| CONSOLIDATED BALANCE SHEETS (USD $) | ||
| In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 |
| Current assets: | ||
| Cash and cash equivalents | $3,007 | $2,449 |
| Short term investments | 479 | 564 |
| Trade receivables, net | 1,346 | 1,168 |
| Inventories | 626 | 574 |
| Deferred income tax assets | 162 | 221 |
| Other current assets | 213 | 243 |
| Total current assets | 5,833 | 5,219 |
| Long term investments | 73 | 24 |
| Property, plant and equipment, net | 1,304 | 1,138 |
| Intangible assets, net | 255 | 91 |
| Goodwill | 688 | 645 |
| Long term deferred income tax assets | 391 | 342 |
| Other assets | 142 | 92 |
| Total assets | 8,686 | 7,551 |
| Current liabilities: | ||
| Accounts payable | 321 | 199 |
| Short term borrowings | 607 | 1,059 |
| Current maturities of long term debt | 0 | 1 |
| Other current liabilities | 1,047 | 931 |
| Total current liabilities | 1,975 | 2,190 |
| Long term debt, net of current maturities | 56 | 61 |
| Long term deferred income tax liabilities | 59 | 22 |
| Other long term liabilities | 691 | 587 |
| Contingencies (note 18) | ||
| Shareholders' equity: | ||
| Common shares, par value CHF 0.20 per share; 320,254,200 shares authorized, 304,016,290 shares issued and 299,550,733 shares outstanding at December 31, 2009; 321,297,600 shares authorized, 304,722,706 shares issued and 298,648,353 shares outstanding at December 31, 2008 | 42 | 42 |
| Additional paid-in capital | 1,535 | 1,449 |
| Accumulated other comprehensive income | 203 | 80 |
| Retained earnings | 4,533 | 3,699 |
| Treasury shares, at cost; 4,465,557 shares at December 31, 2009; and 6,074,353 shares at December 31, 2008 | (408) | (579) |
| Total shareholders' equity | 5,905 | 4,691 |
| Total liabilities and shareholders' equity | $8,686 | $7,551 |
| PARENTHETICAL DATA TO THE CONSOLIDATED BALANCE SHEETS (USD $) | ||
| Dec. 31, 2009
| Dec. 31, 2008
| |
| Shareholders' equity: | ||
| Common shares, par value CHF per share | 0.2 | 0.2 |
| Common shares, shares authorized | 320,254,200 | 321,297,600 |
| Common shares, shares issued | 304,016,290 | 304,722,706 |
| Common shares, shares outstanding | 299,550,733 | 298,648,353 |
| Treasury shares, at cost; shares | 4,465,557 | 6,074,353 |
| CONSOLIDATED STATEMENTS OF EARNINGS (USD $) | |||
| In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
| CONSOLIDATED STATEMENTS OF EARNINGS | |||
| Sales | $6,499 | $6,294 | $5,599 |
| Cost of goods sold | 1,614 | 1,472 | 1,398 |
| Gross profit | 4,885 | 4,822 | 4,201 |
| Selling, general and administrative | 1,935 | 1,961 | 1,694 |
| Research and development | 665 | 619 | 564 |
| In process research and development | 0 | 0 | 9 |
| Amortization of intangibles | 24 | 29 | 51 |
| Operating income | 2,261 | 2,213 | 1,883 |
| Other income (expense): | |||
| Gain (loss) from foreign currency, net | (3) | (21) | 11 |
| Interest income | 46 | 76 | 69 |
| Interest expense | (16) | (51) | (50) |
| Other, net | 25 | (134) | 16 |
| Earnings before income taxes | 2,313 | 2,083 | 1,929 |
| Income taxes | 306 | 36 | 343 |
| Net earnings | $2,007 | $2,047 | $1,586 |
| Basic earnings per common share | 6.72 | 6.86 | 5.32 |
| Diluted earnings per common share | 6.66 | 6.79 | 5.25 |
| Basic weighted average common shares | 298,847,072 | 298,504,732 | 298,353,894 |
| Diluted weighted average common shares | 301,348,181 | 301,582,676 | 302,162,019 |
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (USD $) | ||||||
| In Millions, except Share data | Common Shares
| Additional Paid-in Capital
| Accumulated Other Comprehensive Income
| Retained Earnings
| Treasury Shares
| Total
|
| Beginning Balance (in shares) at Dec. 31, 2006 | 301,182,404 | |||||
| Beginning Balance at Dec. 31, 2006 | $44 | $1,065 | $127 | $3,202 | ($1,524) | $2,914 |
| Comprehensive income: | ||||||
| Net earnings | 0 | 0 | 0 | 1,586 | 0 | 1,586 |
| Change in net unrealized gains (losses) on investments | 0 | 0 | (10) | 0 | 0 | (10) |
| Foreign currency translation adjustments | 0 | 0 | 101 | 0 | 0 | 101 |
| Unrecognized postretirement benefits losses and prior service costs, net of taxes | 0 | 0 | (15) | 0 | 0 | (15) |
| Total comprehensive income | 1,662 | |||||
| Adjustment to initially apply guidance for uncertain tax positions | 0 | 0 | 0 | 30 | 0 | 30 |
| Share-based payments | 0 | 84 | 0 | 0 | 0 | 84 |
| Share award transactions | 0 | 60 | 0 | 0 | 130 | 190 |
| Share award transactions (in shares) | 4,144,557 | |||||
| Tax benefits on share award transactions | 0 | 111 | 0 | 0 | 0 | 111 |
| Treasury shares acquired | 0 | 0 | 0 | 0 | (1,003) | (1,003) |
| Treasury shares acquired (in shares) | (7,664,255) | |||||
| Share cancellation | (1) | (20) | 0 | (813) | 834 | 0 |
| Share cancellation (in shares) | 0 | |||||
| Dividends on common shares | 0 | 0 | 0 | (613) | 0 | (613) |
| Ending Balance at Dec. 31, 2007 | 43 | 1,300 | 203 | 3,392 | (1,563) | 3,375 |
| Ending Balance (in shares) at Dec. 31, 2007 | 297,662,706 | |||||
| Comprehensive income: | ||||||
| Net earnings | 0 | 0 | 0 | 2,047 | 0 | 2,047 |
| Change in net unrealized gains (losses) on investments | 0 | 0 | (7) | 0 | 0 | (7) |
| Foreign currency translation adjustments | 0 | 0 | (89) | 0 | 0 | (89) |
| Unrecognized postretirement benefits losses and prior service costs, net of taxes | 0 | 0 | (27) | 0 | 0 | (27) |
| Total comprehensive income | 1,924 | |||||
| Adjustment for new pension plan measurement date, net of taxes | 0 | 0 | 0 | (1) | 0 | (1) |
| Share-based payments | 0 | 83 | 0 | 0 | 0 | 83 |
| Share award transactions | 0 | 25 | 0 | (8) | 108 | 125 |
| Share award transactions (in shares) | 2,031,562 | |||||
| Tax benefits on share award transactions | 0 | 61 | 0 | 0 | 0 | 61 |
| Treasury shares acquired | 0 | 0 | 0 | 0 | (127) | (127) |
| Treasury shares acquired (in shares) | (1,045,915) | |||||
| Share cancellation | (1) | (21) | 0 | (981) | 1,003 | 0 |
| Share cancellation (in shares) | 0 | |||||
| Dividends on common shares | 0 | 1 | 0 | (750) | 0 | (749) |
| Ending Balance at Dec. 31, 2008 | 42 | 1,449 | 80 | 3,699 | (579) | 4,691 |
| Ending Balance (in shares) at Dec. 31, 2008 | 298,648,353 | 298,648,353 | ||||
| Comprehensive income: | ||||||
| Net earnings | 0 | 0 | 0 | 2,007 | 0 | 2,007 |
| Change in net unrealized gains (losses) on investments | 0 | 0 | 40 | 0 | 0 | 40 |
| Foreign currency translation adjustments | 0 | 0 | 71 | 0 | 0 | 71 |
| Unrecognized postretirement benefits losses and prior service costs, net of taxes | 0 | 0 | 12 | 0 | 0 | 12 |
| Total comprehensive income | 2,130 | |||||
| Adjustment for acquisition of noncontrolling interest | 0 | (12) | 0 | 0 | 0 | (12) |
| Share-based payments | 0 | 74 | 0 | 0 | 0 | 74 |
| Share award transactions | 0 | 5 | 0 | (2) | 52 | 55 |
| Share award transactions (in shares) | 977,202 | |||||
| Tax benefits on share award transactions | 0 | 22 | 0 | 0 | 0 | 22 |
| Treasury shares acquired | 0 | 0 | 0 | 0 | (7) | (7) |
| Treasury shares acquired (in shares) | (74,822) | |||||
| Share cancellation | 0 | (3) | 0 | (123) | 126 | 0 |
| Share cancellation (in shares) | 0 | |||||
| Dividends on common shares | 0 | 0 | 0 | (1,048) | 0 | (1,048) |
| Ending Balance at Dec. 31, 2009 | $42 | $1,535 | $203 | $4,533 | ($408) | $5,905 |
| Ending Balance (in shares) at Dec. 31, 2009 | 299,550,733 | 299,550,733 |
| CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | |||
| In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
| Cash provided by (used in) operating activities: | |||
| Net earnings | $2,007 | $2,047 | $1,586 |
| Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities: | |||
| Depreciation | 194 | 167 | 159 |
| Amortization of intangibles | 24 | 29 | 51 |
| In process research and development | 0 | 0 | 9 |
| Share-based payments | 74 | 83 | 84 |
| Tax benefit from share-based compensation | 5 | 8 | 16 |
| Deferred income taxes | 51 | (146) | (26) |
| Loss (gain) on sale of assets | 49 | 12 | (12) |
| Loss on impairment of available-for-sale securities | 0 | 37 | 0 |
| Unrealized depreciation (appreciation) on trading securities | (76) | 85 | 0 |
| Other, net | 1 | 7 | 2 |
| Changes in operating assets and liabilities, net of effects from business acquisition: | |||
| Trading securities | 0 | 0 | (405) |
| Trade receivables | (144) | (121) | (95) |
| Inventories | (6) | (79) | 3 |
| Other assets | (13) | 25 | (129) |
| Accounts payable | 118 | (8) | 23 |
| Other current liabilities | 100 | 62 | 87 |
| Other long term liabilities | 32 | (176) | 117 |
| Net cash from operating activities | 2,416 | 2,032 | 1,470 |
| Cash provided by (used in) investing activities: | |||
| Purchases of property, plant and equipment | (342) | (302) | (227) |
| Acquisition of business, net of cash acquired | (149) | (23) | (111) |
| Purchases of intangible assets | (8) | (26) | 0 |
| Purchases of investments | (1,261) | (1,099) | (37) |
| Proceeds from sales and maturities of investments | 1,362 | 1,081 | 145 |
| Other, net | 8 | 4 | 3 |
| Net cash from investing activities | (390) | (365) | (227) |
| Cash provided by (used in) financing activities: | |||
| Net proceeds from (repayment of) short term debt | (492) | (633) | 729 |
| Proceeds from issuance of long term debt | 0 | 0 | 1 |
| Repayment of long term debt | (6) | (2) | (6) |
| Dividends on common shares | (1,048) | (749) | (613) |
| Acquisition of treasury shares | (7) | (127) | (1,003) |
| Proceeds from exercise of stock options | 55 | 125 | 190 |
| Tax benefits from share-based payment arrangements | 17 | 53 | 95 |
| Net cash from financing activities | (1,481) | (1,333) | (607) |
| Effect of exchange rates on cash and cash equivalents | 13 | (19) | 9 |
| Net increase in cash and cash equivalents | 558 | 315 | 645 |
| Cash and cash equivalents, beginning of year | 2,449 | 2,134 | 1,489 |
| Cash and cash equivalents, end of year | $3,007 | $2,449 | $2,134 |
| (1) Summary of Significant Accounting Policies and Practices | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Summary of Significant Accounting Policies and Practices | (1) Summary of Significant Accounting Policies and Practices (in millions, except per share data) (a) Description of Business Alcon, Inc. ("Alcon"), a Swiss corporation, is a majority owned subsidiary of Nestl S.A. ("Nestl").During July 2008, Nestl sold approximately 74 million of its Alcon common shares to Novartis AG.At December 31, 2009, Nestl owned 156,076,263 common shares of Alcon. In January 2010, Novartis exercised its call option for Nestl's remaining Alcon common shares and proposed a merger of Alcon with and into Novartis, as discussed in note 17. The principal business of Alcon and all of its subsidiaries (collectively, the "Company") is the development, manufacture and marketing of pharmaceuticals, surgical equipment and devices, contact lens care and other vision care products that treat eye diseases and disorders and promote the general health and function of the human eye.Due to the nature of the Company's worldwide operations, it is not subject to significant concentration risks. (b) Principles of Consolidation The consolidated financial statements include the accounts of the Company.All significant balances and transactions among the consolidated entities have been eliminated in consolidation.All consolidated entities are included on the basis of a calendar year. (c) Management Estimates Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").Actual results could differ from those estimates. (d)Foreign Currency The reporting currency of the Company is the United States dollar.The financial position and results of operations of the Company's foreign subsidiaries are generally determined using the local currency as the functional currency.Assets and liabilities of these subsidiaries have been translated at the rate of exchange at the end of each period.Revenues and expenses have been translated at the weighted average rate of exchange in effect during the period.Gains and losses resulting from translation adjustments are included in accumulated other comprehensive income (loss) in shareholders' equity.The impact of subsidiaries located in countries whose economies are considered highly inflationary is insignificant.Gains and losses resulting from foreign currency transactions are included in nonoperating earnings.Under Swiss corporate law, Alcon is required to declare any dividends on its common shares in Swiss francs. (e)Cash and Cash Equivalents Cash equivalents include demand deposits and all highly liquid investments with original maturities of three months or less. (f)Inventories Inventories are stated at the lower of cost or market.Cost is determined primarily using the first-in, first-out method. (g)Investments The Company holds investments of various types, maturities and classifications. Trading Securities.Trading securities are stated at fair value, with gains or losses resulting from changes in fair value re |
| (2) Cash Flows-Supplemental Disclosures | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Cash Flows-Supplemental Disclosures | (2) Cash Flows__Supplemental Disclosures (in millions, except per share data) 2009 2008 2007 Supplemental Disclosure of Cash Flow Information: Cash paid during the year for the following: Interest expense, net of amount capitalized $ 14 $ 53 $ 48 Income taxes $ 262 $ 232 $ 162 Supplemental Disclosure of Noncash Financing Activities: a) During the years ended December 31, 2009, 2008 and 2007, certain individuals terminated employment prior to the vesting of their restricted Alcon common shares and forfeited 5,420 shares, 17,622 shares and 18,969 shares, respectively.(See note 13 for discussion of restricted common shares.)The forfeited shares were recorded as treasury shares during the respective periods. b) During the year ended December 31, 2009, 1,085 treasury shares, representing previously declared dividends applicable to common shares withdrawn from the Alcon Executive Deferred Compensation Plan, were delivered to plan participants.No such shares were delivered in 2008 and 2007. Changes in Presentation: A revision to the Financial Instruments Topic 825-10-45 in the Accounting Standards Codification (ASC) of the Financial Accounting Standards Board (FASB) became effective for fiscal years beginning after November 15, 2007 and generally does not permit retrospective application.This revision directs entities to classify cash receipts and cash payments related to items measured at fair value according to their nature and purpose.As a result, cash receipts and payments related to trading securities, which were reported in net cash from operating activities in 2007, were reported in cash flows from investing activities in 2009 and 2008 and cash flows for 2009 and 2008 are not directly comparable to those reported in 2007.Cash payments and receipts related to available-for-sale securities have been included in cash flows from investing activities in 2009, 2008 and 2007. |
| (3) Supplemental Balance Sheet Information | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Supplemental Balance Sheet Information | (3) Supplemental Balance Sheet Information (in millions, except per share data) December 31, 2009 2008 Cash and Cash Equivalents Cash $ 195 $ 148 Cash equivalents on deposit with Nestl 10 6 Cash equivalents -- other 2,802 2,295 Total $ 3,007 $ 2,449 Cash equivalents consisted of interest-bearing deposits and repurchase agreements with an initial term of less than three months. December 31, 2009 2008 Trade Receivables, Net Trade receivables $ 1,389 $ 1,213 Allowance for doubtful accounts (43 ) (45 ) Net $ 1,346 $ 1,168 2009 2008 2007 Allowance for Doubtful Accounts Balance at beginning of year $ 45 $ 34 $ 30 Bad debt expense 6 13 4 Charge-off (recoveries), net (8 ) (2 ) -- Balance at end of year $ 43 $ 45 $ 34 December 31, 2009 2008 Inventories Finished products $ 375 $ 358 Work in process 50 40 Raw materials 201 176 Total $ 626 $ 574 December 31, 2009 2008 Other Current Assets Prepaid expenses $ 57 $ 52 Prepaid income taxes 58 75 Other 98 116 Total $ 213 $ 243 December 31, 2009 2008 Property, Plant and Equipment, Net Land and improvements $ 29 $ 28 Buildings and improvements 828 757 Machinery, other equipment and software 1,566 1,358 Construction in progress 227 175 Total 2,650 2,318 Accumulated depreciation (1,346 ) (1,180 ) Net $ 1,304 $ 1,138 Construction in progress at December 31, 2009 consisted primarily of initial construction of a new manufacturing facility in Singapore and various plant expansion and upgrade projects.Commitments related to these projects at December 31, 2009 totaled $96. December 31, 2009 2008 Other Current Liabilities Deferred income tax liabilities $ 9 $ 9 Payables to affiliates 2 8 Accrued warranties 9 7 Accrued compensation 333 308 Accrued taxes 201 187 Accrued product rebates 221 172 Other 272 240 Total $ 1,047 $ 931 2009 2008 2007 Warranty Reserve Balance at beginning of year $ 7 $ 7 $ 7 Warranty expense 12 12 9 Warranty payments, net (10 ) (12 ) (9 ) Balance at end of year $ 9 $ 7 $ 7 December 31, 2009 2008 Other Long Term Liabilities Pension plans $ 423 $ 375 Postretirement healthcare plan 99 146 Deferred compensation 29 24 Long term income tax liabilities (note 10) 57 29 Minority interest (note 19) -- 1 Other 83 12 Total $ 691 $ 587 December 31, 2009 2008 Accumulated Other Comprehensive Income (Loss) Foreign currency translation adjustment $ 265 $ 194 Unrealized gains (losses) on investments, net of income taxes 30 (10 ) Unrecognized postretirement benefits losses and prior service costs, net of tax benefits (92 ) (104 ) Total $ 203 $ 80 At December 31, 2009, the portion of retained earnings that was available under Swiss law for the payment of dividends was $2,665. For th |
| (4) Investments | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Investments | (4) Investments (in millions, except per share data) At December 31, 2009 and 2008, investments were as follows: 2009 2008 Short term investments: Trading securities $ 22 $ 433 Available-for-sale investments 457 131 Total short term investments $ 479 $ 564 Long term investmentsavailable-for-sale investments $ 73 $ 24 At December 31, 2009 and 2008, trading securities were as follows: 2009 2008 Net Estimated Net Estimated Unrealized Fair Unrealized Fair Gains (Losses) Value Gains (Losses) Value Total trading securities $ (9 ) $ 22 $ (85 ) $ 433 At December 31, 2009, available-for-sale investments were as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short term investments: U.S. government and agency securities $ 129 $ -- $ (1 ) $ 128 Mortgage-backed securities fund 75 7 -- 82 Mortgage-backed securities 6 -- -- 6 Senior secured bank loans fund 131 23 -- 154 Corporate debt securities 43 -- -- 43 Equity securities 29 -- -- 29 Other investments 15 -- -- 15 Total short term investments 428 30 (1 ) 457 Long term investments: U.S. government and agency securities 52 -- (1 ) 51 Mortgage-backed securities 10 -- -- 10 Equity securities 2 -- -- 2 Other investments 8 2 -- 10 Total long term investments 72 2 (1 ) 73 Total available-for-sale investments $ 500 $ 32 $ (2 ) $ 530 The senior secured bank loans fund is a professionally managed fund investing in loans made by banks to large corporate borrowers whose assets are pledged as collateral. At December 31, 2008, available-for-sale investments were as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value Short term investments: Mortgage-backed securities $ 58 $ 1 $ -- $ 59 Senior secured bank loans fund 83 -- (11 ) 72 Total short term investments 141 1 (11 ) 131 Long term investments: U.S. government and agency securities 2 -- -- 2 Equity securities 20 -- -- 20 Other investments 2 -- -- 2 Total long term investments 24 -- -- 24 Total available-for-sale investments $ 165 $ 1 $ (11 ) $ 155 The contractual maturities of available-for-sale investments at December 31, 2009 were as follows: Estimated Amortized Fair Cost Value Securities not due at a single maturity date* $ 230 $ 262 Other debt securities, maturing: Within one year 79 79 After 1 year through 10 years 142 141 After 10 years through 15 years -- -- Beyond 15 years 18 17 Total debt securities recorded at market 469 499 Equity and other investments 31 31 Total available-for-sale investments $ 500 $ 530 *Mortgage-backed securities, a senior secured bank loans fund and certain other investments |
| (5) Financial Instruments | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Financial Instruments | (5) Financial Instruments (in millions, except per share data) Foreign Currency Risk Management A significant portion of the Company's cash flows is denominated in foreign currencies.Alcon relies on ongoing cash flows generated from foreign sources to support its long term commitments to U.S. dollar-based research and development.To the extent the dollar value of cash flows is diminished as a result of weakening local currencies relative to the dollar, the Company's ability to fund research and other dollar-based strategic initiatives at a consistent level may be impaired.The Company has established a foreign currency risk management program to protect against volatility of non-functional currency monetary assets and liabilities and changes in fair value caused by fluctuations in foreign exchange rates. The Company primarily utilizes forward exchange contracts in countries where they are available and economically beneficial to offset the impact of fluctuations in foreign exchange rates on monetary assets and their related cash flows.All outstanding foreign exchange forward contracts are entered into to protect the value of assets or liabilities denominated in currencies other than the entity's functional currency.To the extent hedged, the changes in fair value of the forward contracts offset the changes in the value of the assets or liabilities.The changes in value of the foreign exchange forward contracts and the assets/liabilities that are being protected are recorded in foreign exchange gains and losses within other income (expense). The fair values of forward exchange and option contracts are reported in other current assets and other current liabilities.At December 31, 2009, the fair value hedge derivative instruments have settlement dates in the first half of 2010 and cover a gross notional amount of $521. The Company believes that, at the balance sheet date, counterparty credit risk was not significant due to the credit quality of the counterparties to the derivatives, which were all large financial institutions in Switzerland, and the short-term maturities of most derivatives.The credit exposure related to these financial instruments is represented by the fair value of contracts with a positive fair value at the reporting date. For the year ended December 31, 2009, the effects of foreign exchange derivative instruments were: Derivatives in Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Earnings on Derivatives Amount of Gain (Loss) Recognized in Earnings on Derivatives Amount of Gain (Loss) on the Hedged Items Foreign exchange forward contracts Gain (loss) from foreign currency, net $3 $(8) Interest Rate Risk Management The Company may use interest rate swaps on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing.The Company does not use leveraged swaps and does not leverage any of its investment activities that would put capital at risk. At December 31, 2009 and 2008, in connection with a long term bank loan, the Company had an interest rate swap fair value hedge out |
| (6) Impairment of Long-Lived Assets Held and Used | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Impairment of Long-Lived Assets Held and Used | (6) Impairment of Long-Lived Assets Held and Used (in millions, except per share data) During the year ended December 31, 2007, the Company recognized losses totaling $33 related to the impairment of certain plant, equipment and intangible assets used in its refractive product line and to the valuation of refractive product inventories.The losses were recorded in cost of goods sold ($24) and amortization of intangibles ($9) in the consolidated statement of earnings for the year ended December 31, 2007. During March 2007, in connection with the Company's ongoing review of its refractive product line, the Company determined that the carrying amounts of long-lived assets used in the refractive product line probably would not be recovered through the respective projected cash flows, although the Company continued to use those assets.Consequently, the impairment review was conducted using the then-latest projections on a gross basis to determine whether the carrying amounts of the refractive assets were recoverable.After the carrying amounts were determined not recoverable, a traditional discounted cash flow calculation was used to estimate the fair values of the refractive assets for the purpose of measuring the impairment losses, as the Company believes this approach provided the most reasonable estimate of the fair values of those assets. |
| (7) Intangible Assets and Goodwill | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Intangible Assets and Goodwill | (7) Intangible Assets and Goodwill (in millions, except per share data) December 31, 2009 December 31, 2008 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Intangible Assets Subject to amortization: Licensed technology $ 332 $ (296 ) $ 328 $ (284 ) Patents 111 (24 ) 29 (22 ) Other 121 (93 ) 129 (89 ) Total subject to amortization 564 (413 ) 486 (395 ) Not subject to amortization: Purchased in process research and development assets 104 -- -- -- Total intangible assets $ 668 $ (413 ) $ 486 $ (395 ) Certain 2008 details have been classified in the table above to conform to the current period presentation. For an explanation of significant changes in 2009 to intangible assets, see note 19, "Acquisitions." In June 2008, the Company entered into a patent cross-licensing agreement for certain paid-up, non-exclusive, worldwide licenses related to coating systems used in intraocular lens insertion devices.The Company recorded an intangible asset of $23 with a remaining useful life of approximately 8 years. Years ended December 31, 2009 2008 2007 Aggregate amortization expense related to intangible assets $ 24 $ 29 $ 51 Amortization expense in 2007 included the impairment losses of $9, discussed in note 6. Estimated Amortization Expense: For year ended December 31, 2010 $ 27 For year ended December 31, 2011 $ 21 For year ended December 31, 2012 $ 13 For year ended December 31, 2013 $ 12 For year ended December 31, 2014 $ 10 Intangible assets acquired in January 2010 are expected to increase the estimates above by approximately $26 in each year. The changes in the carrying amounts of goodwill for the years ended December 31, 2009 and 2008 were as follows: United States International Segment Segment Total Goodwill: Balance,December 31, 2007 $ 388 $ 238 $ 626 Acquisition of business 15 7 22 Impact of changes in foreign exchange rates -- (3 ) (3 ) Balance,December 31, 2008 403 242 645 Acquisition of business 18 22 40 Impact of changes in foreign exchange rates 2 1 3 Balance,December 31, 2009 $ 423 $ 265 $ 688 |
| (8) Short Term Borrowing | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Short Term Borrowing | (8) Short Term Borrowing (in millions, except per share data) December 31, 2009 2008 Lines of credit $ 273 $ 311 Commercial paper 286 622 From affiliates 7 97 Bank overdrafts 41 29 Total short term borrowings $ 607 $ 1,059 At December 31, 2009, the Company had several unsecured line of credit agreements with third parties totaling $541 that were denominated in various currencies.The commitment fees related to unused borrowings under these facilities were less than $1 during 2009, 2008 and 2007.The weighted average interest rates at December 31, 2009 and 2008 were 2.2% and 3.8%, respectively.The amounts outstanding under these agreements at December 31, 2009 were due at various dates during 2010. At December 31, 2009, the Company had a $2,000 commercial paper facility.At December 31, 2009, the outstanding balance carried an average interest rate of 0.1% before fees.Nestl guarantees the commercial paper facility and assists in its management, for which the Company pays Nestl an annual fee based on the average outstanding commercial paper balances.The Company's management believes that any fees paid by the Company to Nestl for their guarantee of any indebtedness or for the management of the commercial paper program are comparable to the fees that would be paid in an arm's length transaction.Total fees paid to Nestl in connection with this facility for the years ended December 31, 2009, 2008 and 2007 were less than $1 per year. The Company had various unsecured promissory notes and line of credit agreements denominated in various currencies with several subsidiaries of Nestl.These short term borrowings at December 31, 2009 were either due on demand or at various dates during 2010.The weighted average interest rates at December 31, 2009 and 2008 were 10.7% and 2.4%, respectively.The unused portion under the line of credit agreements was $213 at December 31, 2009.In the event of a change of control, these agreements would no longer be available for additional borrowings, and any outstanding balances would become payable in accordance with the related terms. The Company had several unsecured bank overdraft lines of credit denominated in various currencies totaling $191 at December 31, 2009.The weighted average interest rates on bank overdrafts at December 31, 2009 and 2008 were 4.5% and 8.1%, respectively. |
| (9) Long Term Debt | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Long Term Debt | (9) Long Term Debt (in millions, except per share data) December 31, 2009 2008 License obligations $ -- $ 5 Bank loan 56 56 Other -- 1 Total long term debt 56 62 Less current maturities of long term debt -- 1 Long term debt, net of current maturities $ 56 $ 61 The Company's Japanese subsidiary has an outstanding bank loan with a fixed interest rate of 1.6%, due in 2011.This fixed rate of 1.6% was swapped for floating rate yen LIBOR, which was 0.3% at December 31, 2009. The bank loan was guaranteed by Nestl for a fee of less than $1 annually in 2009, 2008 and 2007.The loan contains provisions that may accelerate the obligation in the event that Nestl's ownership of Alcon falls below 51%. Interest costs of $1, $2 and $3 in 2009, 2008 and 2007, respectively, were capitalized as part of property, plant and equipment |
| (10) Income Taxes | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Income Taxes | (10) Income Taxes (in millions, except per share data) The components of earnings before income taxes were: 2009 2008 2007 Switzerland $ 1,339 $ 1,446 $ 1,048 Outside Switzerland 974 637 881 Earnings before income taxes $ 2,313 $ 2,083 $ 1,929 Income tax expense (benefit) consisted of the following: 2009 2008 2007 Current: Switzerland $ 29 $ 6 $ 130 Outside Switzerland 226 176 239 Total current 255 182 369 Deferred: Switzerland (1 ) (6 ) -- Outside Switzerland 52 (140 ) (26 ) Total deferred 51 (146 ) (26 ) Total $ 306 $ 36 $ 343 Income tax expense for the year ended December 31, 2008 reflected a net reduction of $271 for period items, including a reduction of $236 related to losses associated with the Company's investment in and advances to its former subsidiary, Summit Autonomous, Inc., as well as reductions related to progress in audit settlements, advance pricing agreement negotiations, the lapse of statutes of limitation and other minor items. Current tax expense does not reflect benefits of $22, $61 and $111 for the years ended December 31, 2009, 2008 and 2007, respectively, related to restricted shares and the exercise of employee stock options, recorded directly to additional paid-in capital. In 2009 and 2008, the Company realized certain Swiss tax benefits totaling approximately $145 and $130, respectively, for its commitment to relocate and significantly expand its global administration operations in Switzerland.The initial term of these benefits is expected to continue from 2008 for a period of five years.These benefits would be extended for an additional five years if the Company fulfills certain employment commitments and maintains these commitments through 2022. A reconciliation of income tax expense at the statutory tax rate of 7.8% in Switzerland to the consolidated effective tax rate follows: 2009 2008 2007 Statutory income tax rate 7.8 % 7.8 % 7.8 % Effect of different tax rates in various jurisdictions 4.8 8.2 11.4 Current year research and experimentation credits (0.9 ) (1.1 ) (1.2 ) Other current year taxes 0.4 0.2 0.3 Current year nondeductible and excludable items 0.1 (0.4 ) 0.3 Effect of losses on investment in Summit Autonomous, Inc. -- (11.3 ) -- Tax impact of prior year audit settlements, amended returns and adjustments to estimates 1.1 (1.7 ) (0.5 ) Other (0.1 ) -- (0.3 ) Effective tax rate 13.2 % 1.7 % 17.8 % At December 31, 2009, Alcon's subsidiaries had loss carryforwards that expire as follows: 2010 $ -- 2011 -- 2012 -- 2013 6 2014 -- 2015-2026 10 Indefinite -- Total loss carryforwards $ 16 Deferred income taxes are recognized for tax consequences of temporary differences by applying enacted statutory tax rates, applicable to future years, to differences between the financial reporting and the tax basis of existing assets and liabilities. Tempor |
| (11) Business Segments | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Business Segments | (11) Business Segments (in millions, except per share data) The Company conducts its global business through two business segments: Alcon United States and Alcon International.Alcon United States includes sales to unaffiliated customers located in the United States of America, excluding Puerto Rico.Alcon United States operating income is derived from operating profits within the United States.Alcon International includes sales to all other unaffiliated customers. Each business segment markets and sells products principally in three product categories of the ophthalmic market:(1) pharmaceutical (prescription drugs), (2) surgical equipment and devices (cataract, vitreoretinal and refractive), and (3) consumer eye care (contact lens disinfectants and cleaning solutions, artificial tears and ocular vitamins).Business segment operations generally do not include research and development, certain manufacturing and other corporate functions. Segment performance is measured based on sales and operating income reported in accordance with U.S. GAAP. Certain manufacturing costs and manufacturing variances are not assigned to business segments because most manufacturing operations produce products for more than one business segment.Research and development costs, excluding regulatory costs which are included in the business segments, are treated as general corporate costs and are not assigned to business segments. Identifiable assets are not assigned by business segment and are not considered in evaluating the performance of the business segments. Sales Operating Income Depreciation and Amortization 2009 2008 2007 2009 2008 2007 2009 2008 2007 United States $ 2,914 $ 2,807 $ 2,672 $ 1,664 $ 1,554 $ 1,487 $ 47 $ 46 $ 59 International 3,585 3,487 2,927 1,507 1,472 1,209 90 78 69 Segments total 6,499 6,294 5,599 3,171 3,026 2,696 137 124 128 Manufacturing operations -- -- -- (64 ) (61 ) (50 ) 51 46 43 Research and development -- -- -- (579 ) (527 ) (479 ) 18 16 15 In process research and development -- -- -- -- -- (9 ) -- -- -- General corporate -- -- -- (190 ) (144 ) (185 ) 12 10 24 Share-based compensation -- -- -- (77 ) (81 ) (90 ) -- -- -- Total $ 6,499 $ 6,294 $ 5,599 $ 2,261 $ 2,213 $ 1,883 $ 218 $ 196 $ 210 Certain 2008 and 2007 expenses were reclassified to align with the 2009 reporting structure, the most significant of which was to move the operating expenses of the Swiss service center from the general corporate function to the International business segment |
| (12) Geographic, Customer and Product Information | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Geographic, Customer and Product Information | (12) Geographic, Customer and Product Information (in millions, except per share data) Sales for the Company's country of domicile and all individual countries accounting for more than 10% of total sales are presented below along with long lived assets in those countries.Sales by ophthalmic market segment are also included. Sales below are based on the location of the customer.Sales to one customer of the United States business segment represented $661 of the Company's consolidated sales in 2008.No single customer accounted for more than 10% of total sales in 2009 and 2007. Property, Plant and Sales Equipment For the Years ended December 31, At December 31, 2009 2008 2007 2009 2008 United States $ 2,914 $ 2,807 $ 2,672 $ 720 $ 684 Switzerland 46 44 36 19 18 Rest of world 3,539 3,443 2,891 565 436 Total $ 6,499 $ 6,294 $ 5,599 $ 1,304 $ 1,138 Pharmaceutical $ 2,677 $ 2,561 $ 2,313 Surgical 2,997 2,881 2,500 Consumer eye care 825 852 786 Total $ 6,499 $ 6,294 $ 5,599 |
| (13) Share-Based Compensation Plans | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Share-Based Compensation Plans | (13) Share-Based Compensation Plans (in millions, except per share data) Under the Amended 2002 Alcon Incentive Plan, the Company's board of directors may award to officers, directors and key employees share-based compensation, including stock options, share-settled stock appreciation rights ("SSARs"), restricted shares, share-settled restricted share units ("RSUs"), performance share units and certain cash-settled liability awards.The total number of shares that may be issued under the plan with respect to such awards cumulatively shall not exceed 40 million Alcon common shares.The number of shares that may be delivered pursuant to an exercise or after a lapse of a restriction period may not exceed 10% of the total number of shares issued and outstanding at that time.The grant prices for stock options or stock appreciation rights shall not be lower than the prevailing stock exchange price upon the grant of the award, unless specifically approved by the board. Individual grants become exercisable generally on or after the third anniversary of the grant and lapse on the tenth anniversary of the grant.Grants prior to February 2006 also become exercisable upon early retirement at or after age 55.If there is a change in control (as defined by the plan), the exercise or vesting of the awards accelerates. Beginning in February 2006, consistent with earlier grants, participants may vest in the stock option and SSAR grants upon early retirement at or after age 55; however, under grants subsequent to January 2006, participants may exercise these instruments only on or after the third anniversary of the grant.Restricted share and restricted share unit awards are subject to a three-year cliff vesting; furthermore, participants retiring before reaching age 60 for awards granted subsequent to January 2006 through December 2008, or age 62 for awards granted subsequent to January 2009, will forfeit some or all of such awards if the three-year service period has not expired. The Company intends to satisfy all equity awards granted prior to December 31, 2003 and after December 31, 2007 with the issuance of new shares from conditional capital authorized for the Amended 2002 Alcon Incentive Plan.At December 31, 2009, the Company had reserved approximately 12.3 million Alcon common shares for issuance pursuant to the Amended 2002 Alcon Incentive Plan. The Company's board of directors has authorized the acquisition on the open market of Alcon common shares to, among other things, satisfy the share-based awards requirements granted under the Amended 2002 Alcon Incentive Plan.At December 31, 2009, outstanding authorizations by the Company's board of directors would have permitted the purchase of approximately 1.8 million Alcon common shares.The Company has purchased treasury shares on the open market to satisfy the majority of the outstanding equity awards granted subsequent to December 31, 2003 and prior to January 1, 2008.Additional treasury shares were purchased during 2008 and 2007 in anticipation of presenting the shares to the shareholders for approval of cancellation (note 17). Change of Control Provisions Upon a change of control in the o |
| (14) Deferred Compensation | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Deferred Compensation | (14) Deferred Compensation (in millions, except per share data) The Alcon Executive Deferred Compensation Plan permits certain executives of the Company to defer receipt of compensation and certain stock gains otherwise payable currently and to accumulate earnings thereon on a tax-deferred basis.The plan is designed to permit executives' deferral elections to be held and owned by the Company in a Rabbi trust.During the years ended December 31, 2009, 2008 and 2007, certain executives elected to defer compensation totaling $1 annually.At December 31, 2009 and 2008, other long term liabilities in the accompanying consolidated balance sheets included liabilities under the plan of $13 at each date. In 2004, the Company established the Alcon Excess 401(k) Plan, allowing deferral of excess employer contributions that cannot be made to the Alcon 401(k) Retirement Plan because of limitations under the U.S. Internal Revenue Code of 1986.During the years ended December 31, 2009, 2008 and 2007, deferrals under the plan were $3, $3 and $2 respectively.At December 31, 2009 and 2008, liabilities under the plan, included in other long term liabilities in the accompanying consolidated balance sheets, were $13 and $9, respectively. |
| (15) Related Party Transactions | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Related Party Transactions | (15) Related Party Transactions (in millions, except per share data) At December 31, 2009, Nestl owned 156,076,263 common shares of Alcon and Novartis AG owned 74,061,237 common shares of Alcon. The Company's material transactions with related parties during 2009, 2008 and 2007 have been with Nestl and its subsidiaries.All material related party transactions that are not disclosed elsewhere in these notes are included below. During 2009, 2008 and 2007, the Company had investments and borrowings with Nestl and its subsidiaries which resulted in the following impact to earnings before income taxes: 2009 2008 2007 Interest expense $ 3 $ 5 $ 4 Interest income Less than $1 Less than $1 Less than $1 The Company leases certain facilities from Nestl subsidiaries which resulted in rent expense of $3, $2 and $2 in 2009, 2008 and 2007, respectively.Nestl provides the Company with certain services, including a portion of the Company's information technology licenses, corporate legal services, certain treasury and cash management activities and certain internal audit activities.Nestl charges the Company for its portion of the costs of these services based on arm's length prices.Such charges were less than $3 in each of the three years ended December 31, 2009, 2008 and 2007. During 2008, Lehman Brothers International (Europe) London filed for administration in England.At that time the Company's cash and cash equivalents included $707 of short term securities held in a segregated custodial account of Lehman Brothers International (Europe) London pursuant to a Custody Agreement.Nestl invoiced the Company in December 2008, and in 2009 the Company reimbursed Nestl, for a total of $5 in fees paid by Nestl to the Joint Administrators of Lehman Brothers International (Europe) (in administration) related to the release of the short-term securities held in the custodial account.This amount of fees is subject to adjustment depending on the final costs incurred to settle the administration of Lehman Brothers International (Europe). The Company executes certain foreign exchange contracts through Nestl Finance SA, Cham to benefit from Nestl's foreign exchange transaction volumes and expertise.At December 31, 2009 and 2008, the Company had no notional amounts outstanding with Nestl. The Company participates with certain Nestl affiliates in specific cash pooling accounts under which overdraft lines of credit are available and are jointly and severally guaranteed by all participants, including the Company.At December 31, 2009, the total maximum under these lines of credit was approximately $305. The Company is part of the Nestl Swiss Value-Added Tax Group and therefore jointly and severally liable for any Swiss value-added tax liabilities of all other Group participants. On January 9, 2009, Alcon Pharmaceuticals Ltd. entered into an agreement with Novartis Pharma AG (an affiliate of Novartis) providing for the co-promotion under their license of the Lucentis product in Japan.This agreement has a three-year term ending on December 31, 2011.The Company received co-promotion fees totaling $3 in 2009. |
| (16) Pension and Postretirement Benefits | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Pension and Postretirement Benefits | (16) Pension and Postretirement Benefits (in millions, except per share data) The Company's pension and postretirement benefit plans, which in aggregate cover substantially all employees in the United States and employees in certain other countries, consist of defined benefit pension plans, defined contribution plans and a postretirement healthcare plan.The Company's cost of defined contribution plans was $86, $78 and $76 in 2009, 2008 and 2007, respectively. The information provided below pertains to the Company's defined benefit pension plans and postretirement healthcare plan.The measurement date used to determine pension and postretirement benefit measurements for all of the benefit plans in 2009 and 2008, and the majority of them in 2007, is December 31 of the respective year. The changes in benefit obligations, fair values of plan assets and funded status for the years ended December 31, 2009 and 2008 were: Postretirement Pension Benefits Benefits 2009 2008 2009 2008 Change in Benefit Obligation Benefit obligation at beginning of year $ 458 $ 411 $ 269 $ 250 Service cost 23 24 13 13 Interest cost 29 24 16 15 Benefits paid by trust (7 ) (5 ) (10 ) (8 ) Benefits paid by Company (19 ) (14 ) -- -- Employee contributions 1 1 -- -- Foreign currency translation 3 4 -- -- Medicare subsidy -- -- 1 -- Conversion of multi-employer plan/acquisition 35 -- -- -- Impact of change in measurement date -- 1 -- -- Actuarial (gain)/loss 34 12 (13 ) (1 ) Benefit obligation at end of year 557 458 276 269 Change in Plan Assets Fair value of plan assets at beginning of year 68 54 123 141 Actual return on plan assets 10 (3 ) 32 (37 ) Employer contribution 17 13 32 27 Employee contributions 1 1 -- -- Conversion of multi-employer plan/acquisition 29 -- -- -- Foreign currency translation 1 8 -- -- Benefits paid (7 ) (5 ) (10 ) (8 ) Fair value of plan assets at end of year 119 68 177 123 Funded Status at End of Year $ (438 ) $ (390 ) $ (99 ) $ (146 ) Amounts Recognized in the Consolidated Balance Sheets Accrued benefit costs in other current liabilities $ (15 ) $ (15 ) $ -- $ -- Pension and postretirement obligation in other long term liabilities (423 ) (375 ) (99 ) (146 ) Net amount recognized in the consolidated balance sheet $ (438 ) $ (390 ) $ (99 ) $ (146 ) Amounts recognized in accumulated other comprehensive income, net of taxes, at December 31, 2009 consisted of: Pension Benefits Postretirement Benefits Prior service cost $ (3 ) $ -- Net losses (gains) 77 18 Total $ 74 $ 18 The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost in the year ended December 31, 2010 were estimated to be: Pension Postretirement Benefits Benefits Prior service cost $ (1 ) $ -- Net losses (gains) 6 2 Total |
| (17) Shareholders' Equity | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Shareholders' Equity | (17) Shareholders' Equity (in millions, except per share data) Share Cancellation On May 5, 2009, Alcon's shareholders approved the cancellation of 1,043,400 Alcon common shares, which the Company purchased during 2008.After the fulfillment of certain formal Swiss law requirements, the cancellation became effective in August 2009. On May 6, 2008, the Company's shareholders approved the cancellation of 7,657,400 Alcon common shares, which the Company purchased during 2007.After the fulfillment of certain formal Swiss law requirements, the cancellation became effective in August 2008. On May 9, 2007, Alcon's shareholders approved the cancellation of 7,920,000 Alcon common shares, which the Company purchased during 2006.After the fulfillment of certain formal Swiss law requirements, the cancellation became effective in August 2007. Proposed Change of Control On April 6, 2008, Nestl and Novartis AG ("Novartis") executed the Purchase and Option Agreement pursuant to which Nestl agreed to sell approximately 74 million of its shares of Alcon common stock to Novartis in a cash transaction at a price of $143.18 per share.This sale was consummated on July 7, 2008, and Novartis now owns a minority stake in Alcon of slightly less than 25% of Alcon's outstanding shares, while Nestl remains Alcon's majority shareholder with approximately 156 million Alcon shares comprising approximately 52% of the Company's outstanding shares. The Purchase and Option Agreement between Nestl and Novartis also contains put and call option rights on the balance of approximately 156 million Alcon shares owned by Nestl.The option rights commenced on January 1, 2010 and expire on July 31, 2011.As outlined by the twoparties, these rights grant (i) Novartis a call option to buy all but 4.1 million (or 2.5%) of Nestl's remaining Alcon shares at a fixed price of $181 per share and the 4.1 million shares at the first stage price of $143.18 per share, and (ii) Nestl a put option to sell to Novartis all but 4.1 million of its remaining Alcon shares to Novartis at the lowerof Novartis's call price of $181 per share or a premium of approximately 20.5% above the then-market price of Alcon shares, which will be calculated as the average market price ofAlcon shares during the five trading days immediately precedingthe exercise date of the put option, with the 4.1 million share balance to be sold at the first stage closing price of $143.18 per share. On January 4, 2010, Novartis announced that it had exercised its option to purchase the remaining approximately 156 million Alcon shares owned by Nestl at a weighted average price of $180 per share in cash, pursuant to the Purchase and Option Agreement.Upon consummation of the purchase, Novartis would own an approximate 77% interest in Alcon. The consummation of a purchase and sale transaction under the option right is subject to regulatory approvals.The consummation would trigger certain change of control provisions in the Company's share-based awards plan (including the vesting of certain outstanding share-based awards), certain retirement plans for Company employees and other agreements. Upon consummation, the Company w |
| (18) Commitments and Contingencies | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Commitments and Contingencies | (18) Commitments and Contingencies (in millions, except per share data) Minority Shareholder Class Action Lawsuits On January 4, 2010, Novartis announced that it submitted to the Alcon board of directors a proposal for a merger of Alcon with and into Novartis to be effected under Swiss merger law (note 17).Under the terms of the merger proposal, holders of the approximate 23% of Alcon shares that are publicly traded would receive 2.8 Novartis shares for each Alcon share. The Independent Director Committee was formed in 2008 in connection with Novartis's initial purchase of slightly less than 25% of the Alcon shares from Nestl to evaluate transactions such as the merger proposed by Novartis.The Independent Director Committee engaged independent financial and legal advisors in connection with its evaluation of the proposed merger.On January 20, 2010, the Independent Director Committee issued its formal response rejecting the Novartis merger proposal.The committee rejected the merger proposal based on its assessment that the price offered and other terms were not acceptable and that Novartis's merger proposal was not in the best interests of Alcon and its minority shareholders. Certain Alcon minority shareholders have filed several class action lawsuits related to Novartis's merger proposal concerning the acquisition of the remaining 23% publicly held minority interest.The claims vary among the cases, but include allegations of: (i) breach of contract against Alcon; (ii) tortious interference with contract against Novartis and Nestl (iii) breach of fiduciary duties against the Alcon board of directors, Nestl and Novartis; (iv) aiding and abetting breaches of fiduciary duties against the Alcon board of directors, Nestl and Novartis; (v) breach of Section 13(d) of the Exchange Act against Novartis and Nestl for an alleged failure to disclose that they were acting as a "group;" and (vi) breach of Section 14(d) of the Exchange Act against Novartis and Nestl for an alleged failure to file with the U.S. Securities and Exchange Commission the materials required in connection with a "tender offer."Seven of the cases were filed in the Southern District of New York, all of which have been consolidated into one class action case.One case, which does not name Alcon, Inc. and its board of directors as parties, has been filed in the Eastern District of New York.Two cases are pending in District Court, Tarrant County, Texas; one case is pending in the U.S. District Court for the Northern District of Texas, Fort Worth Division; and two cases have been filed in the County Court at Law, Dallas County, Texas. We are currently unable to express an opinion on the outcome of these class action cases due to their infancy. Other Contingencies Alcon, either alone or jointly with its commercial partners, has filed thirteen North American patent infringement actions against six different generic drug companies.With the exception of international generic challenges, all of these generic drug companies are seeking U.S. Food and Drug Administration ("FDA") approval to market generic versions of Alcon products, under what are known as Abbreviated New Drug A |
| (19) Acquisitions | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Acquisition | (19) Acquisitions (in millions, except per share data) ESBATech AG Acquisition in 2009 On September 15, 2009, the Company completed the acquisition of ESBATech AG, a Swiss biotechnology company. Alcon paid ESBATech shareholders $150 in cash at closing. In addition, the Company recorded the estimated fair value of possible contingent payments of up to $439 based upon the achievement of future research and development milestones that would be expected to create value for Alcon. ESBATech is a clinical-stage biotechnology company that has been developing a pipeline of proprietary single-chain antibody fragment therapeutics for topical and local delivery for safe and convenient therapy. This acquisition provides the Company with additional research and development capabilities. The ESBATech acquisition was recorded in accordance with the Business Combinations topic of the ASC. The following table summarizes the components of the ESBATech purchase price: Cash paid for ESBATech shares $ 150 Estimated fair values of future contingent payments 71 Total purchase price $ 221 The Company engaged a third-party valuation firm to assist it in determining the estimated fair values of in process research and development, identifiable intangible assets and certain tangible assets as well as the future contingent payments.Such a valuation requires significant estimates and assumptions including but not limited to determining the timing and estimated costs to complete the in process projects, projecting regulatory approvals, estimating future cash flows, and developing appropriate discount rates.The Company is continuing to obtain information and evaluate these fair value estimates.The Company's fair value estimates for these components of the transaction may change during the allowable allocation period, which is typically up to one year from the acquisition date. Fair Values of Future Contingent Payments In addition to the cash paid to the shareholders of ESBATech at the time of the acquisition, the Company is obligated to make contingent payments of up to $439 based upon the achievement of future research and development milestones that would be expected to create value for Alcon. The fair values of these payments were estimated to be $71 and were included as a cost of the acquisition. There are a number of milestones that could potentially lead to such payments to the former shareholders of ESBATech.This valuation was based on the Company's estimates of the probability and timing of these contingent payments. The fair value measurement was based on significant inputs not observable in the market and thus represents a Level 3 measurement, as described in note 6.Each milestone was assigned a probability based on its current status.The resultant probability-weighted cash flows were then discounted using a discount rate of 6%, which the Company believes is appropriate and representative of a market participant assumption.The probabilities assigned to payment streams ranged from 5% to 39%.An increase or decrease of 10 percentage points in the probability assumptions would result in an adjustment to the estimated value of approx |
| (20) Subsequent Events | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Subsequent Events | (20) Subsequent Events (in millions, except per share data) Share-Based Payment Awards On February 10, 2010, pursuant to the Amended 2002 Alcon Incentive Plan, Alcon's board of directors approved the grant effective February 17, 2010 of approximately 543,000 RSUs to certain employees.The RSUs vest at the end of a three-year period, with forfeitures if the recipient is not fully vested at termination of employment or at retirement before age 62. |
| (21) Unaudited Quarterly Information | |
| 12 Months Ended
Dec. 31, 2009 | |
| Notes to Financial Statements [Abstract] | |
| Unaudited Quarterly Information | (21) Unaudited Quarterly Information (in millions, except per share data) Three Months Ended March 31, June 30, September 30, December 31, 2009 Sales $ 1,493 $ 1,677 $ 1,614 $ 1,715 Operating income 514 632 578 537 Net earnings 452 582 515 458 Basic earnings per common share $ 1.51 $ 1.95 $ 1.72 $ 1.53 Diluted earnings per common share $ 1.51 $ 1.94 $ 1.71 $ 1.51 2008 Sales $ 1,536 $ 1,736 $ 1,524 $ 1,498 Operating income 500 646 494 573 Net earnings 429 567 627 424 Basic earnings per common share $ 1.44 $ 1.90 $ 2.10 $ 1.42 Diluted earnings per common share $ 1.43 $ 1.88 $ 2.07 $ 1.41 Quarterly sales trends reflect seasonality in several products, including ocular allergy and otic products, in the form of increased sales during the spring months, which occur during the second quarter in the northern hemisphere. Operating income and net earnings in 2009 included costs related to a staffing reduction of approximately 260 employee positions of $18 in the three months ended March 31, 2009 and of $1 in the three months ended September 30, 2009. Net earnings in the three months ended December 31, 2009 included $30 in additional tax reserves from new information related to prior years' provisions. Operating income and net earnings after September 15, 2009 reflect the operations of ESBATech subsequent to its acquisition effective September 15, 2009, as discussed in note 19. Net earnings in the three months ended September 30, 2008 included income tax benefits of $236 related to losses associated with the Company's investment in and advances to its former subsidiary, Summit Autonomous, Inc. |
| Document Information | |
| 12 Months Ended
Dec. 31, 2009 | |
| Document Information [Text Block] | |
| Document Type | 20-F |
| Document Period End Date | 2009-12-31 |
| Amendment Flag | false |
| Entity Information (USD $) | |
| 12 Months Ended
Dec. 31, 2009 | |
| Entity [Text Block] | |
| Entity Registrant Name | ALCON INC |
| Entity Central Index Key | 0001167379 |
| Current Fiscal Year End Date | --12-31 |
| Entity Current Reporting Status | Yes |
| Entity Well Known Seasoned Issuer | Yes |
| Entity Voluntary Filers | No |
| Entity Filer Category | Large Accelerated Filer |
| Entity Public Float | $11,408,064,844 |
| Entity Common Stock Shares Outstanding | 299,550,733 |
