Document and Entity Information
Document and Entity Information | 6 Months Ended |
Mar. 31, 2016shares | |
Document And Entity Information [Abstract] | |
Entity registrant name | BECTON DICKINSON & CO |
Trading symbol | BDX |
Entity central index key | 10,795 |
Current fiscal year end date | --09-30 |
Entity filer category | Large Accelerated Filer |
Document type | 10-Q |
Document period end date | Mar. 31, 2016 |
Document fiscal year focus | 2,016 |
Document fiscal period focus | Q2 |
Amendment flag | false |
Entity common stock, shares outstanding (shares) | 212,202,004 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2016 | Sep. 30, 2015 |
Current Assets: | ||
Cash and equivalents | $ 1,696 | $ 1,424 |
Short-term investments | 15 | 20 |
Trade receivables, net | 1,574 | 1,618 |
Current portion of net investment in sales-type leases | 311 | 75 |
Inventories: | ||
Materials | 314 | 384 |
Work in process | 302 | 280 |
Finished products | 1,229 | 1,295 |
Inventories | 1,846 | 1,959 |
Assets held for sale | 618 | 0 |
Prepaid expenses and other | 551 | 563 |
Total Current Assets | 6,612 | 5,659 |
Property, Plant and Equipment | 8,170 | 8,277 |
Less allowances for depreciation and amortization | 4,390 | 4,217 |
Property, Plant and Equipment, Net | 3,779 | 4,060 |
Goodwill | 7,448 | 7,537 |
Customer Relationships, Net | 3,128 | 3,250 |
Developed Technology, Net | 2,721 | 2,977 |
Other Intangibles, Net | 682 | 797 |
Capitalized Software, Net | 346 | 362 |
Net Investment in Sales-Type Leases, Less Current Portion | 826 | 1,118 |
Other Assets | 694 | 717 |
Total Assets | 26,236 | 26,478 |
Current Liabilities: | ||
Short-term debt | 1,651 | 1,452 |
Payables and accrued expenses | 2,527 | 2,930 |
Liabilities held for sale | 202 | 0 |
Total Current Liabilities | 4,380 | 4,381 |
Long-Term Debt | 10,864 | 11,370 |
Long-Term Employee Benefit Obligations | 1,146 | 1,133 |
Deferred Income Taxes and Other | $ 2,181 | $ 2,430 |
Commitments and Contingencies (See Note 5) | ||
Shareholders’ Equity | ||
Common stock | $ 333 | $ 333 |
Capital in excess of par value | 4,600 | 4,475 |
Retained earnings | 12,600 | 12,314 |
Deferred compensation | 20 | 20 |
Common stock in treasury - at cost | (8,240) | (8,239) |
Accumulated other comprehensive loss | (1,647) | (1,738) |
Total Shareholders’ Equity | 7,666 | 7,164 |
Total Liabilities and Shareholders’ Equity | $ 26,236 | $ 26,478 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 3,067 | $ 2,051 | $ 6,054 | $ 4,102 |
Cost of products sold | 1,584 | 1,005 | 3,162 | 2,011 |
Selling and administrative expense | 732 | 511 | 1,480 | 1,055 |
Research and development expense | 182 | 129 | 369 | 258 |
Acquisitions and other restructurings | 104 | 113 | 225 | 136 |
Total Operating Costs and Expenses | 2,601 | 1,758 | 5,236 | 3,460 |
Operating Income | 466 | 293 | 818 | 642 |
Interest expense | (99) | (91) | (196) | (167) |
Interest income | 3 | 8 | 9 | 19 |
Other income, net | 6 | 15 | 11 | 17 |
Income Before Income Taxes | 376 | 225 | 642 | 510 |
Income tax provision | 38 | 9 | 75 | 58 |
Net Income | $ 338 | $ 216 | $ 567 | $ 452 |
Basic Earnings per Share (USD per share) | $ 1.59 | $ 1.10 | $ 2.67 | $ 2.32 |
Diluted Earnings per Share (USD per share) | 1.56 | 1.08 | 2.62 | 2.28 |
Dividends per Common Share (USD per share) | $ 0.66 | $ 0.6 | $ 1.32 | $ 1.2 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 338 | $ 216 | $ 567 | $ 452 |
Other Comprehensive Income (Loss), Net of Tax | ||||
Foreign currency translation adjustments | 179 | (497) | 63 | (638) |
Defined benefit pension and postretirement plans | 12 | 11 | 24 | 22 |
Net unrealized gains (losses) on cash flow hedges, net of reclassifications | 1 | 2 | 4 | (6) |
Other Comprehensive Income (Loss), Net of Tax | 193 | (484) | 91 | (621) |
Comprehensive Income (Loss) | $ 531 | $ (267) | $ 658 | $ (169) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating Activities | ||
Net Income | $ 567 | $ 452 |
Adjustments to net income to derive net cash provided by operating activities: | ||
Depreciation and amortization | 569 | 277 |
Share-based compensation | 119 | 92 |
Deferred income taxes | (112) | (13) |
Change in operating assets and liabilities | (194) | (255) |
Pension obligation | 40 | (3) |
Other, net | 30 | (37) |
Net Cash Provided by Operating Activities | 1,020 | 514 |
Investing Activities | ||
Capital expenditures | (258) | (252) |
Capitalized software | (11) | (17) |
Proceeds from investments, net | 10 | 813 |
Acquisitions of businesses, net of cash acquired | 0 | (8,307) |
Divestitures of businesses | 111 | 0 |
Other, net | (22) | (66) |
Net Cash Used for Investing Activities | (170) | (7,829) |
Financing Activities | ||
Change in short-term debt | (300) | 1,502 |
Proceeds from long-term debt | 0 | 6,164 |
Payments of debt | (1) | (2) |
Excess tax benefits from payments under share-based compensation plans | 51 | 40 |
Dividends paid | (280) | (232) |
Issuance of common stock and other, net | (45) | (79) |
Net Cash (Used for) Provided by Financing Activities | (576) | 7,392 |
Effect of exchange rate changes on cash and equivalents | (2) | (26) |
Net increase in cash and equivalents | 272 | 51 |
Opening Cash and Equivalents | 1,424 | 1,861 |
Closing Cash and Equivalents | $ 1,696 | $ 1,912 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of the management of the Company, include all adjustments which are of a normal recurring nature, necessary for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. However, the financial statements do not include all information and accompanying notes required for a presentation in accordance with U.S. generally accepted accounting principles. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2015 Annual Report on Form 10-K. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages and earnings per share amounts presented are calculated from the underlying amounts. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. |
Accounting Changes
Accounting Changes | 6 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes | Accounting Changes New Accounting Principle Adopted In November 2015, the Financial Accounting Standards Board ("FASB") issued amended guidance that requires entities to present deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Early adoption is permitted under the amendments. The Company has retrospectively adopted the guidance effective October 1, 2015 and as such, the condensed consolidated balance sheet as of September 30, 2015 reflects the reclassification of current deferred tax assets of $387 million as noncurrent amounts, after giving effect to jurisdictional netting requirements. New Accounting Principle Not Yet Adopted In February 2016, the FASB issued a new lease accounting standard which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The new standard also requires expanded disclosures regarding leasing arrangements. The Company is currently evaluating the impact that this new lease accounting standard will have on its consolidated financial statements upon its adoption of the standard on October 1, 2019. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The components and changes of Accumulated other comprehensive income (loss) for the six -month period ended March 31, 2016 were as follows: (Millions of dollars) Total Foreign Currency Translation Benefit Plans Cash Flow Hedges Balance at September 30, 2015 $ (1,738 ) $ (961 ) $ (741 ) $ (36 ) Other comprehensive income before reclassifications, net of taxes 61 63 (A) — (2 ) Amounts reclassified into income, net of taxes 30 — 24 6 Balance at March 31, 2016 $ (1,647 ) $ (899 ) $ (717 ) $ (32 ) (A) The gain for the six months ended March 31, 2016 was primarily attributable to the strengthening of certain European and Asian currencies against the U.S. dollar during the period. Reclassifications out of Accumulated other comprehensive income (loss) were as follows: Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Benefit Plans Reclassification of losses into income $ 19 $ 17 $ 37 $ 34 Associated tax benefits (6 ) (6 ) (13 ) (12 ) Amounts reclassified into income, net of taxes (A) $ 12 $ 11 $ 24 $ 22 Cash Flow Hedges Reclassification of losses into income $ 5 $ 2 $ 9 $ 5 Associated tax benefits (2 ) (1 ) (3 ) (2 ) Amounts reclassified into income, net of taxes (B) $ 3 $ 2 $ 6 $ 3 (A) These reclassifications were not recorded into income in their entirety and were included in the computation of net periodic benefit plan costs. Additional details are provided in Note 8 . (B) These reclassifications were recorded to Interest expense and Cost of products sold . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) were as follows: Three Months Ended Six Months Ended 2016 2015 2016 2015 Average common shares outstanding 212,469 196,085 212,077 194,447 Dilutive share equivalents from share-based plans 4,069 3,853 4,618 4,046 Average common and common equivalent shares outstanding – assuming dilution 216,538 199,938 216,695 198,493 |
Contingencies
Contingencies | 6 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Given the uncertain nature of litigation generally, the Company is not able in all cases to estimate the amount or range of loss that could result from an unfavorable outcome of the litigation to which the Company is a party. In accordance with U.S. generally accepted accounting principles, the Company establishes accruals to the extent probable future losses are estimable (in the case of environmental matters, without considering possible third-party recoveries). In view of the uncertainties discussed below, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations and consolidated cash flows. In June 2007, Retractable Technologies, Inc. (“RTI”) filed a complaint against the Company under the caption Retractable Technologies, Inc. vs. Becton Dickinson and Company (Civil Action No. 2:07-cv-250, U.S. District Court, Eastern District of Texas) alleging that the BD Integra™ syringes infringe patents licensed exclusively to RTI. In its complaint, RTI also alleged that the Company engaged in false advertising with respect to certain of the Company’s safety-engineered products in violation of the Lanham Act; acted to exclude RTI from various product markets and to maintain its market share through, among other things, exclusionary contracts in violation of state and federal antitrust laws; and engaged in unfair competition. In January 2008, the court severed the patent and non-patent claims into separate cases, and stayed the non-patent claims during the pendency of the patent claims at the trial court level. On April 1, 2008, RTI filed a complaint against BD under the caption Retractable Technologies, Inc. and Thomas J. Shaw v. Becton Dickinson and Company (Civil Action No.2:08-cv-141, U.S. District Court, Eastern District of Texas) alleging that the BD Integra™ syringes infringe another patent licensed exclusively to RTI. On August 29, 2008, the court ordered the consolidation of the patent cases. As further set forth in the Company's 2015 Annual Report on Form 10-K, RTI was subsequently awarded $5 million in damages at a jury trial with respect to the patent claims, which has been paid, and the patent cases are now concluded. On September 19, 2013, a jury returned a verdict against BD with respect to RTI’s Lanham Act claim and claim for attempted monopolization based on deception in the safety syringe market. The jury awarded RTI $113.5 million for its attempted monopolization claim (which will be trebled under the antitrust statute). The jury’s verdict rejected RTI’s monopolization claims in the markets for safety syringes, conventional syringes and safety IV catheters; its attempted monopolization claims in the markets for conventional syringes and safety IV catheters; and its claims for contractual restraint of trade and exclusive dealing in the markets for safety syringes, conventional syringes and safety IV catheters. In connection with the verdict, the Company recorded a pre-tax charge of approximately $341 million in the fourth quarter of fiscal year 2013. With respect to RTI's requested injunction relief, in November 2014, the Court granted RTI’s request that BD be ordered to issue certain corrective statements regarding its advertising and enjoined from making certain advertising claims. The Court denied RTI’s request for injunctive relief relating to BD’s contracting practices and BD’s safety syringe advertising, finding that RTI failed to prove that BD’s contracting practices violated the antitrust laws or that BD’s safety syringe advertising is false. On January 14, 2015, the Court granted in part and denied in part BD’s motion for a stay of the injunction. The Court held that, pending appeal, BD would not be required to send the corrective advertising notices to end-user customers, but only to employees, distributors and Group Purchasing Organizations. On January 15, 2015, the Court entered its Final Judgment in the case ordering that RTI recovers $341 million for its attempted monopolization claim and $12 million for attorneys’ fees, and awarded pre and post-judgment interest and costs. On February 3, 2015, the Court of Appeals for the Fifth Circuit denied BD’s motion for a stay of the injunction pending the final appeal, and BD thereafter complied with the Court’s order. On April 23, 2015, the Court granted BD’s motion to eliminate the award of pre-judgment interest, and entered a new Final Judgment. BD has filed its appeal to the Court of Appeals challenging the entirety of the Final Judgment. On July 17, 2015, a class action complaint was filed against the Company in the U.S. District Court for the Southern District of Georgia. The plaintiffs, Glynn-Brunswick Hospital Authority, trading as Southeast Georgia Health System, and Southeast Georgia Health System, Inc., seek to represent a class of acute care purchasers of BD syringes and IV catheters. The complaint alleges that BD monopolized the markets for syringes and IV catheters through contracts, theft of technology, false advertising, acquisitions, and other conduct. The complaint seeks treble damages but does not specify the amount of alleged damages. The Company filed a motion to dismiss the complaint which was granted on January 29, 2016. Plaintiffs have sought to file an amended complaint, which BD has opposed. The Company believes that it has meritorious defenses to each of the above-mentioned suits pending against the Company and is engaged in a vigorous defense of each of these matters. The Company is also involved both as a plaintiff and a defendant in other legal proceedings and claims that arise in the ordinary course of business. The Company is a potentially responsible party to a number of federal administrative proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. The affected sites are in varying stages of development. In some instances, the remedy has been completed, while in others, environmental studies are underway or commencing. For several sites, there are other potentially responsible parties that may be jointly or severally liable to pay all cleanup costs. |
Segment Data
Segment Data | 6 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Data | Segment Data The Company's organizational structure is based upon two principal business segments: BD Medical (“Medical”) and BD Life Sciences (“Life Sciences”). These segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. The Company evaluates performance of its business segments and allocates resources to them primarily based upon operating income. Segment operating income represents revenues reduced by product costs and operating expenses. Financial information for the Company’s segments was as follows: Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Revenues (A) Medical $ 2,131 $ 1,106 $ 4,185 $ 2,177 Life Sciences 936 945 1,869 1,925 Total Revenues $ 3,067 $ 2,051 $ 6,054 $ 4,102 Income Before Income Taxes Medical (B) $ 513 $ 328 $ 978 $ 632 Life Sciences 202 200 404 413 Total Segment Operating Income 715 528 1,381 1,045 Acquisitions and other restructurings (104 ) (113 ) (225 ) (136 ) Net interest expense (96 ) (83 ) (187 ) (149 ) Other unallocated items (C) (139 ) (107 ) (328 ) (250 ) Income Before Income Taxes $ 376 $ 225 $ 642 $ 510 (A) Intersegment revenues are not material. (B) The amounts for the three and six months ended March 31, 2016 include increases of $116 million and $246 million in the three and six-month periods, respectively, of non-cash amortization expense associated with acquisition-related identifiable intangible assets related to CareFusion. (C) Primarily comprised of foreign exchange, corporate expenses, and share-based compensation expense. Revenues by geographic areas were as follows: Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Revenues United States $ 1,719 $ 863 $ 3,410 $ 1,744 International 1,349 1,188 2,644 2,358 Total Revenues $ 3,067 $ 2,051 $ 6,054 $ 4,102 |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company grants share-based awards under the 2004 Employee and Director Equity-Based Compensation Plan (the “2004 Plan”), which provides long-term incentive compensation to employees and directors. The Company believes that such awards align the interests of its employees and directors with those of its shareholders. The fair values of stock appreciation rights granted during the annual share-based grants in November of 2015 and 2014, respectively, were estimated on the date of grant using a lattice-based binomial valuation model based on the following assumptions: 2016 2015 Risk-free interest rate 2.17 % 2.20 % Expected volatility 19.00 % 19.00 % Expected dividend yield 1.76 % 1.78 % Expected life 7.6 years 7.6 years Fair value derived $ 27.69 $ 24.82 The fair value of share-based payments is recognized as compensation expense in net income. For the three months ended March 31, 2016 and 2015 , compensation expense charged to income was $43 million and $44 million , respectively. For the six months ended March 31, 2016 and 2015 , compensation expense charged to income was $119 million and $92 million , respectively. The amount of unrecognized compensation expense for all non-vested share-based awards as of March 31, 2016 was approximately $259 million , which is expected to be recognized over a weighted-average remaining life of approximately 2.2 years . Certain pre-acquisition equity awards of CareFusion were converted into either BD restricted stock awards or BD stock options, as applicable, as of the acquisition date, with substantially the same terms and conditions as were applicable under such CareFusion awards immediately prior to the acquisition date. Included in the unrecognized compensation expense is $20 million associated with these replacement awards. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans The Company has defined benefit pension plans covering certain employees in the United States and certain foreign locations. The Company also provides certain postretirement healthcare and life insurance benefits to qualifying domestic retirees. Other postretirement benefit plans in foreign countries are not material. The measurement date used for the Company’s employee benefit plans is September 30. Net pension and postretirement cost included the following components for the three months ended March 31: Pension Plans Other Postretirement Benefits (Millions of dollars) 2016 2015 2016 2015 Service cost $ 20 $ 19 $ 1 $ 1 Interest cost 18 21 1 2 Expected return on plan assets (27 ) (30 ) — — Amortization of prior service credit (4 ) (4 ) (1 ) (1 ) Amortization of loss 19 17 — 1 Settlements 1 — — — Net pension and postretirement cost $ 27 $ 23 $ 1 $ 2 Net pension and postretirement cost included the following components for the six months ended March 31: Pension Plans Other Postretirement Benefits (Millions of dollars) 2016 2015 2016 2015 Service cost $ 41 $ 38 $ 1 $ 2 Interest cost 37 43 3 4 Expected return on plan assets (55 ) (61 ) — — Amortization of prior service credit (7 ) (8 ) (2 ) (2 ) Amortization of loss 39 34 1 1 Settlements 1 — — — Net pension and postretirement cost $ 55 $ 46 $ 3 $ 4 The amounts provided above for amortization of prior service credit and amortization of loss represent the reclassifications of prior service credits and net actuarial losses that were recognized in Accumulated other comprehensive income (loss) in prior periods. Postemployment benefit costs were $10 million for the three-month periods ended March 31, 2016 and 2015 . Postemployment benefit costs were $20 million and $21 million for the six -month periods ended March 31, 2016 and 2015 , respectively. Employee termination costs associated with the Company's restructuring activities are provided in Note 11 . |
Acquisition
Acquisition | 6 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition CareFusion Corporation On March 17, 2015, the Company acquired a 100% interest in CareFusion, a global medical technology company with a comprehensive portfolio of products in the areas of medication management, infection prevention, operating room and procedural effectiveness, and respiratory care. The acquisition was accounted for under the acquisition method of accounting for business combinations. The operating activities from the acquisition date through March 31, 2015 were not material to the Company’s consolidated results of operations. As such, CareFusion’s operating results were included in the Company’s consolidated results of operations beginning on April 1, 2015. Revenues for the three and six months ended March 31, 2016 include revenues attributable to CareFusion of $1.017 billion and $2.033 billion , respectively. The operating income of the acquired CareFusion operation is no longer specifically identifiable due to the progression of the Company's integration activities. The following table provides the pro forma results for the six months ended March 31, 2016 and 2015 as if CareFusion had been acquired as of the beginning of the periods presented. (Millions of dollars, except per share data) Six Months Ended 2016 2015 Revenues $ 6,063 $ 6,168 Net Income $ 719 $ 640 Diluted Earnings per Share $ 3.32 $ 2.98 The pro forma results above reflect the following adjustments, which were adjusted for the applicable tax impact to derive the net income amounts above: • Additional amortization expense related to the fair value of intangible assets acquired; • Additional depreciation expense related to the fair value of property, plant and equipment acquired; • Additional interest expense and financing costs associated with the Company’s financing arrangements relating to this acquisition, as well as the adjustment to interest expense relating to the fair value of long-term debt assumed; • Elimination of one-time financing fees, transaction, integration and restructuring costs incurred relative to this acquisition; • Exclusion of the income statement effects of the fair value adjustments to inventory and deferred revenue obligations acquired as such adjustments are not recurring in nature. The pro forma results do not include any anticipated cost savings or other effects of the planned integration of CareFusion. Accordingly, the pro forma results above are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future. |
Divestiture
Divestiture | 6 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture Respiratory Solutions In March 2016, the Company signed a definitive agreement to sell 50.1% of its Respiratory Solutions business and form a joint venture with respect to this business. Under the agreement, the Company will transfer the Respiratory Solutions business to a new standalone entity in which it will retain a 49.9% non-controlling interest, and the buyer will own the remainder. The buyer will control the operations and governance of the joint venture. The condensed consolidated balance sheet at March 31, 2016 includes assets and liabilities held for sale under this agreement of approximately $588 million and $202 million , respectively. The Respiratory Solutions business was acquired in the CareFusion acquisition in 2015 and was a component of the Medical segment. The transaction is expected to close later in 2016, subject to regulatory approvals and the satisfaction of customary closing conditions. The historical financial results for the Respiratory Solutions business will not be classified as a discontinued operation. |
Business Restructuring Charges
Business Restructuring Charges | 6 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Business Restructuring Charges | Business Restructuring Charges In connection with the CareFusion acquisition and portfolio rationalization initiatives, the Company incurred restructuring costs during the six months ended March 31, 2016 , which were recorded as Acquisitions and other restructurings . Restructuring liability activity for the six months ended March 31, 2016 was as follows: (Millions of dollars) Employee Termination Share-based Compensation (A) Other (B) Total Balance at September 30, 2015 $ 62 $ — $ — $ 62 Charged to expense 33 25 91 149 Cash payments (52 ) — (32 ) (84 ) Non-cash settlements — (25 ) — (25 ) Other adjustments — — (59 ) (59 ) Balance at March 31, 2016 $ 43 $ — $ — $ 43 (A) Additional disclosures are provided in Note 7 . (B) Includes a non-cash charge of $28 million , after-tax, relating to the Company's agreement reached in December 2015 to sell a non-core asset. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of: March 31, 2016 September 30, 2015 (Millions of dollars) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets Customer relationships $ 3,361 $ 233 $ 3,370 $ 120 Developed technology 3,355 635 3,487 510 Product rights 131 40 128 35 Trademarks 405 36 405 26 Patents and other 338 241 333 212 Amortized intangible assets $ 7,590 $ 1,185 $ 7,723 $ 903 Unamortized intangible assets Acquired in-process research and development $ 124 $ 203 Trademarks 2 2 Unamortized intangible assets $ 126 $ 205 Intangible amortization expense for the three months ended March 31, 2016 and 2015 was $138 million and $20 million , respectively. Intangible amortization expense for the six months ended March 31, 2016 and 2015 was $289 million and $40 million , respectively. The increase in intangible amortization expense in the current-year periods is mostly attributable to identifiable intangible assets acquired in the CareFusion transaction. The following is a reconciliation of goodwill by business segment: (Millions of dollars) Medical Life Sciences Total Goodwill as of September 30, 2015 $ 6,807 $ 730 $ 7,537 Purchase accounting adjustments/currency translation (90 ) (A) 1 (89 ) Goodwill as of March 31, 2016 $ 6,718 $ 731 $ 7,448 (A) Comprised of acquisition accounting adjustments made during the period relating to the CareFusion acquisition of $94 million primarily resulting from adjustment to the deferred tax liability accounts. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company uses derivative instruments to mitigate certain exposures. The effects these derivative instruments and hedged items have on financial position, financial performance, and cash flows are provided below. Foreign Currency Risks and Related Strategies The Company has foreign currency exposures throughout Europe, Greater Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts and currency options. Hedges of the transactional foreign exchange exposures resulting primarily from intercompany payables and receivables are undesignated hedges. As such, the gains or losses on these instruments are recognized immediately in income. The offset of these gains or losses against the gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments, is recognized in Other income (expense), net . The total notional amounts of the Company’s outstanding foreign exchange contracts as of March 31, 2016 and September 30, 2015 were $1.3 billion and $2.2 billion , respectively. Interest Rate Risks and Related Strategies The Company’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Company’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Company periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Company exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated as either fair value or cash flow hedges. For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. Changes in the fair value of the interest rate swaps designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk) are offset by amounts recorded in Other comprehensive income (loss) . If interest rate derivatives designated as cash flow hedges are terminated, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is reclassified into earnings over the remaining life of the hedged debt. The net realized loss related to terminated interest rate swaps expected to be reclassified and recorded in Interest expense within the next 12 months is $6 million , net of tax. The total notional value of the Company's outstanding forward starting interest rate swaps designated as cash flow hedges was $250 million at March 31, 2016 . The Company entered into these contracts in March 2016 to mitigate its exposure to interest rate risk. The Company had no outstanding interest rate swaps designated as cash flow hedges as of September 30, 2015 . The total notional amount of the Company’s outstanding interest rate swaps designated as fair value hedges was $375 million at March 31, 2016 and September 30, 2015 . The outstanding swaps represent fixed-to-floating interest rate swap agreements the Company entered into to convert the interest payments on $375 million of the Company’s 3.125% notes due 2021 from the fixed rate to a floating interest rate based on LIBOR. Changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt. The gains recorded on these fair value hedges, which were offset by losses recorded to the underlying debt instruments, are provided below. Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Gain (loss) on fair value hedges $ 11 $ 6 $ 24 $ 16 Other Risk Exposures The Company purchases resins, which are oil-based components used in the manufacture of certain products. Significant increases in world oil prices that lead to increases in resin purchase costs could impact future operating results. From time to time, the Company has managed price risks associated with these commodity purchases. The total notional amount of cash-settled forward contracts entered into in April 2015 to hedge global resin purchase volume throughout 2015 and 2016 was 24 million pounds ( $13 million ) and 49 million pounds ( $25 million ) at March 31, 2016 and September 30, 2015 , respectively. Effects on Consolidated Balance Sheets The location and amounts of derivative instrument fair values in the consolidated balance sheet are segregated below between designated, qualifying hedging instruments and ones that are not designated for hedge accounting. (Millions of dollars) March 31, September 30, Asset derivatives-designated for hedge accounting Interest rate swaps $ 24 $ 19 Asset derivatives-undesignated for hedge accounting Forward exchange contracts 22 13 Total asset derivatives (A) $ 46 $ 32 Liability derivatives-designated for hedge accounting Commodity forward contracts $ 5 $ 10 Interest rate swaps 3 — Liability derivatives-undesignated for hedge accounting Forward exchange contracts 9 21 Total liability derivatives (B) $ 16 $ 30 (A) All asset derivatives are included in Prepaid expenses and other . (B) All liability derivatives are included in Payables and accrued expenses . Effects on Consolidated Statements of Income Cash flow hedges The after-tax losses recognized for the three and six months ended March 31, 2016 in other comprehensive income relating to the previously discussed cash flow hedges were $2 million . There were no amounts recognized in other comprehensive income relating to cash flow hedges for the three months ended March 31, 2015 . After-tax losses of $8 million recognized in Other comprehensive income (loss) for the six months ended March 31, 2015 were attributable to interest rate swaps that were entered into during the first quarter of fiscal year 2015 to partially hedge interest rate risk associated with the anticipated issuance of senior unsecured notes in connection with the Company’s acquisition of CareFusion. Additional disclosures regarding amounts recognized in the condensed consolidated statements of income for the three and six months ended March 31, 2016 and 2015 relating to cash flow hedges are provided in Note 3 . The Company’s designated derivative instruments are highly effective. As such, there are no gains or losses, related to hedge ineffectiveness or amounts excluded from hedge effectiveness testing, recognized immediately in income relative to derivative contracts outstanding in the periods presented. Undesignated hedges The location and amount of gains and losses recognized in income on derivatives not designated for hedge accounting were as follows: Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives Derivatives Not Designated as Hedging Instruments Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Forward exchange contracts (A) Other income (expense), net $ 15 $ (94 ) $ 26 $ (96 ) (A) The gains and losses on forward contracts and currency options utilized to hedge the intercompany transactional foreign exchange exposures are largely offset by gains and losses on the underlying hedged items in Other income (expense), net . |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements The fair values of financial instruments, including those not recognized on the statement of financial position at fair value, carried at March 31, 2016 and September 30, 2015 are classified in accordance with the fair value hierarchy in the following tables: Basis of Fair Value Measurement (Millions of dollars) March 31, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Institutional money market investments $ 477 $ 477 $ — $ — Interest rate swaps 24 — 24 — Forward exchange contracts 22 — 22 — Total Assets $ 523 $ 477 $ 46 $ — Liabilities Forward exchange contracts $ 9 $ — $ 9 $ — Commodity forward contracts 5 — 5 — Interest rate swaps 3 — 3 — Contingent consideration liabilities 57 — — 57 Total Liabilities $ 73 $ — $ 16 $ 57 Basis of Fair Value Measurement (Millions of dollars) September 30, 2015 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Institutional money market investments $ 147 $ 147 $ — $ — Interest rate swaps 19 — 19 — Forward exchange contracts 13 — 13 — Total Assets $ 179 $ 147 $ 32 $ — Liabilities Forward exchange contracts $ 21 $ — $ 21 $ — Commodity forward contracts 10 — 10 — Contingent consideration liabilities 77 — — 77 Total Liabilities $ 108 $ — $ 30 $ 77 The Company’s institutional money market accounts permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. The Company’s remaining cash equivalents were $1.219 billion and $1.277 billion at March 31, 2016 and September 30, 2015 , respectively. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The cash equivalents consist of liquid investments with a maturity of three months or less and the short-term investments consist of instruments with maturities greater than three months and less than one year . The Company measures the fair value of forward exchange contracts and interest rate swaps based upon the present value of expected future cash flows using market-based observable inputs including credit risk, interest rate yield curves, foreign currency spot prices and forward prices. Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments, which are considered Level 2 inputs in the fair value hierarchy. The fair value of long-term debt was $11.5 billion and $11.6 billion at March 31, 2016 and September 30, 2015 , respectively. During the first quarter of fiscal year 2016, the Company reclassified $500 million of 1.75% notes due on November 8, 2016 from Long-Term Debt to Short-term debt . During the third quarter of fiscal year 2015, the Company reclassified $750 million of floating rates due on June 15, 2016 from Long-Term Debt to Short-term debt . The fair value of reclassified notes was $1.3 billion and $750 million at March 31, 2016 and September 30, 2015 , respectively. The contingent consideration liabilities were recognized as part of the consideration transferred by the Company for certain acquisitions. The fair values of the contingent consideration liabilities were estimated using probability-weighted discounted cash flow models that were based upon the probabilities assigned with regard to achievement of the contingent events. The estimated fair values of the contingent consideration liabilities are remeasured each reporting period based upon increases or decreases in the probability of the contingent payments. The change to the contingent consideration liability as of March 31, 2016 reflected the impact of a net decrease recorded in the second quarter of $22 million in the fair value of contingent consideration liabilities associated with certain product development milestones. The Company’s policy is to recognize any transfers into fair value measurement hierarchy levels and transfers out of levels at the beginning of each reporting period. There were no transfers in and out of Level 1, Level 2 or Level 3 measurements for the three and six months ended March 31, 2016 and 2015 . |
Accounting Changes (Policies)
Accounting Changes (Policies) | 6 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Principle Adopted | New Accounting Principle Adopted In November 2015, the Financial Accounting Standards Board ("FASB") issued amended guidance that requires entities to present deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Early adoption is permitted under the amendments. The Company has retrospectively adopted the guidance effective October 1, 2015 and as such, the condensed consolidated balance sheet as of September 30, 2015 reflects the reclassification of current deferred tax assets of $387 million as noncurrent amounts, after giving effect to jurisdictional netting requirements. New Accounting Principle Not Yet Adopted In February 2016, the FASB issued a new lease accounting standard which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The new standard also requires expanded disclosures regarding leasing arrangements. The Company is currently evaluating the impact that this new lease accounting standard will have on its consolidated financial statements upon its adoption of the standard on October 1, 2019. |
ASC 450-20 Recognition Guidelines | Given the uncertain nature of litigation generally, the Company is not able in all cases to estimate the amount or range of loss that could result from an unfavorable outcome of the litigation to which the Company is a party. In accordance with U.S. generally accepted accounting principles, the Company establishes accruals to the extent probable future losses are estimable (in the case of environmental matters, without considering possible third-party recoveries). In view of the uncertainties discussed below, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations and consolidated cash flows. |
Derivative Instruments and Hedging Activities | Hedges of the transactional foreign exchange exposures resulting primarily from intercompany payables and receivables are undesignated hedges. As such, the gains or losses on these instruments are recognized immediately in income. The offset of these gains or losses against the gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments, is recognized in Other income (expense), net . The Company uses derivative instruments to mitigate certain exposures. The effects these derivative instruments and hedged items have on financial position, financial performance, and cash flows are provided below. The Company’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Company periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Company exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated as either fair value or cash flow hedges. For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. Changes in the fair value of the interest rate swaps designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk) are offset by amounts recorded in Other comprehensive income (loss) . If interest rate derivatives designated as cash flow hedges are terminated, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is reclassified into earnings over the remaining life of the hedged debt. |
ASC 820 Fair Value Disclosures | The Company measures the fair value of forward exchange contracts and interest rate swaps based upon the present value of expected future cash flows using market-based observable inputs including credit risk, interest rate yield curves, foreign currency spot prices and forward prices. Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments, which are considered Level 2 inputs in the fair value hierarchy. The fair value of long-term debt was $11.5 billion and $11.6 billion at March 31, 2016 and September 30, 2015 , respectively. During the first quarter of fiscal year 2016, the Company reclassified $500 million of 1.75% notes due on November 8, 2016 from Long-Term Debt to Short-term debt . During the third quarter of fiscal year 2015, the Company reclassified $750 million of floating rates due on June 15, 2016 from Long-Term Debt to Short-term debt . The fair value of reclassified notes was $1.3 billion and $750 million at March 31, 2016 and September 30, 2015 , respectively. The contingent consideration liabilities were recognized as part of the consideration transferred by the Company for certain acquisitions. The fair values of the contingent consideration liabilities were estimated using probability-weighted discounted cash flow models that were based upon the probabilities assigned with regard to achievement of the contingent events. The estimated fair values of the contingent consideration liabilities are remeasured each reporting period based upon increases or decreases in the probability of the contingent payments. The change to the contingent consideration liability as of March 31, 2016 reflected the impact of a net decrease recorded in the second quarter of $22 million in the fair value of contingent consideration liabilities associated with certain product development milestones. The Company’s policy is to recognize any transfers into fair value measurement hierarchy levels and transfers out of levels at the beginning of each reporting period. |
Accumulated Other Comprehensi21
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Summary of Components and Changes of Accumulated Other Comprehensive Income (Loss) | The components and changes of Accumulated other comprehensive income (loss) for the six -month period ended March 31, 2016 were as follows: (Millions of dollars) Total Foreign Currency Translation Benefit Plans Cash Flow Hedges Balance at September 30, 2015 $ (1,738 ) $ (961 ) $ (741 ) $ (36 ) Other comprehensive income before reclassifications, net of taxes 61 63 (A) — (2 ) Amounts reclassified into income, net of taxes 30 — 24 6 Balance at March 31, 2016 $ (1,647 ) $ (899 ) $ (717 ) $ (32 ) (A) The gain for the six months ended March 31, 2016 was primarily attributable to the strengthening of certain European and Asian currencies against the U.S. dollar during the period. |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Reclassifications out of Accumulated other comprehensive income (loss) were as follows: Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Benefit Plans Reclassification of losses into income $ 19 $ 17 $ 37 $ 34 Associated tax benefits (6 ) (6 ) (13 ) (12 ) Amounts reclassified into income, net of taxes (A) $ 12 $ 11 $ 24 $ 22 Cash Flow Hedges Reclassification of losses into income $ 5 $ 2 $ 9 $ 5 Associated tax benefits (2 ) (1 ) (3 ) (2 ) Amounts reclassified into income, net of taxes (B) $ 3 $ 2 $ 6 $ 3 (A) These reclassifications were not recorded into income in their entirety and were included in the computation of net periodic benefit plan costs. Additional details are provided in Note 8 . (B) These reclassifications were recorded to Interest expense and Cost of products sold . |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares Used in Computations of Basic and Diluted Earnings Per Share | The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) were as follows: Three Months Ended Six Months Ended 2016 2015 2016 2015 Average common shares outstanding 212,469 196,085 212,077 194,447 Dilutive share equivalents from share-based plans 4,069 3,853 4,618 4,046 Average common and common equivalent shares outstanding – assuming dilution 216,538 199,938 216,695 198,493 |
Segment Data (Tables)
Segment Data (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Financial Information for Company's Segments | Financial information for the Company’s segments was as follows: Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Revenues (A) Medical $ 2,131 $ 1,106 $ 4,185 $ 2,177 Life Sciences 936 945 1,869 1,925 Total Revenues $ 3,067 $ 2,051 $ 6,054 $ 4,102 Income Before Income Taxes Medical (B) $ 513 $ 328 $ 978 $ 632 Life Sciences 202 200 404 413 Total Segment Operating Income 715 528 1,381 1,045 Acquisitions and other restructurings (104 ) (113 ) (225 ) (136 ) Net interest expense (96 ) (83 ) (187 ) (149 ) Other unallocated items (C) (139 ) (107 ) (328 ) (250 ) Income Before Income Taxes $ 376 $ 225 $ 642 $ 510 (A) Intersegment revenues are not material. (B) The amounts for the three and six months ended March 31, 2016 include increases of $116 million and $246 million in the three and six-month periods, respectively, of non-cash amortization expense associated with acquisition-related identifiable intangible assets related to CareFusion. (C) Primarily comprised of foreign exchange, corporate expenses, and share-based compensation expense. |
Revenues by Geographic Areas | Revenues by geographic areas were as follows: Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Revenues United States $ 1,719 $ 863 $ 3,410 $ 1,744 International 1,349 1,188 2,644 2,358 Total Revenues $ 3,067 $ 2,051 $ 6,054 $ 4,102 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions for Estimation of Fair Values of Stock Appreciation Rights Granted During Reporting Periods | The fair values of stock appreciation rights granted during the annual share-based grants in November of 2015 and 2014, respectively, were estimated on the date of grant using a lattice-based binomial valuation model based on the following assumptions: 2016 2015 Risk-free interest rate 2.17 % 2.20 % Expected volatility 19.00 % 19.00 % Expected dividend yield 1.76 % 1.78 % Expected life 7.6 years 7.6 years Fair value derived $ 27.69 $ 24.82 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Net Pension and Postretirement Cost | Net pension and postretirement cost included the following components for the three months ended March 31: Pension Plans Other Postretirement Benefits (Millions of dollars) 2016 2015 2016 2015 Service cost $ 20 $ 19 $ 1 $ 1 Interest cost 18 21 1 2 Expected return on plan assets (27 ) (30 ) — — Amortization of prior service credit (4 ) (4 ) (1 ) (1 ) Amortization of loss 19 17 — 1 Settlements 1 — — — Net pension and postretirement cost $ 27 $ 23 $ 1 $ 2 Net pension and postretirement cost included the following components for the six months ended March 31: Pension Plans Other Postretirement Benefits (Millions of dollars) 2016 2015 2016 2015 Service cost $ 41 $ 38 $ 1 $ 2 Interest cost 37 43 3 4 Expected return on plan assets (55 ) (61 ) — — Amortization of prior service credit (7 ) (8 ) (2 ) (2 ) Amortization of loss 39 34 1 1 Settlements 1 — — — Net pension and postretirement cost $ 55 $ 46 $ 3 $ 4 |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of Pro Forma Information | The following table provides the pro forma results for the six months ended March 31, 2016 and 2015 as if CareFusion had been acquired as of the beginning of the periods presented. (Millions of dollars, except per share data) Six Months Ended 2016 2015 Revenues $ 6,063 $ 6,168 Net Income $ 719 $ 640 Diluted Earnings per Share $ 3.32 $ 2.98 |
Business Restructuring Charges
Business Restructuring Charges (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Accrual Activity | Restructuring liability activity for the six months ended March 31, 2016 was as follows: (Millions of dollars) Employee Termination Share-based Compensation (A) Other (B) Total Balance at September 30, 2015 $ 62 $ — $ — $ 62 Charged to expense 33 25 91 149 Cash payments (52 ) — (32 ) (84 ) Non-cash settlements — (25 ) — (25 ) Other adjustments — — (59 ) (59 ) Balance at March 31, 2016 $ 43 $ — $ — $ 43 (A) Additional disclosures are provided in Note 7 . (B) Includes a non-cash charge of $28 million , after-tax, relating to the Company's agreement reached in December 2015 to sell a non-core asset. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Components of Intangible Assets | Intangible assets consisted of: March 31, 2016 September 30, 2015 (Millions of dollars) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortized intangible assets Customer relationships $ 3,361 $ 233 $ 3,370 $ 120 Developed technology 3,355 635 3,487 510 Product rights 131 40 128 35 Trademarks 405 36 405 26 Patents and other 338 241 333 212 Amortized intangible assets $ 7,590 $ 1,185 $ 7,723 $ 903 Unamortized intangible assets Acquired in-process research and development $ 124 $ 203 Trademarks 2 2 Unamortized intangible assets $ 126 $ 205 |
Reconciliation of Goodwill by Business Segment | The following is a reconciliation of goodwill by business segment: (Millions of dollars) Medical Life Sciences Total Goodwill as of September 30, 2015 $ 6,807 $ 730 $ 7,537 Purchase accounting adjustments/currency translation (90 ) (A) 1 (89 ) Goodwill as of March 31, 2016 $ 6,718 $ 731 $ 7,448 (A) Comprised of acquisition accounting adjustments made during the period relating to the CareFusion acquisition of $94 million primarily resulting from adjustment to the deferred tax liability accounts. |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Gains Recored on Fair Value Hedges | The gains recorded on these fair value hedges, which were offset by losses recorded to the underlying debt instruments, are provided below. Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Gain (loss) on fair value hedges $ 11 $ 6 $ 24 $ 16 |
Effects on Consolidated Balance Sheets | The location and amounts of derivative instrument fair values in the consolidated balance sheet are segregated below between designated, qualifying hedging instruments and ones that are not designated for hedge accounting. (Millions of dollars) March 31, September 30, Asset derivatives-designated for hedge accounting Interest rate swaps $ 24 $ 19 Asset derivatives-undesignated for hedge accounting Forward exchange contracts 22 13 Total asset derivatives (A) $ 46 $ 32 Liability derivatives-designated for hedge accounting Commodity forward contracts $ 5 $ 10 Interest rate swaps 3 — Liability derivatives-undesignated for hedge accounting Forward exchange contracts 9 21 Total liability derivatives (B) $ 16 $ 30 (A) All asset derivatives are included in Prepaid expenses and other . (B) All liability derivatives are included in Payables and accrued expenses . |
Undesignated Hedges | The location and amount of gains and losses recognized in income on derivatives not designated for hedge accounting were as follows: Location of Gain (Loss) Recognized in Income on Derivatives Amount of Gain (Loss) Recognized in Income on Derivatives Derivatives Not Designated as Hedging Instruments Three Months Ended Six Months Ended (Millions of dollars) 2016 2015 2016 2015 Forward exchange contracts (A) Other income (expense), net $ 15 $ (94 ) $ 26 $ (96 ) (A) The gains and losses on forward contracts and currency options utilized to hedge the intercompany transactional foreign exchange exposures are largely offset by gains and losses on the underlying hedged items in Other income (expense), net . |
Financial Instruments and Fai30
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | The fair values of financial instruments, including those not recognized on the statement of financial position at fair value, carried at March 31, 2016 and September 30, 2015 are classified in accordance with the fair value hierarchy in the following tables: Basis of Fair Value Measurement (Millions of dollars) March 31, 2016 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Institutional money market investments $ 477 $ 477 $ — $ — Interest rate swaps 24 — 24 — Forward exchange contracts 22 — 22 — Total Assets $ 523 $ 477 $ 46 $ — Liabilities Forward exchange contracts $ 9 $ — $ 9 $ — Commodity forward contracts 5 — 5 — Interest rate swaps 3 — 3 — Contingent consideration liabilities 57 — — 57 Total Liabilities $ 73 $ — $ 16 $ 57 Basis of Fair Value Measurement (Millions of dollars) September 30, 2015 Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Institutional money market investments $ 147 $ 147 $ — $ — Interest rate swaps 19 — 19 — Forward exchange contracts 13 — 13 — Total Assets $ 179 $ 147 $ 32 $ — Liabilities Forward exchange contracts $ 21 $ — $ 21 $ — Commodity forward contracts 10 — 10 — Contingent consideration liabilities 77 — — 77 Total Liabilities $ 108 $ — $ 30 $ 77 |
Accounting Changes (Details)
Accounting Changes (Details) - New Accounting Pronouncement, Early Adoption, Effect $ in Millions | Sep. 30, 2015USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Reclassification from current deferred tax assets to non-current deferred tax assets | $ 387 |
Reclassification of current deferred tax assets, to non-current deferred tax assets | $ 387 |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Loss) - (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at September 30, 2015 | $ (1,738) | |||
Other comprehensive income before reclassifications, net of taxes | 61 | |||
Amounts reclassified into income, net of taxes | 30 | |||
Balance at March 31, 2016 | $ (1,647) | (1,647) | ||
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at September 30, 2015 | (961) | |||
Other comprehensive income before reclassifications, net of taxes | 63 | |||
Amounts reclassified into income, net of taxes | 0 | |||
Balance at March 31, 2016 | (899) | (899) | ||
Benefit Plans | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at September 30, 2015 | (741) | |||
Other comprehensive income before reclassifications, net of taxes | 0 | |||
Amounts reclassified into income, net of taxes | 12 | $ 11 | 24 | $ 22 |
Balance at March 31, 2016 | (717) | (717) | ||
Cash Flow Hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at September 30, 2015 | (36) | |||
Other comprehensive income before reclassifications, net of taxes | (2) | |||
Amounts reclassified into income, net of taxes | 3 | $ 2 | 6 | $ 3 |
Balance at March 31, 2016 | $ (32) | $ (32) |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Loss) - (Detail 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Amounts reclassified into income | $ 30 | |||
Benefit Plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | $ 19 | $ 17 | 37 | $ 34 |
Other comprehensive (income) loss, amortization adjustment from AOCI, pension and other postretirement benefit plans, for net prior service cost (credit), benefit | (6) | (6) | (13) | (12) |
Amounts reclassified into income | 12 | 11 | 24 | 22 |
Cash Flow Hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 5 | 2 | 9 | 5 |
Other comprehensive income (loss), reclassification adjustment from AOCI on derivatives, tax | (2) | (1) | (3) | (2) |
Amounts reclassified into income | $ 3 | $ 2 | $ 6 | $ 3 |
Earnings Per Share - Weighted A
Earnings Per Share - Weighted Average Common Shares Used in Computations of Basic and Diluted Earnings per Share (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share [Abstract] | ||||
Average common shares outstanding (shares) | 212,469 | 196,085 | 212,077 | 194,447 |
Dilutive share equivalents from share-based plans (shares) | 4,069 | 3,853 | 4,618 | 4,046 |
Average common and common equivalent shares outstanding - assuming dilution (shares) | 216,538 | 199,938 | 216,695 | 198,493 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - RTI Technologies - USD ($) $ in Millions | Jan. 15, 2015 | Sep. 19, 2013 | Sep. 30, 2013 | Sep. 30, 2015 |
Loss Contingencies [Line Items] | ||||
Damages awarded | $ 341 | $ 113.5 | $ 5 | |
Pre-tax charge relating to an unfavorable litigation verdict | $ 341 | |||
Professional fees | $ 12 |
Segment Data - Additional Infor
Segment Data - Additional Information (Detail) | 6 Months Ended |
Mar. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of principal business segments (segment) | 2 |
Segment Data - Financial Inform
Segment Data - Financial Information for Company's Segments (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 3,067 | $ 2,051 | $ 6,054 | $ 4,102 |
Business Combination, Acquisition Related Costs And Restructuring Charges | (104) | (113) | (225) | (136) |
Income Before Income Taxes | 376 | 225 | 642 | 510 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Income Before Income Taxes | 715 | 528 | 1,381 | 1,045 |
Operating Segments | Medical | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,131 | 1,106 | 4,185 | 2,177 |
Income Before Income Taxes | 513 | 328 | 978 | 632 |
Operating Segments | Life Sciences | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 936 | 945 | 1,869 | 1,925 |
Income Before Income Taxes | 202 | 200 | 404 | 413 |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Business Combination, Acquisition Related Costs And Restructuring Charges | (104) | (113) | (225) | (136) |
Net interest expense | (96) | (83) | (187) | (149) |
Corporate and All Other | ||||
Segment Reporting Information [Line Items] | ||||
Income Before Income Taxes | $ (139) | $ (107) | $ (328) | $ (250) |
Segment Data - Financial Info38
Segment Data - Financial Information for Company's Segments (Detail 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||
Intangible amortization expense | $ 138 | $ 20 | $ 289 | $ 40 |
Medical | CareFusion | ||||
Segment Reporting Information [Line Items] | ||||
Intangible amortization expense | $ 116 | $ 246 |
Segment Data - Revenues by Geog
Segment Data - Revenues by Geographic Areas (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | $ 3,067 | $ 2,051 | $ 6,054 | $ 4,102 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | 1,719 | 863 | 3,410 | 1,744 |
International | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | $ 1,349 | $ 1,188 | $ 2,644 | $ 2,358 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions for Estimation of Fair Values of Stock Appreciation Rights Granted During Reporting Periods (Detail) - Stock Appreciation Rights (SARs) - $ / shares | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.17% | 2.20% |
Expected volatility | 19.00% | 19.00% |
Expected dividend yield | 1.76% | 1.78% |
Expected life | 7 years 7 months 6 days | 7 years 7 months 6 days |
Fair value derived (USD per share) | $ 27.69 | $ 24.82 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 43 | $ 44 | $ 119 | $ 92 |
Unrecognized compensation expense for all non-vested share-based awards | 259 | $ 259 | ||
Weighted-average remaining life non-vested share-based awards | 2 years 2 months | |||
CareFusion | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense for all non-vested share-based awards | $ 20 | $ 20 |
Benefit Plans - Net Pension and
Benefit Plans - Net Pension and Postretirement Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 20 | $ 19 | $ 41 | $ 38 |
Interest cost | 18 | 21 | 37 | 43 |
Expected return on plan assets | (27) | (30) | (55) | (61) |
Amortization of prior service credit | (4) | (4) | (7) | (8) |
Amortization of loss | 19 | 17 | 39 | 34 |
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | 1 | 0 | 1 | 0 |
Net pension and postretirement cost | 27 | 23 | 55 | 46 |
Other Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 1 | 1 | 1 | 2 |
Interest cost | 1 | 2 | 3 | 4 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service credit | (1) | (1) | (2) | (2) |
Amortization of loss | 0 | 1 | 1 | 1 |
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | 0 | 0 | 0 | 0 |
Net pension and postretirement cost | $ 1 | $ 2 | $ 3 | $ 4 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||||
Postemployment benefit costs | $ 10 | $ 10 | $ 20 | $ 21 |
Acquisition (Details)
Acquisition (Details) - CareFusion - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2016 | Mar. 17, 2015 | |
Business Acquisition [Line Items] | |||
Percentage of voting interests acquired | 100.00% | ||
Acquiree, revenue | $ 1,017 | $ 2,033 |
Acquisition Pro-Forma Informati
Acquisition Pro-Forma Information (Details) - CareFusion - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Acquisition [Line Items] | ||
Revenues | $ 6,063 | $ 6,168 |
Net Income | $ 719 | $ 640 |
Diluted Earnings per Share (USD per share) | $ 3.32 | $ 2.98 |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Sep. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Assets held for sale | $ 618 | $ 0 |
Liabilities held for sale | $ 202 | $ 0 |
Respiratory Solutions | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal group, percent of business sold | 50.10% | |
Disposal Group, percent of business retained | 49.90% | |
Assets held for sale | $ 588 | |
Liabilities held for sale | $ 202 |
Business Restructuring Charge47
Business Restructuring Charges - Summary of Restructuring Accrual Activity (Detail) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended |
Dec. 31, 2015 | Mar. 31, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Balance at September 30, 2015 | $ 62 | |
Charged to expense | 149 | |
Cash payments | (84) | |
Non-cash settlements | (25) | |
Other adjustments | (59) | |
Balance at March 31, 2016 | 43 | |
Write-off of assets relating to the sale of a business | $ 28 | |
Employee Termination | ||
Restructuring Reserve [Roll Forward] | ||
Balance at September 30, 2015 | 62 | |
Charged to expense | 33 | |
Cash payments | (52) | |
Non-cash settlements | 0 | |
Other adjustments | 0 | |
Balance at March 31, 2016 | 43 | |
Share-based Compensation | ||
Restructuring Reserve [Roll Forward] | ||
Balance at September 30, 2015 | 0 | |
Charged to expense | 25 | |
Cash payments | 0 | |
Non-cash settlements | (25) | |
Other adjustments | 0 | |
Balance at March 31, 2016 | 0 | |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Balance at September 30, 2015 | 0 | |
Charged to expense | 91 | |
Cash payments | (32) | |
Non-cash settlements | 0 | |
Other adjustments | (59) | |
Balance at March 31, 2016 | $ 0 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Sep. 30, 2015 |
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,590 | $ 7,723 |
Accumulated Amortization | 1,185 | 903 |
Unamortized intangible assets | 126 | 205 |
Acquired in-process research and development | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Unamortized intangible assets | 124 | 203 |
Trademarks | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Unamortized intangible assets | 2 | 2 |
Customer relationships | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,361 | 3,370 |
Accumulated Amortization | 233 | 120 |
Developed technology | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,355 | 3,487 |
Accumulated Amortization | 635 | 510 |
Product rights | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 131 | 128 |
Accumulated Amortization | 40 | 35 |
Trademarks | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 405 | 405 |
Accumulated Amortization | 36 | 26 |
Patents and other | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 338 | 333 |
Accumulated Amortization | $ 241 | $ 212 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible amortization expense | $ 138 | $ 20 | $ 289 | $ 40 |
Intangible Assets - Reconciliat
Intangible Assets - Reconciliation of Goodwill by Business Segment (Detail) $ in Millions | 6 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill [Roll Forward] | |
Goodwill as of September 30, 2015 | $ 7,537 |
Purchase accounting adjustments/currency translation | (89) |
Goodwill as of March 31, 2016 | 7,448 |
Medical | |
Goodwill [Roll Forward] | |
Goodwill as of September 30, 2015 | 6,807 |
Purchase accounting adjustments/currency translation | (90) |
Goodwill as of March 31, 2016 | 6,718 |
Purchase accounting adjustments | 94 |
Life Sciences | |
Goodwill [Roll Forward] | |
Goodwill as of September 30, 2015 | 730 |
Purchase accounting adjustments/currency translation | 1 |
Goodwill as of March 31, 2016 | $ 731 |
Derivative Instruments and He51
Derivative Instruments and Hedging Activities - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($)lb | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($)lb | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Reclassification of terminated interest rate swaps to interest expense within the next 12 months | $ 6,000,000 | $ 6,000,000 | |||
Cash Flow Hedges | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
After-tax loss recognized in other comprehensive income (loss) | (2,000,000) | $ 0 | (2,000,000) | ||
Fair Value Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Gain (loss) on fair value hedges | 11,000,000 | $ 6,000,000 | 24,000,000 | $ 16,000,000 | |
Forward exchange contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | 1,300,000,000 | 1,300,000,000 | $ 2,200,000,000 | ||
Interest rate swaps | Cash Flow Hedges | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | 250,000,000 | 250,000,000 | 0 | ||
Interest rate swaps | Cash Flow Hedges | CareFusion | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
After-tax loss recognized in other comprehensive income (loss) | $ (8,000,000) | ||||
Fixed to Floating | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | 375,000,000 | ||||
Fixed to Floating | Fair Value Hedging | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | $ 375,000,000 | $ 375,000,000 | |||
Debt instrument, interest rate | 3.125% | 3.125% | |||
Commodity forward contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | $ 13,000,000 | $ 13,000,000 | $ 25,000,000 | ||
Total notional volume (pounds) | lb | 24,000,000 | 49,000,000 |
Derivative Instruments and He52
Derivative Instruments and Hedging Activities - Effects on Consolidated Balance Sheets (Detail) - USD ($) $ in Millions | Mar. 31, 2016 | Sep. 30, 2015 |
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | $ 46 | $ 32 |
Liability derivatives | 16 | 30 |
Derivatives Designated as Hedging Instruments | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | 24 | 19 |
Liability derivatives | 3 | 0 |
Derivatives Designated as Hedging Instruments | Commodity forward contracts | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives | 5 | 10 |
Derivatives Not Designated as Hedging Instruments | Forward exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | 22 | 13 |
Liability derivatives | $ 9 | $ 21 |
Derivative Instruments and He53
Derivative Instruments and Hedging Activities - Undesignated Hedges (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Derivatives Not Designated as Hedging Instruments | Forward exchange contracts | Other income (expense), net | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income on Derivatives | $ 15 | $ (94) | $ 26 | $ (96) |
Financial Instruments and Fai54
Financial Instruments and Fair Value Measurements - Fair Values of Financial Instruments (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2016 | Sep. 30, 2015 |
Assets | ||
Institutional money market investments | $ 477 | $ 147 |
Interest rate swaps | 24 | 19 |
Forward exchange contracts | 22 | 13 |
Total Assets | 523 | 179 |
Liabilities | ||
Forward exchange contracts | 9 | 21 |
Commodity forward contracts | 5 | 10 |
Interest rate swaps | 3 | |
Contingent consideration liabilities | 57 | 77 |
Total Liabilities | 73 | 108 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Institutional money market investments | 477 | 147 |
Interest rate swaps | 0 | 0 |
Forward exchange contracts | 0 | 0 |
Total Assets | 477 | 147 |
Liabilities | ||
Forward exchange contracts | 0 | 0 |
Commodity forward contracts | 0 | 0 |
Interest rate swaps | 0 | |
Contingent consideration liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Institutional money market investments | 0 | 0 |
Interest rate swaps | 24 | 19 |
Forward exchange contracts | 22 | 13 |
Total Assets | 46 | 32 |
Liabilities | ||
Forward exchange contracts | 9 | 21 |
Commodity forward contracts | 5 | 10 |
Interest rate swaps | 3 | |
Contingent consideration liabilities | 0 | 0 |
Total Liabilities | 16 | 30 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Institutional money market investments | 0 | 0 |
Interest rate swaps | 0 | 0 |
Forward exchange contracts | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities | ||
Forward exchange contracts | 0 | 0 |
Commodity forward contracts | 0 | 0 |
Interest rate swaps | 0 | |
Contingent consideration liabilities | 57 | 77 |
Total Liabilities | $ 57 | $ 77 |
Financial Instruments and Fai55
Financial Instruments and Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Remaining cash equivalents | $ 1,219,000,000 | $ 1,219,000,000 | $ 1,277,000,000 | |||
Fair value of long-term debt | 11,500,000,000 | 11,500,000,000 | 11,600,000,000 | |||
Fair value of debt reclassified from long term to short term | 1,300,000,000 | 1,300,000,000 | $ 750,000,000 | |||
Transfer of assets in and out of level 1, 2 and 3 measurements during the period | 0 | $ 0 | 0 | $ 0 | ||
Transfer of liabilities in and out of level 1, 2 and 3 measurements during the period | 0 | $ 0 | 0 | $ 0 | ||
Contingent consideration arrangements, decrease in contingent liability | 22,000,000 | |||||
Notes Due 2016 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of debt | $ 500,000,000 | $ 500,000,000 | ||||
Debt instrument, interest rate | 1.75% | 1.75% | ||||
Notes Due June 2016 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of debt | $ 750,000,000 | |||||
Minimum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Maturity period of short-term investments at the time of purchase | 3 months | |||||
Maximum | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Maturity period of short-term investments at the time of purchase | 1 year |