 |
Gross unrealized losses | (62) | (11) |
Fair values | 1,390 | 2,422 |
Corporate debt securities - Financial [Member] | ||
Debt securities | ||
Amortized cost | 4,091 | 10,089 |
Gross unrealized gains | 1 | 17 |
Gross unrealized losses | (124) | (34) |
Fair values | 3,968 | 10,072 |
Corporate debt securities - Industrial [Member] | ||
Debt securities | ||
Amortized cost | 3,957 | 9,688 |
Gross unrealized gains | 4 | 34 |
Gross unrealized losses | (122) | (52) |
Fair values | 3,839 | 9,670 |
Corporate debt securities - Other [Member] | ||
Debt securities | ||
Amortized cost | 699 | 1,393 |
Gross unrealized gains | 0 | 3 |
Gross unrealized losses | (23) | (6) |
Fair values | 676 | 1,390 |
Residential mortgage-backed securities [Member] | ||
Debt securities | ||
Amortized cost | 1,632 | 2,198 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (53) | (30) |
Fair values | 1,579 | 2,168 |
Other mortgage- and asset-backed securities [Member] | ||
Debt securities | ||
Amortized cost | 672 | 2,312 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (20) | (15) |
Fair values | 652 | 2,297 |
Money market mutual funds [Member] | ||
Debt securities | ||
Amortized cost | 7,341 | 3,245 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 7,341 | 3,245 |
Other short-term interest-bearing securities [Member] | ||
Debt securities | ||
Amortized cost | 5,872 | 1,440 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | $ 5,872 | 1,440 |
Total interest-bearing securities [Member] | ||
Debt securities | ||
Amortized cost | 41,318 | |
Gross unrealized gains | 73 | |
Gross unrealized losses | (222) | |
Fair values | $ 41,169 |
Investments (Fair Values by Cla
Investments (Fair Values by Classification) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||||
Cash and cash equivalents | $ 10,131 | $ 3,800 | $ 2,629 | $ 3,241 |
Marketable securities | 19,264 | 37,878 | ||
Other assets | 1,625 | 2,119 | ||
Total available-for-sale investments | 28,836 | 41,169 | ||
Total available-for-sale investments | 41,318 | |||
Available-for-sale investments [Member] | ||||
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||||
Cash and cash equivalents | 9,572 | 3,291 | ||
Marketable securities | 19,264 | 37,878 | ||
Other assets | 0 | 149 | ||
Total available-for-sale investments | $ 28,836 | |||
Total available-for-sale investments | $ 41,318 |
Investments (Fair Values by Con
Investments (Fair Values by Contractual Maturity) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Maturing in one year or less | $ 13,265 | $ 6,733 |
Maturing after one year through three years | 4,066 | 12,820 |
Maturing after three years through five years | 7,940 | 13,836 |
Maturing after five years through ten years | 1,334 | 3,263 |
Maturing after ten years | 0 | 52 |
Mortgage- and asset-backed securities | 2,231 | 4,465 |
Total available-for-sale investments | $ 28,836 | $ 41,169 |
Investments (Unrealized Losses
Investments (Unrealized Losses and Fair Values) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | $ 13,974 | $ 25,250 |
Less than 12 months, Unrealized losses | (447) | (191) |
12 months or more, Fair values | 1,226 | 2,061 |
12 months or more, Unrealized losses | (47) | (31) |
U.S. Treasury securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 3,355 | 7,728 |
Less than 12 months, Unrealized losses | (85) | (70) |
12 months or more, Fair values | 36 | 195 |
12 months or more, Unrealized losses | (1) | (2) |
Other government-related debt securities - U.S. [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 102 | 188 |
Less than 12 months, Unrealized losses | (3) | (1) |
12 months or more, Fair values | 26 | 34 |
12 months or more, Unrealized losses | (1) | (1) |
Other government-related debt securities - Foreign and other [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 1,209 | 1,163 |
Less than 12 months, Unrealized losses | (56) | (9) |
12 months or more, Fair values | 112 | 115 |
12 months or more, Unrealized losses | (6) | (2) |
Corporate debt securities - Financial [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 3,673 | 5,928 |
Less than 12 months, Unrealized losses | (115) | (28) |
12 months or more, Fair values | 258 | 462 |
12 months or more, Unrealized losses | (9) | (6) |
Corporate debt securities - Industrial [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 3,244 | 5,760 |
Less than 12 months, Unrealized losses | (110) | (43) |
12 months or more, Fair values | 314 | 612 |
12 months or more, Unrealized losses | (12) | (9) |
Corporate debt securities - Other [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 584 | 868 |
Less than 12 months, Unrealized losses | (20) | (4) |
12 months or more, Fair values | 65 | 117 |
12 months or more, Unrealized losses | (3) | (2) |
Residential mortgage-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 1,267 | 1,838 |
Less than 12 months, Unrealized losses | (42) | (24) |
12 months or more, Fair values | 303 | 276 |
12 months or more, Unrealized losses | (11) | (6) |
Other mortgage- and asset-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair values | 540 | 1,777 |
Less than 12 months, Unrealized losses | (16) | (12) |
12 months or more, Fair values | 112 | 250 |
12 months or more, Unrealized losses | $ (4) | $ (3) |
Investments (Available-for-sale
Investments (Available-for-sale Investments) (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Cash and cash equivalents | $ 559 | $ 559 | $ 509 | ||
Total realized gains | 5 | $ 34 | 22 | $ 65 | |
Total realized losses | $ 120 | $ 87 | $ 271 | $ 171 |
Investments (Equity Securities)
Investments (Equity Securities) (Details Textual) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Equity securities | $ 200,000,000 | |
Equity securities | $ 149,000,000 |
Investments Investments (Limite
Investments Investments (Limited Partnership Investments) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Limited Partnership [Member] | Fair Value Measured at Net Asset Value Per Share [Member] | ||
Net Investment Income [Line Items] | ||
Investments | $ 266 | $ 213 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 303 | $ 232 |
Work in process | 1,702 | 1,668 |
Finished goods | 1,058 | 934 |
Total inventories | $ 3,063 | $ 2,834 |
Goodwill and other intangible50
Goodwill and other intangible assets (Goodwill Roll Forward) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 14,761 |
Addition from K-A acquisition | 6 |
Currency translation adjustment | (43) |
Ending balance | $ 14,724 |
Goodwill and other intangible51
Goodwill and other intangible assets (Identifiable Intangible Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Finite-lived intangible assets: | ||
Gross carrying amounts | $ 18,811 | $ 18,344 |
Accumulated amortization | (10,754) | (10,121) |
Intangible assets, net | 8,057 | 8,223 |
Indefinite-lived intangible assets: | ||
Gross carrying amount | 19,197 | 18,730 |
Accumulated amortization | (10,754) | (10,121) |
Intangible assets, net | 8,443 | 8,609 |
In-process Research and Development [Member] | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 386 | 386 |
Developed-Product-Technology Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amounts | 12,581 | 12,589 |
Accumulated amortization | (7,139) | (6,796) |
Intangible assets, net | 5,442 | 5,793 |
Licensing Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amounts | 3,772 | 3,275 |
Accumulated amortization | (1,810) | (1,601) |
Intangible assets, net | 1,962 | 1,674 |
Marketing-Related Intangible Assets [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amounts | 1,303 | 1,319 |
Accumulated amortization | (967) | (920) |
Intangible assets, net | 336 | 399 |
R&D Technology Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amounts | 1,155 | 1,161 |
Accumulated amortization | (838) | (804) |
Intangible assets, net | $ 317 | $ 357 |
Goodwill and other intangible52
Goodwill and other intangible assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization charges associated with finite-lived intangible assets | $ 332 | $ 371 | $ 652 | $ 744 |
Total estimated amortization of finite-lived intangible assets for the six months ending December 31, 2018 | 700 | 700 | ||
Total estimated amortization of finite-lived intangible assets for 2019 | 1,300 | 1,300 | ||
Total estimated amortization of finite-lived intangible assets for 2020 | 1,200 | 1,200 | ||
Total estimated amortization of finite-lived intangible assets for 2021 | 1,000 | 1,000 | ||
Total estimated amortization of finite-lived intangible assets for 2022 | 900 | 900 | ||
Total estimated amortization of finite-lived intangible assets for 2023 | $ 900 | $ 900 |
Financing arrangements (Princip
Financing arrangements (Principal Amounts and Carrying Value of Long-term Borrowings) (Details) $ in Millions | Jun. 30, 2018USD ($) | Jun. 30, 2018EUR (€) | Jun. 30, 2018CHF (SFr) | Jun. 30, 2018GBP (£) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||
Unamortized bond discounts, premiums, issuance costs and fair value adjustments, net | $ (1,129) | $ (929) | |||
Total carrying value of debt | 34,497 | 35,342 | |||
Less current portion | (4,288) | (1,152) | |||
Total noncurrent debt | 30,209 | 34,190 | |||
Notes [Member] | 6.15% notes due 2018 (6.15% 2018 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 0 | 500 | |||
Interest rate, stated percentage | 6.15% | 6.15% | 6.15% | 6.15% | |
Notes [Member] | 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 642 | 653 | |||
Face amount | € | € 550,000,000 | ||||
Interest rate, stated percentage | 4.375% | 4.375% | 4.375% | 4.375% | |
Notes [Member] | 5.70% notes due 2019 (5.70% 2019 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,000 | 1,000 | |||
Interest rate, stated percentage | 5.70% | 5.70% | 5.70% | 5.70% | |
Notes [Member] | 1.90% notes due 2019 (1.90% 2019 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 700 | 700 | |||
Interest rate, stated percentage | 1.90% | 1.90% | 1.90% | 1.90% | |
Notes [Member] | Floating Rate Notes due 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 550 | 550 | |||
Notes [Member] | 2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,400 | 1,400 | |||
Interest rate, stated percentage | 2.20% | 2.20% | 2.20% | 2.20% | |
Notes [Member] | 2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 789 | 810 | |||
Face amount | € | € 675,000,000 | ||||
Interest rate, stated percentage | 2.125% | 2.125% | 2.125% | 2.125% | |
Notes [Member] | 4.50% notes due 2020 (4.50% 2020 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 300 | 300 | |||
Interest rate, stated percentage | 4.50% | 4.50% | 4.50% | 4.50% | |
Notes [Member] | 2.125% notes due 2020 (2.125% 2020 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 750 | 750 | |||
Interest rate, stated percentage | 2.125% | 2.125% | 2.125% | 2.125% | |
Notes [Member] | Floating Rate Notes Due 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 300 | 300 | |||
Notes [Member] | 2.20% notes due 2020 (2.20% 2020 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 700 | 700 | |||
Interest rate, stated percentage | 2.20% | 2.20% | 2.20% | 2.20% | |
Notes [Member] | 3.45% notes due 2020 (3.45% 2020 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 900 | 900 | |||
Interest rate, stated percentage | 3.45% | 3.45% | 3.45% | 3.45% | |
Notes [Member] | 4.10% notes due 2021 (4.10% 2021 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,000 | 1,000 | |||
Interest rate, stated percentage | 4.10% | 4.10% | 4.10% | 4.10% | |
Notes [Member] | 1.85% notes due 2021 (1.85% 2021 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 750 | 750 | |||
Interest rate, stated percentage | 1.85% | 1.85% | 1.85% | 1.85% | |
Notes [Member] | 3.875% notes due 2021 (3.875% 2021 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,750 | 1,750 | |||
Interest rate, stated percentage | 3.875% | 3.875% | 3.875% | 3.875% | |
Notes [Member] | 1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,461 | 1,501 | |||
Face amount | € | € 1,250,000,000 | ||||
Interest rate, stated percentage | 1.25% | 1.25% | 1.25% | 1.25% | |
Notes [Member] | 2.70% notes due 2022 (2.70% 2022 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 500 | 500 | |||
Interest rate, stated percentage | 2.70% | 2.70% | 2.70% | 2.70% | |
Notes [Member] | 2.65% notes due 2022 (2.65% 2022 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,500 | 1,500 | |||
Interest rate, stated percentage | 2.65% | 2.65% | 2.65% | 2.65% | |
Notes [Member] | 3.625% notes due 2022 (3.625% 2022 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 750 | 750 | |||
Interest rate, stated percentage | 3.625% | 3.625% | 3.625% | 3.625% | |
Notes [Member] | 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 707 | 719 | |||
Face amount | SFr | SFr 700,000,000 | ||||
Interest rate, stated percentage | 0.41% | 0.41% | 0.41% | 0.41% | |
Notes [Member] | 2.25% notes due 2023 (2.25% 2023 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 750 | 750 | |||
Interest rate, stated percentage | 2.25% | 2.25% | 2.25% | 2.25% | |
Notes [Member] | 3.625% notes due 2024 (3.625% 2024 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,400 | 1,400 | |||
Interest rate, stated percentage | 3.625% | 3.625% | 3.625% | 3.625% | |
Notes [Member] | 3.125% notes due 2025 (3.125% 2025 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,000 | 1,000 | |||
Interest rate, stated percentage | 3.125% | 3.125% | 3.125% | 3.125% | |
Notes [Member] | 2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 876 | 901 | |||
Face amount | € | € 750,000,000 | ||||
Interest rate, stated percentage | 2.00% | 2.00% | 2.00% | 2.00% | |
Notes [Member] | 2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,250 | 1,250 | |||
Interest rate, stated percentage | 2.60% | 2.60% | 2.60% | 2.60% | |
Notes [Member] | 5.50% pound-sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 627 | 642 | |||
Face amount | £ | £ 475,000,000 | ||||
Interest rate, stated percentage | 5.50% | 5.50% | 5.50% | 5.50% | |
Notes [Member] | 3.20% notes due 2027 (3.20% 2027 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,000 | 1,000 | |||
Interest rate, stated percentage | 3.20% | 3.20% | 3.20% | 3.20% | |
Notes [Member] | 4.00% pound-sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 925 | 946 | |||
Face amount | £ | £ 700,000,000 | ||||
Interest rate, stated percentage | 4.00% | 4.00% | 4.00% | 4.00% | |
Notes [Member] | 6.375% notes due 2037 (6.375% 2037 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 552 | 552 | |||
Interest rate, stated percentage | 6.375% | 6.375% | 6.375% | 6.375% | |
Notes [Member] | 6.90% notes due 2038 (6.90% 2038 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 291 | 291 | |||
Interest rate, stated percentage | 6.90% | 6.90% | 6.90% | 6.90% | |
Notes [Member] | 6.40% notes due 2039 (6.40% 2039 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 466 | 466 | |||
Interest rate, stated percentage | 6.40% | 6.40% | 6.40% | 6.40% | |
Notes [Member] | 5.75% notes due 2040 (5.75% 2040 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 412 | 412 | |||
Interest rate, stated percentage | 5.75% | 5.75% | 5.75% | 5.75% | |
Notes [Member] | 4.95% notes due 2041 (4.95% 2041 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 600 | 600 | |||
Interest rate, stated percentage | 4.95% | 4.95% | 4.95% | 4.95% | |
Notes [Member] | 5.15% notes due 2041 (5.15% 2041 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 974 | 974 | |||
Interest rate, stated percentage | 5.15% | 5.15% | 5.15% | 5.15% | |
Notes [Member] | 5.65% notes due 2042 (5.65% 2042 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 487 | 487 | |||
Interest rate, stated percentage | 5.65% | 5.65% | 5.65% | 5.65% | |
Notes [Member] | 5.375% notes due 2043 (5.375% 2043 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 261 | 261 | |||
Interest rate, stated percentage | 5.375% | 5.375% | 5.375% | 5.375% | |
Notes [Member] | 4.40% notes due 2045 (4.40% 2045 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 2,250 | 2,250 | |||
Interest rate, stated percentage | 4.40% | 4.40% | 4.40% | 4.40% | |
Notes [Member] | 4.563% notes due 2048 (4.563% 2048 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 1,415 | 1,415 | |||
Interest rate, stated percentage | 4.563% | 4.563% | 4.563% | 4.563% | |
Notes [Member] | 4.663% notes due 2051 (4.663% 2051 Notes) [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 3,541 | 3,541 | |||
Interest rate, stated percentage | 4.663% | 4.663% | 4.663% | 4.663% | |
Notes [Member] | Other notes due 2097 [Member] | |||||
Debt Instrument [Line Items] | |||||
Long-term debt, gross | $ 100 | $ 100 |
Financing arrangements (Details
Financing arrangements (Details Textual) - Notes [Member] | Jun. 30, 2018 |
4.563% 2048 Notes [Member] | |
Debt Instrument [Line Items] | |
Interest rate, stated percentage | 4.563% |
Effective interest rate | 6.30% |
4.663% 2051 Notes [Member] | |
Debt Instrument [Line Items] | |
Interest rate, stated percentage | 4.663% |
Effective interest rate | 5.60% |
Stockholders' equity (Share Rep
Stockholders' equity (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions | Mar. 08, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Equity [Abstract] | |||||||
Stock repurchased, Shares | 52.1 | 18.2 | 56.4 | 6.2 | 3.4 | 74.6 | 9.6 |
Stock repurchased | $ 3,190 | $ 10,787 | $ 1,006 | $ 555 | $ 13,977 | $ 1,561 |
Stockholders' equity (Details T
Stockholders' equity (Details Textual) - USD ($) $ / shares in Units, shares in Millions | Mar. 08, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Apr. 30, 2018 | Jan. 31, 2018 |
Equity [Abstract] | ||||||||||||
Stock repurchase program, additional authorized amount | $ 5,000,000,000 | $ 10,000,000,000 | ||||||||||
Number of shares repurchased | 52.1 | 18.2 | 56.4 | 6.2 | 3.4 | 74.6 | 9.6 | |||||
Stock repurchase program, tender offer amount | $ 10,000,000,000 | |||||||||||
Amount available for stock repurchases under a board approved stock repurchase plan | $ 5,400,000,000 | $ 5,400,000,000 | $ 5,400,000,000 | |||||||||
Dividends declared per share (in usd per share) | $ 1.32 | $ 1.32 | ||||||||||
Dividends paid per share (in usd per share) | $ 1.32 | $ 1.32 | $ 1.32 | $ 1.15 | $ 2.64 | $ 2.3 |
Stockholders' equity (Component
Stockholders' equity (Components of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | $ 25,241 | $ 25,241 | ||||
Foreign currency translation adjustments | $ (111) | $ 35 | (82) | $ 59 | ||
Balance as of end of period | 14,909 | 14,909 | ||||
Foreign currency translation [Member] | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | (500) | (529) | (529) | |||
Foreign currency translation adjustments | (111) | 29 | ||||
Income taxes | 0 | |||||
Balance as of end of period | (611) | (500) | (611) | |||
Cash flow hedges [Member] | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | 0 | (6) | (6) | |||
Unrealized gains (losses) | (34) | 149 | ||||
Reclassification adjustments to income | 318 | (130) | ||||
Income taxes | (61) | (13) | ||||
Balance as of end of period | 223 | 0 | 223 | |||
Available-for-sale securities [Member] | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | (496) | (144) | (144) | |||
Cumulative effect of change in accounting principle, net of tax(1) | $ (9) | |||||
Unrealized gains (losses) | (106) | (482) | ||||
Reclassification adjustments to income | 115 | 134 | ||||
Income taxes | 5 | |||||
Balance as of end of period | (487) | (496) | (487) | |||
Other [Member] | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | 2 | 0 | 0 | |||
Unrealized gains (losses) | 0 | 0 | ||||
Other | 2 | |||||
Balance as of end of period | 2 | 2 | 2 | |||
AOCI [Member] | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | (994) | (679) | (679) | |||
Cumulative effect of change in accounting principle, net of tax(1) | $ (9) | |||||
Foreign currency translation adjustments | (111) | 29 | ||||
Unrealized gains (losses) | (140) | (333) | ||||
Reclassification adjustments to income | 433 | 4 | ||||
Other | 0 | 2 | ||||
Income taxes | (61) | (8) | ||||
Balance as of end of period | $ (873) | $ (994) | $ (873) |
Stockholders' equity (Reclassif
Stockholders' equity (Reclassifications out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other income, net | $ 162 | $ 165 | $ 393 | $ 360 |
Income before income taxes | 2,647 | 2,542 | 5,266 | 5,002 |
Provision for income taxes | (351) | (391) | (659) | (780) |
Net income | 2,296 | 2,151 | 4,607 | 4,222 |
Product sales [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Product sales | 5,679 | 5,574 | 11,022 | 10,773 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedges [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income before income taxes | (318) | 330 | (188) | 461 |
Provision for income taxes | 68 | (117) | 40 | (164) |
Net income | (250) | 213 | (148) | 297 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Available-for-sale securities [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other income, net | (115) | (47) | (249) | (96) |
Provision for income taxes | 1 | (2) | 2 | (2) |
Net income | (114) | (49) | (247) | (98) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign currency contract [Member] | Cash flow hedges [Member] | Product sales [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Product sales | (20) | (54) | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cross-currency swap contract [Member] | Cash flow hedges [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other income, net | (298) | (134) | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedges [Member] | Cash flow hedges [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income before income taxes | (318) | 330 | (188) | 461 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedges [Member] | Foreign currency contract [Member] | Cash flow hedges [Member] | Product sales [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Product sales | (20) | 33 | (54) | 90 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedges [Member] | Cross-currency swap contract [Member] | Cash flow hedges [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other income, net | $ (298) | $ 297 | $ (134) | $ 371 |
Fair value measurement (Details
Fair value measurement (Details) - USD ($) | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Assets: | ||||||
Interest-bearing securities | $ 28,836,000,000 | $ 41,169,000,000 | ||||
Equity securities | 200,000,000 | |||||
Fair Value, Measurements, Recurring [Member] | ||||||
Assets: | ||||||
Equity securities | 200,000,000 | 149,000,000 | ||||
Derivatives: | ||||||
Total assets | 29,414,000,000 | 41,604,000,000 | ||||
Derivatives: | ||||||
Contingent consideration obligations in connection with business combinations | 72,000,000 | 69,000,000 | ||||
Total liabilities | 699,000,000 | 554,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Foreign currency contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 106,000,000 | 6,000,000 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 65,000,000 | 204,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Cross-currency swap contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 272,000,000 | 270,000,000 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 296,000,000 | 220,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Interest rate swap contracts [Member] | ||||||
Derivatives: | ||||||
Interest rate contracts | 10,000,000 | |||||
Derivatives: | ||||||
Interest rate swap contracts | 266,000,000 | 61,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 3,391,000,000 | 8,242,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 128,000,000 | 223,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 1,390,000,000 | 2,422,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 3,968,000,000 | 10,072,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 3,839,000,000 | 9,670,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 676,000,000 | 1,390,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 1,579,000,000 | 2,168,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 652,000,000 | 2,297,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 7,341,000,000 | 3,245,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 5,872,000,000 | 1,440,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||||
Assets: | ||||||
Equity securities | 200,000,000 | 149,000,000 | ||||
Derivatives: | ||||||
Total assets | 10,932,000,000 | 11,636,000,000 | ||||
Derivatives: | ||||||
Contingent consideration obligations in connection with business combinations | 0 | 0 | ||||
Total liabilities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Foreign currency contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Cross-currency swap contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Interest rate swap contracts [Member] | ||||||
Derivatives: | ||||||
Interest rate contracts | 0 | |||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 3,391,000,000 | 8,242,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 7,341,000,000 | 3,245,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||||||
Assets: | ||||||
Equity securities | 0 | 0 | ||||
Derivatives: | ||||||
Total assets | 18,482,000,000 | 29,968,000,000 | ||||
Derivatives: | ||||||
Contingent consideration obligations in connection with business combinations | 0 | 0 | ||||
Total liabilities | 627,000,000 | 485,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 106,000,000 | 6,000,000 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 65,000,000 | 204,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross-currency swap contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 272,000,000 | 270,000,000 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 296,000,000 | 220,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Interest rate swap contracts [Member] | ||||||
Derivatives: | ||||||
Interest rate contracts | 10,000,000 | |||||
Derivatives: | ||||||
Interest rate swap contracts | 266,000,000 | 61,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 128,000,000 | 223,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 1,390,000,000 | 2,422,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 3,968,000,000 | 10,072,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 3,839,000,000 | 9,670,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 676,000,000 | 1,390,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 1,579,000,000 | 2,168,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 652,000,000 | 2,297,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 5,872,000,000 | 1,440,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||||||
Assets: | ||||||
Equity securities | 0 | 0 | ||||
Derivatives: | ||||||
Total assets | 0 | 0 | ||||
Derivatives: | ||||||
Contingent consideration obligations in connection with business combinations | 72,000,000 | $ 110,000,000 | 69,000,000 | $ 182,000,000 | $ 184,000,000 | $ 179,000,000 |
Total liabilities | 72,000,000 | 69,000,000 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Foreign currency contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Cross-currency swap contracts [Member] | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Interest rate swap contracts [Member] | ||||||
Derivatives: | ||||||
Interest rate contracts | 0 | |||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Interest-bearing securities | $ 0 | $ 0 |
Fair value measurement (Changes
Fair value measurement (Changes in Contingent Consideration Obligation) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Combination, Contingent Consideration [Roll Forward] | |||||
Beginning balance | $ 69 | $ 69 | |||
Ending balance | $ 72 | 72 | |||
Significant unobservable inputs (Level 3) [Member] | |||||
Business Combination, Contingent Consideration [Roll Forward] | |||||
Beginning balance | 110 | 69 | $ 184 | 69 | $ 179 |
Addition from K-A acquisition | 0 | 0 | 45 | 0 | |
Net changes in valuations | (38) | (2) | (42) | 3 | |
Ending balance | $ 72 | $ 110 | $ 182 | $ 72 | $ 182 |
Fair value measurements (Detail
Fair value measurements (Details Textual) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Length of time hedged in foreign currency contracts (or less) | 3 years | |
Long-term debt, fair value | $ 36,000 | $ 38,600 |
Carrying value of debt | $ 34,497 | $ 35,342 |
Other Government-related and Corporate Debt Securities [Member] | ||
Business Acquisition [Line Items] | ||
Investment maturity period | 5 years |
Derivative instruments (Details
Derivative instruments (Details Textual) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Foreign currency and cross currency swap contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts expected to be reclassified from AOCI into earnings over the next 12 months, foreign currency and cross-currency swaps | $ (119) | |
Rate adjustment to LIBOR on interest rate swap agreements [Member] | Three-Month LIBOR [Member] | Minimum [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, variable interest rate | 0.30% | |
Rate adjustment to LIBOR on interest rate swap agreements [Member] | Three-Month LIBOR [Member] | Maximum [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, variable interest rate | 2.00% | |
Derivatives designated as hedging instrument [Member] | Foreign currency forward contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | $ 4,800 | $ 4,600 |
Derivatives designated as hedging instrument [Member] | Foreign currency option contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | 21 | 74 |
Derivatives designated as hedging instrument [Member] | Interest rate swap [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | 9,450 | 9,450 |
Derivatives not designated as hedging instrument [Member] | Foreign currency forward contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative, notional amount | $ 268 | $ 757 |
Derivative instruments (Cross-c
Derivative instruments (Cross-currency Swaps) (Details) - Cash flow hedge [Member] - Cross-currency swap contracts [Member] € in Millions, £ in Millions, SFr in Millions, $ in Millions | Jun. 30, 2018USD ($) | Jun. 30, 2018EUR (€) | Jun. 30, 2018CHF (SFr) | Jun. 30, 2018GBP (£) |
2.125% 2019 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amounts | $ 864 | € 675 | ||
1.25% 2022 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amounts | 1,388 | 1,250 | ||
0.41% 2023 Swiss franc Bonds [Member] | ||||
Derivative [Line Items] | ||||
Notional amounts | 704 | SFr 700 | ||
2.00% 2026 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amounts | 833 | € 750 | ||
5.50% 2026 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amounts | 747 | £ 475 | ||
4.00% 2029 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amounts | $ 1,111 | £ 700 | ||
Euro Member Countries, Euro | 2.125% 2019 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 2.125% | 2.125% | 2.125% | 2.125% |
Euro Member Countries, Euro | 1.25% 2022 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 1.25% | 1.25% | 1.25% | 1.25% |
Euro Member Countries, Euro | 2.00% 2026 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 2.00% | 2.00% | 2.00% | 2.00% |
Switzerland, Francs | 0.41% 2023 Swiss franc Bonds [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 0.41% | 0.41% | 0.41% | 0.41% |
United Kingdom, Pounds | 5.50% 2026 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 5.50% | 5.50% | 5.50% | 5.50% |
United Kingdom, Pounds | 4.00% 2029 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 4.00% | 4.00% | 4.00% | 4.00% |
United States of America, Dollars | 2.125% 2019 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 2.60% | 2.60% | 2.60% | 2.60% |
United States of America, Dollars | 1.25% 2022 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 3.20% | 3.20% | 3.20% | 3.20% |
United States of America, Dollars | 0.41% 2023 Swiss franc Bonds [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 3.40% | 3.40% | 3.40% | 3.40% |
United States of America, Dollars | 2.00% 2026 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 3.90% | 3.90% | 3.90% | 3.90% |
United States of America, Dollars | 5.50% 2026 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 6.00% | 6.00% | 6.00% | 6.00% |
United States of America, Dollars | 4.00% 2029 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Interest rates | 4.50% | 4.50% | 4.50% | 4.50% |
Derivative instruments (Effecti
Derivative instruments (Effective Portion of Unrealized Gain (Loss)) (Details) - Cash flow hedge [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized (losses) gains | $ (34) | $ 17 | $ 115 | $ 34 |
Foreign currency contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized (losses) gains | 281 | (203) | 192 | (250) |
Cross-currency swap contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized (losses) gains | (315) | 217 | (77) | 281 |
Forward interest rate contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized (losses) gains | $ 0 | $ 3 | $ 0 | $ 3 |
Derivative instruments (Locatio
Derivative instruments (Locations and Effective Portions of Gain (Loss) Reclassified out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other income, net | $ 162 | $ 165 | $ 393 | $ 360 |
Income before income taxes | 2,647 | 2,542 | 5,266 | 5,002 |
Product sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Product sales | 5,679 | 5,574 | 11,022 | 10,773 |
Accumulated net gain (loss) from cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income before income taxes | (318) | 330 | (188) | 461 |
Accumulated net gain (loss) from cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign currency contracts [Member] | Product sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Product sales | (20) | (54) | ||
Accumulated net gain (loss) from cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cross-currency swap contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other income, net | (298) | (134) | ||
Accumulated net gain (loss) from cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Income before income taxes | (318) | 330 | (188) | 461 |
Accumulated net gain (loss) from cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Foreign currency contracts [Member] | Product sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Product sales | (20) | 33 | (54) | 90 |
Accumulated net gain (loss) from cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Cross-currency swap contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other income, net | $ (298) | $ 297 | $ (134) | $ 371 |
Derivative instruments Derivati
Derivative instruments Derivative instruments (Fair Value Hedging Relationships) (Details) - Interest expense, net [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative [Line Items] | ||||
Net unrealized (losses) gains recognized for interest rate swap contracts | $ (51) | $ 37 | $ (215) | $ 18 |
Net unrealized gains (losses) recognized for related hedged debt | $ 51 | $ (37) | $ 215 | $ (18) |
Derivative instruments (Hedged
Derivative instruments (Hedged Liabilities and Cumulative Amount) (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Current portion of long-term debt [Member] | ||
Derivative [Line Items] | ||
Hedged Liability, Discontinued Fair Value Hedge | $ 1,000 | $ 500 |
Carrying amounts of hedged liabilities | 2,398 | 500 |
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | 0 | 23 |
Carrying value with discontinued hedging relationships | 11 | 23 |
Long-term debt [Member] | ||
Derivative [Line Items] | ||
Hedged Liability, Discontinued Fair Value Hedge | 137 | 1,100 |
Carrying amounts of hedged liabilities | 7,905 | 10,516 |
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | (217) | (11) |
Carrying value with discontinued hedging relationships | $ 37 | $ 40 |
Derivative instruments (Summary
Derivative instruments (Summary of Income and Expense Line Items) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other income, net | $ 162 | $ 165 | $ 393 | $ 360 |
Interest expense, net | (347) | (321) | (685) | (647) |
Amortization of cumulative amount of fair value hedging adjustments for discontinued hedging relationships | 7 | 15 | ||
Interest rate swap agreements [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on fair value hedging relationships, Hedged items | 58 | 230 | ||
Gains (losses) on fair value hedging relationships, Derivatives designated as hedging instruments | (51) | (215) | ||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedges [Member] | Cross-currency swap contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and other income, net | (298) | (134) | ||
Product sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Product sales | 5,679 | $ 5,574 | 11,022 | $ 10,773 |
Product sales [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedges [Member] | Foreign currency contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Product sales | $ (20) | $ (54) |
Derivative instruments (Locat69
Derivative instruments (Locations and Gain (Loss) for Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Foreign currency contracts [Member] | Interest and other income [Member] | ||||
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for our derivative instruments not designated as hedging instruments | ||||
Amount of gain (loss) recognized in interest and other income, net | $ 26 | $ 13 | $ 33 | $ 14 |
Derivative instruments (Fair Va
Derivative instruments (Fair Value of Derivatives) (Details) - Derivatives designated as hedging instrument [Member] - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Total derivative assets, fair value | $ 378 | $ 286 |
Liabilities | ||
Total derivative liabilities, fair value | 627 | 485 |
Foreign currency contracts [Member] | Other current assets/Other assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 106 | 6 |
Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 65 | 204 |
Cross-currency swap contracts [Member] | Other current assets/Other assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 272 | 270 |
Cross-currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 296 | 220 |
Interest rate swap contracts [Member] | Other current assets/Other assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 0 | 10 |
Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | $ 266 | $ 61 |
Contingencies and commitments (
Contingencies and commitments (Details) | Jul. 19, 2018patent | Jun. 21, 2018patent | Mar. 09, 2018claim | Mar. 02, 2018claim |
Sanofi/Regeneron Patent Litigation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of pending claims | claim | 2 | |||
KANJINTI Patent Litigation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, patents allegedly infringed, number | patent | 37 | |||
KANJINTI Patent Litigation [Member] | Subsequent Event [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, patents allegedly infringed, number | patent | 18 | |||
Coherus ENBREL Patent Challenge [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of denied petitions | claim | 2 |