Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | ABBOTT LABORATORIES | ||
Entity Central Index Key | 1,800 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 71,342,394,796 | ||
Entity Common Stock, Shares Outstanding | 1,473,241,861 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
Consolidated Statement of Earni
Consolidated Statement of Earnings - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Earnings | |||
Net Sales | $ 20,405 | $ 20,247 | $ 19,657 |
Cost of products sold, excluding amortization of intangible assets | 8,747 | 9,218 | 9,193 |
Amortization of intangible assets | 601 | 555 | 588 |
Research and development | 1,405 | 1,345 | 1,371 |
Selling, general and administrative | 6,785 | 6,530 | 6,372 |
Total operating cost and expenses | 17,538 | 17,648 | 17,524 |
Operating earnings | 2,867 | 2,599 | 2,133 |
Interest expense | 163 | 150 | 145 |
Interest income | (105) | (77) | (67) |
Net loss on extinguishment of debt | 18 | ||
Net foreign exchange (gain) loss | (93) | (24) | 46 |
Other (income) expense, net | (281) | 14 | (32) |
Earnings from Continuing Operations Before Taxes | 3,183 | 2,518 | 2,041 |
Taxes on Earnings from Continuing Operations | 577 | 797 | 53 |
Earnings from continuing operations | 2,606 | 1,721 | 1,988 |
Earnings from Discontinued Operations, net of taxes | 65 | 563 | 588 |
Gain on sale of Discontinued Operations, net of taxes | 1,752 | ||
Net Earnings from Discontinued Operations, net of taxes | 1,817 | 563 | 588 |
Net Earnings | $ 4,423 | $ 2,284 | $ 2,576 |
Basic Earnings Per Common Share - | |||
Continuing Operations (in dollars per share) | $ 1.73 | $ 1.13 | $ 1.27 |
Discontinued Operations (in dollars per share) | 1.21 | 0.37 | 0.37 |
Net Earnings (in dollars per share) | 2.94 | 1.50 | 1.64 |
Diluted Earnings Per Common Share - | |||
Continuing Operations (in dollars per share) | 1.72 | 1.12 | 1.26 |
Discontinued Operations (in dollars per share) | 1.20 | 0.37 | 0.36 |
Net Earnings (in dollars per share) | $ 2.92 | $ 1.49 | $ 1.62 |
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share (in shares) | 1,496 | 1,516 | 1,558 |
Dilutive Common Stock Options (in shares) | 10 | 11 | 16 |
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options (in shares) | 1,506 | 1,527 | 1,574 |
Outstanding Common Stock Options Having No Dilutive Effect (in shares) | 1 | 1 | 1 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Comprehensive Income | |||||
Net Earnings | $ 767 | $ 905 | $ 4,423 | $ 2,284 | $ 2,576 |
Foreign currency translation (loss) adjustments | (2,013) | (2,206) | (239) | ||
Net actuarial gains (losses) and prior service cost and credits and amortization of net actuarial losses and prior service cost and credits, net of taxes of $101 in 2015, $(459) in 2014 and $393 in 2013 | 252 | (917) | 882 | ||
Unrealized gains (losses) on marketable equity securities, net of taxes of $104 in 2015, $(7) in 2014 and $(10) in 2013 | 64 | (12) | (18) | ||
Net (losses) gains on derivative instruments designated as cash flow hedges, net of taxes of $(9) in 2015, $24 in 2014 and $(13) in 2013 | (35) | 94 | (53) | ||
Net current period comprehensive income (loss) | (1,732) | (3,041) | 572 | ||
Comprehensive Income (Loss) | 2,691 | (757) | 3,148 | ||
Supplemental Accumulated Other Comprehensive Income Information, net of tax as of December 31: | |||||
Cumulative foreign currency translation (loss) adjustments | (4,829) | (2,924) | (4,829) | (2,924) | (718) |
Net actuarial (losses) and prior service (cost) and credits | (1,958) | (2,229) | (1,958) | (2,229) | (1,312) |
Cumulative unrealized gains on marketable equity securities | 65 | 1 | 65 | 1 | 13 |
Cumulative gains on derivative instruments designated as cash flow hedges | $ 64 | $ 99 | $ 64 | $ 99 | $ 5 |
Consolidated Statement of Comp4
Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statement of Comprehensive Income | |||
Net actuarial gains (losses) and amortization of net actuarial (losses) and prior service (cost) and credits, taxes | $ 101 | $ (459) | $ 393 |
Unrealized gains (losses) on marketable equity securities, taxes | 104 | (7) | (10) |
Net adjustments for derivative instruments designated as cash flow hedges, taxes | $ (9) | $ 24 | $ (13) |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flow From (Used in) Operating Activities: | |||
Net earnings | $ 4,423 | $ 2,284 | $ 2,576 |
Adjustments to reconcile earnings to net cash from operating activities - | |||
Depreciation | 871 | 918 | 928 |
Amortization of intangible assets | 601 | 630 | 791 |
Share-based compensation | 292 | 246 | 262 |
Investing and financing (gains) losses, net | (18) | 69 | 4 |
Net loss on extinguishment of debt | 18 | ||
Gain on sale of discontinued operations | (2,840) | ||
Gain on sale of Mylan N.V. shares | (207) | ||
Trade receivables | (171) | (195) | (113) |
Inventories | (257) | (297) | (154) |
Prepaid expenses and other assets | 57 | 30 | 131 |
Trade accounts payable and other liabilities | (742) | (225) | (436) |
Income taxes | 957 | 197 | (665) |
Net Cash From Operating Activities | 2,966 | 3,675 | 3,324 |
Cash Flow From (Used in) Investing Activities: | |||
Acquisitions of property and equipment | (1,110) | (1,077) | (1,145) |
Acquisitions of businesses and technologies, net of cash acquired | (235) | (3,317) | (580) |
Proceeds from business dispositions | 230 | 5 | |
Proceeds from the sale of Mylan N.V. shares | 2,290 | ||
Purchases of investment securities | (4,933) | (1,507) | (10,064) |
Proceeds from sales of investment securities | 4,112 | 5,624 | 7,839 |
Other | 52 | 70 | 21 |
Net Cash From (Used in) Investing Activities | 406 | (202) | (3,929) |
Cash Flow From (Used in) Financing Activities: | |||
Proceeds from issuance of (repayments of) short-term debt and other | (1,281) | 1,343 | 2,086 |
Proceeds from issuance of long-term debt and debt with maturities over 3 months | 2,485 | 9 | |
Repayments of long-term debt and debt with maturities over 3 months | (57) | (577) | (303) |
Acquisition and contingent consideration payments related to business acquisitions | (17) | (400) | (495) |
Transfer of cash and cash equivalents to AbbVie Inc. | (5,901) | ||
Purchases of common shares | (2,237) | (2,195) | (1,605) |
Proceeds from stock options exercised, including income tax benefit | 314 | 429 | 395 |
Dividends paid | (1,443) | (1,342) | (882) |
Net Cash (Used in) From Financing Activities | (2,236) | (2,742) | (6,696) |
Effect of exchange rate changes on cash and cash equivalents | (198) | (143) | (26) |
Net (Decrease) Increase in Cash and Cash Equivalents | 938 | 588 | (7,327) |
Cash and Cash Equivalents, Beginning of Year | 4,063 | 3,475 | 10,802 |
Cash and Cash Equivalents, End of Year | 5,001 | 4,063 | 3,475 |
Supplemental Cash Flow Information: | |||
Income taxes paid | 631 | 448 | 1,039 |
Interest paid | $ 166 | $ 146 | $ 148 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 5,001 | $ 4,063 |
Investments, primarily bank time deposits and U.S. treasury bills | 1,124 | 397 |
Trade receivables, less allowances of - 2015: $337; 2014: $310 | 3,418 | 3,586 |
Inventories: | ||
Finished products | 1,744 | 1,807 |
Work in process | 316 | 278 |
Materials | 539 | 558 |
Total inventories | 2,599 | 2,643 |
Other prepaid expenses and receivables | 1,908 | 1,975 |
Current assets held for disposition | 105 | 892 |
Total Current Assets | 14,155 | 13,556 |
Investments | 4,041 | 229 |
Property and Equipment, at Cost: | ||
Land | 432 | 457 |
Buildings | 2,769 | 2,968 |
Equipment | 8,254 | 8,480 |
Construction in progress | 928 | 727 |
Property and equipment, at cost | 12,383 | 12,632 |
Less: accumulated depreciation and amortization | 6,653 | 6,697 |
Net property and equipment | 5,730 | 5,935 |
Intangible assets, net of amortization | 5,562 | 6,198 |
Goodwill | 9,638 | 10,067 |
Deferred income taxes and other assets | 2,119 | 3,288 |
Non-current assets held for disposition | 2 | 1,934 |
Total Assets | 41,247 | 41,207 |
Current Liabilities: | ||
Short-term borrowings | 3,127 | 4,382 |
Trade accounts payable | 1,081 | 1,064 |
Salaries, wages and commissions | 746 | 776 |
Other accrued liabilities | 3,043 | 2,878 |
Dividends payable | 383 | 362 |
Income taxes payable | 430 | 270 |
Current portion of long-term debt | 3 | 55 |
Current liabilities held for disposition | 373 | 680 |
Total Current Liabilities | 9,186 | 10,467 |
Long-term debt | 5,871 | 3,393 |
Post-employment Obligations, deferred income taxes and other long - term Liabilities | $ 4,864 | 5,600 |
Non-current liabilities held for disposition | $ 108 | |
Commitments and Contingencies | ||
Shareholders' Investment: | ||
Preferred shares, one dollar par value Authorized - 1,000,000 shares, none issued | ||
Common shares, without par value Authorized - 2,400,000,000 shares Issued at stated capital amount - Shares: 2015: 1,702,017,390; 2014: 1,694,929,949 | $ 12,734 | $ 12,383 |
Common shares held in treasury, at cost - Shares: 2015: 229,352,338; 2014: 186,894,515 | (10,622) | (8,678) |
Earnings employed in the business | 25,757 | 22,874 |
Accumulated other comprehensive income (loss) | (6,658) | (5,053) |
Total Abbott Shareholders' Investment | 21,211 | 21,526 |
Noncontrolling Interests in Subsidiaries | 115 | 113 |
Total Shareholders' Investment | 21,326 | 21,639 |
Total Liabilities and Shareholders' Investment | $ 41,247 | $ 41,207 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheet | ||
Trade receivables, allowances (in dollars) | $ 337 | $ 310 |
Preferred shares, par value (in dollars per share) | $ 1 | $ 1 |
Preferred shares, Authorized shares | 1,000,000 | 1,000,000 |
Preferred shares, issued shares | 0 | 0 |
Common shares, Authorized shares | 2,400,000,000 | 2,400,000,000 |
Common shares, Issued shares | 1,702,017,390 | 1,694,929,949 |
Common shares held in treasury, shares | 229,352,338 | 186,894,515 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Investment - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Increase (Decrease) in Shareholders' Investment | |||||||
Beginning of Year | $ 21,639 | $ 21,639 | |||||
Net earnings | $ 767 | 2,292 | $ 905 | $ 375 | 4,423 | $ 2,284 | $ 2,576 |
Other comprehensive income (loss) | (1,732) | (3,041) | 572 | ||||
End of Year | 21,326 | 21,639 | 21,326 | 21,639 | |||
Common Shares: | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Beginning of Year | 12,383 | 12,048 | 12,383 | 12,048 | 11,755 | ||
Issued under incentive stock programs | 289 | 404 | 393 | ||||
Share-based compensation | 292 | 245 | 261 | ||||
Issuance of restricted stock awards | (230) | (314) | (361) | ||||
End of Year | 12,734 | 12,383 | 12,734 | 12,383 | 12,048 | ||
Common Shares Held in Treasury: | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Beginning of Year | (8,678) | (6,844) | (8,678) | (6,844) | (5,591) | ||
Issued under incentive stock programs | 250 | 283 | 310 | ||||
Purchased | (2,194) | (2,117) | (1,563) | ||||
End of Year | (10,622) | (8,678) | (10,622) | (8,678) | (6,844) | ||
Earnings Employed in the Business: | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Beginning of Year | 22,874 | 21,979 | 22,874 | 21,979 | 24,151 | ||
Net earnings | 4,423 | 2,284 | 2,576 | ||||
Impact of business dispositions | (3,735) | ||||||
Cash dividends declared on common shares (per share - 2015: $0.98; 2014: $0.90; 2013: $0.64) | (1,464) | (1,363) | (1,002) | ||||
Effect of common and treasury share transactions | (76) | (26) | (11) | ||||
End of Year | 25,757 | 22,874 | 25,757 | 22,874 | 21,979 | ||
Accumulated Other Comprehensive Income (Loss) | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Beginning of Year | (5,053) | (2,012) | (5,053) | (2,012) | (3,594) | ||
Impact of business dispositions | 127 | 1,010 | |||||
Other comprehensive income (loss) | (1,732) | (3,041) | 572 | ||||
End of Year | (6,658) | (5,053) | (6,658) | (5,053) | (2,012) | ||
Noncontrolling Interests in Subsidiaries: | |||||||
Increase (Decrease) in Shareholders' Investment | |||||||
Beginning of Year | $ 113 | $ 96 | 113 | 96 | 92 | ||
Noncontrolling Interests' share of income, business combinations, net of distributions and share repurchases | 2 | 17 | 4 | ||||
End of Year | $ 115 | $ 113 | $ 115 | $ 113 | $ 96 |
Consolidated Statement of Shar9
Consolidated Statement of Shareholders' Investment (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Common Shares: | |||
Increase (Decrease) in Shareholders' Investment | |||
Balance Beginning of Year (in shares) | 1,694,929,949 | 1,685,827,096 | 1,675,930,484 |
Issued under incentive stock programs (in shares) | 7,087,441 | 9,102,853 | 9,896,612 |
Balance End of Year (in shares) | 1,702,017,390 | 1,694,929,949 | 1,685,827,096 |
Common Shares Held in Treasury: | |||
Increase (Decrease) in Shareholders' Investment | |||
Balance Beginning of Year (in shares) | 186,894,515 | 137,728,810 | 99,262,992 |
Issued under incentive stock programs (in shares) | 5,381,586 | 5,818,599 | 5,718,575 |
Purchased: treasury shares (in shares) | 47,839,409 | 54,984,304 | 44,184,393 |
Balance End of Year (in shares) | 229,352,338 | 186,894,515 | 137,728,810 |
Earnings Employed in the Business: | |||
Increase (Decrease) in Shareholders' Investment | |||
Cash Dividends Declared Per Common Share (in dollars per share) | $ 0.98 | $ 0.90 | $ 0.64 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1 — Summary of Significant Accounting Policies NATURE OF BUSINESS — Abbott's principal business is the discovery, development, manufacture and sale of a broad line of health care products. CHANGES IN PRESENTATION — On February 27, 2015, Abbott completed the sale of its developed markets branded generics pharmaceuticals business to Mylan Inc. (Mylan) for equity ownership of a newly formed entity that combined Mylan's existing business and Abbott's developed markets pharmaceuticals business. Mylan N.V. is publicly traded. The sale was announced in July 2014. On February 10, 2015, Abbott completed the sale of its animal health business to Zoetis Inc. Abbott entered an agreement to sell this business in November 2014. The historical operating results of these businesses up to the date of sale are excluded from Earnings from Continuing Operations and are presented on the Earnings from Discontinued Operations line in Abbott's Consolidated Statement of Earnings. The assets and liabilities of these businesses were reported as held for disposition in Abbott's Consolidated Balance Sheet at December 31, 2014. The cash flows of these businesses up to the date of disposition are included in Abbott's Consolidated Statements of Cash Flows. See Note 3 — Discontinued Operations for additional information. BASIS OF CONSOLIDATION — The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions. USE OF ESTIMATES — The financial statements have been prepared in accordance with generally accepted accounting principles in the United States and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for sales rebates; income taxes; pension and other post-employment benefits, including certain asset values that are based on significant unobservable inputs; valuation of intangible assets; litigation; derivative financial instruments; and inventory and accounts receivable exposures. FOREIGN CURRENCY TRANSLATION — The statements of earnings of foreign subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars using average exchange rates for the period. The net assets of foreign subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars using exchange rates as of the balance sheet date. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation adjustment account, which is included in equity as a component of Accumulated other comprehensive income (loss). Transaction gains and losses are recorded on the Net foreign exchange (gain) loss line of the Consolidated Statement of Earnings. REVENUE RECOGNITION — Revenue from product sales is recognized upon passage of title and risk of loss to customers. Provisions for discounts, rebates and sales incentives to customers, and returns and other adjustments are provided for in the period the related sales are recorded. Sales incentives to customers are not material. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer's normal requirements are recorded when the conditions noted above are met. In those situations, management records a returns reserve for such revenue, if necessary. In certain of Abbott's businesses, primarily within diagnostics and medical optics, Abbott participates in selling arrangements that include multiple deliverables (e.g., instruments, reagents, procedures, and service agreements). Under these arrangements, Abbott recognizes revenue upon delivery of the product or performance of the service and allocates the revenue based on the relative selling price of each deliverable, which is based primarily on vendor specific objective evidence. Sales of product rights for marketable products are recorded as revenue upon disposition of the rights. Revenue from license of product rights, or for performance of research or selling activities, is recorded over the periods earned. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive model for accounting for revenue from contracts with customers and will supersede most existing revenue recognition guidance. The standard becomes effective for Abbott in the first quarter of 2018. Abbott is currently evaluating the effect, if any, that the standard will have on its consolidated financial statements and related disclosures. INCOME TAXES — Deferred income taxes are provided for the tax effect of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at the enacted statutory rate to be in effect when the taxes are paid. U.S. income taxes are provided on those earnings of foreign subsidiaries which are intended to be remitted to the parent company. Deferred income taxes are not provided on undistributed earnings reinvested indefinitely in foreign subsidiaries as working capital and plant and equipment. Interest and penalties on income tax obligations are included in taxes on income. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which requires entities to classify all deferred tax assets and liabilities as non-current on the balance sheet. The standard may be adopted on either a prospective or retrospective basis. The standard is effective for fiscal years beginning after December 15, 2016, and early adoption is permitted. Effective December 31, 2015, Abbott adopted ASU 2015-17 and applied the new standard retrospectively. As a result of applying ASU 2015-17 to the previously reported Consolidated Balance Sheet as of December 31, 2014, Deferred income taxes within the Total Current Assets line decreased and the Deferred income taxes and other assets line increased by approximately $1.7 billion, respectively; Other accrued liabilities within the Total Current Liabilities line decreased by $65 million and the Post-employment obligations and other long-term liabilities line increased by $12 million. Reclassification of the deferred tax balances from current to noncurrent affected the netting of these balances as a deferred tax asset or liability in various jurisdictions. EARNINGS PER SHARE — Unvested restricted stock units and awards that contain non-forfeitable rights to dividends are treated as participating securities and are included in the computation of earnings per share under the two-class method. Under the two-class method, net earnings are allocated between common shares and participating securities. Earnings from Continuing Operations allocated to common shares in 2015, 2014 and 2013 were $2.595 billion, $1.713 billion and $1.979 billion, respectively. Net earnings allocated to common shares in 2015, 2014 and 2013 were $4.403 billion, $2.273 billion and $2.558 billion, respectively. PENSION AND POST-EMPLOYMENT BENEFITS — Abbott accrues for the actuarially determined cost of pension and post-employment benefits over the service attribution periods of the employees. Abbott must develop long-term assumptions, the most significant of which are the health care cost trend rates, discount rates and the expected return on plan assets. Differences between the expected long-term return on plan assets and the actual return are amortized over a five-year period. Actuarial losses and gains are amortized over the remaining service attribution periods of the employees under the corridor method. FAIR VALUE MEASUREMENTS — For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model. Purchased intangible assets are recorded at fair value. The fair value of significant purchased intangible assets is based on independent appraisals. Abbott uses a discounted cash flow model to value intangible assets. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, terminal values and market participants. Intangible assets, goodwill and indefinite-lived intangible assets are reviewed for impairment at least on a quarterly and annual basis, respectively. SHARE-BASED COMPENSATION — The fair value of stock options and restricted stock awards and units are amortized over their requisite service period, which could be shorter than the vesting period if an employee is retirement eligible, with a charge to compensation expense. LITIGATION — Abbott accounts for litigation losses in accordance with FASB ASC No. 450, "Contingencies." Under ASC No. 450, loss contingency provisions are recorded for probable losses at management's best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded. Legal fees are recorded as incurred. CASH, CASH EQUIVALENTS AND INVESTMENTS — Cash equivalents consist of bank time deposits and U.S. treasury bills with original maturities of three months or less. Investments in two publicly traded companies, with a carrying value of approximately $104 million, are accounted for under the equity method of accounting. All other investments in marketable equity securities are classified as available-for-sale and are recorded at fair value with any unrealized holding gains or losses, net of tax, included in Accumulated other comprehensive income (loss). Investments in equity securities that are not traded on public stock exchanges are recorded at cost. Investments in debt securities are classified as held-to-maturity, as management has both the intent and ability to hold these securities to maturity, and are reported at cost, net of any unamortized premium or discount. Income relating to these securities is reported as interest income. Abbott reviews the carrying value of investments each quarter to determine whether an other than temporary decline in fair value exists. Abbott considers factors affecting the investee, factors affecting the industry the investee operates in and general equity market trends. Abbott considers the length of time an investment's fair value has been below carrying value and the near-term prospects for recovery to carrying value. When Abbott determines that an other than temporary decline has occurred, the investment is written down with a charge to Other (income) expense, net. TRADE RECEIVABLE VALUATIONS — Accounts receivable are stated at their net realizable value. The allowance against gross trade receivables reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Accounts receivable are charged off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. INVENTORIES — Inventories are stated at the lower of cost (first-in, first-out basis) or market. Cost includes material and conversion costs. PROPERTY AND EQUIPMENT — Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. The following table shows estimated useful lives of property and equipment: Classification Estimated Useful Lives Buildings 10 to 50 years (average 27 years) Equipment 3 to 20 years (average 11 years) PRODUCT LIABILITY — Abbott accrues for product liability claims when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The liabilities are adjusted quarterly as additional information becomes available. Receivables for insurance recoveries for product liability claims are recorded as assets, on an undiscounted basis, when it is probable that a recovery will be realized. Product liability losses are self-insured. RESEARCH AND DEVELOPMENT COSTS — Internal research and development costs are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are achieved. ACQUIRED IN-PROCESS AND COLLABORATIONS RESEARCH AND DEVELOPMENT (IPR&D) — The initial costs of rights to IPR&D projects obtained in an asset acquisition are expensed as IPR&D unless the project has an alternative future use. These costs include initial payments incurred prior to regulatory approval in connection with research and development collaboration agreements that provide rights to develop, manufacture, market and/or sell pharmaceutical products. The fair value of IPR&D projects acquired in a business combination are capitalized and accounted for as indefinite-lived intangible assets until completed and are then amortized over the remaining useful life. Collaborations are not significant for continuing operations. CONCENTRATION OF RISK AND GUARANTEES — Due to the nature of its operations, Abbott is not subject to significant concentration risks relating to customers, products or geographic locations. Governmental accounts in Italy, Spain, Greece and Portugal accounted for 7 percent and 9 percent of total net trade receivables as of December 31, 2015 and 2014, respectively. Product warranties are not significant. Abbott has no material exposures to off-balance sheet arrangements; no special purpose entities; nor activities that include non-exchange-traded contracts accounted for at fair value. Abbott has periodically entered into agreements in the ordinary course of business, such as assignment of product rights, with other companies, which has resulted in Abbott becoming secondarily liable for obligations that Abbott was previously primarily liable. Since Abbott no longer maintains a business relationship with the other parties, Abbott is unable to develop an estimate of the maximum potential amount of future payments, if any, under these obligations. Based upon past experience, the likelihood of payments under these agreements is remote. Abbott periodically acquires a business or product rights in which Abbott agrees to pay contingent consideration based on attaining certain thresholds or based on the occurrence of certain events. |
Separation of AbbVie Inc.
Separation of AbbVie Inc. | 12 Months Ended |
Dec. 31, 2015 | |
Separation of AbbVie Inc. | |
Separation of AbbVie Inc. | Note 2 — Separation of AbbVie Inc. On January 1, 2013, Abbott completed the separation of AbbVie Inc. (AbbVie), which was formed to hold Abbott's research-based proprietary pharmaceuticals business. Abbott and AbbVie entered into transitional services agreements prior to the separation pursuant to which Abbott and AbbVie provided to each other, on an interim transitional basis, various services. Transition services were provided for up to 24 months with an option for a one-year extension by the recipient. Services provided by Abbott included certain information technology and back office support. Billings by Abbott under these transitional services agreements were recorded as a reduction of the costs to provide the respective service in the applicable expense category in the Consolidated Statement of Earnings. This transitional support enabled AbbVie to establish its stand-alone processes for various activities that were previously provided by Abbott and did not constitute significant continuing support of AbbVie's operations. For a small portion of AbbVie's operations, the legal transfer of AbbVie's assets (net of liabilities) did not occur with the separation of AbbVie on January 1, 2013 due to the time required to transfer marketing authorizations and other regulatory requirements in each of these countries. Under the terms of the separation agreement with Abbott, AbbVie is subject to the risks and entitled to the benefits generated by these operations and assets. The majority of these operations were transferred to AbbVie in 2013 and 2014. These assets and liabilities have been presented as held for disposition in the Consolidated Balance Sheet. At December 31, 2015, the assets and liabilities held for disposition consist of cash and trade accounts receivable of $54 million, inventories of $43 million, other assets of $10 million, and trade accounts payable and accrued liabilities of $373 million. Abbott has recorded a prepaid asset of $266 million for its obligation to transfer these net liabilities held for disposition to AbbVie. Abbott has retained all liabilities for all U.S. federal and foreign income taxes on income prior to the separation, as well as certain non-income taxes attributable to AbbVie's business. AbbVie generally will be liable for all other taxes attributable to its business. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations. | |
Discontinued Operations | Note 3 — Discontinued Operations On February 27, 2015, Abbott completed the sale of its developed markets branded generics pharmaceuticals business to Mylan Inc. (Mylan) for 110 million shares (or approximately 22%) of a newly formed entity (Mylan N.V.) that combined Mylan's existing business and Abbott's developed markets branded generics pharmaceuticals business. Mylan N.V. is publicly traded. Historically, this business was included in Abbott's Established Pharmaceutical Products segment. Abbott retained its branded generics pharmaceuticals business in emerging markets. At the date of closing, the 110 million Mylan N.V. shares that Abbott received were valued at $5.77 billion and Abbott recorded an after-tax gain on the sale of the business of approximately $1.6 billion. The shareholder agreement with Mylan N.V. includes voting and other restrictions that prevent Abbott from exercising significant influence over the operating and financial policies of Mylan N.V. At the close of this transaction Abbott and Mylan entered into a transition services agreement pursuant to which Abbott and Mylan are providing various back office support services to each other on an interim transitional basis. Transition services may be provided for up to 2 years. Charges by Abbott under this transition services agreement are recorded as a reduction of the costs to provide the respective service in the applicable expense category in the Consolidated Statement of Earnings. This transition support does not constitute significant continuing involvement in Mylan's operations. Abbott also entered into manufacturing supply agreements with Mylan related to certain products, with the supply term ranging from 3 to 10 years and requiring a 2 year notice prior to termination. The cash flows associated with these transition services and manufacturing supply agreements are not expected to be significant, and therefore, these cash flows are not direct cash flows of the disposed component under Accounting Standards Codification 205. In April 2015, Abbott sold 40.25 million of the 110 million ordinary shares of Mylan N.V. received in the sale of the developed markets branded generics pharmaceuticals business to Mylan. Abbott recorded a pretax gain of $207 million on $2.29 billion in net proceeds from the sale of these shares. The gain is recognized in the Other (income) expense line of the Consolidated Statement of Earnings. As a result of this sale, Abbott's ownership interest in Mylan N.V. decreased to approximately 14%. On February 10, 2015, Abbott completed the sale of its animal health business to Zoetis Inc. Abbott received cash proceeds of $230 million and reported an after tax gain on the sale of approximately $130 million. As a result of the disposition of the above businesses, the current and prior years' operating results of these businesses up to the date of sale are reported as part of discontinued operations on the Earnings from Discontinued Operations, net of taxes line in the Consolidated Statement of Earnings. Discontinued operations include an allocation of interest expense assuming a uniform ratio of consolidated debt to equity for all of Abbott's historical operations. The operating results of Abbott's developed markets branded generics pharmaceuticals and animal health businesses as well as the income tax benefit related to the businesses transferred to AbbVie, which are being reported as discontinued operations are as follows: Year Ended December 31 (in millions) 2015 2014 2013 Net Sales Developed markets generics pharmaceuticals and animal health businesses $ $ $ AbbVie — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings Before Tax Developed markets generics pharmaceuticals and animal health businesses $ $ $ AbbVie — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Earnings Developed markets generics pharmaceuticals and animal health businesses $ $ $ AbbVie ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The net earnings of discontinued operations include income tax benefits of $52 million in 2015, $58 million in 2014 and $108 million in 2013. 2015 includes $48 million of tax benefits related to the resolution of various tax positions related to prior years. 2014 and 2013 include $166 million and $193 million, respectively, of tax benefits as a result of the resolution of various tax positions related to AbbVie's operations for years prior to the separation. The sale of the developed markets branded generics pharmaceuticals and animal health business in 2015 resulted in the recognition of a pretax gain of $2.840 billion, tax expense of $1.088 billion and an after tax gain of $1.752 billion. The tax provision includes $667 million of tax expense on certain current year funds earned outside the U.S. related to the developed markets branded generics pharmaceuticals businesses that were not designated as permanently reinvested overseas. The assets of the operations held for disposition and the liabilities to be assumed in the disposition related to the businesses noted above, as well as the AbbVie assets and liabilities discussed in Note 2 are classified as held for disposition in the Consolidated Balance Sheet as of December 31, 2014. The held for disposition balances as of December 31, 2015, relate to AbbVie assets and liabilities. Prior period balance sheets are not adjusted when a business is designated as being held for sale. The cash flows associated with the developed markets branded generics pharmaceuticals and animal health businesses up to the date of disposition are included in Abbott's Consolidated Statement of Cash Flows. The following is a summary of the assets and liabilities held for disposition: (in millions) December 31, 2015 December 31, 2014 Cash and Trade receivables, net $ $ Total inventories Prepaid expenses and other receivables ​ ​ ​ ​ ​ ​ ​ ​ Current assets held for disposition ​ ​ ​ ​ ​ ​ ​ ​ Net property and equipment Intangible assets, net of amortization — Goodwill — Deferred income taxes and other assets ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets held for disposition ​ ​ ​ ​ ​ ​ ​ ​ Total assets held for disposition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade accounts payable Salaries, wages, commissions and other accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities held for disposition Post-employment obligations, deferred income taxes and other long-term liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities held for disposition $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Supplemental Financial Informat
Supplemental Financial Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Financial Information | |
Supplemental Financial Information | Note 4 — Supplemental Financial Information Other (income) expense, net, for 2015 primarily relates to a $207 million gain on the sale of a portion of Abbott's position in Mylan N.V. stock and $79 million of income resulting from a decrease in the fair value of contingent consideration related to a business acquisition. Abbott sold 40.25 million of the 110 million ordinary shares of Mylan N.V. received in the sale of the developed markets branded generics pharmaceuticals business to Mylan. Abbott received $2.29 billion in net proceeds from the sale of these shares. As a result of this sale, Abbott's ownership interest in Mylan N.V. decreased from approximately 22% to approximately 14%. Other (income) expense, net, for 2014 primarily relates to impairment charges related to non-publically traded equity securities partially offset by gains from the sales of equity securities. The loss on the extinguishment of debt of $18 million in 2014 relates to the early redemption of approximately $500 million of long-term notes. The detail of various balance sheet components is as follows: 2015 2014 (in millions) Long-term Investments: Equity securities $ $ Other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The long-term investments in equity securities as of December 31, 2015 include 69.7 million of ordinary shares of Mylan N.V. with a market value of $3.771 billion. 2015 2014 (in millions) Other Accrued Liabilities: Accrued rebates payable to government agencies $ $ Accrued other rebates (a) All other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Accrued wholesaler chargeback rebates of $170 million and $158 million at December 31, 2015 and 2014, respectively, are netted in trade receivables because Abbott's customers are invoiced at a higher catalog price but only remit to Abbott their contract price for the products. 2015 2014 (in millions) Post-employment Obligations and Other Long-term Liabilities: Defined benefit pension plans and post-employment medical and dental plans for significant plans $ $ Deferred income taxes All other (b) ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (b) 2015 and 2014 include approximately $600 million of net unrecognized tax benefits, as well as approximately $148 million and $220 million, respectively, of acquisition consideration payable. Since January 2010, Venezuela has been designated as a highly inflationary economy under U.S. GAAP. In 2014 and 2015, the government of Venezuela operated multiple mechanisms to exchange bolivars into U.S. dollars. These mechanisms included the CENCOEX, SICAD, and SIMADI rates, which stood at 6.3, 13.5, and approximately 200, respectively, at December 31, 2015. In 2015, Abbott continued to use the CENCOEX rate of 6.3 Venezuelan bolivars to the U.S. dollar to report the results, financial position, and cash flows related to its operations in Venezuela since Abbott continued to qualify for this exchange rate to pay for the import of various products into Venezuela. Revenue from operations in Venezuela represented approximately 2% of Abbott's total net sales and pre-tax income totaled approximately $200 million in 2015 and $175 million in 2014. Abbott's sales in Venezuela primarily relate to the Nutritional and Established Pharmaceuticals segments. Abbott had net monetary assets that are subject to revaluation in Venezuela of approximately $440 million at December 31, 2015. Such assets are comprised primarily of cash. On February 17, 2016, the Venezuelan government announced that the three-tier exchange rate system will be reduced to two rates and the official rate for food and medicine imports will be adjusted from 6.3 to 10 bolivars per U.S. dollar. As a result of the new 10 bolivars per U.S. dollar exchange rate, Abbott's net monetary assets in Venezuela will be subject to revaluation during the quarter ending March 31, 2016, which will result in recognition of a foreign currency exchange loss in that period. Based on Abbott's net monetary assets subject to revaluation at December 31, 2015, remeasuring these assets at a rate of 10 bolivars per U.S. dollar would result in a foreign currency loss of approximately $165 million. Abbott cannot be certain that the Venezuelan government will not make further revisions to the official exchange rate in the future which could result in additional foreign currency losses. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income | Note 5 — Accumulated Other Comprehensive Income The components of the changes in accumulated other comprehensive income from continuing operations, net of income taxes, are as follows: ( in millions ) Cumulative Foreign Currency Translation Adjustments Net Actuarial Losses and Prior Service Costs and Credits Cumulative Unrealized Gains on Marketable Equity Securities Cumulative Gains on Derivative Instruments Designated as Cash Flow Hedges Total Balance at December 31, 2013 $ ) $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before reclassifications ) ) ) (Income) loss amounts reclassified from accumulated other comprehensive income (a) — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period comprehensive income (loss) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2014 ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of business dispositions — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before reclassifications ) ) (Income) loss amounts reclassified from accumulated other comprehensive income (a) — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period comprehensive income (loss) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2015 $ ) $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Reclassified amounts for foreign currency translation are recorded in the Consolidated Statement of Earnings as Net Foreign exchange loss (gain); gains (losses) on marketable equity securities are recorded as Other (income) expense and gains/losses related to cash flow hedges are recorded as Cost of product sold. Net actuarial losses and prior service cost is included as a component of net periodic benefit plan cost — see Note 13 for additional information. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisitions | |
Business Acquisitions | Note 6 — Business Acquisitions In August 2015, Abbott completed the acquisition of the equity of Tendyne Holdings, Inc. (Tendyne) that Abbott did not already own for approximately $225 million in cash plus additional payments up to $150 million to be made upon completion of certain regulatory milestones. The acquisition of Tendyne, which is focused on developing minimally invasive mitral valve replacement therapies, allows Abbott to broaden its foundation in the treatment of mitral valve disease. The preliminary allocation of the fair value of the acquisition resulted in non-deductible acquired in-process research and development of approximately $220 million, which is accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation, non-deductible goodwill of approximately $142 million, other assets of approximately $13 million, net deferred tax liabilities of approximately $80 million, and contingent consideration of approximately $70 million. The preliminary allocations of the fair value of the above acquisition will be finalized when the valuation is completed. In September 2014, Abbott completed the acquisition of the controlling interest in CFR Pharmaceuticals S.A. (CFR) for approximately $2.9 billion in cash ($2.8 billion net of CFR cash on hand at closing). Including the assumption of approximately $570 million of debt, the total cost of the acquisition was $3.4 billion. The acquisition of CFR more than doubles Abbott's branded generics pharmaceutical presence in Latin America and further expands its presence in emerging markets. CFR's financial results are included in Abbott's financial statements beginning on September 26, 2014, the date that Abbott acquired control of this business. Abbott currently owns 99.9% of the outstanding ordinary shares of CFR. The fair value of the non-controlling interest at the acquisition date was approximately $3 million. The acquisition was funded with cash and cash equivalents and short-term investments. The final allocation of the fair value of the acquisition is shown in the table below. (in billions) Acquired intangible assets, non-deductible $ Goodwill, non-deductible Acquired net tangible assets Deferred income taxes recorded at acquisition ) ​ ​ ​ ​ ​ Total final allocation of fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Acquired intangible assets consist primarily of product rights for currently marketed products and are amortized over 12 to 16 years (weighted average of 15 years). The goodwill is primarily attributable to intangible assets that do not qualify for separate recognition. The goodwill is identifiable to the Established Pharmaceutical Products segment. The acquired tangible assets consist primarily of cash and cash equivalents of approximately $94 million, trade accounts receivable of approximately $180 million, inventory of approximately $169 million, other current assets of approximately $51 million, property and equipment of approximately $210 million, and other long-term assets of approximately $145 million. Assumed liabilities consist of borrowings of approximately $570 million, trade accounts payable and other current liabilities of approximately $240 million and other non-current liabilities of approximately $14 million. Net sales for CFR Pharmaceuticals totaled approximately $750 million in 2015. In December 2014, Abbott acquired control of Veropharm, a leading Russian pharmaceutical company for approximately $315 million excluding assumed debt, plus a subsequent $5 million payment related to a working capital adjustment. Through this acquisition, Abbott establishes a manufacturing footprint in Russia and obtains a portfolio of medicines that is well aligned with Abbott's current pharmaceutical therapeutic areas of focus. Abbott acquired control of Veropharm through its purchase of Limited Liability Company Garden Hills, the holding company that owns approximately 98 percent of Veropharm. Including the assumption of approximately $90 million of debt and a non-controlling interest with a fair value of $5 million, the total value of the acquired business was approximately $415 million. The final allocation of the fair value of the acquisition resulted in definite-lived non-deductible intangible assets of approximately $100 million, non-deductible goodwill of approximately $140 million, and net deferred tax liabilities of approximately $25 million. Non-deductible goodwill is identifiable with the Established Pharmaceutical Products segment. Additionally, Abbott acquired property, plant, and equipment of approximately $150 million, accounts receivable of approximately $45 million, inventory of approximately $25 million, and net other liabilities of approximately $20 million. Acquired intangible assets consist of developed technology and are being amortized over 16 years. In 2015, Abbott acquired the remaining shares of Veropharm, increasing its ownership to 100 percent. In December 2014, Abbott completed the acquisition of Topera, Inc. for approximately $250 million in cash, plus additional payments up to $300 million to be made upon completion of certain regulatory and sales milestones. The acquisition of Topera provides Abbott a foundational entry in the electrophysiology market. The final allocation of the fair value of the acquisition resulted in non-deductible acquired in-process research and development of approximately $60 million, which is accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation, non-deductible definite-lived intangible assets of approximately $215 million, non-deductible goodwill of approximately $145 million, net deferred tax liabilities of approximately $80 million, and contingent consideration of approximately $90 million. The fair value of the contingent consideration was determined based on an independent appraisal. Acquired intangible assets consist of developed technology and trademarks, and are being amortized over 17 years. In August 2013, Abbott acquired 100 percent of IDEV Technologies, net of debt, for $310 million, in cash. The acquisition of IDEV Technologies expands Abbott's endovascular portfolio. The final allocation of the fair value of the acquisition resulted in non-deductible acquired in-process research and development of approximately $170 million which is accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation, non-deductible definite-lived intangible assets of approximately $66 million, non-deductible goodwill of approximately $112 million and net deferred tax liabilities of $47 million. Acquired intangible assets consist of developed technology and are being amortized over 11 years. In August 2013, Abbott acquired 100 percent of OptiMedica for $260 million, in cash, plus additional payments up to $150 million to be made upon completion of certain development, regulatory and sales milestones. The acquisition of OptiMedica provides Abbott with an immediate entry point into the laser assisted cataract surgery market. The final allocation of the fair value of the acquisition resulted in non-deductible definite-lived intangible assets of approximately $160 million; non-deductible acquired in-process research and development of approximately $60 million, which is accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation; non-deductible goodwill of approximately $130 million, net deferred tax liabilities of $49 million and contingent consideration of approximately $70 million. The fair value of the contingent consideration was determined based on an independent appraisal. Acquired intangible assets consist primarily of developed technology that is being amortized over 18 years. Had the aggregate in each year of the above acquisitions taken place as of the beginning of the comparable prior annual reporting period, consolidated net sales and earnings would not have been significantly different from reported amounts. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 7 — Goodwill and Intangible Assets The total amount of goodwill reported was $9.638 billion at December 31, 2015 and $10.067 billion at December 31, 2014, which excluded goodwill classified as held for disposition. Foreign currency translation decreased goodwill in 2015 and 2014 by $454 million and $566 million, respectively. In 2015, Abbott recorded goodwill of approximately $142 million related to the Tendyne acquisition, and purchase price allocation adjustments associated with recent acquisitions decreased goodwill by approximately $117 million. The amount of goodwill related to reportable segments at December 31, 2015 was $2.9 billion for the Established Pharmaceutical Products segment, $286 million for the Nutritional Products segment, $450 million for the Diagnostic Products segment, and $2.9 billion for the Vascular Products segment. In 2015, there was no reduction of goodwill relating to impairments. In 2014, Abbott recorded goodwill of approximately $1.8 billion related to the acquisitions of CFR Pharmaceuticals, Veropharm and Topera, and purchase price allocation adjustments associated with other recent acquisitions decreased goodwill by approximately $30 million; and approximately $950 million of goodwill was moved to Non-current assets held for disposition due to the planned disposition of the developed markets branded generics pharmaceuticals business. The gross amount of amortizable intangible assets, primarily product rights and technology was $10.8 billion and $11.0 billion as of December 31, 2015 and 2014, respectively, and accumulated amortization was $5.7 billion and $4.9 billion as of December 31, 2015 and 2014, respectively. The December 31, 2014 amounts exclude the intangibles that were classified as held for disposition. Indefinite-lived intangible assets, which relate to in-process research and development acquired in a business combination, were approximately $419 million and $134 million at December 31, 2015 and 2014, respectively. Foreign currency translation decreased intangible assets, net of amortization, in 2015 and 2014 by $251 million and $396 million, respectively. In 2015, the acquisition of Tendyne increased intangible assets by approximately $220 million. In 2014, the acquisition of CFR Pharmaceuticals increased intangible assets by approximately $1.8 billion. Approximately $804 million of net intangible assets related to the developed markets branded generics pharmaceuticals businesses was reclassified to Non-current assets held for disposition due to the planned disposition of this business. The estimated annual amortization expense for intangible assets recorded at December 31, 2015 is approximately $580 million in 2016, $560 million in 2017, $520 million in 2018, $490 million in 2019 and $480 million in 2020. Amortizable intangible assets are amortized over 2 to 20 years (average 13 years). |
Restructuring Plans
Restructuring Plans | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring Plans | |
Restructuring Plans | Note 8 — Restructuring Plans In 2015 and 2014, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in various Abbott businesses including the nutritional, established pharmaceuticals and vascular businesses. Abbott recorded employee related severance and other charges of approximately $95 million in 2015 and $164 million in 2014. Approximately $18 million in 2015 and $20 million in 2014 are recorded in Cost of products sold, approximately $34 million in 2015 and $53 million in 2014 are recorded in Research and development and approximately $43 million in 2015 and $91 million in 2014 are recorded in Selling, general and administrative expense. Additional charges of approximately $45 million in 2015 and $39 million in 2014 were recorded primarily for accelerated depreciation. The following summarizes the activity for these restructurings: (in millions) Restructuring charges recorded in 2014 $ Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ From 2013 to 2015, Abbott management approved various plans to reduce costs and improve efficiencies across various functional areas. In 2013, Abbott management also approved plans to streamline certain manufacturing operations in order to reduce costs and improve efficiencies in Abbott's established pharmaceuticals business. In 2012, Abbott management approved plans to streamline various commercial operations in order to reduce costs and improve efficiencies in Abbott's core diagnostics, established pharmaceuticals and nutritionals businesses. Abbott recorded employee related severance charges of approximately $66 million in 2015, $125 million in 2014 and $78 million in 2013. Approximately $9 million in 2015, $7 million in 2014 and $14 million in 2013 are recorded in Cost of products sold, approximately $2 million in 2015 and $6 million in 2014 are recorded in Research and development, and approximately $55 million in 2015, $112 million in 2014 and $32 million in 2013 are recorded in Selling, general and administrative expense. The remaining charge of $32 million in 2013 is related to Abbott's developed market established pharmaceutical business and is being recognized in the results of discontinued operations. Additional charges of approximately $4 million in 2013 were also recorded primarily for accelerated depreciation. The following summarizes the activity related to these restructurings: (in millions) Restructuring charges recorded in 2012 $ Restructuring charges recorded in 2013 Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2013 Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In 2013 and prior years, Abbott management approved plans to streamline global manufacturing operations, reduce overall costs and improve efficiencies in its worldwide pharmaceutical, vascular and core diagnostics businesses as well as selected domestic and international commercial and research and development operations. Abbott recorded charges for employee severance as well as for the impairment of manufacturing facilities and other assets. In 2013 Abbott recorded employee severance charges of approximately $11 million which was classified as cost of products sold. An additional $41 million was recorded in 2013 relating to these restructurings, primarily for accelerated depreciation. The following summarizes the activity related to these restructurings: (in millions) Accrued balance at December 31, 2011 $ Payments, impairments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2012 Transfer of liability to AbbVie ) Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2013 Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Incentive Stock Programs
Incentive Stock Programs | 12 Months Ended |
Dec. 31, 2015 | |
Incentive Stock Programs | |
Incentive Stock Programs | Note 9 — Incentive Stock Program The 2009 Incentive Stock Program authorizes the granting of nonqualified stock options, restricted stock awards, restricted stock units, performance awards, foreign benefits and other share-based awards. Stock options and restricted stock awards and units comprise the majority of benefits that have been granted and are currently outstanding under this program and a prior program. In 2015, Abbott granted 5,577,553 stock options, 662,553 restricted stock awards and 5,940,778 restricted stock units under this program. The purchase price of shares under option must be at least equal to the fair market value of the common stock on the date of grant, and the maximum term of an option is 10 years. Options generally vest equally over three years. Restricted stock awards generally vest between 3 and 5 years and for restricted stock awards that vest over 5 years, no more than one-third of the award vests in any one year upon Abbott reaching a minimum return on equity target. Restricted stock units vest over three years and upon vesting, the recipient receives one share of Abbott stock for each vested restricted stock unit. The aggregate fair market value of restricted stock awards and units is recognized as expense over the requisite service period, which may be shorter than the vesting period if an employee is retirement eligible. Restricted stock awards and settlement of vested restricted stock units are issued out of treasury shares. Abbott generally issues new shares for exercises of stock options. As a policy, Abbott does not purchase its shares relating to its share-based programs. In connection with the separation of AbbVie on January 1, 2013, Abbott modified its outstanding equity awards granted under incentive stock programs for its employees. The awards were generally modified such that immediately following the separation; the awardees held the same number of awards in Abbott stock and an equal number of awards in AbbVie stock. The exercise price on outstanding Abbott options was adjusted and the exercise price on the AbbVie options granted under this modification was established with the intention of generally preserving the value of the awards immediately prior to the separation. This modification did not result in additional compensation expense. At December 31, 2015, approximately 87 million shares were reserved for future grants. The number of restricted stock awards and units outstanding and the weighted-average grant-date fair value at December 31, 2015 and December 31, 2014 was 11,855,327 and $42.54 and 12,671,328 and $35.48, respectively. The number of restricted stock awards and units, and the weighted-average grant-date fair value, that were granted, vested and lapsed during 2015 were 6,603,331 and $46.94, 6,693,743 and $33.72 and 725,589 and $40.77, respectively. The fair market value of restricted stock awards and units vested in 2015, 2014 and 2013 was $312 million, $281 million and $274 million, respectively. Options Outstanding Exercisable Options Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) December 31, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Lapsed ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The aggregate intrinsic value of options outstanding and exercisable at December 31, 2015 was $475 million and $447 million, respectively. The total intrinsic value of options exercised in 2015, 2014 and 2013 was $167 million, $152 million and $120 million, respectively. The total unrecognized compensation cost related to all share-based compensation plans at December 31, 2015 amounted to approximately $169 million, which is expected to be recognized over the next three years. Total non-cash stock compensation expense charged against income from continuing operations in 2015, 2014 and 2013 for share-based plans totaled approximately $291 million, $239 million and $254 million, respectively, and the tax benefit recognized was approximately $98 million, $79 million and $82 million, respectively. Stock compensation cost capitalized as part of inventory is not significant. The fair value of an option granted in 2015, 2014 and 2013 was $6.67, $6.39, and $5.77, respectively. The fair value of an option grant was estimated using the Black-Scholes option-pricing model with the following assumptions: 2015 2014 2013 Risk-free interest rate % % % Average life of options (years) Volatility % % % Dividend yield % % % The risk-free interest rate is based on the rates available at the time of the grant for zero-coupon U.S. government issues with a remaining term equal to the option's expected life. The average life of an option is based on both historical and projected exercise and lapsing data. Expected volatility is based on implied volatilities from traded options on Abbott's stock and historical volatility of Abbott's stock over the expected life of the option. Dividend yield is based on the option's exercise price and annual dividend rate at the time of grant. |
Debt and Lines of Credit
Debt and Lines of Credit | 12 Months Ended |
Dec. 31, 2015 | |
Debt and Lines of Credit | |
Debt and Lines of Credit | Note 10 — Debt and Lines of Credit The following is a summary of long-term debt at December 31: ( in millions ) 2015 2014 5.125% Notes, due 2019 $ $ 4.125% Notes, due 2020 2.00% Notes, due 2020 — 2.55% Notes, due 2022 — 2.95% Notes, due 2025 — 6.15% Notes, due 2037 6.0% Notes, due 2039 5.3% Notes, due 2040 Other, including fair value adjustments relating to interest rate hedge contracts designated as fair value hedges (a) ​ ​ ​ ​ ​ ​ ​ ​ Total, net of current maturities Current maturities of long-term debt ​ ​ ​ ​ ​ ​ ​ ​ Total carrying amount $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) In 2015 and 2014, balances also include debt issuance costs in accordance with ASU 2015-03, which was adopted in 2015. Prior to the adoption of ASU 2015-03, debt issuance costs were classified on the balance sheet as assets within Deferred Income Taxes and Other Assets. In March 2015, Abbott issued $2.5 billion of long-term debt consisting of $750 million at 2.00% Senior Notes due March 15, 2020; $750 million of 2.55% Senior Notes due March 15, 2022; and $1.0 billion of 2.95% Senior Notes due March 15, 2025. Proceeds from this debt were used to pay down short-term borrowings. Abbott also entered into interest rate swap contracts totaling $2.5 billion. These contracts have the effect of changing Abbott's obligation from a fixed interest rate to a variable interest rate obligation. In 2014, Abbott extinguished approximately $500 million of long-term debt assumed as part of the CFR Pharmaceuticals acquisition and incurred a cost of $18.3 million to extinguish this debt. Principal payments required on long-term debt outstanding at December 31, 2015 are $3 million in 2016, $2 million in 2017, $1 million in 2018, $0.9 billion in 2019, $1.3 billion in 2020 and $3.5 billion in 2021 and thereafter. At December 31, 2015, Abbott's long-term debt rating was A+ by Standard & Poor's Corporation and A2 by Moody's Investors Service. As a result of the pending acquisition of Alere, Abbott's credit ratings are under review and it is anticipated that the ratings will be adjusted to reflect the increased borrowings that will be incurred to finance the acquisition. Abbott has readily available financial resources, including unused lines of credit of $5.0 billion which expire in 2019 and that support commercial paper borrowing arrangements. Abbott's weighted-average interest rate on short-term borrowings was 0.2% at December 31, 2015, 2014 and 2013. |
Financial Instruments, Derivati
Financial Instruments, Derivatives and Fair Value Measures | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments, Derivatives and Fair Value Measures | |
Financial Instruments, Derivatives and Fair Value Measures | Note 11 — Financial Instruments, Derivatives and Fair Value Measures Certain Abbott foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar. These contracts, with notional amounts totaling $2.4 billion at December 31, 2015, and $1.5 billion at December 31, 2014, are designated as cash flow hedges of the variability of the cash flows due to changes in foreign exchange rates and are recorded at fair value. Accumulated gains and losses as of December 31, 2015 will be included in Cost of products sold at the time the products are sold, generally through the next twelve to eighteen months. The amount of hedge ineffectiveness was not significant in 2015, 2014 and 2013. Abbott enters into foreign currency forward exchange contracts to manage currency exposures for foreign currency denominated third-party trade payables and receivables, and for intercompany loans and trade accounts payable where the receivable or payable is denominated in a currency other than the functional currency of the entity. For intercompany loans, the contracts require Abbott to sell or buy foreign currencies, primarily European currencies and Japanese yen, in exchange for primarily U.S. dollars and other European currencies. For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar, European currencies and Japanese yen. At December 31, 2015, 2014 and 2013, Abbott held $14.0 billion, $14.1 billion and $13.8 billion, respectively, of such foreign currency forward exchange contracts. Abbott has designated foreign denominated short-term debt as a hedge of the net investment in a foreign subsidiary of approximately $439 million, $445 million and $505 million as of December 31, 2015, 2014 and 2013, respectively. Accordingly, changes in the fair value of this debt due to changes in exchange rates are recorded in Accumulated other comprehensive income (loss), net of tax. Abbott is a party to interest rate hedge contracts totaling $4.0 billion at December 31, 2015 and $1.5 billion at December 31, 2014 and December 31, 2013, to manage its exposure to changes in the fair value of fixed-rate debt. These contracts are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The effect of the hedge is to change a fixed-rate interest obligation to a variable rate for that portion of the debt. Abbott records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount. No hedge ineffectiveness was recorded in income in 2015, 2014 and 2013 for these hedges. Gross unrealized holding gains (losses) on available-for-sale equity securities totaled $171 million, $3 million and $22 million at December 31, 2015, 2014 and 2013, respectively. The following table summarizes the amounts and location of certain derivative financial instruments as of December 31: Fair Value — Assets Fair Value — Liabilities 2015 2014 Balance Sheet Caption 2015 2014 Balance Sheet Caption (in millions) Interest rate swaps designated as fair value hedges $ $ Deferred income taxes and other assets $ — $ — Post-employment obligations and other long-term liabilities Foreign currency forward exchange contracts — Hedging instruments Other prepaid expenses and receivables — Other accrued liabilities Others not designated as hedges Other prepaid expenses and receivables Other accrued liabilities Debt designated as a hedge of net investment in a foreign subsidiary — — n/a Short-term borrowings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table summarizes the activity for foreign currency forward exchange contracts designated as cash flow hedges, debt designated as a hedge of net investment in a foreign subsidiary and certain other derivative financial instruments, as well as the amounts and location of income (expense) and gain (loss) reclassified into income. The amount of hedge ineffectiveness was not significant in 2015, 2014 and 2013 for these hedges. Gain (loss) Recognized in Other Comprehensive Income (loss) Income (expense) and Gain (loss) Reclassified into Income 2015 2014 2013 2015 2014 2013 Income Statement Caption (in millions) Foreign currency forward exchange contracts designated as cash flow hedges $ $ $ $ $ $ Cost of products sold Debt designated as a hedge of net investment in a foreign subsidiary — — — n/a Interest rate swaps designated as fair value hedges n/a n/a n/a ) Interest expense Foreign currency forward exchange contracts not designated as hedges n/a n/a n/a Net foreign exchange (gain) loss The interest rate swaps are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The hedged debt is marked to market, offsetting the effect of marking the interest rate swaps to market. The carrying values and fair values of certain financial instruments as of December 31 are shown in the table below. The carrying values of all other financial instruments approximate their estimated fair values. The counterparties to financial instruments consist of select major international financial institutions. Abbott does not expect any losses from nonperformance by these counterparties. 2015 2014 Carrying Value Fair Value Carrying Value Fair Value (in millions) Long-term Investment Securities: Equity securities $ $ $ $ Other Total Long-term Debt ) ) ) ) Foreign Currency Forward Exchange Contracts: Receivable position (Payable) position ) ) ) ) Interest Rate Hedge Contracts: Receivable position The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis in the balance sheet: Basis of Fair Value Measurement Outstanding Balances Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (in millions) December 31, 2015: Equity securities $ $ $ — $ — Interest rate swap financial instruments — — Foreign currency forward exchange contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of hedged long-term debt $ $ — $ $ — Foreign currency forward exchange contracts — — Contingent consideration related to business combinations — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014: Equity securities $ $ $ — $ — Interest rate swap financial instruments — — Foreign currency forward exchange contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of hedged long-term debt $ $ — $ $ — Foreign currency forward exchange contracts — — Contingent consideration related to business combinations — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities are principally comprised of Mylan N.V. ordinary shares. The fair value of the Mylan N.V. equity securities was determined based on the value of the publicly-traded ordinary shares. The fair value of foreign currency forward exchange contracts is determined using a market approach, which utilizes values for comparable derivative instruments. The fair value of the debt was determined based on the face value of the debt adjusted for the fair value of the interest rate swaps, which is based on a discounted cash flow analysis using significant other observable inputs. The fair value of the contingent consideration was determined based on independent appraisals adjusted for the time value of money and other changes in fair value primarily resulting from changes in regulatory timelines. Contingent consideration results from three acquisitions and the maximum amount estimated to be due is $450 million, which is dependent upon attaining certain sales thresholds or based on the occurrence of certain events, such as regulatory approvals. |
Litigation and Environmental Ma
Litigation and Environmental Matters | 12 Months Ended |
Dec. 31, 2015 | |
Litigation and Environmental Matters | |
Litigation and Environmental Matters | Note 12 — Litigation and Environmental Matters Abbott has been identified as a potentially responsible party for investigation and cleanup costs at a number of locations in the United States and Puerto Rico under federal and state remediation laws and is investigating potential contamination at a number of company-owned locations. Abbott has recorded an estimated cleanup cost for each site for which management believes Abbott has a probable loss exposure. No individual site cleanup exposure is expected to exceed $4 million, and the aggregate cleanup exposure is not expected to exceed $10 million. Abbott is involved in various claims and legal proceedings, and Abbott estimates the range of possible loss for its legal proceedings and environmental exposures to be from approximately $35 million to $50 million. The recorded accrual balance at December 31, 2015 for these proceedings and exposures was approximately $45 million. This accrual represents management's best estimate of probable loss, as defined by FASB ASC No. 450, "Contingencies." Within the next year, legal proceedings may occur that may result in a change in the estimated loss accrued by Abbott. While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott's financial position, cash flows, or results of operations. |
Post-Employment Benefits
Post-Employment Benefits | 12 Months Ended |
Dec. 31, 2015 | |
Post-Employment Benefits | |
Post-Employment Benefits | Note 13 — Post-Employment Benefits Retirement plans consist of defined benefit, defined contribution and medical and dental plans. Information for Abbott's major defined benefit plans and post-employment medical and dental benefit plans is as follows: Defined Benefit Plans Medical and Dental Plans (in millions) 2015 2014 2015 2014 Projected benefit obligations, January 1 $ $ $ $ Service cost — benefits earned during the year Interest cost on projected benefit obligations (Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs ) ) Benefits paid ) ) ) ) Business dispositions ) — — — Other, including foreign currency translation ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations, December 31 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at fair value, January 1 $ $ $ $ Actual return (loss) on plans' assets ) ) Company contributions Benefits paid ) ) ) ) Business dispositions ) — — — Other, including foreign currency translation ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at fair value, December 31 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations greater than plan assets, December 31 $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term assets $ $ $ — $ — Short-term liabilities ) ) ) ) Long-term liabilities ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net liability $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Recognized in Accumulated Other Comprehensive Income (loss): Actuarial losses, net $ $ $ $ Prior service cost (credits) — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The projected benefit obligations for non-U.S. defined benefit plans was $2.1 billion and $2.5 billion at December 31, 2015 and 2014, respectively. The accumulated benefit obligations for all defined benefit plans were $6.9 billion and $7.3 billion at December 31, 2015 and 2014, respectively. For plans where the accumulated benefit obligations exceeded plan assets at December 31, 2015 and 2014, the aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets were as follows: (in millions) 2015 2014 Accumulated benefit obligation $ $ Projected benefit obligation Fair value of plan assets The components of the net periodic benefit cost were as follows: Defined Benefit Plans Medical and Dental Plans 2015 2014 2013 2015 2014 2013 (in millions) Service cost — benefits earned during the year $ $ $ $ $ $ Interest cost on projected benefit obligations Expected return on plans' assets ) ) ) ) ) ) Amortization of actuarial losses Amortization of prior service cost (credits) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost Less: Discontinued operations ) ) ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cost — continuing operations $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) for each respective year includes the amortization of actuarial losses and prior service costs (credits) as noted in the previous table. Other comprehensive income (loss) for each respective year also includes: net actuarial gains and prior service credits of $37 million for defined benefit plans and $116 million for medical and dental plans in 2015; net actuarial losses and prior service credits of $1.6 billion for defined benefit plans and $57 million for medical and dental plans in 2014; and net actuarial gains and prior service credits of $995 million for defined benefit plans and $201 million for medical and dental plans in 2013. The pretax amount of actuarial losses and prior service cost (credits) included in Accumulated other comprehensive income (loss) at December 31, 2015 that is expected to be recognized in the net periodic benefit cost in 2016 is $131 million and nil of expense, respectively, for defined benefit pension plans and $22 million of expense and $45 million of income, respectively, for medical and dental plans. The weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows: 2015 2014 2013 Discount rate % % % Expected aggregate average long-term change in compensation % % % The weighted average assumptions used to determine the net cost for defined benefit plans and medical and dental plans are as follows: 2015 2014 2013 Discount rate % % % Expected return on plan assets % % % Expected aggregate average long-term change in compensation % % % The assumed health care cost trend rates for medical and dental plans at December 31 were as follows: 2015 2014 2013 Health care cost trend rate assumed for the next year % % % Rate that the cost trend rate gradually declines to % % % Year that rate reaches the assumed ultimate rate The discount rates used to measure liabilities were determined based on high-quality fixed income securities that match the duration of the expected retiree benefits. The health care cost trend rates represent Abbott's expected annual rates of change in the cost of health care benefits and are forward projections of health care costs as of the measurement date. A one-percentage point increase/(decrease) in the assumed health care cost trend rate would increase/(decrease) the accumulated post-employment benefit obligations as of December 31, 2015, by $176 million /$(144) million, and the total of the service and interest cost components of net post-employment health care cost for the year then ended by approximately $16 million/$(12) million. The following table summarizes the basis used to measure the defined benefit and medical and dental plan assets at fair value: Basis of Fair Value Measurement Outstanding Balances Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (in millions) December 31, 2015: Equities: U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities: U.S. government securities (d) — Corporate debt instruments (e) Non-U.S. government securities (f) Other (g) — Absolute return funds (h) Commodities (i) Other (j) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014: Equities: U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities: U.S. government securities (d) — Corporate debt instruments (e) — Non-U.S. government securities (f) — Other (g) — Absolute return funds (h) Commodities (i) Other (j) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) A mix of index funds that track the S&P 500 (35 percent in 2015 and 50 percent in 2014) and separate actively managed equity accounts that are benchmarked to the Russell 1000 (65 percent in 2015 and 50 percent in 2014). (b) A mix of index funds (80 percent in 2015 and 70 percent in 2014) and separate actively managed equity accounts (20 percent in 2015 and 30 percent in 2014) that track or are benchmarked to the S&P 400 midcap index. (c) A mix of index funds (30 percent in 2015 and 20 percent in 2014) and separate actively managed pooled investment funds (70 percent in 2015 and 80 percent in 2014) that track or are benchmarked to the MSCI EAFE and MSCI emerging market indices. (d) A mix of index funds that track the Barclays U.S. Gov't Aggregate (70 percent in 2015 and 65 percent in 2014) and separate actively managed accounts (30 percent in 2015 and 35 percent in 2014) that are benchmarked to Barclays U.S. Long Gov't/Corp Index or the Barclays Global Aggregate. (e) A mix of index funds that track the Barclays U.S. Gov't Aggregate (10 percent in 2015 and 15 percent in 2014) and separate actively managed accounts (90 percent in 2015 and 85 percent in 2014) that are benchmarked to Barclays U.S. Long Gov't/Corp Index or the Barclays Global Aggregate. (f) Primarily United Kingdom, Japan, Netherlands and Irish government-issued bonds. (g) Primarily mortgage backed securities (40 percent in 2015 and 2014) and an actively managed, diversified fixed income vehicle benchmarked to the one-month Libor / Euribor (60 percent in 2015 and 2014). (h) Primarily funds invested by managers that have a global mandate with the flexibility to allocate capital broadly across a wide range of asset classes and strategies including, but not limited to equities, fixed income, commodities, interest rate futures, currencies and other securities to outperform an agreed upon benchmark with specific return and volatility targets. (i) Primarily investments in liquid commodity future contracts and private energy funds. (j) Primarily cash and cash equivalents (50 percent in 2015 and 75 percent in 2014) and investment in private equity funds (50 percent in 2015 and 25 percent in 2014). Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company that are valued using significant other observable inputs are valued at the net asset value (NAV) provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry-recognized vendors. Absolute return funds and commodities are valued at the NAV provided by the fund administrator. Private energy and private equity funds are valued at the NAV provided by the partnership on a one-quarter lag adjusted for known cash flows and significant events through the reporting date. The following table summarizes the change in the value of assets that are measured using significant unobservable inputs: 2015 2014 (in millions) January 1 $ $ Actual return on plan assets: Assets on hand at year end ) Assets sold during the year Purchases, sales and settlements, net ​ ​ ​ ​ ​ ​ ​ ​ December 31 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return as well as balancing higher return, more volatile equity securities with lower return, less volatile fixed income securities. Investment allocations are made across a range of markets, industry sectors, capitalization sizes, and in the case of fixed income securities, maturities and credit quality. The plans do not directly hold any securities of Abbott. There are no known significant concentrations of risk in the plans' assets. Abbott's medical and dental plans' assets are invested in a similar mix as the pension plan assets. The actual asset allocation percentages at year end are consistent with the company's targeted asset allocation percentages. The plans' expected return on assets, as shown above is based on management's expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, as well as current economic and capital market conditions. Abbott funds its domestic pension plans according to IRS funding limitations. International pension plans are funded according to similar regulations. Abbott funded $579 million in 2015 and $393 million in 2014 to defined pension plans. Abbott expects to contribute approximately $576 million to its pension plans in 2016, of which approximately $470 million relates to its main domestic pension plan. Total benefit payments expected to be paid to participants, which includes payments funded from company assets, as well as paid from the plans, are as follows: (in millions) Defined Benefit Plans Medical and Dental Plans 2016 $ $ 2017 2018 2019 2020 2021 to 2025 The Abbott Stock Retirement Plan is the principal defined contribution plan. Abbott's contributions to this plan were $81 million in 2015, $85 million in 2014 and $86 million in 2013. |
Taxes on Earnings from Continui
Taxes on Earnings from Continuing Operations | 12 Months Ended |
Dec. 31, 2015 | |
Taxes on Earnings from Continuing Operations | |
Taxes on Earnings from Continuing Operations | Note 14 — Taxes on Earnings from Continuing Operations Taxes on earnings from continuing operations reflect the annual effective rates, including charges for interest and penalties. Deferred income taxes reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. In 2015, taxes on earnings from continuing operations include a tax cost of $71 million related to the disposal of shares of Mylan N.V. stock. In 2014, taxes on earnings from continuing operations reflect the recognition of $440 million of tax expense associated with a one-time repatriation of 2014 non-U.S. earnings, partially offset by the favorable resolution of various tax positions and adjustments of tax uncertainties pertaining to prior years. In 2013, taxes on earnings from continuing operations reflect the recognition of $230 million of tax benefits as a result of the favorable resolution of various tax positions pertaining to prior years. In addition, as a result of the American Taxpayer Relief Act of 2012 signed into law in January 2013, Abbott recognized a tax benefit in the tax provision related to continuing operations of approximately $103 million in the first quarter of 2013 for the retroactive extension of the research tax credit and the look-through rules of section 954(c)(6) of the Internal Revenue Code to the beginning of 2012. U.S. income taxes are provided on those earnings of foreign subsidiaries which are intended to be remitted to the parent company. Abbott does not record deferred income taxes on earnings reinvested indefinitely in foreign subsidiaries. Undistributed earnings reinvested indefinitely in foreign subsidiaries as working capital and plant and equipment aggregated $22.4 billion at December 31, 2015. It is not practicable to determine the amount of deferred income taxes not provided on these earnings. In the U.S., Abbott's federal income tax returns through 2011 are settled except for one item, and the income tax returns for years after 2011 are open. There are numerous other income tax jurisdictions for which tax returns are not yet settled, none of which are individually significant. Reserves for interest and penalties are not significant. Earnings from continuing operations before taxes, and the related provisions for taxes on earnings from continuing operations, were as follows: (in millions) 2015 2014 2013 Earnings From Continuing Operations Before Taxes: Domestic $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) 2015 2014 2013 Taxes on Earnings (Losses) From Continuing Operations: Current: Domestic $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Domestic ) Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Differences between the effective income tax rate and the U.S. statutory tax rate were as follows: 2015 2014 2013 Statutory tax rate on earnings from continuing operations % % % Impact of foreign operations ) ) Resolution of certain tax positions pertaining to prior years — ) ) Effect of retroactive legislation — — ) State taxes, net of federal benefit ) Federal tax cost on sale of Mylan N.V. shares — — All other, net ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate on earnings from continuing operations % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of foreign operations is primarily derived from operations in Puerto Rico, Switzerland, Ireland, Singapore, and the Netherlands. In 2014, this benefit was more than offset by the tax expense accrued as a result of Abbott's one-time repatriation of its current year foreign earnings. The 2015 effective tax rate includes the impact of the R&D tax credit that was made permanent in the U.S. by the Protecting Americans from Tax Hikes Act of 2015. The tax effect of the differences that give rise to deferred tax assets and liabilities were as follows: (in millions) 2015 2014 Deferred tax assets: Compensation and employee benefits $ $ Other, primarily reserves not currently deductible, and NOL's and credit carryforwards Trade receivable reserves Inventory reserves Deferred intercompany profit State income taxes ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Depreciation ) ) Unremitted earnings of foreign subsidiaries ) ) Other, primarily the excess of book basis over tax basis of intangible assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Abbott has incurred losses in a foreign jurisdiction where realization of the future economic benefit is so remote that the benefit is not reflected as a deferred tax asset. Valuation allowances for other recorded deferred tax assets were not significant. The following table summarizes the gross amounts of unrecognized tax benefits without regard to reduction in tax liabilities or additions to deferred tax assets and liabilities if such unrecognized tax benefits were settled: (in millions) 2015 2014 January 1 $ $ Increase due to current year tax positions Increase due to prior year tax positions Decrease due to prior year tax positions ) ) Settlements ) ) ​ ​ ​ ​ ​ ​ ​ ​ December 31 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is approximately $1.4 billion. Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease within a range of $555 million to $655 million, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters. |
Segment and Geographical Area I
Segment and Geographical Area Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Segment and Geographical Area Information | Note 15 — Segment and Geographic Area Information Abbott's principal business is the discovery, development, manufacture and sale of a broad line of health care products. Abbott's products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians' offices and government agencies throughout the world. On February 27, 2015, Abbott completed the sale of its developed markets branded generics pharmaceuticals business to Mylan. This business was previously included in the Established Pharmaceutical Products segment. The segment information below, including prior period amounts, has been adjusted to reflect the classification of the developed markets branded generics pharmaceuticals business as part of discontinued operations in the Consolidated Statement of Earnings. Abbott's reportable segments are as follows: Established Pharmaceutical Products — International sales of a broad line of branded generic pharmaceutical products. Nutritional Products — Worldwide sales of a broad line of adult and pediatric nutritional products. Diagnostic Products — Worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites. For segment reporting purposes, the Core Laboratories Diagnostics, Molecular Diagnostics, Point of Care and Ibis diagnostic divisions are aggregated and reported as the Diagnostic Products segment. Vascular Products — Worldwide sales of coronary, endovascular, structural heart, vessel closure and other medical device products. For segment reporting purposes, the Vascular and Electrophysiology Products divisions are aggregated and reported as the Vascular Products segment. Non-reportable segments include the Diabetes Care and Medical Optics segments. Abbott's underlying accounting records are maintained on a legal entity basis for government and public reporting requirements. Segment disclosures are on a performance basis consistent with internal management reporting. The cost of some corporate functions and the cost of certain employee benefits are charged to segments at predetermined rates that approximate cost. Remaining costs, if any, are not allocated to segments. In addition, intangible asset amortization is not allocated to operating segments, and intangible assets and goodwill are not included in the measure of each segment's assets. The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements. Net Sales to External Customers (a) Operating Earnings (a) (in millions) 2015 2014 2013 2015 2014 2013 Established Pharmaceuticals $ $ $ $ $ $ Nutritionals Diagnostics Vascular ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Reportable Segments $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Net sales and operating earnings were unfavorably affected by the relatively stronger U.S. dollar in 2015, 2014 and 2013. 2015 2014 2013 (in millions) Total Reportable Segment Operating Earnings $ $ $ Corporate functions and benefit plans costs ) ) ) Non-reportable segments Net interest expense ) ) ) Net loss on extinguishment of debt — ) — Share-based compensation ) ) ) Amortization of intangible assets ) ) ) Other, net (b) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings from Continuing Operations before Taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (b) Other, net includes: charges for restructuring actions and other cost reduction initiatives of approximately $310 million in 2015, $435 million in 2014 and $350 million in 2013. 2015 includes a $207 million pre-tax gain on the sale of a portion of the Mylan N.V. shares. Depreciation (c) Additions to Long-term Assets Total Assets (in millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013 Established Pharmaceuticals $ $ $ $ $ $ $ $ $ Nutritionals Diagnostics Vascular ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Reportable Segments $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) Amounts in Other for years 2014 and 2013 include depreciation related to discontinued operations. 2015 2014 2013 (in millions) Total Reportable Segment Assets $ $ $ Cash and investments Non-reportable segments Goodwill and intangible assets (d) All other (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (d) Goodwill and intangible assets related to developed markets established pharmaceuticals and animal health are included in the Goodwill and intangible assets line in 2013 and All other line in 2014. Net Sales to External Customers (e) 2015 2014 2013 (in millions) United States $ $ $ China India Germany Japan The Netherlands Switzerland Russia United Kingdom Canada Colombia Italy Brazil France All Other Countries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (e) Sales by country are based on the country that sold the product. Long-lived assets on a geographic basis primarily include property, plant and equipment. It excludes goodwill, intangible assets, deferred tax assets, and financial instruments, which were previously included in the balances reported for long-term assets in prior years. At December 31, 2015 and 2014, Long-lived assets totaled $6.4 billion and $6.8 billion, respectively, and in the United States such assets totaled $3.1 billion in both years. Long-lived asset balances associated with other countries were not material on an individual country basis in either of the two years. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Event. | |
Subsequent Event | Note 16 — Subsequent Event On January 30, 2016, Abbott entered into a definitive agreement to acquire Alere, Inc. (Alere). With annual sales of approximately $2.5 billion, Alere is a global leader in point of care diagnostics. The acquisition, which is expected to significantly advance Abbott's global diagnostics presence and leadership, is subject to the approval of Alere shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals. Under the terms of the agreement, Abbott will pay $56 per common share at a total expected equity value of $5.8 billion. Alere's net debt, currently $2.6 billion, will be assumed or refinanced by Abbott. In February 2016, Abbott obtained a commitment for a 364-day senior unsecured bridge term loan facility for an amount not to exceed $9 billion in conjunction with its pending acquisition of Alere. While Abbott plans to use cash on hand at the time of the acquisition from anticipated long-term borrowings to acquire Alere, the bridge facility will provide back-up financing. |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Results (Unaudited) | |
Quarterly Results (Unaudited) | Note 17 — Quarterly Results (Unaudited) (in millions except per share data) 2015 2014 First Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low Second Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low Third Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low Fourth Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low (a) The sum of the four quarters of earnings per share for 2015 and 2014 may not add to the full year earnings per share amount due to rounding and/or the use of quarter-to-date weighted average shares to calculate the earnings per share amount in each respective quarter. |
SCHEDULE II VALUATION AND QUALI
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2015 | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS | Allowances for Doubtful Accounts and Product Returns Balance at Beginning of Year Provisions/ Charges to Income Amounts Charged Off and Other Deductions Balance at End of Year 2015 $ $ $ ) $ 2014 ) 2013 )(1) (1) Includes $178 million transferred to AbbVie as part of the separation on January 1, 2013. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
NATURE OF BUSINESS | NATURE OF BUSINESS — Abbott's principal business is the discovery, development, manufacture and sale of a broad line of health care products. |
CHANGES IN PRESENTATION | CHANGES IN PRESENTATION — On February 27, 2015, Abbott completed the sale of its developed markets branded generics pharmaceuticals business to Mylan Inc. (Mylan) for equity ownership of a newly formed entity that combined Mylan's existing business and Abbott's developed markets pharmaceuticals business. Mylan N.V. is publicly traded. The sale was announced in July 2014. On February 10, 2015, Abbott completed the sale of its animal health business to Zoetis Inc. Abbott entered an agreement to sell this business in November 2014. The historical operating results of these businesses up to the date of sale are excluded from Earnings from Continuing Operations and are presented on the Earnings from Discontinued Operations line in Abbott's Consolidated Statement of Earnings. The assets and liabilities of these businesses were reported as held for disposition in Abbott's Consolidated Balance Sheet at December 31, 2014. The cash flows of these businesses up to the date of disposition are included in Abbott's Consolidated Statements of Cash Flows. See Note 3 — Discontinued Operations for additional information. |
BASIS OF CONSOLIDATION | BASIS OF CONSOLIDATION — The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions. |
USE OF ESTIMATES | USE OF ESTIMATES — The financial statements have been prepared in accordance with generally accepted accounting principles in the United States and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for sales rebates; income taxes; pension and other post-employment benefits, including certain asset values that are based on significant unobservable inputs; valuation of intangible assets; litigation; derivative financial instruments; and inventory and accounts receivable exposures. |
FOREIGN CURRENCY TRANSLATION | FOREIGN CURRENCY TRANSLATION — The statements of earnings of foreign subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars using average exchange rates for the period. The net assets of foreign subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars using exchange rates as of the balance sheet date. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation adjustment account, which is included in equity as a component of Accumulated other comprehensive income (loss). Transaction gains and losses are recorded on the Net foreign exchange (gain) loss line of the Consolidated Statement of Earnings. |
REVENUE RECOGNITION | REVENUE RECOGNITION — Revenue from product sales is recognized upon passage of title and risk of loss to customers. Provisions for discounts, rebates and sales incentives to customers, and returns and other adjustments are provided for in the period the related sales are recorded. Sales incentives to customers are not material. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer's normal requirements are recorded when the conditions noted above are met. In those situations, management records a returns reserve for such revenue, if necessary. In certain of Abbott's businesses, primarily within diagnostics and medical optics, Abbott participates in selling arrangements that include multiple deliverables (e.g., instruments, reagents, procedures, and service agreements). Under these arrangements, Abbott recognizes revenue upon delivery of the product or performance of the service and allocates the revenue based on the relative selling price of each deliverable, which is based primarily on vendor specific objective evidence. Sales of product rights for marketable products are recorded as revenue upon disposition of the rights. Revenue from license of product rights, or for performance of research or selling activities, is recorded over the periods earned. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers , which provides a single comprehensive model for accounting for revenue from contracts with customers and will supersede most existing revenue recognition guidance. The standard becomes effective for Abbott in the first quarter of 2018. Abbott is currently evaluating the effect, if any, that the standard will have on its consolidated financial statements and related disclosures. |
INCOME TAXES | INCOME TAXES — Deferred income taxes are provided for the tax effect of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at the enacted statutory rate to be in effect when the taxes are paid. U.S. income taxes are provided on those earnings of foreign subsidiaries which are intended to be remitted to the parent company. Deferred income taxes are not provided on undistributed earnings reinvested indefinitely in foreign subsidiaries as working capital and plant and equipment. Interest and penalties on income tax obligations are included in taxes on income. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes , which requires entities to classify all deferred tax assets and liabilities as non-current on the balance sheet. The standard may be adopted on either a prospective or retrospective basis. The standard is effective for fiscal years beginning after December 15, 2016, and early adoption is permitted. Effective December 31, 2015, Abbott adopted ASU 2015-17 and applied the new standard retrospectively. As a result of applying ASU 2015-17 to the previously reported Consolidated Balance Sheet as of December 31, 2014, Deferred income taxes within the Total Current Assets line decreased and the Deferred income taxes and other assets line increased by approximately $1.7 billion, respectively; Other accrued liabilities within the Total Current Liabilities line decreased by $65 million and the Post-employment obligations and other long-term liabilities line increased by $12 million. Reclassification of the deferred tax balances from current to noncurrent affected the netting of these balances as a deferred tax asset or liability in various jurisdictions. |
EARNINGS PER SHARE | EARNINGS PER SHARE — Unvested restricted stock units and awards that contain non-forfeitable rights to dividends are treated as participating securities and are included in the computation of earnings per share under the two-class method. Under the two-class method, net earnings are allocated between common shares and participating securities. Earnings from Continuing Operations allocated to common shares in 2015, 2014 and 2013 were $2.595 billion, $1.713 billion and $1.979 billion, respectively. Net earnings allocated to common shares in 2015, 2014 and 2013 were $4.403 billion, $2.273 billion and $2.558 billion, respectively. |
PENSION AND POST-EMPLOYMENT BENEFITS | PENSION AND POST-EMPLOYMENT BENEFITS — Abbott accrues for the actuarially determined cost of pension and post-employment benefits over the service attribution periods of the employees. Abbott must develop long-term assumptions, the most significant of which are the health care cost trend rates, discount rates and the expected return on plan assets. Differences between the expected long-term return on plan assets and the actual return are amortized over a five-year period. Actuarial losses and gains are amortized over the remaining service attribution periods of the employees under the corridor method. |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS — For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model. Purchased intangible assets are recorded at fair value. The fair value of significant purchased intangible assets is based on independent appraisals. Abbott uses a discounted cash flow model to value intangible assets. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, terminal values and market participants. Intangible assets, goodwill and indefinite-lived intangible assets are reviewed for impairment at least on a quarterly and annual basis, respectively. |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION — The fair value of stock options and restricted stock awards and units are amortized over their requisite service period, which could be shorter than the vesting period if an employee is retirement eligible, with a charge to compensation expense. |
LITIGATION | LITIGATION — Abbott accounts for litigation losses in accordance with FASB ASC No. 450, "Contingencies." Under ASC No. 450, loss contingency provisions are recorded for probable losses at management's best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded. Legal fees are recorded as incurred. |
CASH, CASH EQUIVALENTS AND INVESTMENTS | CASH, CASH EQUIVALENTS AND INVESTMENTS — Cash equivalents consist of bank time deposits and U.S. treasury bills with original maturities of three months or less. Investments in two publicly traded companies, with a carrying value of approximately $104 million, are accounted for under the equity method of accounting. All other investments in marketable equity securities are classified as available-for-sale and are recorded at fair value with any unrealized holding gains or losses, net of tax, included in Accumulated other comprehensive income (loss). Investments in equity securities that are not traded on public stock exchanges are recorded at cost. Investments in debt securities are classified as held-to-maturity, as management has both the intent and ability to hold these securities to maturity, and are reported at cost, net of any unamortized premium or discount. Income relating to these securities is reported as interest income. Abbott reviews the carrying value of investments each quarter to determine whether an other than temporary decline in fair value exists. Abbott considers factors affecting the investee, factors affecting the industry the investee operates in and general equity market trends. Abbott considers the length of time an investment's fair value has been below carrying value and the near-term prospects for recovery to carrying value. When Abbott determines that an other than temporary decline has occurred, the investment is written down with a charge to Other (income) expense, net. |
TRADE RECEIVABLE VALUATIONS | TRADE RECEIVABLE VALUATIONS — Accounts receivable are stated at their net realizable value. The allowance against gross trade receivables reflects the best estimate of probable losses inherent in the receivables portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available information. Accounts receivable are charged off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. |
INVENTORIES | INVENTORIES — Inventories are stated at the lower of cost (first-in, first-out basis) or market. Cost includes material and conversion costs. |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT — Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. The following table shows estimated useful lives of property and equipment: Classification Estimated Useful Lives Buildings 10 to 50 years (average 27 years) Equipment 3 to 20 years (average 11 years) |
PRODUCT LIABILITY | PRODUCT LIABILITY — Abbott accrues for product liability claims when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The liabilities are adjusted quarterly as additional information becomes available. Receivables for insurance recoveries for product liability claims are recorded as assets, on an undiscounted basis, when it is probable that a recovery will be realized. Product liability losses are self-insured. |
RESEARCH AND DEVELOPMENT COSTS | RESEARCH AND DEVELOPMENT COSTS — Internal research and development costs are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are achieved. |
ACQUIRED IN-PROCESS AND COLLABORATIONS RESEARCH AND DEVELOPMENT (IPR&D) | ACQUIRED IN-PROCESS AND COLLABORATIONS RESEARCH AND DEVELOPMENT (IPR&D) — The initial costs of rights to IPR&D projects obtained in an asset acquisition are expensed as IPR&D unless the project has an alternative future use. These costs include initial payments incurred prior to regulatory approval in connection with research and development collaboration agreements that provide rights to develop, manufacture, market and/or sell pharmaceutical products. The fair value of IPR&D projects acquired in a business combination are capitalized and accounted for as indefinite-lived intangible assets until completed and are then amortized over the remaining useful life. Collaborations are not significant for continuing operations. |
CONCENTRATION OF RISK AND GUARANTEES | CONCENTRATION OF RISK AND GUARANTEES — Due to the nature of its operations, Abbott is not subject to significant concentration risks relating to customers, products or geographic locations. Governmental accounts in Italy, Spain, Greece and Portugal accounted for 7 percent and 9 percent of total net trade receivables as of December 31, 2015 and 2014, respectively. Product warranties are not significant. Abbott has no material exposures to off-balance sheet arrangements; no special purpose entities; nor activities that include non-exchange-traded contracts accounted for at fair value. Abbott has periodically entered into agreements in the ordinary course of business, such as assignment of product rights, with other companies, which has resulted in Abbott becoming secondarily liable for obligations that Abbott was previously primarily liable. Since Abbott no longer maintains a business relationship with the other parties, Abbott is unable to develop an estimate of the maximum potential amount of future payments, if any, under these obligations. Based upon past experience, the likelihood of payments under these agreements is remote. Abbott periodically acquires a business or product rights in which Abbott agrees to pay contingent consideration based on attaining certain thresholds or based on the occurrence of certain events. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Estimated useful lives of property and equipment | Classification Estimated Useful Lives Buildings 10 to 50 years (average 27 years) Equipment 3 to 20 years (average 11 years) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations. | |
Components of discontinued operations | Year Ended December 31 (in millions) 2015 2014 2013 Net Sales Developed markets generics pharmaceuticals and animal health businesses $ $ $ AbbVie — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings Before Tax Developed markets generics pharmaceuticals and animal health businesses $ $ $ AbbVie — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Earnings Developed markets generics pharmaceuticals and animal health businesses $ $ $ AbbVie ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of the assets and liabilities held for sale | (in millions) December 31, 2015 December 31, 2014 Cash and Trade receivables, net $ $ Total inventories Prepaid expenses and other receivables ​ ​ ​ ​ ​ ​ ​ ​ Current assets held for disposition ​ ​ ​ ​ ​ ​ ​ ​ Net property and equipment Intangible assets, net of amortization — Goodwill — Deferred income taxes and other assets ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets held for disposition ​ ​ ​ ​ ​ ​ ​ ​ Total assets held for disposition ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trade accounts payable Salaries, wages, commissions and other accrued liabilities ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities held for disposition Post-employment obligations, deferred income taxes and other long-term liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities held for disposition $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Supplemental Financial Inform31
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Financial Information | |
Components of long-term investments | 2015 2014 (in millions) Long-term Investments: Equity securities $ $ Other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Other Accrued Liabilities | 2015 2014 (in millions) Other Accrued Liabilities: Accrued rebates payable to government agencies $ $ Accrued other rebates (a) All other ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Accrued wholesaler chargeback rebates of $170 million and $158 million at December 31, 2015 and 2014, respectively, are netted in trade receivables because Abbott's customers are invoiced at a higher catalog price but only remit to Abbott their contract price for the products. |
Post employment Obligations and Other Long term Liabilities | 2015 2014 (in millions) Post-employment Obligations and Other Long-term Liabilities: Defined benefit pension plans and post-employment medical and dental plans for significant plans $ $ Deferred income taxes All other (b) ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (b) 2015 and 2014 include approximately $600 million of net unrecognized tax benefits, as well as approximately $148 million and $220 million, respectively, of acquisition consideration payable. |
Accumulated Other Comprehensi32
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of the changes in accumulated other comprehensive income from continuing operations, net of income taxes, are as follows: ( in millions ) Cumulative Foreign Currency Translation Adjustments Net Actuarial Losses and Prior Service Costs and Credits Cumulative Unrealized Gains on Marketable Equity Securities Cumulative Gains on Derivative Instruments Designated as Cash Flow Hedges Total Balance at December 31, 2013 $ ) $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before reclassifications ) ) ) (Income) loss amounts reclassified from accumulated other comprehensive income (a) — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period comprehensive income (loss) ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2014 ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impact of business dispositions — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive income (loss) before reclassifications ) ) (Income) loss amounts reclassified from accumulated other comprehensive income (a) — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period comprehensive income (loss) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2015 $ ) $ ) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Reclassified amounts for foreign currency translation are recorded in the Consolidated Statement of Earnings as Net Foreign exchange loss (gain); gains (losses) on marketable equity securities are recorded as Other (income) expense and gains/losses related to cash flow hedges are recorded as Cost of product sold. Net actuarial losses and prior service cost is included as a component of net periodic benefit plan cost — see Note 13 for additional information. |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
CFR Pharmaceuticals SA | |
Schedule of the allocation of the fair value of the acquisition | (in billions) Acquired intangible assets, non-deductible $ Goodwill, non-deductible Acquired net tangible assets Deferred income taxes recorded at acquisition ) ​ ​ ​ ​ ​ Total final allocation of fair value $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Restructuring Plans (Tables)
Restructuring Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring Plan 2015 and 2014 | |
Restructuring costs | |
Schedule of restructuring activity | (in millions) Restructuring charges recorded in 2014 $ Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Restructuring Plan 2013 to 2015 | |
Restructuring costs | |
Schedule of restructuring activity | (in millions) Restructuring charges recorded in 2012 $ Restructuring charges recorded in 2013 Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2013 Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Restructuring Plan 2013 and Prior Years | |
Restructuring costs | |
Schedule of restructuring activity | (in millions) Accrued balance at December 31, 2011 $ Payments, impairments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2012 Transfer of liability to AbbVie ) Restructuring charges Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2013 Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2014 Payments and other adjustments ) ​ ​ ​ ​ ​ Accrued balance at December 31, 2015 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Incentive Stock Programs (Table
Incentive Stock Programs (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Incentive Stock Programs | |
Stock options outstanding and exercisable | Options Outstanding Exercisable Options Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) Shares Weighted Average Exercise Price Weighted Average Remaining Life (Years) December 31, 2014 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Lapsed ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair value assumptions | 2015 2014 2013 Risk-free interest rate % % % Average life of options (years) Volatility % % % Dividend yield % % % |
Debt and Lines of Credit (Table
Debt and Lines of Credit (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt and Lines of Credit | |
Summary of long-term debt | The following is a summary of long-term debt at December 31: ( in millions ) 2015 2014 5.125% Notes, due 2019 $ $ 4.125% Notes, due 2020 2.00% Notes, due 2020 — 2.55% Notes, due 2022 — 2.95% Notes, due 2025 — 6.15% Notes, due 2037 6.0% Notes, due 2039 5.3% Notes, due 2040 Other, including fair value adjustments relating to interest rate hedge contracts designated as fair value hedges (a) ​ ​ ​ ​ ​ ​ ​ ​ Total, net of current maturities Current maturities of long-term debt ​ ​ ​ ​ ​ ​ ​ ​ Total carrying amount $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) In 2015 and 2014, balances also include debt issuance costs in accordance with ASU 2015-03, which was adopted in 2015. Prior to the adoption of ASU 2015-03, debt issuance costs were classified on the balance sheet as assets within Deferred Income Taxes and Other Assets. |
Financial Instruments, Deriva37
Financial Instruments, Derivatives and Fair Value Measures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Financial Instruments, Derivatives and Fair Value Measures | |
Summary of the amounts and location of certain derivative financial instruments | Fair Value — Assets Fair Value — Liabilities 2015 2014 Balance Sheet Caption 2015 2014 Balance Sheet Caption (in millions) Interest rate swaps designated as fair value hedges $ $ Deferred income taxes and other assets $ — $ — Post-employment obligations and other long-term liabilities Foreign currency forward exchange contracts — Hedging instruments Other prepaid expenses and receivables — Other accrued liabilities Others not designated as hedges Other prepaid expenses and receivables Other accrued liabilities Debt designated as a hedge of net investment in a foreign subsidiary — — n/a Short-term borrowings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of derivatives gain (loss) in OCI and earnings | Gain (loss) Recognized in Other Comprehensive Income (loss) Income (expense) and Gain (loss) Reclassified into Income 2015 2014 2013 2015 2014 2013 Income Statement Caption (in millions) Foreign currency forward exchange contracts designated as cash flow hedges $ $ $ $ $ $ Cost of products sold Debt designated as a hedge of net investment in a foreign subsidiary — — — n/a Interest rate swaps designated as fair value hedges n/a n/a n/a ) Interest expense Foreign currency forward exchange contracts not designated as hedges n/a n/a n/a Net foreign exchange (gain) loss |
Schedule of carrying values and fair values of certain financial instruments | 2015 2014 Carrying Value Fair Value Carrying Value Fair Value (in millions) Long-term Investment Securities: Equity securities $ $ $ $ Other Total Long-term Debt ) ) ) ) Foreign Currency Forward Exchange Contracts: Receivable position (Payable) position ) ) ) ) Interest Rate Hedge Contracts: Receivable position |
Schedule of assets and liabilities measured at fair value on a recurring basis | Basis of Fair Value Measurement Outstanding Balances Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (in millions) December 31, 2015: Equity securities $ $ $ — $ — Interest rate swap financial instruments — — Foreign currency forward exchange contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of hedged long-term debt $ $ — $ $ — Foreign currency forward exchange contracts — — Contingent consideration related to business combinations — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014: Equity securities $ $ $ — $ — Interest rate swap financial instruments — — Foreign currency forward exchange contracts — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value of hedged long-term debt $ $ — $ $ — Foreign currency forward exchange contracts — — Contingent consideration related to business combinations — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Liabilities $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Post-Employment Benefits (Table
Post-Employment Benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Post-Employment Benefits | |
Schedule of aggregate accumulated benefit obligations, projected benefit obligations and aggregate plan assets for plans whose accumulated benefit obligation exceeded plan assets | Defined Benefit Plans Medical and Dental Plans (in millions) 2015 2014 2015 2014 Projected benefit obligations, January 1 $ $ $ $ Service cost — benefits earned during the year Interest cost on projected benefit obligations (Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs ) ) Benefits paid ) ) ) ) Business dispositions ) — — — Other, including foreign currency translation ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations, December 31 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at fair value, January 1 $ $ $ $ Actual return (loss) on plans' assets ) ) Company contributions Benefits paid ) ) ) ) Business dispositions ) — — — Other, including foreign currency translation ) ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plan assets at fair value, December 31 $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligations greater than plan assets, December 31 $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term assets $ $ $ — $ — Short-term liabilities ) ) ) ) Long-term liabilities ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net liability $ ) $ ) $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Recognized in Accumulated Other Comprehensive Income (loss): Actuarial losses, net $ $ $ $ Prior service cost (credits) — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of plans where the accumulated benefit obligations exceeded plan assets the aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets | (in millions) 2015 2014 Accumulated benefit obligation $ $ Projected benefit obligation Fair value of plan assets |
The components of the net periodic benefit cost for the entity's major defined benefit plans and post-employment medical and dental benefit plans | Defined Benefit Plans Medical and Dental Plans 2015 2014 2013 2015 2014 2013 (in millions) Service cost — benefits earned during the year $ $ $ $ $ $ Interest cost on projected benefit obligations Expected return on plans' assets ) ) ) ) ) ) Amortization of actuarial losses Amortization of prior service cost (credits) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total cost Less: Discontinued operations ) ) ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cost — continuing operations $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Weighted-average assumptions used to determine benefit obligations and net cost for defined benefit plans and medical and dental plans | The weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows: 2015 2014 2013 Discount rate % % % Expected aggregate average long-term change in compensation % % % The weighted average assumptions used to determine the net cost for defined benefit plans and medical and dental plans are as follows: 2015 2014 2013 Discount rate % % % Expected return on plan assets % % % Expected aggregate average long-term change in compensation % % % |
Assumed health care cost trend rates | 2015 2014 2013 Health care cost trend rate assumed for the next year % % % Rate that the cost trend rate gradually declines to % % % Year that rate reaches the assumed ultimate rate |
Bases used to measure defined benefit plans' assets at fair value | Basis of Fair Value Measurement Outstanding Balances Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs (in millions) December 31, 2015: Equities: U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities: U.S. government securities (d) — Corporate debt instruments (e) Non-U.S. government securities (f) Other (g) — Absolute return funds (h) Commodities (i) Other (j) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014: Equities: U.S. large cap (a) $ $ $ $ — U.S. mid cap (b) — International (c) — Fixed income securities: U.S. government securities (d) — Corporate debt instruments (e) — Non-U.S. government securities (f) — Other (g) — Absolute return funds (h) Commodities (i) Other (j) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) A mix of index funds that track the S&P 500 (35 percent in 2015 and 50 percent in 2014) and separate actively managed equity accounts that are benchmarked to the Russell 1000 (65 percent in 2015 and 50 percent in 2014). (b) A mix of index funds (80 percent in 2015 and 70 percent in 2014) and separate actively managed equity accounts (20 percent in 2015 and 30 percent in 2014) that track or are benchmarked to the S&P 400 midcap index. (c) A mix of index funds (30 percent in 2015 and 20 percent in 2014) and separate actively managed pooled investment funds (70 percent in 2015 and 80 percent in 2014) that track or are benchmarked to the MSCI EAFE and MSCI emerging market indices. (d) A mix of index funds that track the Barclays U.S. Gov't Aggregate (70 percent in 2015 and 65 percent in 2014) and separate actively managed accounts (30 percent in 2015 and 35 percent in 2014) that are benchmarked to Barclays U.S. Long Gov't/Corp Index or the Barclays Global Aggregate. (e) A mix of index funds that track the Barclays U.S. Gov't Aggregate (10 percent in 2015 and 15 percent in 2014) and separate actively managed accounts (90 percent in 2015 and 85 percent in 2014) that are benchmarked to Barclays U.S. Long Gov't/Corp Index or the Barclays Global Aggregate. (f) Primarily United Kingdom, Japan, Netherlands and Irish government-issued bonds. (g) Primarily mortgage backed securities (40 percent in 2015 and 2014) and an actively managed, diversified fixed income vehicle benchmarked to the one-month Libor / Euribor (60 percent in 2015 and 2014). (h) Primarily funds invested by managers that have a global mandate with the flexibility to allocate capital broadly across a wide range of asset classes and strategies including, but not limited to equities, fixed income, commodities, interest rate futures, currencies and other securities to outperform an agreed upon benchmark with specific return and volatility targets. (i) Primarily investments in liquid commodity future contracts and private energy funds. (j) Primarily cash and cash equivalents (50 percent in 2015 and 75 percent in 2014) and investment in private equity funds (50 percent in 2015 and 25 percent in 2014). |
Change in the value of assets that are measured using significant unobservable inputs | 2015 2014 (in millions) January 1 $ $ Actual return on plan assets: Assets on hand at year end ) Assets sold during the year Purchases, sales and settlements, net ​ ​ ​ ​ ​ ​ ​ ​ December 31 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Benefit payments expected to be paid to participants | (in millions) Defined Benefit Plans Medical and Dental Plans 2016 $ $ 2017 2018 2019 2020 2021 to 2025 |
Taxes on Earnings from Contin39
Taxes on Earnings from Continuing Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Taxes on Earnings from Continuing Operations | |
Earnings from continuing operations before taxes | (in millions) 2015 2014 2013 Earnings From Continuing Operations Before Taxes: Domestic $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Components of Income Tax Expense (Benefit), Continuing Operations | (in millions) 2015 2014 2013 Taxes on Earnings (Losses) From Continuing Operations: Current: Domestic $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred: Domestic ) Foreign ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reconciliation of income taxes at the U.S. federal statutory rate to income tax expense (benefit) | 2015 2014 2013 Statutory tax rate on earnings from continuing operations % % % Impact of foreign operations ) ) Resolution of certain tax positions pertaining to prior years — ) ) Effect of retroactive legislation — — ) State taxes, net of federal benefit ) Federal tax cost on sale of Mylan N.V. shares — — All other, net ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effective tax rate on earnings from continuing operations % % % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of net deferred tax assets (liabilities) | (in millions) 2015 2014 Deferred tax assets: Compensation and employee benefits $ $ Other, primarily reserves not currently deductible, and NOL's and credit carryforwards Trade receivable reserves Inventory reserves Deferred intercompany profit State income taxes ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: Depreciation ) ) Unremitted earnings of foreign subsidiaries ) ) Other, primarily the excess of book basis over tax basis of intangible assets ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Total net deferred tax assets $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reconciliation of unrecognized tax benefits for the period | (in millions) 2015 2014 January 1 $ $ Increase due to current year tax positions Increase due to prior year tax positions Decrease due to prior year tax positions ) ) Settlements ) ) ​ ​ ​ ​ ​ ​ ​ ​ December 31 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Segment Information and Geograp
Segment Information and Geographical Area Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Schedule of net sales by product type | Net Sales to External Customers (a) Operating Earnings (a) (in millions) 2015 2014 2013 2015 2014 2013 Established Pharmaceuticals $ $ $ $ $ $ Nutritionals Diagnostics Vascular ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Reportable Segments $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (a) Net sales and operating earnings were unfavorably affected by the relatively stronger U.S. dollar in 2015, 2014 and 2013. |
Schedule of reconciliation of operating earnings by segment | 2015 2014 2013 (in millions) Total Reportable Segment Operating Earnings $ $ $ Corporate functions and benefit plans costs ) ) ) Non-reportable segments Net interest expense ) ) ) Net loss on extinguishment of debt — ) — Share-based compensation ) ) ) Amortization of intangible assets ) ) ) Other, net (b) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings from Continuing Operations before Taxes $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (b) Other, net includes: charges for restructuring actions and other cost reduction initiatives of approximately $310 million in 2015, $435 million in 2014 and $350 million in 2013. 2015 includes a $207 million pre-tax gain on the sale of a portion of the Mylan N.V. shares. |
Schedule of information about long-lived assets by segment | Depreciation (c) Additions to Long-term Assets Total Assets (in millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013 Established Pharmaceuticals $ $ $ $ $ $ $ $ $ Nutritionals Diagnostics Vascular ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Reportable Segments $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (c) Amounts in Other for years 2014 and 2013 include depreciation related to discontinued operations. |
Schedule of reconciliation of total assets by segment | 2015 2014 2013 (in millions) Total Reportable Segment Assets $ $ $ Cash and investments Non-reportable segments Goodwill and intangible assets (d) All other (d) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (d) Goodwill and intangible assets related to developed markets established pharmaceuticals and animal health are included in the Goodwill and intangible assets line in 2013 and All other line in 2014. |
Schedule of segment and geographic area information | Net Sales to External Customers (e) 2015 2014 2013 (in millions) United States $ $ $ China India Germany Japan The Netherlands Switzerland Russia United Kingdom Canada Colombia Italy Brazil France All Other Countries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (e) Sales by country are based on the country that sold the product. |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Results (Unaudited) | |
Quarterly Results (Unaudited) | (in millions except per share data) 2015 2014 First Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low Second Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low Third Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low Fourth Quarter Continuing Operations: Net Sales $ $ Gross Profit Earnings from Continuing Operations Basic Earnings per Common Share Diluted Earnings per Common Share Net Earnings Basic Earnings Per Common Share (a) Diluted Earnings Per Common Share (a) Market Price Per Share-High Market Price Per Share-Low (a) The sum of the four quarters of earnings per share for 2015 and 2014 may not add to the full year earnings per share amount due to rounding and/or the use of quarter-to-date weighted average shares to calculate the earnings per share amount in each respective quarter. |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Income Taxes (Details) - Accounting Standards Update 2015-17 $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Other assets | |
INCOME TAXES | |
Approximate increase in deferred income taxes and other assets | $ 1,700 |
Current liabilities | |
INCOME TAXES | |
Decrease in other accrued liabilities within total current liabilities | 65 |
Post-employment obligations and other long-term liabilities | |
INCOME TAXES | |
Increase in post-employment obligations and other long-term liabilities | $ 12 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Details 2) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
EARNINGS PER SHARE | |||
Earnings from continuing operations allocated to common shares | $ 2,595 | $ 1,713 | $ 1,979 |
Net earnings allocated to common shares | $ 4,403 | $ 2,273 | $ 2,558 |
PENSION AND POST EMPLOYMENT BENEFITS | |||
Amortization period of differences Between the expected long-term return on plan assets and the actual return | 5 years | ||
Model used to derive fair value | discounted cash flow model or Black-Scholes model | ||
CASH, CASH EQUIVALENTS AND INVESTMENTS | |||
Investments in two publicly traded companies | $ 104 | ||
No Of Publicly Traded Companies | item | 2 | ||
Buildings | Minimum | |||
Property and equipment: | |||
Estimated Useful Lives | 10 years | ||
Buildings | Maximum | |||
Property and equipment: | |||
Estimated Useful Lives | 50 years | ||
Buildings | Average | |||
Property and equipment: | |||
Estimated Useful Lives | 27 years | ||
Equipment | Minimum | |||
Property and equipment: | |||
Estimated Useful Lives | 3 years | ||
Equipment | Maximum | |||
Property and equipment: | |||
Estimated Useful Lives | 20 years | ||
Equipment | Average | |||
Property and equipment: | |||
Estimated Useful Lives | 11 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Details 3) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Trade receivables | Italy, Spain, Greece and Portugal | ||
Concentration of Risk | ||
Trade receivables by principal customers (as a percent) | 7.00% | 9.00% |
Separation of AbbVie Inc. (Deta
Separation of AbbVie Inc. (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Additional disclosures | |||
Earnings from discontinued operations, net tax benefits | $ 1,817 | $ 563 | $ 588 |
AbbVie | |||
Financial information for discontinued operations | |||
Term by which the transition services agreement can be extended | 1 year | ||
AbbVie | Maximum | |||
Financial information for discontinued operations | |||
Term for which transition services may be provided | 24 months | ||
Discontinued Operations | AbbVie | |||
Additional disclosures | |||
Cash and trade accounts receivable | $ 54 | ||
Inventories | 43 | ||
Other assets | 10 | ||
Trade accounts payable and accrued liabilities | 373 | ||
Obligation to transfer the net assets held for disposition included in other current liabilities | $ 266 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) shares in Thousands, $ in Millions | Feb. 27, 2015 | Feb. 10, 2015 | Apr. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
After Tax Gain | $ 1,752 | ||||
Gain on sale of Mylan shares | 207 | ||||
Proceeds from the sale of Mylan N.V. shares | 2,290 | ||||
Current assets held for disposition | 105 | $ 892 | |||
Current liabilities held for disposition | $ 373 | 680 | |||
Developed markets branded generics pharmaceuticals business | |||||
Value of shares received for sale of generics pharmaceuticals business to Mylan Inc | $ 5,770 | ||||
After Tax Gain | $ 1,600 | ||||
Period of notice require to terminate manufacturing supply of products | 2 years | ||||
Developed markets branded generics pharmaceuticals business | Minimum | |||||
Period for providing manufacturing supply of products | 3 years | ||||
Developed markets branded generics pharmaceuticals business | Maximum | |||||
Period of transition services | 2 years | ||||
Period for providing manufacturing supply of products | 10 years | ||||
Developed markets generics pharmaceuticals and animal health business | |||||
After Tax Gain | $ 1,752 | ||||
Cash and Trade accounts receivables, net | 54 | 501 | |||
Total inventories | 43 | 254 | |||
Prepaid expenses and other receivables | 8 | 137 | |||
Current assets held for disposition | 105 | 892 | |||
Net property and equipment | 1 | 125 | |||
Intangible assets, net of amortization | 804 | ||||
Goodwill | 950 | ||||
Deferred income taxes and other assets | 1 | 55 | |||
Non-current assets held for disposition | 2 | 1,934 | |||
Total assets held for disposition | 107 | 2,826 | |||
Trade accounts payable | 359 | 423 | |||
Salaries, wages, commissions and other accrued liabilities | 14 | 257 | |||
Current liabilities held for disposition | 373 | 680 | |||
Post-employment obligations, deferred income taxes and other long-term liabilities | 108 | ||||
Total liabilities held for disposition | $ 373 | $ 788 | |||
Animal Health Business | |||||
After Tax Gain | $ 130 | ||||
Proceeds from the disposition of business | $ 230 | ||||
Mylan | |||||
Number of shares received for sale of generics pharmaceuticals business to Mylan Inc | 110,000 | ||||
Number of shares in investment sold | 40,250 | ||||
Mylan | Developed markets branded generics pharmaceuticals business | |||||
Number of shares received for sale of generics pharmaceuticals business to Mylan Inc | 110,000 | 110,000 | |||
Number of shares in investment sold | 40,250 | ||||
Gain on sale of Mylan shares | $ 207 | ||||
Mylan NV | |||||
Ownership interest (as a percent) | 14.00% | ||||
Mylan NV | Developed markets branded generics pharmaceuticals business | |||||
Percentage of shares received for sale of generics pharmaceuticals business to Mylan Inc | 22.00% |
Discontinued Operations (Deta47
Discontinued Operations (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Net sales | $ 256 | $ 2,076 | $ 2,191 |
Earnings Before Tax | 13 | 505 | 480 |
Income Tax Expense (Benefit) | 52 | 58 | 108 |
Net Earnings | 65 | 563 | 588 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax [Abstract] | |||
Pretax Gain | 2,840 | ||
After Tax Gain | 1,752 | ||
Developed markets generics pharmaceuticals and animal health business | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Net sales | 256 | 2,076 | 2,191 |
Earnings Before Tax | 13 | 505 | 480 |
Net Earnings | 62 | 397 | 395 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax [Abstract] | |||
Pretax Gain | 2,840 | ||
Tax Expenses from discontinued operations | 1,088 | ||
After Tax Gain | 1,752 | ||
Developed markets branded pharmaceuticals business | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Tax benefit related to the resolution of various tax positions related to prior years | (48) | ||
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax [Abstract] | |||
Tax Expenses from discontinued operations | 667 | ||
AbbVie | |||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | |||
Net Earnings | $ 3 | 166 | 193 |
Tax benefit related to the resolution of various tax positions related to prior years | $ (166) | $ (193) |
Supplemental Financial Inform48
Supplemental Financial Information (Details) shares in Thousands, $ in Millions | Feb. 17, 2016USD ($) | Feb. 27, 2015shares | Apr. 30, 2015shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Component of investments | ||||||
Investments | $ 4,041 | $ 229 | ||||
Gain on sale of Mylan shares | 207 | |||||
Decrease in fair value of contingent consideration | 79 | |||||
Proceeds from the sale of Mylan N.V. shares | 2,290 | |||||
Net unrecognized tax benefits | 1,438 | 1,403 | $ 1,965 | |||
Contingent consideration | 450 | |||||
Pre-tax income | 3,183 | 2,518 | $ 2,041 | |||
Revaluation of Abbott net monetary assets | 440 | |||||
Net loss on extinguishment of debt | (18) | |||||
Redemption amount | 500 | |||||
Other Accrued Liabilities: | ||||||
Accrued rebates payable to government agencies | 140 | 88 | ||||
Accrued other rebates | 301 | 239 | ||||
All other | 2,602 | 2,551 | ||||
Total | 3,043 | 2,878 | ||||
Accrued wholesaler chargeback rebates | 170 | 158 | ||||
Post-employment Obligations and Other Long-term Liabilities: | ||||||
Defined benefit pension plans and post-employment medical and dental plans for significant plans | 2,241 | 2,875 | ||||
Deferred income taxes | 808 | 872 | ||||
All other | 1,815 | 1,853 | ||||
Total | $ 4,864 | 5,600 | ||||
Venezuela | ||||||
Component of investments | ||||||
Foreign currency loss on remeasurement | $ 165 | |||||
Abbott's total net sales in revenue from operations (as a percent) | 2.00% | |||||
Pre-tax income | $ 200 | 175 | ||||
Venezuelan bolivars | ||||||
Component of investments | ||||||
Official rate to U.S. dollar | 10 | 6.3 | ||||
Remeasurement rate of bolivers per U.S. dollar | 10 | |||||
CENCOEX | ||||||
Component of investments | ||||||
Official rate to U.S. dollar | 6.3 | |||||
SICAD | ||||||
Component of investments | ||||||
Official rate to U.S. dollar | 13.5 | |||||
SIMAD | ||||||
Component of investments | ||||||
Official rate to U.S. dollar | 200 | |||||
Mylan NV | ||||||
Component of investments | ||||||
Number of shares owned | shares | 69,700 | |||||
Market value | $ 3,771 | |||||
Percentage of shares held before sale of generics pharmaceuticals business to Mylan Inc | 22.00% | |||||
Ownership interest (as a percent) | 14.00% | |||||
Mylan | ||||||
Component of investments | ||||||
Number of shares in investment sold | shares | 40,250 | |||||
Number of shares received for sale of generics pharmaceuticals business to Mylan Inc | shares | 110,000 | |||||
Post-employment Obligations and Other Long-term Liabilities: | ||||||
Component of investments | ||||||
Net unrecognized tax benefits | $ 600 | 600 | ||||
Post-employment Obligations and Other Long-term Liabilities: | Piramal Healthcare Limited's Healthcare Solutions | ||||||
Component of investments | ||||||
Contingent consideration | 148 | 220 | ||||
Defined Benefit Plans | ||||||
Post-employment Obligations and Other Long-term Liabilities: | ||||||
Defined benefit pension plans and post-employment medical and dental plans for significant plans | 1,421 | 1,950 | ||||
Medical and Dental Plans | ||||||
Post-employment Obligations and Other Long-term Liabilities: | ||||||
Defined benefit pension plans and post-employment medical and dental plans for significant plans | 820 | 925 | ||||
Equity securities | ||||||
Component of investments | ||||||
Investments | 4,014 | 212 | ||||
Other | ||||||
Component of investments | ||||||
Investments | 27 | $ 17 | ||||
Developed markets branded generics pharmaceuticals business | Mylan | ||||||
Component of investments | ||||||
Gain on sale of Mylan shares | $ 207 | |||||
Number of shares in investment sold | shares | 40,250 | |||||
Number of shares received for sale of generics pharmaceuticals business to Mylan Inc | shares | 110,000 | 110,000 |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other comprehensive income from continuing operations, net of income taxes | |||
Beginning of Year | $ 21,639 | ||
Net current period comprehensive income (loss) | (1,732) | $ (3,041) | $ 572 |
End of Year | 21,326 | 21,639 | |
Accumulated Other Comprehensive Income (Loss) | |||
Other comprehensive income from continuing operations, net of income taxes | |||
Beginning of Year | (5,053) | (2,012) | (3,594) |
Impact of business dispositions | 127 | 1,010 | |
Other comprehensive income (loss) before reclassifications | (1,577) | (3,066) | |
(Income) loss amounts reclassified from accumulated other comprehensive income | (155) | 25 | |
Net current period comprehensive income (loss) | (1,732) | (3,041) | 572 |
End of Year | (6,658) | (5,053) | (2,012) |
Cumulative Foreign Currency Translation Adjustments | |||
Other comprehensive income from continuing operations, net of income taxes | |||
Beginning of Year | (2,924) | (718) | |
Impact of business dispositions | 108 | ||
Other comprehensive income (loss) before reclassifications | (2,013) | (2,206) | |
Net current period comprehensive income (loss) | (2,013) | (2,206) | |
End of Year | (4,829) | (2,924) | (718) |
Net Actuarial Losses and Prior Service Costs and Credits | |||
Other comprehensive income from continuing operations, net of income taxes | |||
Beginning of Year | (2,229) | (1,312) | |
Impact of business dispositions | 19 | ||
Other comprehensive income (loss) before reclassifications | 145 | (970) | |
(Income) loss amounts reclassified from accumulated other comprehensive income | 107 | 53 | |
Net current period comprehensive income (loss) | 252 | (917) | |
End of Year | (1,958) | (2,229) | (1,312) |
Cumulative Unrealized Gains on Marketable Equity Securities | |||
Other comprehensive income from continuing operations, net of income taxes | |||
Beginning of Year | 1 | 13 | |
Other comprehensive income (loss) before reclassifications | 202 | 4 | |
(Income) loss amounts reclassified from accumulated other comprehensive income | (138) | (16) | |
Net current period comprehensive income (loss) | 64 | (12) | |
End of Year | 65 | 1 | 13 |
Cumulative Gains on Derivative Instruments Designated as Cash Flow Hedges | |||
Other comprehensive income from continuing operations, net of income taxes | |||
Beginning of Year | 99 | 5 | |
Other comprehensive income (loss) before reclassifications | 89 | 106 | |
(Income) loss amounts reclassified from accumulated other comprehensive income | (124) | (12) | |
Net current period comprehensive income (loss) | (35) | 94 | |
End of Year | $ 64 | $ 99 | $ 5 |
Business Acquisitions (Details)
Business Acquisitions (Details) - USD ($) $ in Millions | Sep. 26, 2014 | Aug. 31, 2015 | Aug. 31, 2013 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Business acquisitions | ||||||||||||||
Net cash paid, net of cash on hand of acquired company | $ 235 | $ 3,317 | $ 580 | |||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | $ 9,638 | $ 10,067 | $ 9,638 | 10,067 | ||||||||||
Amortization period of acquired intangible assets | 13 years | |||||||||||||
Contingent consideration | 450 | $ 450 | ||||||||||||
Net Sales | 5,188 | $ 5,150 | $ 5,170 | $ 4,897 | 5,356 | $ 5,079 | $ 5,057 | $ 4,755 | $ 20,405 | 20,247 | $ 19,657 | |||
Minimum | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Amortization period of acquired intangible assets | 2 years | |||||||||||||
Maximum | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Amortization period of acquired intangible assets | 20 years | |||||||||||||
Established Pharmaceutical Products | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | 2,900 | $ 2,900 | ||||||||||||
Nutritional Products | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | 286 | 286 | ||||||||||||
Diagnostic Products | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | 450 | 450 | ||||||||||||
Vascular Products | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | 2,900 | 2,900 | ||||||||||||
Tendyne Holdings, Inc. | ||||||||||||||
Business acquisitions | ||||||||||||||
Cash paid for business acquisition | $ 225 | |||||||||||||
Additional payments upon completion of certain development, regulatory and sales milestones | 150 | |||||||||||||
Allocation of the fair value | ||||||||||||||
Acquired intangible assets, non-deductible | $ 220 | 220 | ||||||||||||
Goodwill, non-deductible | 142 | |||||||||||||
Deferred income taxes recorded at acquisition | (80) | |||||||||||||
Other long-term assets | 13 | |||||||||||||
Non-deductible acquired in-process research and development | 220 | |||||||||||||
Contingent consideration | $ 70 | |||||||||||||
CFR Pharmaceuticals SA | ||||||||||||||
Business acquisitions | ||||||||||||||
Cash paid for business acquisition | $ 2,900 | |||||||||||||
Net cash paid, net of cash on hand of acquired company | 2,800 | |||||||||||||
Assumed debt | 570 | |||||||||||||
Acquisition cost | $ 3,400 | |||||||||||||
Percentage of voting interest acquired | 99.90% | |||||||||||||
Fair value of the non-controlling interest at the acquisition date | $ 3 | |||||||||||||
Allocation of the fair value | ||||||||||||||
Acquired intangible assets, non-deductible | 1,870 | |||||||||||||
Goodwill, non-deductible | 1,420 | |||||||||||||
Acquired net tangible assets | 30 | |||||||||||||
Deferred income taxes recorded at acquisition | (400) | |||||||||||||
Total final allocation of fair value | 2,920 | |||||||||||||
Cash and cash equivalents | 94 | |||||||||||||
Trade accounts receivable | 180 | |||||||||||||
Inventory | 169 | |||||||||||||
Other current assets | 51 | |||||||||||||
Property and equipment | 210 | |||||||||||||
Other long-term assets | 145 | |||||||||||||
Borrowings | 570 | |||||||||||||
Trade accounts payable and other current liabilities | 240 | |||||||||||||
Other noncurrent liabilities | $ 14 | |||||||||||||
Net Sales | $ 750 | |||||||||||||
CFR Pharmaceuticals SA | Minimum | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Amortization period of acquired intangible assets | 12 years | |||||||||||||
CFR Pharmaceuticals SA | Maximum | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Amortization period of acquired intangible assets | 16 years | |||||||||||||
CFR Pharmaceuticals SA | Average | ||||||||||||||
Allocation of the fair value | ||||||||||||||
Amortization period of acquired intangible assets | 15 years | |||||||||||||
Veropharm | ||||||||||||||
Business acquisitions | ||||||||||||||
Cash paid for business acquisition | 315 | |||||||||||||
Subsequent payment related to working capital adjustment | 5 | 5 | ||||||||||||
Assumed debt | $ 90 | 90 | ||||||||||||
Acquisition cost | $ 415 | |||||||||||||
Percentage of voting interest acquired | 100.00% | 98.00% | 100.00% | 98.00% | ||||||||||
Fair value of the non-controlling interest at the acquisition date | $ 5 | $ 5 | ||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | 140 | 140 | ||||||||||||
Deferred income taxes recorded at acquisition | (25) | $ (25) | ||||||||||||
Amortization period of acquired intangible assets | 16 years | |||||||||||||
Trade accounts receivable | 45 | $ 45 | ||||||||||||
Inventory | 25 | 25 | ||||||||||||
Property and equipment | 150 | 150 | ||||||||||||
Other current liabilities | 20 | 20 | ||||||||||||
Non-deductible definite-lived intangible assets | 100 | 100 | ||||||||||||
Topera | ||||||||||||||
Business acquisitions | ||||||||||||||
Cash paid for business acquisition | 250 | |||||||||||||
Additional payments upon completion of certain development, regulatory and sales milestones | 300 | 300 | ||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | 145 | 145 | ||||||||||||
Deferred income taxes recorded at acquisition | (80) | $ (80) | ||||||||||||
Amortization period of acquired intangible assets | 17 years | |||||||||||||
Non-deductible acquired in-process research and development | 60 | $ 60 | ||||||||||||
Non-deductible definite-lived intangible assets | 215 | 215 | ||||||||||||
Contingent consideration | $ 90 | $ 90 | ||||||||||||
IDEV Technologies | ||||||||||||||
Business acquisitions | ||||||||||||||
Cash paid for business acquisition | $ 310 | |||||||||||||
Percentage of voting interest acquired | 100.00% | |||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | $ 112 | |||||||||||||
Deferred income taxes recorded at acquisition | $ (47) | |||||||||||||
Amortization period of acquired intangible assets | 11 years | |||||||||||||
Non-deductible acquired in-process research and development | $ 170 | |||||||||||||
Non-deductible definite-lived intangible assets | 66 | |||||||||||||
OptiMedica | ||||||||||||||
Business acquisitions | ||||||||||||||
Cash paid for business acquisition | 260 | |||||||||||||
Additional payments upon completion of certain development, regulatory and sales milestones | $ 150 | |||||||||||||
Percentage of voting interest acquired | 100.00% | |||||||||||||
Allocation of the fair value | ||||||||||||||
Goodwill, non-deductible | $ 130 | |||||||||||||
Deferred income taxes recorded at acquisition | $ (49) | |||||||||||||
Amortization period of acquired intangible assets | 18 years | |||||||||||||
Non-deductible acquired in-process research and development | $ 60 | |||||||||||||
Non-deductible definite-lived intangible assets | 160 | |||||||||||||
Contingent consideration | $ 70 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Aug. 31, 2015 | |
Goodwill and intangible assets information | |||
Goodwill | $ 9,638 | $ 10,067 | |
Goodwill moved to non-current assets held for disposition | 950 | ||
Change in goodwill due to foreign currency translation and other adjustments | 454 | 566 | |
Purchase price allocation adjustments associated with a decrease in goodwill | (117) | ||
CFR Pharmaceuticals, Verapharm and Topera | |||
Goodwill and intangible assets information | |||
Goodwill on acquisition | 1,800 | ||
Other Acquisition Member | |||
Goodwill and intangible assets information | |||
Purchase price allocation adjustments associated with a decrease in goodwill | $ (30) | ||
Tendyne Holdings, Inc. | |||
Goodwill and intangible assets information | |||
Goodwill on acquisition | 142 | ||
Goodwill | $ 142 | ||
Established Pharmaceutical Products | |||
Goodwill and intangible assets information | |||
Goodwill | 2,900 | ||
Nutritional Products | |||
Goodwill and intangible assets information | |||
Goodwill | 286 | ||
Diagnostic Products | |||
Goodwill and intangible assets information | |||
Goodwill | 450 | ||
Vascular Products | |||
Goodwill and intangible assets information | |||
Goodwill | $ 2,900 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets | ||
Gross amount of amortizable intangible assets | $ 10,800 | $ 11,000 |
Accumulated amortization of intangible assets | 5,700 | 4,900 |
Indefinite-lived intangible assets related to in-process research and development acquired in a business combination | 419 | 134 |
Change in intangible assets due to foreign currency translation and other adjustments | (251) | (396) |
Net intangible assets held for disposition | 804 | |
Estimated annual amortization expense, intangible assets, 2016 | 580 | |
Estimated annual amortization expense, intangible assets, 2017 | 560 | |
Estimated annual amortization expense, intangible assets, 2018 | 520 | |
Estimated annual amortization expense, intangible assets, 2019 | 490 | |
Estimated annual amortization expense, intangible assets, 2020 | $ 480 | |
Average amortization period, intangible assets | 13 years | |
Minimum | ||
Goodwill and Intangible Assets | ||
Average amortization period, intangible assets | 2 years | |
Maximum | ||
Goodwill and Intangible Assets | ||
Average amortization period, intangible assets | 20 years | |
CFR Pharmaceuticals, Verapharm and Topera | ||
Goodwill and Intangible Assets | ||
Increased intangible assets | $ 1,800 | |
Tendyne Holdings, Inc. | ||
Goodwill and Intangible Assets | ||
Increased intangible assets | $ 220 |
Restructuring Plans (Details)
Restructuring Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restructuring Plan 2015 and 2014 | ||||
Restructuring costs | ||||
Employee related severance and other charges | $ 95 | $ 164 | ||
Restructuring reserve | 118 | 118 | ||
Restructuring reserve activity | ||||
Restructuring reserve, beginning balance of the period | 118 | |||
Restructuring charges | 95 | 164 | ||
Payments and other adjustments | (113) | (46) | ||
Restructuring reserve, ending balance of the period | 100 | 118 | ||
Additional charges for accelerated depreciation | 45 | 39 | ||
Restructuring Plan 2015 and 2014 | Research and development | ||||
Restructuring reserve activity | ||||
Restructuring charges | 34 | 53 | ||
Restructuring Plan 2015 and 2014 | Cost of products sold | ||||
Restructuring reserve activity | ||||
Restructuring charges | 18 | 20 | ||
Restructuring Plan 2015 and 2014 | Selling, general and administrative expense | ||||
Restructuring reserve activity | ||||
Restructuring charges | 43 | 91 | ||
Restructuring Plan From 2013 to 2015 | ||||
Restructuring costs | ||||
Employee related severance and other charges | 66 | 125 | $ 78 | |
Restructuring reserve | 135 | 148 | 148 | |
Restructuring reserve activity | ||||
Restructuring reserve, beginning balance of the period | 135 | 148 | ||
Restructuring charges | 66 | 125 | 78 | $ 167 |
Payments and other adjustments | (113) | (138) | (97) | |
Restructuring reserve, ending balance of the period | 88 | 135 | 148 | |
Additional charges for accelerated depreciation | 4 | |||
Restructuring Plan From 2013 to 2015 | Research and development | ||||
Restructuring reserve activity | ||||
Restructuring charges | 2 | 6 | ||
Restructuring Plan From 2013 to 2015 | Cost of products sold | ||||
Restructuring reserve activity | ||||
Restructuring charges | 9 | 7 | 14 | |
Restructuring Plan From 2013 to 2015 | Selling, general and administrative expense | ||||
Restructuring reserve activity | ||||
Restructuring charges | 55 | 112 | 32 | |
Restructuring Plan 2013 and Prior Years | ||||
Restructuring costs | ||||
Employee related severance and other charges | 11 | |||
Restructuring reserve | 39 | 61 | 185 | 256 |
Restructuring reserve activity | ||||
Restructuring reserve, beginning balance of the period | 39 | 61 | 185 | 256 |
Restructuring charges | 11 | |||
Payments and other adjustments | (28) | (22) | (73) | (71) |
Transfer of liability to AbbVie | (62) | |||
Restructuring reserve, ending balance of the period | $ 11 | $ 39 | 61 | $ 185 |
Additional charges for accelerated depreciation | 41 | |||
Developed markets branded generics pharmaceuticals business | ||||
Restructuring reserve activity | ||||
Restructuring charges | $ 32 |
Incentive Stock Programs (Detai
Incentive Stock Programs (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Incentive stock programs, shares reserved for future grants | 87,000,000 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Grants in period, stock options (in shares) | 5,577,553 | ||
Award vesting period | 3 years | ||
Stock options outstanding, number of shares | 34,562,557 | 36,796,700 | |
Stock options outstanding, weighted-average exercise price (in dollars per share) | $ 31.57 | $ 27.83 | |
Stock options outstanding, weighted-average remaining life | 4 years 6 months | 4 years 1 month 6 days | |
Stock options outstanding during the period | |||
Stock options granted during the period, weighted-average exercise price (in dollars per share) | $ 47.16 | ||
Stock options exercised during the period (in shares) | (7,557,745) | ||
Stock options exercised during the period, weighted-average exercise price (in dollars per share) | $ 24.68 | ||
Stock options lapsed during the period (in shares) | (253,951) | ||
Stock options lapsed during the period, weighted-average exercise price (in dollars per share) | $ 36.19 | ||
Exercisable options, number of shares | 25,119,505 | 29,276,499 | |
Exercisable options, weighted-average exercise price (in dollars per share) | $ 27.18 | $ 25.60 | |
Exercisable options, weighted-average remaining life | 3 years | 3 years | |
Aggregate intrinsic value of options outstanding | $ 475 | ||
Aggregate intrinsic value of options exercisable | 447 | ||
Total intrinsic value of options exercised | 167 | $ 152 | $ 120 |
Total unrecognized compensation cost | $ 169 | ||
Total unrecognized compensation cost, recognition period | 3 years | ||
Allocated Share-based Compensation Expense | $ 291 | 239 | 254 |
Tax benefit recognized in total non-cash compensation expense | $ 98 | $ 79 | $ 82 |
Fair value of an option granted (in dollars per share) | $ 6.67 | $ 6.39 | $ 5.77 |
Fair value assumptions: | |||
Risk-free interest rate (as a percent) | 1.80% | 1.90% | 1.10% |
Average life of options | 6 years | 6 years | 6 years |
Volatility (as a percent) | 17.00% | 20.00% | 20.00% |
Dividend yield (as a percent) | 2.00% | 2.20% | 1.60% |
Stock options | 2009 Incentive Stock Program | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Grants in period, stock options (in shares) | 5,577,553 | ||
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Maximum term of option | 10 years | ||
Restricted stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Portion of awards vesting in any one year for awards that vest over 5 years (as a percent) | 33.00% | ||
For awards with a term of five years, number of years in which no more than one-third of the award vests | 1 year | ||
Restricted stock awards | 2009 Incentive Stock Program | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Grants in period, restricted stock (in shares) | 662,553 | ||
Restricted stock awards | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 3 years | ||
Restricted stock awards | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 5 years | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Award vesting period | 3 years | ||
Number of shares of common stock received for each vested restricted stock unit (in shares) | 1 | ||
Restricted stock units | 2009 Incentive Stock Program | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Awards and units granted during period (in shares) | 5,940,778 | ||
Restricted stock awards and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Awards and units granted during period (in shares) | 6,603,331 | ||
Awards and units outstanding (in shares) | 11,855,327 | 12,671,328 | |
Awards and units outstanding, weighted-average grant-date fair value (in dollars per share) | $ 42.54 | $ 35.48 | |
Awards and units granted during period, weighted-average grant-date fair value (in dollars per share) | $ 46.94 | ||
Awards and units vested during period (in shares) | 6,693,743 | ||
Awards and units vested during period, weighted-average grant-date fair value (in dollars per share) | $ 33.72 | ||
Awards and units lapsed during period (in shares) | 725,589 | ||
Awards and units lapsed during period, weighted-average grant-date fair value (in dollars per share) | $ 40.77 | ||
Fair value of awards and units vested | $ 312 | $ 281 | $ 274 |
Debt and Lines of Credit (Detai
Debt and Lines of Credit (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Debt Instrument | |||
Total, net of current maturities | $ 3,393 | $ 5,871 | |
Current portion of long-term debt | 55 | 3 | |
Total carrying amount | 3,448 | 5,874 | |
Long-term debt issued | $ 2,500 | ||
Net loss on extinguishment of debt | 18 | ||
Extinguishment of long-term debt | 500 | ||
Redemption amount | $ 500 | ||
Principal payments of long-term debt | |||
Principal payments required in 2016 | 3 | ||
Principal payments required in 2017 | 2 | ||
Principal payments required in 2018 | 1 | ||
Principal payments required in 2019 | 900 | ||
Principal payments required in 2020 | 1,300 | ||
Principal payments required in 2021 and thereafter | 3,500 | ||
Unused lines of credit | $ 5,000 | ||
Weighted-average interest rate on short-term borrowings (as a percent) | 0.20% | 0.20% | |
5.125% Notes, due 2019 | |||
Debt Instrument | |||
Total, net of current maturities | $ 947 | $ 947 | |
Interest rate percentage | 5.125% | 5.125% | |
4.125% Notes, due 2020 | |||
Debt Instrument | |||
Total, net of current maturities | $ 597 | $ 597 | |
Interest rate percentage | 4.125% | 4.125% | |
2.00% Notes, due 2020 | |||
Debt Instrument | |||
Total, net of current maturities | $ 750 | ||
Interest rate percentage | 2.00% | ||
2.55% Notes, due 2022 | |||
Debt Instrument | |||
Total, net of current maturities | $ 750 | ||
Interest rate percentage | 2.55% | ||
2.95% Notes, due 2025 | |||
Debt Instrument | |||
Total, net of current maturities | $ 1,000 | ||
Interest rate percentage | 2.95% | ||
6.15% Notes, due 2037 | |||
Debt Instrument | |||
Total, net of current maturities | $ 547 | $ 547 | |
Interest rate percentage | 6.15% | 6.15% | |
6.0% Notes, due 2039 | |||
Debt Instrument | |||
Total, net of current maturities | $ 515 | $ 515 | |
Interest rate percentage | 6.00% | 6.00% | |
5.3% Notes, due 2040 | |||
Debt Instrument | |||
Total, net of current maturities | $ 694 | $ 694 | |
Interest rate percentage | 5.30% | 5.30% | |
Other, including fair value adjustments relating to interest rate hedge contracts designated as fair value hedges | |||
Debt Instrument | |||
Total, net of current maturities | $ 93 | $ 71 | |
Interest rate swaps | |||
Debt Instrument | |||
Notional amount of contracts entered during the period | $ 2,500 | ||
2.00% Senior Notes Due March 15, 2020 | |||
Debt Instrument | |||
Interest rate percentage | 2.00% | ||
Long-term debt issued | $ 750 | ||
2.55% Senior Notes Due March 15, 2022 | |||
Debt Instrument | |||
Interest rate percentage | 2.55% | ||
Long-term debt issued | $ 750 | ||
2.95% Senior Notes Due March 15, 2025 | |||
Debt Instrument | |||
Interest rate percentage | 2.95% | ||
Long-term debt issued | $ 1,000 |
Financial Instruments, Deriva56
Financial Instruments, Derivatives and Fair Value Measures (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Derivative instruments, notional amount and fair value | |||
Fair Value - Assets | $ 295 | $ 358 | |
Fair Value - Liabilities | 541 | 575 | |
Gross unrealized holding gains on available-for-sale equity securities | 171 | 3 | $ 22 |
Designated as hedging instrument | Short-term borrowings | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Liabilities | 439 | 445 | |
Designated as hedging instrument | Short-term borrowings | Net investment hedges | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Liabilities | 439 | 445 | 505 |
Designated as hedging instrument | Interest rate swaps | Fair value hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of cash flow hedge instruments | 4,000 | 1,500 | |
Amount of hedge ineffectiveness recorded in income | 0 | 0 | 0 |
Designated as hedging instrument | Interest rate swaps | Deferred income taxes and other assets | Fair value hedges | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Assets | 116 | 101 | |
Designated as hedging instrument | Foreign currency forward exchange contracts. | Cash flow hedges | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of cash flow hedge instruments | $ 2,400 | 1,500 | |
Minimum length of time over which accumulated gains and losses will be recognized in Cost of products sold | 12 months | ||
Maximum length of time over which accumulated gains and losses will be recognized in Cost of products sold | 18 months | ||
Designated as hedging instrument | Foreign currency forward exchange contracts. | Other prepaid expenses and receivables | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Assets | $ 64 | 107 | |
Designated as hedging instrument | Foreign currency forward exchange contracts. | Other accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Liabilities | 18 | ||
Not designated as hedging instrument | Foreign currency forward exchange contracts. | |||
Derivative instruments, notional amount and fair value | |||
Notional amount of cash flow hedge instruments | 14,000 | 14,100 | $ 13,800 |
Not designated as hedging instrument | Foreign currency forward exchange contracts. | Other prepaid expenses and receivables | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Assets | 115 | 150 | |
Not designated as hedging instrument | Foreign currency forward exchange contracts. | Other accrued liabilities | |||
Derivative instruments, notional amount and fair value | |||
Fair Value - Liabilities | $ 84 | $ 130 |
Financial Instruments, Deriva57
Financial Instruments, Derivatives and Fair Value Measures (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net investment hedges | Designated as hedging instrument | |||
Gain (loss) on derivatives | |||
Gain (loss) Recognized in Other Comprehensive Income (loss) | $ 6 | $ 60 | $ 110 |
Interest rate swaps | Fair value hedges | Designated as hedging instrument | Interest expense | |||
Gain (loss) on derivatives | |||
Gain (loss) Reclassified into Income | 15 | 14 | (98) |
Foreign currency forward exchange contracts. | Not designated as hedging instrument | Net foreign exchange loss (gain) | |||
Gain (loss) on derivatives | |||
Gain (loss) Reclassified into Income | 77 | 122 | 84 |
Foreign currency forward exchange contracts. | Cash flow hedges | Designated as hedging instrument | Cost of products sold | |||
Gain (loss) on derivatives | |||
Gain (loss) Recognized in Other Comprehensive Income (loss) | 91 | 105 | 35 |
Gain (loss) Reclassified into Income | $ 124 | $ 11 | $ 44 |
Financial Instruments, Deriva58
Financial Instruments, Derivatives and Fair Value Measures (Details 3) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value, asset and liability measures | ||
Investments Securities | $ 4,041 | $ 229 |
Foreign currency forward exchange contracts, receivable position | 295 | 358 |
Foreign currency forward exchange contracts, (payable) position | (541) | (575) |
Equity securities | ||
Fair value, asset and liability measures | ||
Investments Securities | 4,014 | 212 |
Carrying value | ||
Fair value, asset and liability measures | ||
Total long-term debt | (5,874) | (3,448) |
Foreign currency forward exchange contracts, receivable position | 179 | 263 |
Foreign currency forward exchange contracts, (payable) position | (102) | (135) |
Interest rate hedge contracts, receivable position | 116 | 101 |
Carrying value | Equity securities | ||
Fair value, asset and liability measures | ||
Investments Securities | 4,014 | 212 |
Carrying value | Other. | ||
Fair value, asset and liability measures | ||
Investments Securities | 27 | 17 |
Fair value | ||
Fair value, asset and liability measures | ||
Total long-term debt | (6,337) | (4,098) |
Foreign currency forward exchange contracts, receivable position | 179 | 263 |
Foreign currency forward exchange contracts, (payable) position | (102) | (135) |
Interest rate hedge contracts, receivable position | 116 | 101 |
Fair value | Equity securities | ||
Fair value, asset and liability measures | ||
Investments Securities | 4,014 | 212 |
Fair value | Other. | ||
Fair value, asset and liability measures | ||
Investments Securities | $ 30 | $ 17 |
Financial Instruments, Deriva59
Financial Instruments, Derivatives and Fair Value Measures (Details 4) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value, asset and liability measures | ||
Fair Value - Assets | $ 295 | $ 358 |
Fair Value - Liabilities | 541 | 575 |
Contingent consideration related to business combinations | 450 | |
Recurring | ||
Fair value, asset and liability measures | ||
Equity securities | 3,780 | 9 |
Interest rate swap derivative financial instruments, assets | 116 | 101 |
Total Assets | 4,075 | 373 |
Fair value of hedged long-term debt | 4,135 | 1,637 |
Contingent consideration related to business combinations | 173 | 243 |
Total Liabilities | 4,410 | 2,015 |
Recurring | Foreign currency forward exchange contracts | ||
Fair value, asset and liability measures | ||
Fair Value - Assets | 179 | 263 |
Fair Value - Liabilities | 102 | 135 |
Recurring | Quoted Prices in Active Markets | ||
Fair value, asset and liability measures | ||
Equity securities | 3,780 | 9 |
Total Assets | 3,780 | 9 |
Recurring | Significant Other Observable Inputs | ||
Fair value, asset and liability measures | ||
Interest rate swap derivative financial instruments, assets | 116 | 101 |
Total Assets | 295 | 364 |
Fair value of hedged long-term debt | 4,135 | 1,637 |
Total Liabilities | 4,237 | 1,772 |
Recurring | Significant Other Observable Inputs | Foreign currency forward exchange contracts | ||
Fair value, asset and liability measures | ||
Fair Value - Assets | 179 | 263 |
Fair Value - Liabilities | 102 | 135 |
Recurring | Significant Unobservable Inputs | ||
Fair value, asset and liability measures | ||
Contingent consideration related to business combinations | 173 | 243 |
Total Liabilities | $ 173 | $ 243 |
Litigation and Environmental 60
Litigation and Environmental Matters (Details) $ in Millions | Dec. 31, 2015USD ($) |
Loss Contingencies | |
Maximum expected cleanup exposure for individual site | $ 4 |
Maximum expected cleanup exposure in aggregate | 10 |
Other legal proceedings and environmental exposures | |
Loss Contingencies | |
Other legal proceedings or environmental exposure, minimum | 35 |
Other legal proceedings or environmental exposure, maximum | 50 |
Recorded reserve balance for legal proceedings and exposures | $ 45 |
Post-Employment Benefits (Detai
Post-Employment Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Plan assets at fair value: | |||
Plan assets at fair value, balance at the beginning of the period | $ 7,239 | ||
Plan assets at fair value, balance at the end of the period | 7,213 | $ 7,239 | |
Projected benefit obligations greater than plan assets | |||
Long-term liabilities | (2,241) | (2,875) | |
Amounts Recognized in Accumulated Other Comprehensive Income (loss): | |||
Accumulated other comprehensive income (loss), net of income taxes | (6,658) | (5,053) | |
Projected benefit obligations | 2,100 | 2,500 | |
Accumulated benefit obligations | 6,900 | 7,300 | |
The aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets | |||
Accumulated benefit obligation | 3,651 | 4,315 | |
Projected benefit obligation | 4,226 | 5,133 | |
Fair value of plan assets | 2,862 | 3,170 | |
A one percentage point increase / (decrease) in the assumed health care cost | |||
Increase in accumulated post employment benefit obligations due to a one percentage point increase in the assumed health care cost | 176 | ||
Decrease in accumulated post employment benefit obligations due to a one percentage point decrease in the assumed health care cost | (144) | ||
Increase in the total of service and interest cost components of net post employment health care cost due to a one percentage point increase in the assumed health care cost | 16 | ||
Decrease in the total of service and interest cost components of net post employment health care cost due to a one percentage point decrease in the assumed health care cost | (12) | ||
Defined Benefit Plans | |||
Defined benefit plan net periodic benefit cost | |||
Service cost - benefits earned during the period | 307 | 269 | $ 303 |
Interest cost on projected benefit obligations | 314 | 317 | 276 |
Expected return on plan assets | (511) | (458) | (396) |
Actuarial loss, net | 184 | 103 | 169 |
Prior service cost (credit) | 1 | 2 | 3 |
Net Cost | 295 | 233 | 355 |
Net amortization of: | |||
Company contributions | 579 | 393 | |
Projected benefit obligations: | |||
Projected benefit obligations, balance at the beginning of the period | 8,345 | 6,432 | |
(Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs | (574) | 1,554 | |
Benefits paid | (230) | (222) | |
Business dispositions | (117) | ||
Other, including foreign currency translation | (225) | (5) | |
Projected benefit obligations, balance at the end of the period | 7,820 | 8,345 | 6,432 |
Plan assets at fair value: | |||
Plan assets at fair value, balance at the beginning of the period | 6,754 | 6,123 | |
Actual return (loss) on plans' assets | (56) | 529 | |
Benefits paid | (230) | (222) | |
Business dispositions | (113) | ||
Other, including foreign currency translation | (162) | (69) | |
Plan assets at fair value, balance at the end of the period | 6,772 | 6,754 | 6,123 |
Projected benefit obligations greater than plan assets | |||
Projected benefit obligations greater than plan assets, December 31 | (1,048) | (1,591) | |
Long-term assets | 390 | 374 | |
Short-term liabilities | (17) | (15) | |
Long-term liabilities | (1,421) | (1,950) | |
Net liability | (1,048) | (1,591) | |
Amounts Recognized in Accumulated Other Comprehensive Income (loss): | |||
Actuarial losses, net | 2,903 | 3,187 | |
Prior service cost (credits) | 1 | ||
Total | 2,903 | 3,188 | |
The aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets | |||
Net actuarial gains and prior service credits | 37 | $ 1,600 | $ 995 |
Pretax amount included in accumulated other comprehensive income (loss), expected to be recognized in the net period benefit cost in 2014 | |||
Pretax amount of actuarial losses expected to recognized in the net periodic benefit cost in 2015 | 131 | ||
Pretax amount of prior service cost (credits) expected to recognized in the net periodic benefit cost in 2015 | $ 0 | ||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 4.30% | 3.90% | 4.90% |
Expected aggregate average long term change in compensation (as a percent) | 4.40% | 4.30% | 5.00% |
Weighted average assumptions used to determine the net cost | |||
Discount rate (as a percent) | 3.90% | 4.90% | 4.20% |
Expected return on plan assets (as a percent) | 7.40% | 7.50% | 7.80% |
Expected aggregate average long-term change in compensation (as a percent) | 4.30% | 4.90% | 5.00% |
Defined Benefit Plans | Discontinued operations | |||
Defined benefit plan net periodic benefit cost | |||
Net Cost | $ (3) | $ (1) | $ (3) |
Defined Benefit Plans | Continuing operations | |||
Defined benefit plan net periodic benefit cost | |||
Net Cost | 292 | 232 | 352 |
Medical and Dental Plans | |||
Defined benefit plan net periodic benefit cost | |||
Service cost - benefits earned during the period | 33 | 33 | 43 |
Interest cost on projected benefit obligations | 52 | 63 | 59 |
Expected return on plan assets | (39) | (40) | (36) |
Actuarial loss, net | 23 | 16 | 34 |
Prior service cost (credit) | (48) | (39) | (35) |
Net Cost | 21 | 33 | 65 |
Net amortization of: | |||
Company contributions | 25 | 41 | |
Projected benefit obligations: | |||
Projected benefit obligations, balance at the beginning of the period | 1,411 | 1,297 | |
(Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs | (166) | 187 | |
Benefits paid | (61) | (57) | |
Other, including foreign currency translation | (7) | (112) | |
Projected benefit obligations, balance at the end of the period | 1,262 | 1,411 | 1,297 |
Plan assets at fair value: | |||
Plan assets at fair value, balance at the beginning of the period | 485 | 462 | |
Actual return (loss) on plans' assets | (14) | 32 | |
Benefits paid | (55) | (50) | |
Plan assets at fair value, balance at the end of the period | 441 | 485 | 462 |
Projected benefit obligations greater than plan assets | |||
Projected benefit obligations greater than plan assets, December 31 | (821) | (926) | |
Short-term liabilities | (1) | (1) | |
Long-term liabilities | (820) | (925) | |
Net liability | (821) | (926) | |
Amounts Recognized in Accumulated Other Comprehensive Income (loss): | |||
Actuarial losses, net | 369 | 509 | |
Prior service cost (credits) | (299) | (348) | |
Total | 70 | 161 | |
The aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets | |||
Net actuarial gains and prior service credits | 116 | $ 57 | |
Net actuarial (gains) losses recognized in other comprehensive income | $ 201 | ||
Pretax amount included in accumulated other comprehensive income (loss), expected to be recognized in the net period benefit cost in 2014 | |||
Pretax amount of actuarial losses expected to recognized in the net periodic benefit cost in 2015 | 45 | ||
Pretax amount of prior service cost (credits) expected to recognized in the net periodic benefit cost in 2015 | $ 22 | ||
Assumed health care cost trend rates | |||
Health care cost trend rate assumed for the next year (as a percent) | 8.00% | 8.00% | 7.00% |
Rate that the cost trend rate gradually declines to (as a percent) | 5.00% | 5.00% | 5.00% |
Year that rate reaches the assumed ultimate rate | 2,028 | 2,025 | 2,019 |
Medical and Dental Plans | Continuing operations | |||
Defined benefit plan net periodic benefit cost | |||
Net Cost | $ 21 | $ 33 | $ 65 |
Post-Employment Benefits (Det62
Post-Employment Benefits (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 7,213 | $ 7,239 | |
One-month Libor / Euribor | one-month Libor / Euribor | ||
Total benefit payments expected to be paid to participants | |||
Contribution to Abbott Stock Retirement Plan, defined contribution plan | $ 81 | 85 | $ 86 |
Defined Benefit Plans | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 6,772 | 6,754 | 6,123 |
Defined benefit plan, expected contributions in future | 576 | ||
Total benefit payments expected to be paid to participants | |||
2,016 | 225 | ||
2,017 | 238 | ||
2,018 | 253 | ||
2,019 | 271 | ||
2,020 | 290 | ||
2021 to 2025 | 1,772 | ||
Domestic defined benefit plan | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plan, expected contributions in future | 470 | ||
Medical and Dental Plans | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 441 | 485 | 462 |
Total benefit payments expected to be paid to participants | |||
2,016 | 67 | ||
2,017 | 68 | ||
2,018 | 69 | ||
2,019 | 70 | ||
2,020 | 71 | ||
2021 to 2025 | 393 | ||
U.S. large cap | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 1,770 | $ 1,738 | |
A mix of index funds that track S and P 500 (as a percent) | 35.00% | 50.00% | |
Separate actively managed securities that are benchmarked to Russell 1000 (as a percent) | 65.00% | 50.00% | |
U.S. mid cap | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 434 | $ 433 | |
Mix of index funds investments (as a percent) | (70.00%) | ||
Separate actively managed securities that track and are benchmarked to S and P 400 mid-cap Index (as a percentage) | 20.00% | (30.00%) | |
A mix of index funds not actively managed (as a percent) | 80.00% | ||
International | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 1,193 | $ 1,230 | |
A mix of index funds that track S and P 500 (as a percent) | 30.00% | 20.00% | |
Separate actively managed securities that track and are benchmarked to the MSCI EAFE and MSCI (as a percentage) | 70.00% | 80.00% | |
U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 401 | $ 449 | |
A mix of index funds not actively managed (as a percent) | 70.00% | 65.00% | |
Separate actively managed accounts (as a percentage) | 30.00% | 35.00% | |
Corporate debt instruments | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 731 | $ 573 | |
A mix of index funds not actively managed (as a percent) | 10.00% | 15.00% | |
Separate actively managed accounts (as a percentage) | 90.00% | 85.00% | |
Non U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 497 | $ 697 | |
Other | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 136 | $ 130 | |
Primarily mortgage backed securities (as a percentage) | 40.00% | 40.00% | |
Actively Managed Diversified Fixed Income Vehicle Benchmarked(as a percentage) | 60.00% | 60.00% | |
Absolute return funds | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 1,777 | $ 1,631 | |
Commodities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 107 | 165 | |
Other. | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 167 | $ 193 | |
Primarily cash and cash equivalents (as a percentage) | 50.00% | 75.00% | |
Investment in private equity funds (as a percentage) | 50.00% | 25.00% | |
Quoted Prices in Active Markets | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 1,789 | $ 2,133 | |
Quoted Prices in Active Markets | U.S. large cap | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 1,078 | 860 | |
Quoted Prices in Active Markets | U.S. mid cap | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 84 | 142 | |
Quoted Prices in Active Markets | International | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 245 | 342 | |
Quoted Prices in Active Markets | U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 5 | 10 | |
Quoted Prices in Active Markets | Corporate debt instruments | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 109 | 130 | |
Quoted Prices in Active Markets | Non U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 111 | 286 | |
Quoted Prices in Active Markets | Other, | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 28 | 35 | |
Quoted Prices in Active Markets | Absolute return funds | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 101 | 203 | |
Quoted Prices in Active Markets | Commodities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 7 | 10 | |
Quoted Prices in Active Markets | Other. | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 21 | 115 | |
Significant Other Observable Inputs | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 4,428 | 4,438 | |
Significant Other Observable Inputs | U.S. large cap | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 692 | 878 | |
Significant Other Observable Inputs | U.S. mid cap | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 350 | 291 | |
Significant Other Observable Inputs | International | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 948 | 888 | |
Significant Other Observable Inputs | U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 396 | 439 | |
Significant Other Observable Inputs | Corporate debt instruments | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 543 | 443 | |
Significant Other Observable Inputs | Non U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 384 | 411 | |
Significant Other Observable Inputs | Other, | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 108 | 95 | |
Significant Other Observable Inputs | Absolute return funds | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 917 | 895 | |
Significant Other Observable Inputs | Commodities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 25 | 69 | |
Significant Other Observable Inputs | Other. | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 65 | 29 | |
Significant Unobservable Inputs | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 996 | 668 | $ 555 |
Significant Unobservable Inputs | Corporate debt instruments | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 79 | ||
Significant Unobservable Inputs | Non U.S. government securities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 2 | ||
Significant Unobservable Inputs | Absolute return funds | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 759 | 533 | |
Significant Unobservable Inputs | Commodities | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | 75 | 86 | |
Significant Unobservable Inputs | Other. | |||
Bases used to measure defined benefit plans assets at fair value | |||
Defined benefit plans' assets at fair value | $ 81 | $ 49 |
Post-Employment Benefits (Det63
Post-Employment Benefits (Details 3) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Retirement Plans | ||
Defined benefit plans' assets at fair value | $ 7,239 | $ 7,239 |
Change in value of assets that are measured using significant unobservable inputs | ||
Plan assets at fair value, balance at the beginning of the period | 7,239 | |
Actual return on plan assets: | ||
Plan assets at fair value, balance at the end of the period | 7,213 | 7,239 |
Significant Unobservable Inputs | ||
Retirement Plans | ||
Defined benefit plans' assets at fair value | 668 | 555 |
Change in value of assets that are measured using significant unobservable inputs | ||
Plan assets at fair value, balance at the beginning of the period | 668 | 555 |
Actual return on plan assets: | ||
Assets on hand at year end | (13) | 25 |
Assets sold during the year | 5 | 21 |
Purchases, sales and settlements, net | 336 | 67 |
Plan assets at fair value, balance at the end of the period | $ 996 | $ 668 |
Taxes on Earnings from Contin64
Taxes on Earnings from Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Taxes on Earnings | ||||
Tax cost related to the disposal of shares | $ 71 | |||
Favorable resolution of various tax positions and other unusual provision items | $ (103) | $ 440 | $ (230) | |
Minimum | ||||
Taxes on Earnings | ||||
Decrease reasonably possible in gross unrecognized tax benefits | 555 | |||
Maximum | ||||
Taxes on Earnings | ||||
Decrease reasonably possible in gross unrecognized tax benefits | $ 655 |
Taxes on Earnings from Contin65
Taxes on Earnings from Continuing Operations (Details 2) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Taxes on Earnings from Continuing Operations | |||
Number of items which are not settled in the U.S. | item | 1 | ||
Undistributed earnings reinvested indefinitely in foreign subsidiaries | $ 22,400 | ||
Earnings From Continuing Operations Before Taxes: | |||
Domestic | 789 | $ 392 | $ 496 |
Foreign | 2,394 | 2,126 | 1,545 |
Earnings from Continuing Operations Before Taxes | 3,183 | 2,518 | 2,041 |
Current: | |||
Domestic | 64 | 27 | 4 |
Foreign, current tax | 220 | 468 | 482 |
Total current taxes | 284 | 495 | 486 |
Deferred: | |||
Domestic, deferred tax | 313 | 298 | (308) |
Foreign, deferred tax | (20) | 4 | (125) |
Total deferred taxes | 293 | 302 | (433) |
Total | $ 577 | $ 797 | $ 53 |
Differences between the effective income tax rate and the U.S. statutory tax rate: | |||
Statutory tax rate on earnings from continuing operations (as a percent) | 35.00% | 35.00% | 35.00% |
Impact of foreign operations | (18.20%) | 0.70% | (18.50%) |
Resolution of certain tax positions pertaining to prior years (as a percent) | (4.20%) | (11.30%) | |
Effect of retroactive litigation (as a percent) | (5.00%) | ||
State taxes, net of federal benefit (as a percent) | 0.30% | (0.50%) | 2.10% |
Federal tax cost on sale of Mylan N.V. shares | 2.20% | ||
All other, net (as a percent) | (1.20%) | 0.60% | 0.30% |
Effective tax rate on earnings from continuing operations (as a percent) | 18.10% | 31.60% | 2.60% |
Deferred tax assets: | |||
Compensation and employee benefits | $ 992 | $ 1,239 | |
Other, primarily reserves not currently deductible, and NOL's and credit carryforwards | 2,618 | 2,759 | |
Trade receivable reserves | 197 | 146 | |
Inventory reserves | 141 | 152 | |
Deferred intercompany profit | 276 | 330 | |
State income taxes | 159 | 178 | |
Total deferred tax assets | 4,383 | 4,804 | |
Deferred tax liabilities: | |||
Depreciation | (118) | (93) | |
Unremitted earnings of foreign subsidiaries | (694) | (184) | |
Other, primarily the excess of book basis over tax basis of intangible assets | (1,942) | (2,307) | |
Total deferred tax liabilities | (2,754) | (2,584) | |
Total net deferred tax assets | 1,629 | 2,220 | |
Reconciliation of Unrecognized Tax Benefits | |||
Balance at the beginning of the period | 1,403 | 1,965 | |
Increase due to current year tax positions | 234 | 220 | |
Increase due to prior year tax positions | 95 | 153 | |
Decrease due to prior year tax positions | (169) | (856) | |
Settlements | (125) | (79) | |
Balance at the end of the period | 1,438 | $ 1,403 | $ 1,965 |
Unrecognized tax benefits that would impact effective tax rate | $ 1,400 |
Segment and Geographical Area66
Segment and Geographical Area Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information | |||||||||||
Net Sales to External Customers | $ 5,188 | $ 5,150 | $ 5,170 | $ 4,897 | $ 5,356 | $ 5,079 | $ 5,057 | $ 4,755 | $ 20,405 | $ 20,247 | $ 19,657 |
Operating Earnings | 2,867 | 2,599 | 2,133 | ||||||||
Depreciation | 871 | 918 | 928 | ||||||||
Additions to Long-term Assets | 1,354 | 5,290 | 1,905 | ||||||||
Total Assets | 41,247 | 41,207 | 41,247 | 41,207 | 42,937 | ||||||
Other | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 2,272 | 2,469 | 2,498 | ||||||||
Depreciation | 247 | 275 | 185 | ||||||||
Additions to Long-term Assets | 747 | 4,603 | 981 | ||||||||
Total Reportable Segments | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 18,133 | 17,778 | 17,159 | ||||||||
Operating Earnings | 4,631 | 4,253 | 3,784 | ||||||||
Depreciation | 624 | 643 | 743 | ||||||||
Additions to Long-term Assets | 607 | 687 | 924 | ||||||||
Total Assets | 9,777 | 10,172 | 9,777 | 10,172 | 9,986 | ||||||
Total Reportable Segments | Established Pharmaceutical Products | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 3,720 | 3,118 | 2,862 | ||||||||
Operating Earnings | 658 | 624 | 551 | ||||||||
Depreciation | 83 | 72 | 63 | ||||||||
Additions to Long-term Assets | 112 | 136 | 128 | ||||||||
Total Assets | 2,210 | 2,244 | 2,210 | 2,244 | 1,445 | ||||||
Total Reportable Segments | Nutritional Products | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 6,975 | 6,953 | 6,740 | ||||||||
Operating Earnings | 1,741 | 1,459 | 1,263 | ||||||||
Depreciation | 157 | 173 | 190 | ||||||||
Additions to Long-term Assets | 142 | 174 | 340 | ||||||||
Total Assets | 3,187 | 3,435 | 3,187 | 3,435 | 3,518 | ||||||
Total Reportable Segments | Diagnostic Products | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 4,646 | 4,721 | 4,545 | ||||||||
Operating Earnings | 1,171 | 1,079 | 1,008 | ||||||||
Depreciation | 310 | 314 | 368 | ||||||||
Additions to Long-term Assets | 321 | 349 | 394 | ||||||||
Total Assets | 2,844 | 2,964 | 2,844 | 2,964 | 3,312 | ||||||
Total Reportable Segments | Vascular Products | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 2,792 | 2,986 | 3,012 | ||||||||
Operating Earnings | 1,061 | 1,091 | 962 | ||||||||
Depreciation | 74 | 84 | 122 | ||||||||
Additions to Long-term Assets | 32 | 28 | 62 | ||||||||
Total Assets | 1,536 | 1,529 | 1,536 | 1,529 | 1,711 | ||||||
Reconciling items | |||||||||||
Segment Reporting Information | |||||||||||
Operating Earnings | 268 | 439 | 430 | ||||||||
Non-reportable segment | |||||||||||
Segment Reporting Information | |||||||||||
Total Assets | $ 1,267 | $ 1,211 | $ 1,267 | $ 1,211 | $ 1,153 |
Segment and Geographical Area67
Segment and Geographical Area Information (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information | |||
Operating Earnings | $ 2,867 | $ 2,599 | $ 2,133 |
Net loss on extinguishment of debt | (18) | ||
Amortization of intangible assets | (601) | (555) | (588) |
Earnings from Continuing Operations Before Taxes | 3,183 | 2,518 | 2,041 |
Gain on sale of Mylan shares | 207 | ||
Segment assets: | |||
Total Assets | 41,247 | 41,207 | 42,937 |
Corporate functions | |||
Segment Reporting Information | |||
Corporate functions and benefit plans costs | (416) | (342) | (514) |
Reconciling items | |||
Segment Reporting Information | |||
Operating Earnings | 268 | 439 | 430 |
Net interest expense | (58) | (73) | (78) |
Net loss on extinguishment of debt | (18) | ||
Share-based compensation | (291) | (239) | (254) |
Amortization of intangible assets | (601) | (555) | (588) |
Other, net | (350) | (947) | (739) |
Separation related costs and cost reduction initiatives and integration | 310 | 435 | 350 |
Segment assets: | |||
Cash, investments and restricted funds | 10,166 | 4,689 | 8,217 |
Goodwill and intangible assets | 15,200 | 16,265 | 15,507 |
All other | $ 4,837 | $ 8,870 | $ 8,074 |
Segment and Geographic Area Inf
Segment and Geographic Area Information (Details 3) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information | |||||||||||
Net Sales to External Customers | $ 5,188 | $ 5,150 | $ 5,170 | $ 4,897 | $ 5,356 | $ 5,079 | $ 5,057 | $ 4,755 | $ 20,405 | $ 20,247 | $ 19,657 |
Long-lived assets | 6,400 | 6,800 | 6,400 | 6,800 | |||||||
United States | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 6,270 | 6,123 | 6,208 | ||||||||
Long-lived assets | $ 3,100 | $ 3,100 | 3,100 | 3,100 | |||||||
China | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 1,796 | 1,321 | 1,083 | ||||||||
India | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 1,053 | 1,009 | 922 | ||||||||
Germany | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 1,004 | 978 | 963 | ||||||||
Japan | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 895 | 968 | 1,042 | ||||||||
The Netherlands | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 855 | 788 | 960 | ||||||||
Switzerland | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 784 | 707 | 792 | ||||||||
Russia | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 483 | 536 | 525 | ||||||||
United Kingdom | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 430 | 447 | 395 | ||||||||
Canada | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 428 | 462 | 493 | ||||||||
Colombia | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 388 | 283 | 205 | ||||||||
Italy | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 383 | 436 | 457 | ||||||||
Brazil | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 381 | 508 | 470 | ||||||||
France | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | 375 | 488 | 480 | ||||||||
All Other Countries | |||||||||||
Segment Reporting Information | |||||||||||
Net Sales to External Customers | $ 4,880 | $ 5,193 | $ 4,662 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Billions | Jan. 30, 2016 | Feb. 29, 2016 | Feb. 01, 2016 |
Maximum | |||
Subsequent event | |||
Senior unsecured bridge term loan | $ 9 | ||
Bridge loan | |||
Subsequent event | |||
Maturity period | 364 days | ||
Alere Inc | |||
Subsequent event | |||
Annual sales | $ 2.5 | ||
Share price | $ 56 | ||
Expected equity value | $ 5.8 | ||
Liabilities assumed | $ 2.6 |
Quarterly Results (Unaudited)70
Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Results (Unaudited) | |||||||||||
Net Sales | $ 5,188 | $ 5,150 | $ 5,170 | $ 4,897 | $ 5,356 | $ 5,079 | $ 5,057 | $ 4,755 | $ 20,405 | $ 20,247 | $ 19,657 |
Gross Profit | 2,839 | 2,757 | 2,801 | 2,660 | 2,856 | 2,628 | 2,636 | 2,354 | |||
Earnings from Continuing Operations | $ 695 | $ 596 | $ 786 | $ 529 | $ 634 | $ 438 | $ 425 | $ 224 | $ 2,606 | $ 1,721 | $ 1,988 |
Basic Earnings per Common Share | $ 0.46 | $ 0.40 | $ 0.52 | $ 0.35 | $ 0.42 | $ 0.29 | $ 0.28 | $ 0.15 | $ 1.73 | $ 1.13 | $ 1.27 |
Diluted Earnings per Common Share | $ 0.46 | $ 0.39 | $ 0.52 | $ 0.35 | $ 0.41 | $ 0.29 | $ 0.28 | $ 0.14 | $ 1.72 | $ 1.12 | $ 1.26 |
Net Earnings | $ 767 | $ 580 | $ 784 | $ 2,292 | $ 905 | $ 538 | $ 466 | $ 375 | $ 4,423 | $ 2,284 | $ 2,576 |
Basic Earnings Per Common Share (in dollars per share) | $ 0.51 | $ 0.39 | $ 0.52 | $ 1.52 | $ 0.59 | $ 0.36 | $ 0.30 | $ 0.24 | $ 2.94 | $ 1.50 | $ 1.64 |
Diluted Earnings Per Common Share (in dollars per share) | 0.51 | 0.38 | 0.52 | 1.51 | 0.59 | 0.36 | 0.30 | 0.24 | 2.92 | 1.49 | $ 1.62 |
Minimum | |||||||||||
Market Price Per Share | 39.28 | 39 | 45.55 | 43.36 | 39.28 | 40.92 | 36.65 | 35.65 | 39.28 | 39.28 | |
Maximum | |||||||||||
Market Price Per Share | $ 46.38 | $ 51.74 | $ 50.47 | $ 47.88 | $ 46.50 | $ 44.20 | $ 41.30 | $ 40.49 | $ 46.38 | $ 46.50 |
Schedule II Valuation and Qua71
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowances for Doubtful Accounts | |||
Balance at Beginning of Year | $ 310 | $ 312 | $ 406 |
Provisions/Charges to Income | 225 | 220 | 163 |
Amounts Charged Off and Other Deductions | (198) | (222) | (257) |
Balance at End of Year | $ 337 | $ 310 | 312 |
AbbVie | |||
Allowances for Doubtful Accounts | |||
Amounts Charged Off and Other Deductions | $ (178) |