Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 02, 2017 | Jul. 28, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | JOHNSON & JOHNSON | |
Entity Central Index Key | 200,406 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jul. 2, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 2,683,999,728 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 12,598 | $ 18,972 |
Marketable securities | 255 | 22,935 |
Accounts receivable, trade, less allowances for doubtful accounts $292 (2016, $252) | 13,283 | 11,699 |
Inventories (Note 2) | 9,699 | 8,144 |
Prepaid expenses and other | 2,954 | 3,282 |
Total current assets | 38,789 | 65,032 |
Property, plant and equipment at cost | 40,075 | 37,773 |
Less: accumulated depreciation | (23,617) | (21,861) |
Property, plant and equipment, net | 16,458 | 15,912 |
Intangible assets, net (Note 3) | 54,942 | 26,876 |
Goodwill (Note 3) | 31,234 | 22,805 |
Deferred taxes on income | 6,111 | 6,148 |
Other assets | 5,273 | 4,435 |
Total assets | 152,807 | 141,208 |
Current liabilities: | ||
Loans and notes payable | 7,209 | 4,684 |
Accounts payable | 6,135 | 6,918 |
Accrued liabilities | 6,076 | 5,635 |
Accrued rebates, returns and promotions | 6,319 | 5,403 |
Accrued compensation and employee related obligations | 2,374 | 2,676 |
Accrued taxes on income | 759 | 971 |
Total current liabilities | 28,872 | 26,287 |
Long-term debt (Note 4) | 27,363 | 22,442 |
Deferred taxes on income | 4,846 | 2,910 |
Employee related obligations | 9,687 | 9,615 |
Other liabilities | 10,117 | 9,536 |
Total liabilities | 80,885 | 70,790 |
Shareholders’ equity: | ||
Common stock — par value $1.00 per share (authorized 4,320,000,000 shares; issued 3,119,843,000 shares) | 3,120 | 3,120 |
Accumulated other comprehensive income (loss) (Note 7) | (13,234) | (14,901) |
Retained earnings | 113,208 | 110,551 |
Less: common stock held in treasury, at cost (434,653,000 and 413,332,000 shares) | 31,172 | 28,352 |
Total shareholders’ equity | 71,922 | 70,418 |
Total liabilities and shareholders' equity | $ 152,807 | $ 141,208 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 |
Current assets: | ||
Allowances for doubtful accounts | $ 292 | $ 252 |
Shareholders' equity: | ||
Common stock, par value per share | $ 1 | $ 1 |
Common stock, shares authorized | 4,320,000,000 | 4,320,000,000 |
Common stock, shares issued | 3,119,843,000 | 3,119,843,000 |
Treasury stock, shares | 434,653,000 | 413,332,000 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Income Statement [Abstract] | ||||
Sales to customers (Note 9) | $ 18,839 | $ 18,482 | $ 36,605 | $ 35,964 |
Sales to customers percent to sales | 100.00% | 100.00% | 100.00% | 100.00% |
Cost of products sold | $ 5,823 | $ 5,336 | $ 11,209 | $ 10,665 |
Cost of products sold percent to sales | 30.90% | 28.90% | 30.60% | 29.60% |
Gross profit | $ 13,016 | $ 13,146 | $ 25,396 | $ 25,299 |
Gross profit percent to sales | 69.10% | 71.10% | 69.40% | 70.40% |
Selling, marketing and administrative expenses | $ 5,262 | $ 5,176 | $ 9,999 | $ 9,864 |
Selling marketing and administrative expenses percent to sales | 28.00% | 28.00% | 27.30% | 27.40% |
Research and development expense | $ 2,285 | $ 2,264 | $ 4,345 | $ 4,277 |
Research and development expense percent to sales | 12.10% | 12.20% | 11.90% | 11.90% |
Research and Development in Process | $ 0 | $ 29 | $ 0 | $ 29 |
Research and development in process percent to sales | 0.00% | 0.20% | 0.00% | 0.10% |
Interest income | $ (105) | $ (88) | $ (226) | $ (171) |
Interest income percent to sales | (0.60%) | (0.50%) | (0.60%) | (0.50%) |
Interest expense, net of portion capitalized | $ 227 | $ 190 | $ 431 | $ 350 |
Interest expense, net of portion capitalized percent to sales | 1.20% | 1.10% | 1.20% | 1.00% |
Other (income) expense, net | $ 588 | $ 557 | $ 428 | $ 518 |
Other (income) expense, net percent to sales | 3.10% | 3.00% | 1.20% | 1.40% |
Restructuring (Note 12) | $ 11 | $ 114 | $ 96 | $ 234 |
Restructuring charge percent to sales | 0.10% | 0.60% | 0.20% | 0.70% |
Earnings before provision for taxes on income | $ 4,748 | $ 4,904 | $ 10,323 | $ 10,198 |
Earnings before provision for taxes on income percent to sales | 25.20% | 26.50% | 28.20% | 28.40% |
Provision for taxes on income (Note 5) | $ 921 | $ 907 | $ 2,074 | $ 1,744 |
Provision for taxes on income perent to sales | 4.90% | 4.90% | 5.70% | 4.90% |
NET EARNINGS | $ 3,827 | $ 3,997 | $ 8,249 | $ 8,454 |
Net earnings percent to sales | 20.30% | 21.60% | 22.50% | 23.50% |
NET EARNINGS PER SHARE (Note 8) | ||||
Basic (per share) | $ 1.42 | $ 1.46 | $ 3.06 | $ 3.07 |
Diluted (per share) | 1.40 | 1.43 | 3 | 3.02 |
CASH DIVIDENDS PER SHARE | $ 0.84 | $ 0.80 | $ 1.64 | $ 1.55 |
AVG. SHARES OUTSTANDING | ||||
Basic (shares) | 2,691.9 | 2,745.4 | 2,699.3 | 2,751.4 |
Diluted (shares) | 2,741.5 | 2,794.2 | 2,749.4 | 2,800.9 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 3,827 | $ 3,997 | $ 8,249 | $ 8,454 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation | 843 | (295) | 1,238 | 584 |
Securities: | ||||
Unrealized holding gain (loss) arising during period | 47 | 156 | 136 | 100 |
Reclassifications to earnings | (14) | (12) | (193) | (94) |
Net change | 33 | 144 | (57) | 6 |
Employee benefit plans: | ||||
Prior service cost amortization during period | (5) | (6) | (9) | (10) |
Gain (loss) amortization during period | 123 | 101 | 246 | 207 |
Net change | 118 | 95 | 237 | 197 |
Derivatives & hedges: | ||||
Unrealized gain (loss) arising during period | 154 | (250) | (70) | (441) |
Reclassifications to earnings | 140 | (10) | 319 | 112 |
Net change | 294 | (260) | 249 | (329) |
Other comprehensive income (loss) | 1,288 | (316) | 1,667 | 458 |
Comprehensive income | $ 5,115 | $ 3,681 | $ 9,916 | $ 8,912 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Consolidated Statement of Comprehensive Income [Abstract] | ||||
Securities | $ 17 | $ 77 | $ (31) | $ 3 |
Employee Benefits | (60) | (56) | (120) | (104) |
Derivatives & Hedges | $ 158 | $ (140) | $ 134 | $ 177 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net earnings | $ 8,249 | $ 8,454 |
Adjustments to reconcile net earnings to cash flows from operating activities: | ||
Depreciation and amortization of property and intangibles | 2,062 | 1,791 |
Stock based compensation | 522 | 479 |
Asset write-downs | 270 | 187 |
Net gain on sale of assets/businesses | (53) | (185) |
Deferred tax provision | (72) | 115 |
Accounts receivable allowances | 24 | (4) |
Changes in assets and liabilities, net of effects from acquisitions and divestitures: | ||
Increase in accounts receivable | (476) | (1,098) |
Increase in inventories | (421) | (443) |
Decrease in accounts payable and accrued liabilities | (1,201) | (1,047) |
Increase in other current and non-current assets | (541) | (794) |
Increase/(Decrease) in other current and non-current liabilities | 322 | (702) |
NET CASH FLOWS FROM OPERATING ACTIVITIES | 8,685 | 6,753 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to property, plant and equipment | (1,249) | (1,396) |
Proceeds from the disposal of assets/businesses, net | 125 | 685 |
Acquisitions, net of cash acquired | (34,072) | (730) |
Purchases of investments | (5,227) | (17,511) |
Sales of investments | 27,320 | 18,775 |
Other | (80) | (38) |
NET CASH USED BY INVESTING ACTIVITIES | (13,183) | (215) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends to shareholders | (4,433) | (4,266) |
Repurchase of common stock | (5,232) | (4,751) |
Proceeds from short-term debt | 2,635 | 118 |
Retirement of short-term debt | (180) | (4,687) |
Proceeds from long-term debt, net of issuance costs | 4,464 | 11,951 |
Retirement of long-term debt | (15) | (936) |
Proceeds from the exercise of stock options/employee withholding tax on stock awards, net | 719 | 929 |
Other | (25) | 0 |
NET CASH USED BY FINANCING ACTIVITIES | (2,067) | (1,642) |
Effect of exchange rate changes on cash and cash equivalents | 191 | 12 |
(Decrease)/Increase in cash and cash equivalents | (6,374) | 4,908 |
Cash and Cash equivalents, beginning of period | 18,972 | 13,732 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 12,598 | 18,640 |
Acquisitions | ||
Fair value of assets acquired | 36,161 | 744 |
Fair value of liabilities assumed and noncontrolling interests | (2,089) | (14) |
Net cash paid for acquisitions | $ 34,072 | $ 730 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 02, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of Johnson & Johnson and its subsidiaries (the Company) and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2017 . The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented. New Accounting Standards Adopted as of July 2, 2017 During the fiscal first quarter of 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2016-07 Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting. The amendments in the update eliminate the requirement that when an investment qualifies for the use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step by step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the application of the equity method. The adoption of this standard did not have a material impact on the presentation of the Company's consolidated financial statements. During the fiscal second quarter of 2015, the FASB issued Accounting Standards Update 2015-11: Simplifying the Measurement of Inventory. This update requires inventory to be measured at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update is effective for the Company for all annual and interim periods beginning after December 15, 2016. The amendments in this update should be applied prospectively. This update did not have any material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards Not Adopted as of July 2, 2017 During the fiscal first quarter of 2017, the FASB issued Accounting Standards Update 2017-07: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. This update requires that an employer disaggregate the service cost component from the other components of net periodic benefit cost (“NPBC”). In addition, only the service cost component will be eligible for capitalization. This update is effective for the Company for all annual and interim periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The Company will adopt this new standard in 2018. The amendments in this Update should be applied retrospectively for the presentation of the service cost component and the other components of NPBC in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of NPBC in assets. The Company is assessing the retroactive restatement methodology and impact to the individual line items on Consolidated Statement of Earnings. The Company does not expect there to be a material impact to net earnings. During the fiscal first quarter of 2017, the FASB issued Accounting Standard Update 2017-05: Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets. This update clarifies the scope of asset derecognition guidance, adds guidance for partial sales of nonfinancial assets and clarifies recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. This update will be effective for the Company for its annual and interim reporting periods beginning after December 15, 2017, the same time as the amendments in Update 2014-09 Revenue from Contracts with Customers. This update allows the Company to choose either a full retrospective method or modified retrospective method upon adoption. The Company is currently assessing the impact of the future adoption of this standard on its financial statements. During the fiscal first quarter of 2017, the FASB issued Accounting Standard Update 2017-04: Simplifying the Test for Goodwill Impairment. This update simplifies how an entity is required to test goodwill for impairment. A goodwill impairment will now be measured by the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This update will be effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. This update should be applied prospectively. The Company is currently assessing the impact of the future adoption of this standard on its financial statements. During the fiscal first quarter of 2017, the FASB issued Accounting Standard Update 2017-01: Clarifying the Definition of a Business. This update narrows the definition of a business by providing a screen to determine when an integrated set of assets and activities is not a business. The screen specifies that an integrated set of assets and activities is not a business if substantially all of the fair value of the gross assets acquired or disposed of is concentrated in a single or a group of similar identifiable assets. This update will be effective for the Company for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. This update should be applied prospectively. The Company is currently assessing the impact of the future adoption of this standard on its financial statements. During the fiscal fourth quarter of 2016, the FASB issued Accounting Standards Update 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This update removes the current exception in US GAAP prohibiting entities from recognizing current and deferred income tax expenses or benefits related to transfer of assets, other than inventory, within the consolidated entity. The current exception to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. The amendments in this update are effective for public entities for annual reporting periods beginning after December 15, 2017. Early adoption is permitted and should be in the first interim period if an entity issues interim financial statements. The Company is currently assessing the impact of the future adoption of this standard on its consolidated financial statements and based upon the preliminary assessment expects to record a credit to retained earnings based on timing differences that exist as of the date of adoption. During the fiscal third quarter of 2016, the FASB issued Accounting Standards Update 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses whether to present certain specific cash flow items as operating, investing or financing activities. The amendments in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted, including adoption in an interim period. The Company is currently assessing the impact of the future adoption of this standard on its consolidated Statements of Cash Flows. During the fiscal first quarter of 2016, the FASB issued Accounting Standards Update 2016-02 Leases (Topic 842). This update requires the recognition of lease assets and lease liabilities on the balance sheet for all lease obligations and disclosing key information about leasing arrangements. This update requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under current generally accepted accounting principles. This update will be effective for the Company for all annual and interim periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The update is required to be adopted using a modified retrospective approach. The Company anticipates that most of its operating leases will result in the recognition of additional assets and the corresponding liabilities on its Consolidated Balance Sheets, however does not expect to have a material impact on the financial position. The actual impact will depend on the Company's lease portfolio at the time of adoption. The Company continues to assess all implications of the standard and related financial disclosures. During the fiscal first quarter of 2016, the FASB issued Accounting Standards Update 2016-01 Financial Instruments: Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The standard amends financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. This update will be effective for the Company for annual periods beginning after December 15, 2017, and interim periods within those annual periods. The Company is unable to estimate the impact of the future adoption of this standard on its financial statements as it will depend on the equity investments as of the adoption date. During the fiscal second quarter of 2014, the FASB issued Accounting Standards Update 2014-09: Revenue from Contracts with Customers, which, along with amendments issued in 2015 and 2016, will replace substantially all current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. Early adoption of this standard is permitted but not before the original effective date for all annual periods and interim reporting periods beginning after December 15, 2017. The guidance permits two methods of adoption: full retrospective method (retrospective application to each prior reporting period presented) or modified retrospective method (retrospective application with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures). The Company plans to adopt the standard using the modified retrospective method. While the Company continues to evaluate the effect of the standard, preliminarily, it does not anticipate a material impact on its financial statements including the potential impact of additional disclosure requirements. To complete the assessment of the impact of the standard, the Company continues to assess all implications of the standard on its financial statements and disclosures. Additionally, the Company continues to monitor modifications, clarifications and interpretations issued by the FASB that may affect current conclusions. |
Inventories
Inventories | 6 Months Ended |
Jul. 02, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES (Dollars in Millions) July 2, 2017 January 1, 2017 Raw materials and supplies $ 1,138 952 Goods in process 2,515 2,185 Finished goods 6,046 5,007 Total inventories $ 9,699 8,144 Inventory of $58 million was classified as held for sale, and reported in prepaid expenses and other on the Consolidated Balance Sheet, related to the divestiture of the Codman Neurosurgery business which was pending as of July 2, 2017. See Note 10 to the Consolidated Financial Statements for additional details on inventory related to the Actelion acquisition. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jul. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | INTANGIBLE ASSETS AND GOODWILL Intangible assets that have finite useful lives are amortized over their estimated useful lives. The latest annual impairment assessment of goodwill and indefinite lived intangible assets was completed in the fiscal fourth quarter of 2016 . Future impairment tests for goodwill and indefinite lived intangible assets will be performed annually in the fiscal fourth quarter, or sooner, if warranted. (Dollars in Millions) July 2, 2017 January 1, 2017 Intangible assets with definite lives: Patents and trademarks — gross $ 35,804 10,521 Less accumulated amortization 5,546 5,076 Patents and trademarks — net 30,258 5,445 Customer relationships and other intangibles — gross 20,048 17,615 Less accumulated amortization 7,053 6,515 Customer relationships and other intangibles — net 12,995 11,100 Intangible assets with indefinite lives: Trademarks 7,069 6,888 Purchased in-process research and development 4,620 3,443 Total intangible assets with indefinite lives 11,689 10,331 Total intangible assets — net $ 54,942 26,876 Goodwill as of July 2, 2017 was allocated by segment of business as follows: (Dollars in Millions) Consumer Pharm Med Devices Total Goodwill, net at January 1, 2017 $ 8,263 2,840 11,702 22,805 Goodwill, related to acquisitions* 11 5,986 2,081 8,078 Goodwill, related to divestitures (13 ) — — (13 ) Currency translation/Other 369 64 (69 ) (1) 364 Goodwill, net at July 2, 2017 $ 8,630 8,890 13,714 31,234 (1) Net of $106 million classified as held for sale, reported in other assets on the Consolidated Balance Sheet, related to the divestiture of the Codman Neurosurgery business which was pending as of July 2, 2017. * Includes measurement period adjustments The weighted average amortization periods for patents and trademarks and customer relationships and other intangible assets are 12 years and 23 years, respectively. The amortization expense of amortizable intangible assets included in cost of products sold was $809 million and $576 million for the fiscal six months ended July 2, 2017 and July 3, 2016 , respectively. The estimated amortization expense for the five succeeding years approximates $4.3 billion , before tax, per year. Intangible asset write-downs are included in Other (income) expense, net. The primary driver of the increase to intangible assets and goodwill is related to the Actelion acquisition in the fiscal second quarter of 2017, which resulted in the recording of $25.0 billion to intangible assets and approximately $6.0 billion to goodwill. Additionally, the Abbott Medical Optics (AMO) acquisition in the fiscal first quarter of 2017, resulted in the recording of $2.3 billion to intangible assets and $1.8 billion to goodwill. The intangible assets and goodwill amounts related to the Actelion and AMO acquisitions are based on the preliminary purchase price allocation. See Note 10 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 02, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company uses forward foreign exchange contracts to manage its exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of future intercompany products and third-party purchases of materials denominated in a foreign currency. The Company uses cross currency interest rate swaps to manage currency risk primarily related to borrowings. The Company also uses equity collar contracts to manage exposure to market risk associated with certain equity investments. All three types of derivatives are designated as cash flow hedges. Additionally, the Company uses interest rate swaps as an instrument to manage interest rate risk related to fixed rate borrowings. These derivatives are designated as fair value hedges. The Company uses forward foreign exchange contracts designated as net investment hedges. Additionally, the Company uses forward foreign exchange contracts to offset its exposure to certain foreign currency assets and liabilities. These forward foreign exchange contracts are not designated as hedges and therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the related foreign currency assets and liabilities. The Company does not enter into derivative financial instruments for trading or speculative purposes, or that contain credit risk related contingent features. During the fiscal second quarter of 2017, the Company entered into credit support agreements (CSA) with our derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. As of July 2, 2017 the total amount of collateral received under the credit support agreements (CSA) amounted to $20 million . For equity collar contracts, the Company pledged the underlying hedged marketable equity securities to the counter-party as collateral. On an ongoing basis, the Company monitors counter-party credit ratings. The Company considers credit non-performance risk to be low, because the Company primarily enters into agreements with commercial institutions that have at least an investment grade credit rating. Refer to the table on significant financial assets and liabilities measured at fair value contained in this footnote for receivables and payables with these commercial institutions. As of July 2, 2017 , the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps, interest rate swaps and equity collar contracts of $35.8 billion , $2.3 billion , $1.8 billion , and $0.2 billion respectively. As of January 1, 2017, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps, interest rate swaps and equity collar contracts of $36.0 billion , $2.3 billion , $1.8 billion , and $0.3 billion respectively. All derivative instruments are recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction, and if so, the type of hedge transaction. The designation as a cash flow hedge is made at the entrance date of the derivative contract. At inception, all derivatives are expected to be highly effective. Changes in the fair value of a derivative that is designated as a cash flow hedge and is highly effective are recorded in accumulated other comprehensive income until the underlying transaction affects earnings, and are then reclassified to earnings in the same account as the hedged transaction. Gains and losses associated with interest rate swaps and changes in fair value of hedged debt attributable to changes in interest rates are recorded to interest expense in the period in which they occur. Gains and losses on net investment hedges are accounted for through the currency translation account. On an ongoing basis, the Company assesses whether each derivative continues to be highly effective in offsetting changes of hedged items. If and when a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is included in current period earnings in Other (income) expense, net for forward foreign exchange contracts, cross currency interest rate swaps, net investment hedges and equity collar contracts. For interest rate swaps designated as fair value hedges, hedge ineffectiveness, if any, is included in current period earnings within interest expense. For the current reporting period, hedge ineffectiveness associated with interest rate swaps was not material. During the fiscal second quarter of 2016, the Company designated its Euro denominated notes issued in May 2016 with due dates ranging from 2022 to 2035 as a net investment hedge of the Company's investments in certain of its international subsidiaries that use the Euro as their functional currency in order to reduce the volatility caused by changes in exchange rates. The change in the carrying value due to remeasurement of these Euro notes resulted in a $268 million pretax loss during the fiscal second quarter of 2017 reflected in foreign currency translation adjustment, within the Consolidated Statements of Comprehensive Income. The change in the carrying value due to remeasurement of these Euro notes resulted in a $378 million pretax loss during the fiscal six months of 2017, resulting in a cumulative $3 million pretax loss from hedge inception through the fiscal six months of 2017 reflected in foreign currency translation adjustment, within the Consolidated Statements of Comprehensive Income. As of July 2, 2017 , the balance of deferred net losses on derivatives included in accumulated other comprehensive income was $36 million after-tax. For additional information, see the Consolidated Statements of Comprehensive Income and Note 7. The Company expects that substantially all of the amounts related to forward foreign exchange contracts will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period. The maximum length of time over which the Company is hedging transaction exposure is 18 months , excluding interest rate contracts, net investment hedges and equity collar contracts. The amount ultimately realized in earnings may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity of the derivative. The following table is a summary of the activity related to derivatives designated as cash flow hedges for the fiscal second quarters in 2017 and 2016 : Gain/(Loss) Recognized In Accumulated OCI (1) Gain/(Loss) Reclassified From Accumulated OCI Into Income (1) Gain/(Loss) Recognized In Other Income/Expense (2) (Dollars in Millions) Fiscal Second Quarters Ended Cash Flow Hedges By Income Statement Caption July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Sales to customers (3) $ 36 (27 ) (6 ) (3 ) (1 ) — Cost of products sold (3) 218 (178 ) (68 ) 13 1 (2 ) Research and development expense (3) (19 ) 12 1 (1 ) 1 (1 ) Interest (income)/Interest expense, net (4) (69 ) (3 ) (65 ) 7 — — Other (income) expense, net (3) (5) (12 ) (54 ) (2 ) (6 ) (1 ) — Total $ 154 (250 ) (140 ) 10 — (3 ) The following table is a summary of the activity related to derivatives designated as cash flow hedges for the fiscal six months in 2017 and 2016 : Gain/(Loss) Recognized In Accumulated OCI (1) Gain/(Loss) Reclassified From Accumulated OCI Into Income (1) Gain/(Loss) Recognized In Other Income/Expense (2) (Dollars in Millions) Fiscal Six Months Ended Cash Flow Hedges By Income Statement Caption July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Sales to customers (3) $ 22 (27 ) (39 ) (21 ) (1 ) — Cost of products sold (3) 121 (222 ) (99 ) (8 ) (16 ) (6 ) Research and development expense (3) (128 ) (95 ) (101 ) (96 ) 6 (1 ) Interest (income)/Interest expense, net (4) (41 ) 9 (43 ) 15 — — Other (income) expense, net (3) (5) (44 ) (106 ) (37 ) (2 ) — (3 ) Total $ (70 ) (441 ) (319 ) (112 ) (11 ) (10 ) All amounts shown in the table above are net of tax. (1) Effective portion (2) Ineffective portion (3) Forward foreign exchange contracts (4) Cross currency interest rate swaps (5) Includes equity collar contracts For the fiscal second quarters ended July 2, 2017 and July 3, 2016 , a gain of $63 million and loss $36 million , respectively, was recognized in Other (income) expense, net, relating to forward foreign exchange contracts not designated as hedging instruments. For the fiscal six months ended July 2, 2017 and July 3, 2016 , a gain of $34 million and a loss of $41 million , respectively, was recognized in Other (income) expense, net, relating to forward foreign exchange contracts not designated as hedging instruments. Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement determined using assumptions that market participants would use in pricing an asset or liability. The authoritative literature establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described below with Level 1 having the highest priority and Level 3 having the lowest. The fair value of a derivative financial instrument (i.e. forward foreign exchange contracts, interest rate contracts) is the aggregation by currency of all future cash flows discounted to its present value at the prevailing market interest rates and subsequently converted to the U.S. Dollar at the current spot foreign exchange rate. The Company does not believe that fair values of these derivative instruments materially differ from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a material effect on the Company’s results of operations, cash flows or financial position. The Company also holds equity investments which are classified as Level 1 and debt securities which are classified as Level 2. The Company did not have any other significant financial assets or liabilities which would require revised valuations under this standard that are recognized at fair value. The following three levels of inputs are used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities. Level 2 — Significant other observable inputs. Level 3 — Significant unobservable inputs. The Company’s significant financial assets and liabilities measured at fair value as of July 2, 2017 and January 1, 2017 were as follows: July 2, 2017 January 1, 2017 (Dollars in Millions) Level 1 Level 2 Level 3 Total Total (1) Derivatives designated as hedging instruments: Assets: Forward foreign exchange contracts (7) $ — 418 — 418 747 Interest rate contracts (2)(4)(7) — 15 — 15 31 Total — 433 — 433 778 Liabilities: Forward foreign exchange contracts (8) — 454 — 454 723 Interest rate contracts (3)(4)(8) — 273 — 273 382 Equity collar contracts (8) — 50 — 50 57 Total — 777 — 777 1,162 Derivatives not designated as hedging instruments: Assets: Forward foreign exchange contracts (7) — 56 — 56 34 Liabilities: Forward foreign exchange contracts (8) — 31 — 31 57 Available For Sale Other Investments: Equity investments (5) 1,040 — — 1,040 1,209 Debt securities (6) $ — 3,599 — 3,599 12,087 (1) 2016 assets and liabilities are all classified as Level 2 with the exception of equity investments of $1,209 million , which are classified as Level 1. (2) Includes $11 million and $23 million of non-current other assets for July 2, 2017 and January 1, 2017, respectively. (3) Includes $273 million and $382 million of non-current other liabilities for July 2, 2017 and January 1, 2017, respectively. (4) Includes cross currency interest rate swaps and interest rate swaps. (5) Classified as non-current other assets with the exception of $204 million of current assets for July 2, 2017 . The original cost of the equity investments were $496 million and $520 million as of July 2, 2017 and January 1, 2017, respectively. The unrealized gains were $548 million and $757 million as of July 2, 2017 and January 1, 2017, respectively. The unrealized losses were $4 million and $68 million as of July 2, 2017 and January 1, 2017, respectively. (6) Classified as cash equivalents and current marketable securities. (7) Classified as other current assets, including the net effect of the CSA (8) Classified as accounts payable, including the net effect of the CSA. The Company's cash, cash equivalents and current marketable securities as of July 2, 2017 comprised: July 2, 2017 (Dollars in Millions) Carrying Amount Unrecognized Gain Unrecognized Loss Estimated Fair Value Cash & Cash Equivalents Current Marketable Securities Cash $ 2,547 — — 2,547 2,547 U.S. Gov't Securities (1) — — — — Other Sovereign Securities (1) 210 — — 210 210 U.S. Reverse repurchase agreements 2,841 — — 2,841 2,841 Other Reverse repurchase agreements 271 — — 271 271 Corporate debt securities (1) 979 — — 979 979 Money market funds 1,076 — — 1,076 1,076 Time deposits (1) 1,126 — — 1,126 1,126 Subtotal 9,050 — — 9,050 9,050 — Unrealized Gain Unrealized Loss Gov't securities 3,548 — — 3,548 3,548 Other Sovereign Securities 1 — — 1 — 1 Corporate debt securities 50 — — 50 — 50 Equity investments 17 187 204 — 204 Subtotal Available for Sale (2) $ 3,616 187 — 3,803 3,548 255 Total cash, cash equivalents and current marketable securities 12,598 255 (1) Held to maturity investments are reported at amortized cost and gains or losses are reported in earnings. (2) Available for sale securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income. Fair value of government securities and obligations and corporate debt securities was estimated using quoted broker prices and significant other observable inputs. The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. Available for sale securities with stated maturities of greater than one year from the date of purchase are available for current operations and are classified as cash equivalents and current marketable securities. The excess of the estimated fair value over the carrying value of cash equivalents and current marketable securities was $0.2 billion at January 1, 2017. The contractual maturities of the available for sale securities at July 2, 2017 are as follows: (Dollars in Millions) Cost Basis Fair Value Due within one year $ 3,588 3,588 Due after one year through five years 11 11 Due after five years through ten years — — Total debt securities $ 3,599 3,599 Financial Instruments not measured at Fair Value: The following financial liabilities are held at carrying amount on the consolidated balance sheet as of July 2, 2017 : (Dollars in Millions) Carrying Amount Estimated Fair Value Financial Liabilities Current Debt $ 7,209 7,209 Non-Current Debt 5.15% Debentures due 2018 899 933 1.65% Notes due 2018 599 601 4.75% Notes due 2019 (1B Euro 1.1397) 1,136 1,266 1.875% Notes due 2019 500 508 0.89% Notes due 2019 300 301 1.125% Notes due 2019 699 696 3% Zero Coupon Convertible Subordinated Debentures due in 2020 69 126 2.95% Debentures due 2020 546 566 3.55% Notes due 2021 448 476 2.45% Notes due 2021 349 357 1.65% Notes due 2021 997 991 0.250% Notes due 2022 (1B Euro 1.1397) 1,136 1,136 2.25% Notes due 2022 995 1,003 6.73% Debentures due 2023 250 311 3.375% Notes due 2023 807 866 2.05% Notes due 2023 497 493 0.650% Notes due 2024 (750MM Euro 1.1397) 850 852 5.50% Notes due 2024 (500 MM GBP 1.2965) 642 823 2.45% Notes due 2026 1,990 1,946 2.95% Notes due 2027 995 1,034 1.150% Notes due 2028 (750MM Euro 1.1397) 846 848 6.95% Notes due 2029 296 409 4.95% Debentures due 2033 498 596 4.375% Notes due 2033 857 982 1.650% Notes due 2035 (1.5B Euro 1.1397) 1,691 1,717 3.55% Notes due 2036 987 1,027 5.95% Notes due 2037 990 1,334 3.625% Notes due 2037 1,485 1,556 5.85% Debentures due 2038 695 933 4.50% Debentures due 2040 537 608 4.85% Notes due 2041 296 358 4.50% Notes due 2043 495 578 3.70% Notes due 2046 1,971 2,030 3.75% Notes due 2047 990 1,033 Other 25 25 Total Non-Current Debt $ 27,363 29,319 The weighted average effective interest rate on non-current debt is 3.27% . The excess of the estimated fair value over the carrying value of debt was $1.6 billion at January 1, 2017. Fair value of the non-current debt was estimated using market prices, which were corroborated by quoted broker prices and significant other observable inputs. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 02, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The worldwide effective income tax rates for the fiscal six months of 2017 and 2016 were 20.1% and 17.1% , respectively. The Company completed its acquisition of AMO in the first fiscal quarter of 2017, and incurred incremental tax costs that were discretely recorded in the first quarter, which has increased the effective tax rate by 2.1% for the first six months of 2017 compared to the same period in 2016. Additionally, the Company had more income in higher tax jurisdictions relative to lower tax jurisdictions as compared to 2016. These increases to the effective tax rate were partially offset by additional tax benefits received from stock-based compensation that either vested or were exercised during the first fiscal six months of 2017 and 2016, which reduced the effective tax rate by 2.7% and 2.8% , respectively. As of July 2, 2017 , the Company had approximately $3.2 billion of liabilities from unrecognized tax benefits. The Company believes it is possible that audits may be completed by tax authorities in some jurisdictions over the next twelve months. The Company is not able to provide a reasonably reliable estimate of the timing of any future tax payments relating to uncertain tax positions. |
Pensions and Other Postretireme
Pensions and Other Postretirement Benefits | 6 Months Ended |
Jul. 02, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | PENSIONS AND OTHER POSTRETIREMENT BENEFITS Components of Net Periodic Benefit Cost Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit plans for the fiscal second quarters of 2017 and 2016 include the following components: Fiscal Second Quarters Ended Retirement Plans Other Benefit Plans (Dollars in Millions) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Service cost $ 255 226 62 55 Interest cost 231 233 40 39 Expected return on plan assets (509 ) (493 ) (1 ) (1 ) Amortization of prior service cost/(credit) 1 (1 ) (8 ) (8 ) Recognized actuarial losses 150 124 35 34 Curtailments and settlements (1 ) 4 — — Net periodic benefit cost $ 127 93 128 119 Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit plans for the fiscal six months of 2017 and 2016 include the following components: Fiscal Six Months Ended Retirement Plans Other Benefit Plans (Dollars in Millions) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Service cost $ 506 452 123 110 Interest cost 461 466 79 79 Expected return on plan assets (1,014 ) (985 ) (3 ) (3 ) Amortization of prior service cost/(credit) 1 — (15 ) (16 ) Recognized actuarial losses 302 248 69 68 Curtailments and settlements (1 ) 5 — — Net periodic benefit cost $ 255 186 253 238 Company Contributions For the fiscal six months ended July 2, 2017 , the Company contributed $34 million and $20 million to its U.S. and international retirement plans, respectively. The Company plans to continue to fund its U.S. defined benefit plans to comply with the Pension Protection Act of 2006. International plans are funded in accordance with local regulations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jul. 02, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME Components of other comprehensive income (loss) consist of the following: Foreign Gain/(Loss) Employee Gain/(Loss) Total Accumulated Currency On Benefit On Derivatives Other Comprehensive (Dollars in Millions) Translation Securities Plans & Hedges Income (Loss) January 1, 2017 $ (9,047 ) 411 (5,980 ) (285 ) (14,901 ) Net change 1,238 (57 ) 237 249 1,667 July 2, 2017 $ (7,809 ) 354 (5,743 ) (36 ) (13,234 ) Amounts in accumulated other comprehensive income are presented net of the related tax impact. Foreign currency translation is not adjusted for income taxes where it relates to permanent investments in international subsidiaries. For additional details on comprehensive income see the Consolidated Statements of Comprehensive Income. Details on reclassifications out of Accumulated Other Comprehensive Income: Gain/(Loss) On Securities - reclassifications released to Other (income) expense, net. Employee Benefit Plans - reclassifications are included in net periodic benefit cost. See Note 6 for additional details. Gain/(Loss) On Derivatives & Hedges - reclassifications to earnings are recorded in the same account as the underlying transaction. See Note 4 for additional details. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jul. 02, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal second quarters ended July 2, 2017 and July 3, 2016 : Fiscal Second Quarters Ended (Shares in Millions) July 2, 2017 July 3, 2016 Basic net earnings per share $ 1.42 1.46 Average shares outstanding — basic 2,691.9 2,745.4 Potential shares exercisable under stock option plans 143.2 146.3 Less: shares which could be repurchased under treasury stock method (94.6 ) (99.2 ) Convertible debt shares 1.0 1.7 Average shares outstanding — diluted 2,741.5 2,794.2 Diluted net earnings per share $ 1.40 1.43 The diluted net earnings per share calculation for both the fiscal second quarters ended July 2, 2017 and July 3, 2016 included the dilutive effect of convertible debt that was offset by the related reduction in interest expense. The diluted net earnings per share calculation for both the fiscal second quarters ended July 2, 2017 and July 3, 2016 included all shares related to stock options, as there were no options or other instruments which were anti-dilutive. The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal six months ended July 2, 2017 and July 3, 2016 : Fiscal Six Months Ended (Shares in Millions) July 2, 2017 July 3, 2016 Basic net earnings per share $ 3.06 3.07 Average shares outstanding — basic 2,699.3 2,751.4 Potential shares exercisable under stock option plans 142.2 145.8 Less: shares which could be repurchased under treasury stock method (93.1 ) (98.0 ) Convertible debt shares 1.0 1.7 Average shares outstanding — diluted 2,749.4 2,800.9 Diluted net earnings per share $ 3.00 3.02 The diluted net earnings per share calculation for both the fiscal six months ended July 2, 2017 and July 3, 2016 included the dilutive effect of convertible debt that was offset by the related reduction in interest expense. The diluted net earnings per share calculation for both the fiscal six months ended July 2, 2017 and July 3, 2016 included all shares related to stock options, as there were no options or other instruments which were anti-dilutive. |
Segments of Business and Geogra
Segments of Business and Geographic Areas | 6 Months Ended |
Jul. 02, 2017 | |
Segment Reporting [Abstract] | |
Segments of Business and Geographic Areas | SEGMENTS OF BUSINESS AND GEOGRAPHIC AREAS SALES BY SEGMENT OF BUSINESS Fiscal Second Quarters Ended (Dollars in Millions) July 2, July 3, Percent Change Consumer United States $ 1,487 1,384 7.4 % International 1,991 2,035 (2.2 ) Total 3,478 3,419 1.7 Pharmaceutical United States 5,010 5,144 (2.6 ) International 3,625 3,510 3.3 Total 8,635 8,654 (0.2 ) Medical Devices United States 3,229 3,044 6.1 International 3,497 3,365 3.9 Total 6,726 6,409 4.9 Worldwide United States 9,726 9,572 1.6 International 9,113 8,910 2.3 Total $ 18,839 18,482 1.9 % Fiscal Six Months Ended (Dollars in Millions) July 2, July 3, Percent Change Consumer United States $ 2,901 2,742 5.8 % International 3,805 3,872 (1.7 ) Total 6,706 6,614 1.4 Pharmaceutical United States 9,882 10,081 (2.0 ) International 6,998 6,751 3.7 Total 16,880 16,832 0.3 Medical Devices United States 6,321 6,070 4.1 International 6,698 6,448 3.9 Total 13,019 12,518 4.0 Worldwide United States 19,104 18,893 1.1 International 17,501 17,071 2.5 Total $ 36,605 35,964 1.8 % INCOME BEFORE TAX BY SEGMENT Fiscal Second Quarters Ended (Dollars in Millions) July 2, July 3, Percent Change Consumer $ 658 571 15.2 % Pharmaceutical (1) 3,414 3,687 (7.4 ) Medical Devices (2) 992 939 5.6 Segments operating profit 5,064 5,197 (2.6 ) Less: Expense not allocated to segments (3) 316 293 Worldwide income before tax $ 4,748 4,904 (3.2 )% Fiscal Six Months Ended (Dollars in Millions) July 2, 2017 July 3, 2016 Percent Change Consumer $ 1,254 1,137 10.3 % Pharmaceutical (1) 7,077 7,031 0.7 Medical Devices (2) 2,555 2,515 1.6 Segments operating profit 10,886 10,683 1.9 Less: Expense not allocated to segments (3) 563 485 Worldwide income before taxes $ 10,323 10,198 1.2 % (1) Includes a positive adjustment of $0.3 billion to previous reserve estimates in the fiscal second quarter of 2016. Includes a positive adjustment of $0.5 billion to previous reserve estimates in the fiscal six months of 2016. Includes acquisition costs related to the Actelion acquisition of $0.2 billion in the fiscal second quarter and fiscal six months of 2017. Includes a gain of $0.2 billion related to monetization of future royalty receivables in the fiscal second quarter and fiscal six months of 2017. Includes a gain of $0.2 billion and $0.1 billion in the fiscal six months of 2017 and 2016, respectively, related to the sale of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc. (2) Includes a restructuring related charge of $0.1 billion and $0.1 billion in the fiscal second quarters of 2017 and 2016, respectively. Includes a restructuring related charge of $0.3 billion and $0.3 billion in the fiscal six months of 2017 and 2016, respectively. Includes litigation expense of $0.4 billion and $0.6 billion in the fiscal second quarter of 2017 and 2016, respectively. Includes litigation expense of $0.4 billion and $0.7 billion in the fiscal six months of 2017 and 2016, respectively. Includes an asset impairment of $0.2 billion primarily related to the insulin pump business in the fiscal second quarter and fiscal six months of 2017. (3) Amounts not allocated to segments include interest income/expense and general corporate income/expense. SALES BY GEOGRAPHIC AREA Fiscal Second Quarters Ended (Dollars in Millions) July 2, 2017 July 3, 2016 Percent Change United States $ 9,726 9,572 1.6 % Europe 4,232 4,090 3.5 Western Hemisphere, excluding U.S. 1,499 1,542 (2.8 ) Asia-Pacific, Africa 3,382 3,278 3.2 Total $ 18,839 18,482 1.9 % Fiscal Six Months Ended (Dollars in Millions) July 2, 2017 July 3, 2016 Percent Change United States $ 19,104 18,893 1.1 % Europe 8,090 7,937 1.9 Western Hemisphere, excluding U.S. 2,953 2,873 2.8 Asia-Pacific, Africa 6,458 6,261 3.1 Total $ 36,605 35,964 1.8 % |
Business Combinations and Dives
Business Combinations and Divestitures | 6 Months Ended |
Jul. 02, 2017 | |
Business Combinations [Abstract] | |
Business Combinations and Divestitures | BUSINESS COMBINATIONS AND DIVESTITURES On June 16, 2017, the Company completed the acquisition of Actelion Ltd. through an all cash tender offer in Switzerland for $280 per share, payable in U.S. dollars. As of July 2, 2017, the Company paid $28.8 billion , net of cash acquired, representing 97.86% of the shares to which the offer was extended. The Company recorded a current liability of $0.7 billion for the shares not tendered as of July 2, 2017, which the Company expects to pay in the second half of 2017 as it takes steps to acquire the remaining outstanding shares of Actelion. As part of the transaction, immediately prior to the completion of the acquisition, Actelion spun out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company, Idorsia Ltd. The shares of Idorsia are listed on the SIX Swiss Exchange (SIX). The Company currently holds 9.9% of the shares of Idorsia and has rights to an additional 22.1% of Idorsia equity through a convertible loan with a principal amount of approximately $0.5 billion . The convertible loan may be converted into Idorsia shares as follows: (i) up to an aggregate shareholding of 16% of Idorsia shares as a result of certain shareholders holding more than 20% of the issued Idorsia shares, and (ii) up to the balance of the remaining amount within 20 business days of the maturity date of the convertible loan, which has a ten year term, or if Idorsia undergoes a change of control transaction. The investment in Idorsia was recorded as a cost method investment in Other assets in the Company's consolidated Balance Sheet. The Company also acquired an option on ACT-132577, a product within Idorsia being developed for resistant hypertension currently in phase 2 of clinical development. The Company has also entered into an agreement to provide Idorsia with a Swiss franc denominated credit facility of approximately $250 million . As of July 2, 2017, Idorsia has not made any draw-downs under the credit facility. Actelion has entered into a transitional services agreement with Idorsia. Actelion has established a leading franchise of differentiated, innovative products for pulmonary arterial hypertension (PAH) that are highly complementary to the existing portfolio of the Company. The addition of Actelion’s specialty in-market medicines and late-stage products is consistent with the Company's efforts to grow in attractive and complementary therapeutic areas and serve patients with serious illnesses and significant unmet medical need. Due to the timing of the close of the transaction, the Company is still finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed. The allocation of the purchase price included in the current period balance sheet is based on the best estimate of management and is preliminary and subject to change. To assist management in the allocation, the Company engaged valuation specialists to prepare independent appraisals. The Company will finalize the amounts recognized as the information necessary to complete the analysis is obtained. The Company expects to finalize these amounts as soon as possible but no later than one year from the acquisition date. The following table presents the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date on June 16, 2017: (Dollars in Millions) Cash & Cash equivalents $ 469 Inventory (1) 759 Accounts Receivable 485 Other current assets 93 Property, plant and equipment 104 Goodwill 5,986 Intangible assets 25,010 Deferred Taxes 3 Other non-current assets 19 Total Assets Acquired 32,928 Current liabilities 531 Deferred Taxes 1,960 Other non-current liabilities 383 Total Liabilities Assumed 2,874 Net Assets Acquired $ 30,054 (1) Includes adjustment of $642 million to write-up the acquired inventory to its estimated fair value. The assets acquired are recorded in the Pharmaceutical segment. The acquisition of Actelion resulted in approximately $6.0 billion of goodwill. The goodwill is primarily attributable to synergies expected to arise from the acquisition. The goodwill is not expected to be deductible for tax purposes. The purchase price allocation to the identifiable intangible assets is as follows: (Dollars in Millions) Intangible assets with definite lives: Patents and trademarks $ 24,230 Total amortizable intangibles 24,230 In-process research and development 780 Total intangible assets $ 25,010 The patents and trademarks acquired are comprised of developed technology with a weighted average life of 9 years and was primarily based on the patent life of the marketed products. The intangible assets with definite lives were assigned asset lives ranging from 4 to 10 years . The in-process research and development intangible assets were valued for technology programs for unapproved products. The value of the IPR&D was calculated using probability adjusted cash flow projections discounted for the risk inherent in such projects. The discount rate applied was 9% . The acquisition was accounted for using the acquisition method and, accordingly, the results of operations of Actelion were reported in the Company's financial statements beginning on June 16, 2017, the date of acquisition. Total sales and a net loss for Actelion for the second quarter ended July 2, 2017 were $91 million and $116 million , respectively. The following table provides pro forma results of operations for the fiscal second quarters and the fiscal six months ended July 2, 2017 and July 3, 2016, as if Actelion had been acquired as of January 4, 2016. The pro forma results include the effect of certain purchase accounting adjustments such as the estimated changes in depreciation and amortization expense on the acquired tangible and intangible assets. However, pro forma results do not include any anticipated cost savings or other effects of the planned integration of Actelion. Accordingly, such amounts are not necessarily indicative of the results if the acquisition had occurred on the dates indicated or which may occur in the future. Unaudited Pro forma Consolidated Results Fiscal Six Months Ended Fiscal Second Quarters Ended (Dollars in Millions Except Per Share Data) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Net Sales 37,836 37,165 19,426 19,090 Net Earnings 7,890 6,875 3,788 3,495 Diluted Net Earnings per Common Share 2.87 2.45 1.38 1.25 In the fiscal second quarter of 2017, the Company recorded acquisition related costs of approximately $0.2 billion before tax, which was recorded in Other (income)/expense. Additionally, during the fiscal second quarter of 2017, the Company completed the acquisition of Neuravi Limited, a privately-held medical device company that develops and markets medical devices for neurointerventional therapy. During the fiscal first quarter of 2017, the Company acquired Abbott Medical Optics (AMO), a wholly-owned subsidiary of Abbott Laboratories, for $4.4 billion , net of cash acquired. The acquisition included ophthalmic products related to: cataract surgery, laser refractive surgery and consumer eye health. The net purchase price was primarily recorded as amortizable intangible assets for $2.3 billion and goodwill for $1.8 billion . The weighted average life of total amortizable intangibles, the majority being customer relationships, is approximately 14.5 years . The goodwill is primarily attributable to synergies expected to arise from the business acquisition and is not deductible for tax purposes. The intangible assets and goodwill amounts are based on the preliminary purchase price allocation which is under review by the Company and is subject to change. The assets acquired were recorded in the Medical Devices segment. Additionally, during the fiscal first quarter of 2017, the Company completed the acquisition of Torax Medical, Inc., a privately-held medical device company that manufactures and markets the LINX™ Reflux Management System for the surgical treatment of gastroesophageal reflux disease and Megadyne Medical Products, Inc., a privately-held medical device company that develops, manufactures and markets electrosurgical tools. During the fiscal first quarter of 2017, the Company received a binding offer from Integra LifeSciences Holdings Corporation to purchase the Company's Codman Neurosurgery business for approximately $1.0 billion . As of July 2, 2017, the assets held for sale were $58 million of inventory, classified as prepaid expenses and other on the Consolidated Balance Sheet. The non-current assets classified as held for sale were $33 million of property, plant and equipment, net and $106 million of goodwill, classified as other assets on the Consolidated Balance Sheet. During the fiscal first quarter of 2017, the Company announced it is engaging in a process to evaluate potential strategic options for the Johnson & Johnson Diabetes Care Companies, specifically LifeScan, Inc., Animas Corporation, and Calibra Medical, Inc. Strategic options may include the formation of operating partnerships, joint ventures or strategic alliances, a sale of the businesses, or other alternatives either separately or together. During the fiscal second quarter of 2017, the Company recorded an impairment charge of $0.2 billion , primarily related to the insulin pump business. All strategic options are still being evaluated to determine the best opportunity to drive future growth and maximize shareholder value. There can be no assurance that this process will result in any transaction or other strategic alternative of any kind therefore, there were no assets held for sale as of July 2, 2017 related to the announcement. During the fiscal second quarter of 2016, the Company completed the acquisitions of NeuWave Medical, Inc., a privately-held medical device company that manufactures and markets minimally invasive soft tissue microwave ablation systems and NeoStrata Company, Inc., a global leader in dermocosmetics. Additionally, during the fiscal second quarter of 2016, the Company completed the divestiture of its controlled substance raw material and active pharmaceutical ingredient (API) business. The proceeds from the divestiture were $0.6 billion . |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jul. 02, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | LEGAL PROCEEDINGS Johnson & Johnson and certain of its subsidiaries are involved in various lawsuits and claims regarding product liability, intellectual property, commercial and other matters; governmental investigations; and other legal proceedings that arise from time to time in the ordinary course of their business. The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. As of July 2, 2017 , the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25. For these and other litigation and regulatory matters discussed below for which a loss is probable or reasonably possible, the Company is unable to estimate the possible loss or range of loss beyond the amounts already accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions. The ability to make such estimates and judgments can be affected by various factors, including whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; or there are numerous parties involved. In the Company's opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company's balance sheet, is not expected to have a material adverse effect on the Company's financial position. However, the resolution of, or increase in accruals for, one or more of these matters in any reporting period may have a material adverse effect on the Company's results of operations and cash flows for that period. PRODUCT LIABILITY Johnson & Johnson and certain of its subsidiaries are involved in numerous product liability claims and lawsuits involving multiple products. Claimants in these cases seek substantial compensatory and, where available, punitive damages. While the Company believes it has substantial defenses, it is not feasible to predict the ultimate outcome of litigation. The Company has established accruals for product liability claims and lawsuits in compliance with ASC 450-20 based on currently available information, which in some cases may be limited. The Company accrues an estimate of the legal defense costs needed to defend each matter when those costs are probable and can be reasonably estimated. For certain of these matters, the Company has accrued additional amounts such as estimated costs associated with settlements, damages and other losses. To the extent adverse verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated. Product liability accruals can represent projected product liability for thousands of claims around the world, each in different litigation environments and with different fact patterns. Changes to the accruals may be required in the future as additional information becomes available. The most significant of these cases include: the DePuy ASR™ XL Acetabular System and DePuy ASR™ Hip Resurfacing System; the PINNACLE ® Acetabular Cup System; pelvic meshes; RISPERDAL ® ; XARELTO ® ; body powders containing talc, primarily JOHNSONS ® Baby Powder; and INVOKANA ® . As of July 2, 2017 , in the U.S. there were approximately 2,000 plaintiffs with direct claims in pending lawsuits regarding injuries allegedly due to the DePuy ASR™ XL Acetabular System and DePuy ASR™ Hip Resurfacing System; 9,700 with respect to the PINNACLE ® Acetabular Cup System; 55,500 with respect to pelvic meshes; 13,800 with respect to RISPERDAL ®; 20,000 with respect to XARELTO ®; 4,800 with respect to body powders containing talc; and 800 with respect to INVOKANA ® . In August 2010, DePuy Orthopaedics, Inc. (DePuy) announced a worldwide voluntary recall of its ASR ™ XL Acetabular System and DePuy ASR ™ Hip Resurfacing System used in hip replacement surgery. Claims for personal injury have been made against DePuy and Johnson & Johnson. The number of pending lawsuits is expected to fluctuate as certain lawsuits are settled or dismissed and additional lawsuits are filed. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the Northern District of Ohio. Litigation has also been filed in countries outside of the United States, primarily in the United Kingdom, Canada, Australia, Ireland, Germany and Italy. In November 2013, DePuy reached an agreement with a Court-appointed committee of lawyers representing ASR Hip System plaintiffs to establish a program to settle claims with eligible ASR Hip patients in the United States who had surgery to replace their ASR Hips, known as revision surgery, as of August 31, 2013. DePuy reached additional agreements in February 2015 and March 2017, which further extended the settlement program to include ASR Hip patients who had revision surgeries after August 31, 2013 and prior to February 15, 2017. This settlement program has resolved more than 9,500 claims, with more expected from the recent extension, therefore bringing to resolution significant ASR Hip litigation activity in the United States. However, lawsuits in the United States remain, and the settlement program does not address litigation outside of the United States. In Australia, a class action settlement was reached that resolved the claims of the majority of ASR Hip patients in that country. The Company continues to receive information with respect to potential additional costs associated with this recall on a worldwide basis. The Company has established accruals for the costs associated with the U.S. settlement program and DePuy ASR ™ Hip-related product liability litigation. Claims for personal injury have also been made against DePuy and Johnson & Johnson relating to the PINNACLE ® Acetabular Cup System used in hip replacement surgery. The number of pending product liability lawsuits continues to increase, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the Northern District of Texas. Litigation has also been filed in some state courts and in countries outside of the United States, primarily in the United Kingdom. The Company has established an accrual for defense costs in connection with product liability litigation associated with the PINNACLE ® Acetabular Cup System. Claims for personal injury have been made against Ethicon, Inc. (Ethicon) and Johnson & Johnson arising out of Ethicon's pelvic mesh devices used to treat stress urinary incontinence and pelvic organ prolapse. The number of pending product liability lawsuits continues to increase, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the Southern District of West Virginia. In addition, class actions and individual personal injury cases or claims have been commenced in various countries outside of the United States, including claims and cases in the United Kingdom, the Netherlands and Belgium, and class actions in Israel, Australia and Canada, seeking damages for alleged injury resulting from Ethicon's pelvic mesh devices. The Company has established an accrual with respect to product liability litigation associated with Ethicon's pelvic mesh products. Claims for personal injury have been made against Janssen Pharmaceuticals, Inc. and Johnson & Johnson arising out of the use of RISPERDAL ® , indicated for the treatment of schizophrenia, acute manic or mixed episodes associated with bipolar I disorder and irritability associated with autism, and related compounds. Lawsuits have been primarily filed in state courts in Pennsylvania, California, and Missouri. Other actions are pending in various courts in the United States and Canada. Product liability lawsuits continue to be filed, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. The Company has established an accrual with respect to product liability litigation associated with RISPERDAL ® . Claims for personal injury arising out of the use of XARELTO ® , an oral anticoagulant, have been made against Janssen Pharmaceuticals, Inc. (JPI); Johnson & Johnson; and JPI's collaboration partner for XARELTO ® Bayer AG and certain of its affiliates. The number of pending product liability lawsuits continues to increase, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the Eastern District of Louisiana. In addition, cases have been filed in state courts across the United States. Many of these cases have been consolidated into a state mass tort litigation in Philadelphia, Pennsylvania; and there are coordinated proceedings in Delaware, California and Missouri. Class action lawsuits also have been filed in Canada. The Company has established an accrual for defense costs in connection with product liability litigation associated with XARELTO ® . Claims for personal injury have been made against Johnson & Johnson Consumer Inc. and Johnson & Johnson arising out of the use of body powders containing talc, primarily JOHNSONS ® Baby Powder. The number of pending product liability lawsuits continues to increase, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. Lawsuits have been primarily filed in state courts in Missouri, New Jersey and California. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the District of New Jersey. The Company has established an accrual for defense costs in connection with product liability litigation associated with body powders containing talc. Claims for personal injury have been made against a number of Johnson & Johnson companies, including Janssen Pharmaceuticals, Inc. and Johnson & Johnson, arising out of the use of INVOKANA ® , a prescription medication indicated to improve glycemic control in adults with Type 2 diabetes. The number of pending product liability lawsuits continues to increase, and the Company continues to receive information with respect to potential costs and the anticipated number of cases. Cases filed in federal courts in the United States have been organized as a multi-district litigation in the United States District Court for the District of New Jersey. In addition, there are federal cases pending in the Southern District of California and the Eastern District of Missouri. Cases have also been filed in state courts in Pennsylvania, California and New Jersey. Class action lawsuits have been filed in Canada. The Company has established an accrual for defense costs in connection with product liability litigation associated with INVOKANA ® . INTELLECTUAL PROPERTY Certain subsidiaries of Johnson & Johnson are subject, from time to time, to legal proceedings and claims related to patent, trademark and other intellectual property matters arising out of their businesses. Many of these matters involve challenges to the coverage and/or validity of the patents on various products and allegations that certain of the Company’s products infringe the patents of third parties. Although these subsidiaries believe that they have substantial defenses to these challenges and allegations with respect to all significant patents, there can be no assurance as to the outcome of these matters. A loss in any of these cases could adversely affect the ability of these subsidiaries to sell their products, result in loss of sales due to loss of market exclusivity, require the payment of past damages and future royalties, and may result in a non-cash impairment charge for any associated intangible asset. The most significant of these matters are described below. Medical Devices In June 2009, Rembrandt Vision Technologies, L.P. (Rembrandt) filed a patent infringement lawsuit against Johnson & Johnson Vision Care, Inc. (JJVCI) in the United States District Court for the Eastern District of Texas alleging that JJVCI's manufacture and sale of its ACUVUE ® ADVANCE and ACUVUE OASYS ® Hydrogel Contact Lenses infringed Rembrandt’s U.S. Patent No. 5,712,327 and seeking monetary relief. The case was transferred to the United States District Court for the Middle District of Florida, where a trial in May 2012 resulted in a verdict of non-infringement that was subsequently upheld on appeal. In July 2014, Rembrandt sought a new trial based on alleged new evidence, which the District Court denied. In April 2016, the Court of Appeals overturned that ruling and remanded the case to the District Court for a new trial. A new trial is scheduled for August 2017. In March 2013, Medinol Ltd. (Medinol) filed a patent infringement lawsuit against Cordis Corporation (Cordis) and Johnson & Johnson in the United States District Court for the Southern District of New York alleging that Cordis’s sales of the CYPHER ™ and CYPHER SELECT ™ Stents made in the United States since 2005 willfully infringed four of Medinol's patents directed to the geometry of articulated stents. Medinol is seeking damages and attorneys’ fees. After trial in January 2014, the District Court dismissed the case, finding Medinol unreasonably delayed bringing its claims (the laches defense). In September 2014, the District Court denied a motion by Medinol to vacate the judgment and grant it a new trial. Medinol appealed the decision to the United States Court of Appeals for the Federal Circuit, then dismissed the appeal in order to file a petition for review with the United States Supreme Court. In March 2017, the United States Supreme Court held that the laches defense is not available in patent cases and remanded this case to the U.S. Court of Appeals for the Federal Circuit for further proceedings. Cordis was divested in 2015, and the Company retained any liability that may result from this case. In November 2016, MedIdea, L.L.C. (MedIdea) filed a patent infringement lawsuit against DePuy Orthopaedics, Inc. in the United States District Court for the Northern District of Illinois alleging infringement by the ATTUNE ® Knee System. MedIdea alleges infringement of U.S. Patent Nos. 6,558,426; 8,273,132; 8,721,730 and 9,492,280 relating to posterior stabilized knee systems. Specifically, MedIdea alleges that the SOFCAM TM Contact feature of the ATTUNE ® posterior stabilized knee products infringes the patents-in-suit. MedIdea is seeking monetary damages and injunctive relief. In June 2017, the case was transferred to the United States District Court for the District of Massachusetts. In December 2016, Ethicon Endo-Surgery, Inc. and Ethicon Endo-Surgery, LLC (now known as Ethicon LLC) sued Covidien, Inc. in the United States District Court for the District of Massachusetts seeking a declaration that U.S. Patent Nos. 6,585,735 (the ’735 patent); 7,118,587; 7,473,253; 8,070,748 and 8,241,284 (the ’284 patent), are either invalid or not infringed by Ethicon’s ENSEAL ® X1 Large Jaw Tissue Sealer product. In April 2017, Covidien LP, Covidien Sales LLC, and Covidien AG (collectively, Covidien) answered and counterclaimed, denying the allegations, asserting willful infringement of the ’735 patent, the ’284 patent and U.S. Patent Nos. 8,323,310; 9,084,608; 9,241,759 and 9,113,882, and seeking damages and an injunction. Covidien filed a motion for preliminary injunction, and a hearing on the motion is set for September 2017. Pharmaceutical In April 2016, MorphoSys AG, a German biotech company, filed a patent infringement lawsuit against Janssen Biotech, Inc. (JBI), Genmab U.S. Inc. and Genmab A/S (collectively, Genmab) in the United States District Court for the District of Delaware. MorphoSys alleges that JBI’s manufacture and sale of DARZALEX ® (daratumumab) willfully infringes MorphoSys’ U.S. Patent Nos. 8,263,746 and 9,200,061. MorphoSys is seeking money damages. JBI licenses patents and the commercial rights to DARZALEX ® from Genmab. Trial in the case is scheduled to commence in August 2018. In August 2016, Sandoz Ltd and Hexal AG (collectively, Sandoz) filed a lawsuit in the English High Court against G.D. Searle LLC (a Pfizer company) and Janssen Sciences Ireland UC (JSI) alleging that Searle’s supplementary protection certificate SPC/GB07/038 (SPC), which is exclusively licensed to JSI, is invalid and should be revoked. Janssen-Cilag Limited sells PREZISTA ® (darunavir) in the UK pursuant to this license. In October 2016, Searle and JSI counterclaimed against Sandoz for threatened infringement of the SPC based on statements of its plans to launch generic darunavir in the UK. Sandoz admitted that its generic darunavir product would infringe the SPC if it is found valid. Searle and JSI are seeking an order enjoining Sandoz from marketing its generic darunavir before the expiration of the SPC. Following a trial in April 2017, the Court entered a decision holding that the SPC is valid and granting a final injunction. Sandoz has appealed the Court’s decision and the injunction will be stayed pending the appeal. REMICADE ® Related Cases U.S. Proceedings In September 2013, Janssen Biotech, Inc. (JBI) and NYU Langone Medical Center (NYU) received an Office Action from the United States Patent and Trademark Office (USPTO) rejecting the claims in U.S. Patent No. 6,284,471 relating to REMICADE ® (infliximab) (the ’471 patent) in a reexamination proceeding instituted by a third party. The ’471 patent expires in September 2018 and is co-owned by JBI and NYU, with NYU having granted JBI an exclusive license to NYU’s rights under the patent. Following several office actions by the patent examiner, including two further rejections, and responses by JBI, the USPTO issued a further action maintaining its rejection of the ’471 patent. JBI filed a notice of appeal to the USPTO’s Patent Trial and Appeal Board, which issued a decision in November 2016 upholding the examiner's rejection. JBI has filed an appeal to the United States Court of Appeals for the Federal Circuit. In August 2014, Celltrion Healthcare Co. Ltd. and Celltrion Inc. (together, Celltrion) filed an application with the U.S. Food and Drug Administration (FDA) for approval to make and sell its own infliximab biosimilar. In March 2015, JBI filed a lawsuit in the United States District Court for the District of Massachusetts against Celltrion and Hospira Healthcare Corporation (Hospira), which has exclusive U.S. marketing rights for Celltrion's infliximab biosimilar in the United States, seeking, among other things, a declaratory judgment that their biosimilar product infringes or potentially infringes several JBI patents, including the ’471 patent and U.S. Patent No. 7,598,083 (the ’083 patent). In August 2016, the District Court granted both Celltrion's and Hospira's motions for summary judgment of invalidity of the ’471 patent. JBI appealed those decisions to the United States Court of Appeals for the Federal Circuit. This case and the appeal of the reexamination of the ’471 patent have been designated companion cases and will be heard by the same panel of judges at the Federal Circuit. In June 2016, JBI filed two additional patent infringement lawsuits asserting the ’083 patent, one against Celltrion in the United States District Court for the District of Massachusetts and the other against HyClone Laboratories, Inc., the manufacturer of the cell culture media that Celltrion uses to make its biosimilar product, in the United States District Court for the District of Utah. Although the ’083 patent is already asserted in the existing lawsuit against Celltrion, the additional lawsuit expands the claims to include any use of the cell culture media made in the United States to manufacture Celltrion's biosimilar. This additional lawsuit against Celltrion has been consolidated with the existing lawsuit discussed above. Hospira has moved to dismiss all counts of the lawsuit related to the ’083 patent as to it. Celltrion has moved to dismiss all counts of the lawsuit related to the ’083 patent without prejudice for failure to join all the co-owners of the ’083 patent as plaintiffs. The trial has been postponed pending resolution of these motions. The FDA approved Celltrion’s infliximab biosimilar for sale in the United States in April 2016. Hospira's parent company, Pfizer Inc., launched Celltrion's infliximab biosimilar in the United States in late 2016. In April 2017, JBI received notice that the FDA approved a marketing application submitted by Samsung Bioepis Co. Ltd. (Samsung) for the sale of its infliximab biosimilar in the United States. In May 2017, JBI filed a patent infringement lawsuit against Samsung in the United States District Court for the District of New Jersey alleging that the sale of its biosimilar product may infringe three of JBI’s patents. In July 2017, Samsung announced the U.S. launch of its biosimilar, which is being commercialized by Merck in the United States. Canadian Proceedings In March 2013, Hospira filed an impeachment proceeding in the Federal Court of Canada against The Kennedy Institute of Rheumatology (Kennedy) challenging the validity of a Canadian patent related to REMICADE ® (a Feldman patent), which is exclusively licensed to JBI. In October 2013, Kennedy, along with JBI, Janssen Inc. (Janssen) and Cilag GmbH International (both affiliates of JBI), filed a counterclaim for infringement against Celltrion and Hospira. The counterclaim alleges that the products described in Celltrion’s and Hospira’s marketing applications to Health Canada for their subsequent entry biologics (SEB) to REMICADE ® would infringe the Feldman patents owned by Kennedy. Janssen and Kennedy are seeking damages and an injunction against Hospira. A trial in this patent action concluded in October 2016, and closing arguments took place in January 2017. The parties are awaiting a decision. The remaining REMICADE ® patent at issue in the action expired August 1, 2017. In January 2014, Health Canada approved Celltrion’s SEB to REMICADE ® , allowing Celltrion to market its infliximab biosimilar in Canada, regardless of the pending patent action. In June 2014, Health Canada approved Hospira’s SEB to REMICADE ® . In July 2014, Janssen filed a lawsuit in the Federal Court of Canada challenging the Canadian Minister of Health’s marketing approval (Notice of Compliance) for Hospira’s SEB because Hospira did not serve a Notice of Allegation on Janssen to address the patent listed by Janssen on the Patent Register. In March 2015, the parties entered a settlement agreement whereby Health Canada agreed to a Consent Judgment setting aside Hospira’s Notice of Compliance, subject to Health Canada's appeal, which was filed in June 2015. Nevertheless, Hospira began marketing an infliximab biosimilar as a distributor under Celltrion’s Notice of Compliance. In October 2016, the appeals court reversed the Consent Judgment. In June 2017, the Supreme Court of Canada denied Janssen's application for leave to appeal. The REMICADE ® patent at issue in the lawsuit expired August 1, 2017. Hospira continues to market and sell Celltrion's infliximab biosimilar in Canada. Litigation Against Filers of Abbreviated New Drug Applications (ANDAs) The following summarizes lawsuits pending against generic companies that have filed Abbreviated New Drug Applications (ANDAs) with the FDA, or undertaken similar regulatory processes outside of the United States, seeking to market generic forms of products sold by various subsidiaries of Johnson & Johnson prior to expiration of the applicable patents covering those products. These ANDAs typically include allegations of non-infringement, invalidity and unenforceability of the applicable patents. In the event the subsidiaries are not successful in these actions, or the statutory 30-month stays of the ANDAs expire before the United States District Court rulings are obtained, the third-party companies involved will have the ability, upon approval of the FDA, to introduce generic versions of the products at issue to the market, resulting in the potential for substantial market share and revenue losses for those products, and which may result in a non-cash impairment charge in any associated intangible asset. In addition, from time to time, subsidiaries may settle these actions and such settlements can involve the introduction of generic versions of the products at issue to the market prior to the expiration of the relevant patents. The inter partes review (IPR) process with the United States Patent and Trademark Office (USPTO), created under the 2011 America Invents Act, is also being used by generic companies in conjunction with these ANDAs and lawsuits to challenge patents held by the Company’s subsidiaries. CONCERTA ® In October 2016, ALZA Corporation and Janssen Pharmaceuticals, Inc. (together, Janssen) initiated a patent infringement lawsuit in the United States District Court for the District of Delaware against Amneal Pharmaceuticals of New York, LLC and Amneal Pharmaceuticals LLC (together, Amneal), who filed an ANDA seeking approval to market a generic version of CONCERTA ® before the expiration of United States Patent Nos. 8,163,798 and 9,144,549. Janssen is seeking an order enjoining Amneal from marketing its generic version of CONCERTA ® before the expiration of the patents. In July 2017, the parties filed a stipulation of dismissal based on Amneal's agreement not to market its generic version of CONCERTA ® before the expiration of the patents. ZYTIGA ® In July 2015, Janssen Biotech, Inc. (JBI), Janssen Oncology, Inc. (Janssen Oncology) and Janssen Research & Development, LLC (collectively, Janssen) and BTG International Ltd. (BTG) initiated a patent infringement lawsuit in the United States District Court for the District of New Jersey against a number of generic companies (and certain of their affiliates and/or suppliers) who filed ANDAs seeking approval to market a generic version of ZYTIGA ® before the expiration of United States Patent No. 8,822,438 (the ’438 patent). The generic companies currently include Actavis Laboratories, FL, Inc. (Actavis); Amneal Pharmaceuticals, LLC and Amneal Pharmaceuticals of New York, LLC (collectively, Amneal); Apotex Inc. and Apotex Corp. (collectively, Apotex); Citron Pharma LLC (Citron); Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively, Dr. Reddy’s); Mylan Pharmaceuticals Inc. and Mylan Inc. (collectively, Mylan); Par Pharmaceuticals, Inc. and Par Pharmaceutical Companies, Inc. (collectively, Par); Sun Pharmaceutical Industries Ltd. and Sun Pharmaceuticals Industries, Inc. (collectively, Sun); Teva Pharmaceuticals USA, Inc. (Teva); Wockhardt Bio A.G.; Wockhardt USA LLC and Wockhardt Ltd. (collectively, Wockhardt); West-Ward Pharmaceutical Corp. (West-Ward) and Hikma Pharmaceuticals, LLC (Hikma). The Court has set a trial date of October 2017. Subsequently, Janssen and BTG initiated patent infringement lawsuits in the United States District Court for the District of New Jersey against Amerigen Pharmaceuticals Limited (Amerigen) in May 2016, and Glenmark Pharmaceuticals, Inc. in June 2016, each of whom filed an ANDA seeking approval to market its generic version of ZYTIGA ® before the expiration of the ’438 patent. In August 2015, Janssen and BTG filed an additional jurisdictional protective lawsuit against the Mylan defendants in the United States District Court for the Northern District of West Virginia, which has been stayed. In each of the above lawsuits, Janssen is seeking an order enjoining the defendants from marketing their generic versions of ZYTIGA ® before the expiration of the ’438 patent. Several generic companies including Amerigen, Argentum Pharmaceuticals LLC (Argentum), Mylan, Wockhardt, Actavis, Amneal, Dr. Reddy’s, Sun, Teva, West-Ward and Hikma have filed Petitions for Inter Partes Review (IPR) with the USPTO, seeking to invalidate the ’438 patent. The Company is awaiting final written decisions in all of the IPRs. COMPLERA ® In August and September 2015, Janssen Pharmaceutica NV and Janssen Sciences Ireland UC (collectively, Janssen) and Gilead Sciences, Inc. and Gilead Sciences Ireland UC (collectively, Gilead) initiated patent infringement lawsuits in the United States District Courts for the District of Delaware and the District of West Virginia, respectively, against Mylan, Inc. and Mylan Pharmaceuticals, Inc. (collectively, Mylan), who filed an ANDA seeking approval to market a generic version of COMPLERA ® before the expiration of U.S. Patent Nos. 8,841,310, 7,125,879 and 8,101,629. In July 2017, the West Virginia lawsuit was dismissed without prejudice by stipulation of the parties. In the Delaware lawsuit, Janssen and Gilead amended their complaint to add claims for patent infringement with respect to U.S. Patent Nos. 8,080,551; 7,399,856; 7,563,922; 8,101,752 and 8,618,291. A trial in the Delaware action has been scheduled for February 2018. In each of these lawsuits, Janssen is seeking an order enjoining the defendants from marketing their generic versions of COMPLERA ® before the expiration of the relevant patents. XARELTO ® B eginning in October 2015, Janssen Pharmaceuticals, Inc. (JPI) and Bayer Pharma AG and Bayer Intellectual Property GmbH (together, Bayer) filed patent infringement lawsuits in the United States District Court for the District of Delaware against a number of generic companies who filed ANDAs seeking approval to market generic versions of XARELTO ® before expiration of Bayer’s U.S. Patent Nos. 7,157,456 , 7,585,860 and 7,592,339 relating to XARELTO ® . JPI is the exclusive licensee of the asserted patents. The following generic companies are named defendants: Aurobindo Pharma Limited and Aurobindo Pharma USA, Inc. (together, Aurobindo); Breckenridge Pharmaceutical, Inc.; Invagen Pharmaceuticals Inc. (Invagen); Micro Labs USA Inc. and Micro Labs Ltd (together, Micro); Mylan Pharmaceuticals Inc. (Mylan); Prinston Pharmaceuticals, Inc.; Sigmapharm Laboratories, LLC (Sigmapharm); Torrent Pharmaceuticals, Limited and Torrent Pharma Inc. Trial is scheduled for March 2018. Beginning in April 2017, JPI and Bayer Intellectual Property GmbH and Bayer AG (together, Bayer AG) filed patent infringement lawsuits in the United States District Court for the District of Delaware against a number of generic companies who filed ANDAs seeking approval to market generic versions of XARELTO ® before expiration of Bayer AG’s U.S. Patent No. 9,539,218 relating to XARELTO ® . The following generic companies are named defendants: Taro Pharmaceutical Industries Ltd. and Taro Pharmaceuticals U.S.A., Inc. (together, Taro); Aurobindo; Micro; Mylan; Sigmapharm; Invagen; Alembic Pharmaceuticals Limited, Alembic Global Holding SA and Alembic Pharmaceuticals, Inc. In each of these lawsuits, JPI is seeking an order enjoining the defendants from marketing their generic versions of XARELTO ® before the expiration of the relevant patents. RISPERDAL ® CONSTA ® On November 30, 2016, the United States Patent and Trademark Office (USPTO) instituted an Inter Partes Review filed by Luye Pharma Group Ltd., Luye Pharma (USA) Ltd., Sandong Luye Pharmaceutical Co., Ltd. and Nanjing Luye Pharmaceutical Co., Ltd., seeking to invalidate U.S. Patent No. 6,667,061 relating to RISPERDAL CONSTA ® . Janssen Pharmaceuticals, Inc. markets RISPERDAL CONSTA ® pursuant to a license from Alkermes Pharma Ireland Ltd. A decision by the USPTO is expected in November 2017. INVOKANA ® /INVOKAMET ® Beginning in July 2017, Janssen Pharmaceuticals, Inc., Janssen |
Restructuring
Restructuring | 6 Months Ended |
Jul. 02, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING The Company announced restructuring actions in its Medical Devices segment to better serve the needs of patients and customers in today’s evolving healthcare marketplace. The Company is undertaking actions to strengthen its go-to-market model, accelerate the pace of innovation, further prioritize key platforms and geographies, and streamline operations while maintaining high quality standards. The Company estimates that, in connection with its plans, it will record pre-tax restructuring and other charges of approximately $2.0 billion to $2.4 billion . In the fiscal six months of 2017, the Company recorded a pre-tax charge of $289 million , of which $17 million was included in cost of products sold and $176 million was included in other (income) expense. In the fiscal second quarter of 2017, the Company recorded a pre-tax charge of $128 million , of which $13 million was included in cost of products sold and $104 million was included in other (income) expense. In the fiscal second quarter of 2017, the Company recorded a $90 million accrual adjustment to the severance reserve due to higher voluntary separation than anticipated. See the following table for additional details. Total project costs of $1.6 billion have been recorded since the restructuring announcement. Additionally, as part of the plan, the Company expects that the restructuring actions will result in position eliminations of approximately 4 to 6 percent of the Medical Devices segment’s global workforce over the next 18 months , subject to any consultation procedures in countries, where required. Approximately 2,100 positions have been eliminated of which 1,650 received separation payments since the restructuring announcement. The Company estimates that approximately one half of the cumulative pre-tax costs will result in cash outlays, including approximately $400 million of employee severance. Approximately one half of the cumulative pre-tax costs are non-cash, relating primarily to facility rationalization, inventory write-offs and intangible asset write-offs. The following table summarizes the severance related reserves and the associated spending under this initiative through the first fiscal six months of 2017: (Dollars in Millions) Severance Asset Write-offs Other** Total Reserve balance, January 1, 2017 $ 380 — 1 381 Current year activity: Charges — 112 267 379 Cash payments (39 ) — (264 ) (303 ) Settled non cash — (112 ) — (112 ) Accrual adjustment (90 ) — — (90 ) Reserve balance, July 2, 2017* $ 251 — 4 255 *Cash outlays for severance are expected to be substantially paid out over the next 2 years in accordance with the Company's plans and local laws. **Other includes project expense such as salaries for employees supporting the initiative and consulting expenses. |
Fair Value Measurements (Polici
Fair Value Measurements (Policies) | 6 Months Ended |
Jul. 02, 2017 | |
Fair Value Disclosures [Abstract] | |
Cash and Cash Equivalents, Policy | The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. Available for sale securities with stated maturities of greater than one year from the date of purchase are available for current operations and are classified as cash equivalents and current marketable securities. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | (Dollars in Millions) July 2, 2017 January 1, 2017 Raw materials and supplies $ 1,138 952 Goods in process 2,515 2,185 Finished goods 6,046 5,007 Total inventories $ 9,699 8,144 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | (Dollars in Millions) July 2, 2017 January 1, 2017 Intangible assets with definite lives: Patents and trademarks — gross $ 35,804 10,521 Less accumulated amortization 5,546 5,076 Patents and trademarks — net 30,258 5,445 Customer relationships and other intangibles — gross 20,048 17,615 Less accumulated amortization 7,053 6,515 Customer relationships and other intangibles — net 12,995 11,100 Intangible assets with indefinite lives: Trademarks 7,069 6,888 Purchased in-process research and development 4,620 3,443 Total intangible assets with indefinite lives 11,689 10,331 Total intangible assets — net $ 54,942 26,876 |
Goodwill | Goodwill as of July 2, 2017 was allocated by segment of business as follows: (Dollars in Millions) Consumer Pharm Med Devices Total Goodwill, net at January 1, 2017 $ 8,263 2,840 11,702 22,805 Goodwill, related to acquisitions* 11 5,986 2,081 8,078 Goodwill, related to divestitures (13 ) — — (13 ) Currency translation/Other 369 64 (69 ) (1) 364 Goodwill, net at July 2, 2017 $ 8,630 8,890 13,714 31,234 (1) Net of $106 million classified as held for sale, reported in other assets on the Consolidated Balance Sheet, related to the divestiture of the Codman Neurosurgery business which was pending as of July 2, 2017. * Includes measurement period adjustments |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Derivative Activity | The following table is a summary of the activity related to derivatives designated as cash flow hedges for the fiscal second quarters in 2017 and 2016 : Gain/(Loss) Recognized In Accumulated OCI (1) Gain/(Loss) Reclassified From Accumulated OCI Into Income (1) Gain/(Loss) Recognized In Other Income/Expense (2) (Dollars in Millions) Fiscal Second Quarters Ended Cash Flow Hedges By Income Statement Caption July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Sales to customers (3) $ 36 (27 ) (6 ) (3 ) (1 ) — Cost of products sold (3) 218 (178 ) (68 ) 13 1 (2 ) Research and development expense (3) (19 ) 12 1 (1 ) 1 (1 ) Interest (income)/Interest expense, net (4) (69 ) (3 ) (65 ) 7 — — Other (income) expense, net (3) (5) (12 ) (54 ) (2 ) (6 ) (1 ) — Total $ 154 (250 ) (140 ) 10 — (3 ) The following table is a summary of the activity related to derivatives designated as cash flow hedges for the fiscal six months in 2017 and 2016 : Gain/(Loss) Recognized In Accumulated OCI (1) Gain/(Loss) Reclassified From Accumulated OCI Into Income (1) Gain/(Loss) Recognized In Other Income/Expense (2) (Dollars in Millions) Fiscal Six Months Ended Cash Flow Hedges By Income Statement Caption July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Sales to customers (3) $ 22 (27 ) (39 ) (21 ) (1 ) — Cost of products sold (3) 121 (222 ) (99 ) (8 ) (16 ) (6 ) Research and development expense (3) (128 ) (95 ) (101 ) (96 ) 6 (1 ) Interest (income)/Interest expense, net (4) (41 ) 9 (43 ) 15 — — Other (income) expense, net (3) (5) (44 ) (106 ) (37 ) (2 ) — (3 ) Total $ (70 ) (441 ) (319 ) (112 ) (11 ) (10 ) All amounts shown in the table above are net of tax. (1) Effective portion (2) Ineffective portion (3) Forward foreign exchange contracts (4) Cross currency interest rate swaps (5) Includes equity collar contracts |
Financial Assets and Liabilities at Fair Value | The Company’s significant financial assets and liabilities measured at fair value as of July 2, 2017 and January 1, 2017 were as follows: July 2, 2017 January 1, 2017 (Dollars in Millions) Level 1 Level 2 Level 3 Total Total (1) Derivatives designated as hedging instruments: Assets: Forward foreign exchange contracts (7) $ — 418 — 418 747 Interest rate contracts (2)(4)(7) — 15 — 15 31 Total — 433 — 433 778 Liabilities: Forward foreign exchange contracts (8) — 454 — 454 723 Interest rate contracts (3)(4)(8) — 273 — 273 382 Equity collar contracts (8) — 50 — 50 57 Total — 777 — 777 1,162 Derivatives not designated as hedging instruments: Assets: Forward foreign exchange contracts (7) — 56 — 56 34 Liabilities: Forward foreign exchange contracts (8) — 31 — 31 57 Available For Sale Other Investments: Equity investments (5) 1,040 — — 1,040 1,209 Debt securities (6) $ — 3,599 — 3,599 12,087 (1) 2016 assets and liabilities are all classified as Level 2 with the exception of equity investments of $1,209 million , which are classified as Level 1. (2) Includes $11 million and $23 million of non-current other assets for July 2, 2017 and January 1, 2017, respectively. (3) Includes $273 million and $382 million of non-current other liabilities for July 2, 2017 and January 1, 2017, respectively. (4) Includes cross currency interest rate swaps and interest rate swaps. (5) Classified as non-current other assets with the exception of $204 million of current assets for July 2, 2017 . The original cost of the equity investments were $496 million and $520 million as of July 2, 2017 and January 1, 2017, respectively. The unrealized gains were $548 million and $757 million as of July 2, 2017 and January 1, 2017, respectively. The unrealized losses were $4 million and $68 million as of July 2, 2017 and January 1, 2017, respectively. (6) Classified as cash equivalents and current marketable securities. (7) Classified as other current assets, including the net effect of the CSA (8) Classified as accounts payable, including the net effect of the CSA. |
Marketable Securities | The Company's cash, cash equivalents and current marketable securities as of July 2, 2017 comprised: July 2, 2017 (Dollars in Millions) Carrying Amount Unrecognized Gain Unrecognized Loss Estimated Fair Value Cash & Cash Equivalents Current Marketable Securities Cash $ 2,547 — — 2,547 2,547 U.S. Gov't Securities (1) — — — — Other Sovereign Securities (1) 210 — — 210 210 U.S. Reverse repurchase agreements 2,841 — — 2,841 2,841 Other Reverse repurchase agreements 271 — — 271 271 Corporate debt securities (1) 979 — — 979 979 Money market funds 1,076 — — 1,076 1,076 Time deposits (1) 1,126 — — 1,126 1,126 Subtotal 9,050 — — 9,050 9,050 — Unrealized Gain Unrealized Loss Gov't securities 3,548 — — 3,548 3,548 Other Sovereign Securities 1 — — 1 — 1 Corporate debt securities 50 — — 50 — 50 Equity investments 17 187 204 — 204 Subtotal Available for Sale (2) $ 3,616 187 — 3,803 3,548 255 Total cash, cash equivalents and current marketable securities 12,598 255 (1) Held to maturity investments are reported at amortized cost and gains or losses are reported in earnings. (2) Available for sale securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income. |
Schedule of Available for Sale Securities Maturities | The contractual maturities of the available for sale securities at July 2, 2017 are as follows: (Dollars in Millions) Cost Basis Fair Value Due within one year $ 3,588 3,588 Due after one year through five years 11 11 Due after five years through ten years — — Total debt securities $ 3,599 3,599 |
Financial Liabilities not Measured at Fair Value | Financial Instruments not measured at Fair Value: The following financial liabilities are held at carrying amount on the consolidated balance sheet as of July 2, 2017 : (Dollars in Millions) Carrying Amount Estimated Fair Value Financial Liabilities Current Debt $ 7,209 7,209 Non-Current Debt 5.15% Debentures due 2018 899 933 1.65% Notes due 2018 599 601 4.75% Notes due 2019 (1B Euro 1.1397) 1,136 1,266 1.875% Notes due 2019 500 508 0.89% Notes due 2019 300 301 1.125% Notes due 2019 699 696 3% Zero Coupon Convertible Subordinated Debentures due in 2020 69 126 2.95% Debentures due 2020 546 566 3.55% Notes due 2021 448 476 2.45% Notes due 2021 349 357 1.65% Notes due 2021 997 991 0.250% Notes due 2022 (1B Euro 1.1397) 1,136 1,136 2.25% Notes due 2022 995 1,003 6.73% Debentures due 2023 250 311 3.375% Notes due 2023 807 866 2.05% Notes due 2023 497 493 0.650% Notes due 2024 (750MM Euro 1.1397) 850 852 5.50% Notes due 2024 (500 MM GBP 1.2965) 642 823 2.45% Notes due 2026 1,990 1,946 2.95% Notes due 2027 995 1,034 1.150% Notes due 2028 (750MM Euro 1.1397) 846 848 6.95% Notes due 2029 296 409 4.95% Debentures due 2033 498 596 4.375% Notes due 2033 857 982 1.650% Notes due 2035 (1.5B Euro 1.1397) 1,691 1,717 3.55% Notes due 2036 987 1,027 5.95% Notes due 2037 990 1,334 3.625% Notes due 2037 1,485 1,556 5.85% Debentures due 2038 695 933 4.50% Debentures due 2040 537 608 4.85% Notes due 2041 296 358 4.50% Notes due 2043 495 578 3.70% Notes due 2046 1,971 2,030 3.75% Notes due 2047 990 1,033 Other 25 25 Total Non-Current Debt $ 27,363 29,319 |
Pensions and Other Postretire24
Pensions and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit plans for the fiscal six months of 2017 and 2016 include the following components: Fiscal Six Months Ended Retirement Plans Other Benefit Plans (Dollars in Millions) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Service cost $ 506 452 123 110 Interest cost 461 466 79 79 Expected return on plan assets (1,014 ) (985 ) (3 ) (3 ) Amortization of prior service cost/(credit) 1 — (15 ) (16 ) Recognized actuarial losses 302 248 69 68 Curtailments and settlements (1 ) 5 — — Net periodic benefit cost $ 255 186 253 238 Net periodic benefit cost for the Company’s defined benefit retirement plans and other benefit plans for the fiscal second quarters of 2017 and 2016 include the following components: Fiscal Second Quarters Ended Retirement Plans Other Benefit Plans (Dollars in Millions) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Service cost $ 255 226 62 55 Interest cost 231 233 40 39 Expected return on plan assets (509 ) (493 ) (1 ) (1 ) Amortization of prior service cost/(credit) 1 (1 ) (8 ) (8 ) Recognized actuarial losses 150 124 35 34 Curtailments and settlements (1 ) 4 — — Net periodic benefit cost $ 127 93 128 119 |
Accumulated Other Comprehensi25
Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income | Components of other comprehensive income (loss) consist of the following: Foreign Gain/(Loss) Employee Gain/(Loss) Total Accumulated Currency On Benefit On Derivatives Other Comprehensive (Dollars in Millions) Translation Securities Plans & Hedges Income (Loss) January 1, 2017 $ (9,047 ) 411 (5,980 ) (285 ) (14,901 ) Net change 1,238 (57 ) 237 249 1,667 July 2, 2017 $ (7,809 ) 354 (5,743 ) (36 ) (13,234 ) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic Net Earnings per Share to Diluted Net Earnings per Share | The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal six months ended July 2, 2017 and July 3, 2016 : Fiscal Six Months Ended (Shares in Millions) July 2, 2017 July 3, 2016 Basic net earnings per share $ 3.06 3.07 Average shares outstanding — basic 2,699.3 2,751.4 Potential shares exercisable under stock option plans 142.2 145.8 Less: shares which could be repurchased under treasury stock method (93.1 ) (98.0 ) Convertible debt shares 1.0 1.7 Average shares outstanding — diluted 2,749.4 2,800.9 Diluted net earnings per share $ 3.00 3.02 The following is a reconciliation of basic net earnings per share to diluted net earnings per share for the fiscal second quarters ended July 2, 2017 and July 3, 2016 : Fiscal Second Quarters Ended (Shares in Millions) July 2, 2017 July 3, 2016 Basic net earnings per share $ 1.42 1.46 Average shares outstanding — basic 2,691.9 2,745.4 Potential shares exercisable under stock option plans 143.2 146.3 Less: shares which could be repurchased under treasury stock method (94.6 ) (99.2 ) Convertible debt shares 1.0 1.7 Average shares outstanding — diluted 2,741.5 2,794.2 Diluted net earnings per share $ 1.40 1.43 |
Segments of Business and Geog27
Segments of Business and Geographic Areas (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Segment Reporting [Abstract] | |
Sales By Segment Of Business | Fiscal Second Quarters Ended (Dollars in Millions) July 2, July 3, Percent Change Consumer United States $ 1,487 1,384 7.4 % International 1,991 2,035 (2.2 ) Total 3,478 3,419 1.7 Pharmaceutical United States 5,010 5,144 (2.6 ) International 3,625 3,510 3.3 Total 8,635 8,654 (0.2 ) Medical Devices United States 3,229 3,044 6.1 International 3,497 3,365 3.9 Total 6,726 6,409 4.9 Worldwide United States 9,726 9,572 1.6 International 9,113 8,910 2.3 Total $ 18,839 18,482 1.9 % Fiscal Six Months Ended (Dollars in Millions) July 2, July 3, Percent Change Consumer United States $ 2,901 2,742 5.8 % International 3,805 3,872 (1.7 ) Total 6,706 6,614 1.4 Pharmaceutical United States 9,882 10,081 (2.0 ) International 6,998 6,751 3.7 Total 16,880 16,832 0.3 Medical Devices United States 6,321 6,070 4.1 International 6,698 6,448 3.9 Total 13,019 12,518 4.0 Worldwide United States 19,104 18,893 1.1 International 17,501 17,071 2.5 Total $ 36,605 35,964 1.8 % |
Operating Profit by Segment of Business | Fiscal Second Quarters Ended (Dollars in Millions) July 2, July 3, Percent Change Consumer $ 658 571 15.2 % Pharmaceutical (1) 3,414 3,687 (7.4 ) Medical Devices (2) 992 939 5.6 Segments operating profit 5,064 5,197 (2.6 ) Less: Expense not allocated to segments (3) 316 293 Worldwide income before tax $ 4,748 4,904 (3.2 )% Fiscal Six Months Ended (Dollars in Millions) July 2, 2017 July 3, 2016 Percent Change Consumer $ 1,254 1,137 10.3 % Pharmaceutical (1) 7,077 7,031 0.7 Medical Devices (2) 2,555 2,515 1.6 Segments operating profit 10,886 10,683 1.9 Less: Expense not allocated to segments (3) 563 485 Worldwide income before taxes $ 10,323 10,198 1.2 % (1) Includes a positive adjustment of $0.3 billion to previous reserve estimates in the fiscal second quarter of 2016. Includes a positive adjustment of $0.5 billion to previous reserve estimates in the fiscal six months of 2016. Includes acquisition costs related to the Actelion acquisition of $0.2 billion in the fiscal second quarter and fiscal six months of 2017. Includes a gain of $0.2 billion related to monetization of future royalty receivables in the fiscal second quarter and fiscal six months of 2017. Includes a gain of $0.2 billion and $0.1 billion in the fiscal six months of 2017 and 2016, respectively, related to the sale of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc. (2) Includes a restructuring related charge of $0.1 billion and $0.1 billion in the fiscal second quarters of 2017 and 2016, respectively. Includes a restructuring related charge of $0.3 billion and $0.3 billion in the fiscal six months of 2017 and 2016, respectively. Includes litigation expense of $0.4 billion and $0.6 billion in the fiscal second quarter of 2017 and 2016, respectively. Includes litigation expense of $0.4 billion and $0.7 billion in the fiscal six months of 2017 and 2016, respectively. Includes an asset impairment of $0.2 billion primarily related to the insulin pump business in the fiscal second quarter and fiscal six months of 2017. (3) Amounts not allocated to segments include interest income/expense and general corporate income/expense. |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Fiscal Second Quarters Ended (Dollars in Millions) July 2, 2017 July 3, 2016 Percent Change United States $ 9,726 9,572 1.6 % Europe 4,232 4,090 3.5 Western Hemisphere, excluding U.S. 1,499 1,542 (2.8 ) Asia-Pacific, Africa 3,382 3,278 3.2 Total $ 18,839 18,482 1.9 % Fiscal Six Months Ended (Dollars in Millions) July 2, 2017 July 3, 2016 Percent Change United States $ 19,104 18,893 1.1 % Europe 8,090 7,937 1.9 Western Hemisphere, excluding U.S. 2,953 2,873 2.8 Asia-Pacific, Africa 6,458 6,261 3.1 Total $ 36,605 35,964 1.8 % |
Business Combinations and Div28
Business Combinations and Divestitures (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Amounts Recognized for Assets Acquired and Liabilities Assumed | The following table presents the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date on June 16, 2017: (Dollars in Millions) Cash & Cash equivalents $ 469 Inventory (1) 759 Accounts Receivable 485 Other current assets 93 Property, plant and equipment 104 Goodwill 5,986 Intangible assets 25,010 Deferred Taxes 3 Other non-current assets 19 Total Assets Acquired 32,928 Current liabilities 531 Deferred Taxes 1,960 Other non-current liabilities 383 Total Liabilities Assumed 2,874 Net Assets Acquired $ 30,054 (1) Includes adjustment of $642 million to write-up the acquired inventory to its estimated fair value. |
Purchase Price Allocation of Identifiable Intangible Assets | The purchase price allocation to the identifiable intangible assets is as follows: (Dollars in Millions) Intangible assets with definite lives: Patents and trademarks $ 24,230 Total amortizable intangibles 24,230 In-process research and development 780 Total intangible assets $ 25,010 |
Schedule of Pro Forma Results | The following table provides pro forma results of operations for the fiscal second quarters and the fiscal six months ended July 2, 2017 and July 3, 2016, as if Actelion had been acquired as of January 4, 2016. The pro forma results include the effect of certain purchase accounting adjustments such as the estimated changes in depreciation and amortization expense on the acquired tangible and intangible assets. However, pro forma results do not include any anticipated cost savings or other effects of the planned integration of Actelion. Accordingly, such amounts are not necessarily indicative of the results if the acquisition had occurred on the dates indicated or which may occur in the future. Unaudited Pro forma Consolidated Results Fiscal Six Months Ended Fiscal Second Quarters Ended (Dollars in Millions Except Per Share Data) July 2, 2017 July 3, 2016 July 2, 2017 July 3, 2016 Net Sales 37,836 37,165 19,426 19,090 Net Earnings 7,890 6,875 3,788 3,495 Diluted Net Earnings per Common Share 2.87 2.45 1.38 1.25 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jul. 02, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve | The following table summarizes the severance related reserves and the associated spending under this initiative through the first fiscal six months of 2017: (Dollars in Millions) Severance Asset Write-offs Other** Total Reserve balance, January 1, 2017 $ 380 — 1 381 Current year activity: Charges — 112 267 379 Cash payments (39 ) — (264 ) (303 ) Settled non cash — (112 ) — (112 ) Accrual adjustment (90 ) — — (90 ) Reserve balance, July 2, 2017* $ 251 — 4 255 *Cash outlays for severance are expected to be substantially paid out over the next 2 years in accordance with the Company's plans and local laws. **Other includes project expense such as salaries for employees supporting the initiative and consulting expenses. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 |
Summary of Inventories | ||
Raw materials and supplies | $ 1,138 | $ 952 |
Goods in process | 2,515 | 2,185 |
Finished goods | 6,046 | 5,007 |
Total inventories | 9,699 | $ 8,144 |
Inventories [Member] | Codman Neurosurgery [Member] | ||
Inventory [Line Items] | ||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | $ 58 |
Intangible Assets and Goodwil31
Intangible Assets and Goodwill (Details) - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 |
Intangible assets with indefinite lives: | ||
Indefinite-Lived Intangible Assets | $ 11,689 | $ 10,331 |
Total intangible assets - net | 54,942 | 26,876 |
Trademarks | ||
Intangible assets with indefinite lives: | ||
Indefinite-Lived Intangible Assets | 7,069 | 6,888 |
Purchased In-Process Research And Development | ||
Intangible assets with indefinite lives: | ||
Indefinite-Lived Intangible Assets | 4,620 | 3,443 |
Patents And Trademarks | ||
Intangible assets with definite lives: | ||
Finite-Lived Intangible Assets, Gross | 35,804 | 10,521 |
Less accumulated amortization | 5,546 | 5,076 |
Finite-Lived Intangible Assets, Net | 30,258 | 5,445 |
Customer relationships and other intangible assets | ||
Intangible assets with definite lives: | ||
Finite-Lived Intangible Assets, Gross | 20,048 | 17,615 |
Less accumulated amortization | 7,053 | 6,515 |
Finite-Lived Intangible Assets, Net | $ 12,995 | $ 11,100 |
Goodwill By Segment (Details)
Goodwill By Segment (Details) $ in Millions | 6 Months Ended |
Jul. 02, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill Beginning of Period | $ 22,805 |
Goodwill, related to acquisitions | 8,078 |
Goodwill, related to divestitures | (13) |
Currency translation/Other | 364 |
Goodwill End of Period | 31,234 |
Consumer | |
Goodwill [Roll Forward] | |
Goodwill Beginning of Period | 8,263 |
Goodwill, related to acquisitions | 11 |
Goodwill, related to divestitures | (13) |
Currency translation/Other | 369 |
Goodwill End of Period | 8,630 |
Pharmaceutical | |
Goodwill [Roll Forward] | |
Goodwill Beginning of Period | 2,840 |
Goodwill, related to acquisitions | 5,986 |
Goodwill, related to divestitures | 0 |
Currency translation/Other | 64 |
Goodwill End of Period | 8,890 |
Medical Devices | |
Goodwill [Roll Forward] | |
Goodwill Beginning of Period | 11,702 |
Goodwill, related to acquisitions | 2,081 |
Goodwill, related to divestitures | 0 |
Currency translation/Other | (69) |
Goodwill End of Period | $ 13,714 |
Intangible Assets and Goodwil33
Intangible Assets and Goodwill - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jul. 02, 2017 | Apr. 02, 2017 | Jul. 02, 2017 | Jul. 03, 2016 | Jun. 16, 2017 | Jan. 01, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 4,300 | $ 4,300 | ||||
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 4,300 | 4,300 | ||||
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 4,300 | 4,300 | ||||
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 4,300 | 4,300 | ||||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 4,300 | 4,300 | ||||
Intangible Assets and Goodwill (Textuals) | ||||||
Amortization expense of amortizable intangible assets | 809 | $ 576 | ||||
Goodwill | 31,234 | $ 31,234 | $ 22,805 | |||
Patents And Trademarks | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Finite-Lived Intangible Assets, Weighted-Average Useful Life | 12 years | |||||
Customer relationships and other intangible assets | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Finite-Lived Intangible Assets, Weighted-Average Useful Life | 23 years | |||||
Pharmaceutical | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Goodwill | 8,890 | $ 8,890 | 2,840 | |||
Medical Devices [Member] | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Goodwill | 13,714 | 13,714 | $ 11,702 | |||
Actelion [Member] | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Goodwill | $ 5,986 | |||||
Actelion [Member] | Pharmaceutical | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Total amortizable intangibles | 25,000 | |||||
Goodwill | 6,000 | 6,000 | ||||
AMO [Member] | Medical Devices [Member] | ||||||
Intangible Assets and Goodwill (Textuals) | ||||||
Total amortizable intangibles | 2,300 | $ 2,300 | ||||
Goodwill | 1,800 | $ 1,800 | 1,800 | |||
Goodwill [Member] | Codman Neurosurgery [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | $ 106 | $ 106 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 15 Months Ended | |||
Jul. 02, 2017 | Jan. 01, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | |
Derivative [Line Items] | ||||||
Foreign currency translation | $ 843 | $ (295) | $ 1,238 | $ 584 | ||
Accumulated other comprehensive income on derivatives, after tax | (36) | $ (36) | $ (36) | |||
Reclassification of foreign exchange contracts into earnings, period | next 12 months | |||||
Maximum length of time for hedge exposure | 18 months | |||||
Other income/(expense), net, related to foreign exchange contracts, non hedging | $ 63 | $ (36) | $ 34 | $ (41) | ||
Excess fair value over carrying value of cash and cash equivalents | $ 200 | |||||
Weighted average interest rate on non-current debt | 3.27% | 3.27% | 3.27% | |||
Excess of the estimated fair value over the carrying value of debt | 1,600 | |||||
Foreign exchange contracts | ||||||
Derivative [Line Items] | ||||||
Collateral Already Posted, Aggregate Fair Value | $ 20 | $ 20 | $ 20 | |||
Derivative notional amounts outstanding | 35,800 | 36,000 | 35,800 | 35,800 | ||
Cross currency interest rate swaps | ||||||
Derivative [Line Items] | ||||||
Derivative notional amounts outstanding | 2,300 | 2,300 | 2,300 | 2,300 | ||
Interest Rate Contract | ||||||
Derivative [Line Items] | ||||||
Derivative notional amounts outstanding | 1,800 | 1,800 | 1,800 | 1,800 | ||
Equity Contract | ||||||
Derivative [Line Items] | ||||||
Derivative notional amounts outstanding | 200 | $ 300 | 200 | 200 | ||
Other Comprehensive Income (Loss) [Member] | ||||||
Derivative [Line Items] | ||||||
Foreign currency translation | $ (268) | $ (378) | $ (3) |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Derivative Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 15 Months Ended | |||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jan. 01, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss), before Reclassification and Tax | $ 843 | $ (295) | $ 1,238 | $ 584 | ||
Equity Contract [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative, Notional Amount | 200 | 200 | $ 200 | $ 300 | ||
Foreign exchange contracts | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Collateral Already Posted, Aggregate Fair Value | 20 | 20 | 20 | |||
Derivative, Notional Amount | 35,800 | 35,800 | 35,800 | 36,000 | ||
Cross currency interest rate swaps | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Derivative, Notional Amount | 2,300 | 2,300 | 2,300 | $ 2,300 | ||
Designated as Hedging Instrument | ||||||
Summary of designated derivatives | ||||||
Gain/ (Loss) recognized in Accumulated OCI | 154 | (250) | (70) | (441) | ||
Gain/ (Loss) reclassified from Accumulated OCI into income | (140) | 10 | (319) | (112) | ||
Gain/ (Loss) recognized in Other income/expense | 0 | (3) | (11) | (10) | ||
Designated as Hedging Instrument | Foreign exchange contracts | Sales to customers | ||||||
Summary of designated derivatives | ||||||
Gain/ (Loss) recognized in Accumulated OCI | 36 | (27) | 22 | (27) | ||
Gain/ (Loss) reclassified from Accumulated OCI into income | (6) | (3) | (39) | (21) | ||
Gain/ (Loss) recognized in Other income/expense | (1) | 0 | (1) | 0 | ||
Designated as Hedging Instrument | Foreign exchange contracts | Cost of products sold | ||||||
Summary of designated derivatives | ||||||
Gain/ (Loss) recognized in Accumulated OCI | 218 | (178) | 121 | (222) | ||
Gain/ (Loss) reclassified from Accumulated OCI into income | (68) | 13 | (99) | (8) | ||
Gain/ (Loss) recognized in Other income/expense | 1 | (2) | (16) | (6) | ||
Designated as Hedging Instrument | Foreign exchange contracts | Research and development expense | ||||||
Summary of designated derivatives | ||||||
Gain/ (Loss) recognized in Accumulated OCI | (19) | 12 | (128) | (95) | ||
Gain/ (Loss) reclassified from Accumulated OCI into income | 1 | (1) | (101) | (96) | ||
Gain/ (Loss) recognized in Other income/expense | 1 | (1) | 6 | (1) | ||
Designated as Hedging Instrument | Foreign exchange contracts | Other (income) expense, net | ||||||
Summary of designated derivatives | ||||||
Gain/ (Loss) recognized in Accumulated OCI | (12) | (54) | (44) | (106) | ||
Gain/ (Loss) reclassified from Accumulated OCI into income | (2) | (6) | (37) | (2) | ||
Gain/ (Loss) recognized in Other income/expense | (1) | 0 | 0 | (3) | ||
Designated as Hedging Instrument | Cross currency interest rate swaps | Interest (income)/Interest expense, net | ||||||
Summary of designated derivatives | ||||||
Gain/ (Loss) recognized in Accumulated OCI | (69) | (3) | (41) | 9 | ||
Gain/ (Loss) reclassified from Accumulated OCI into income | (65) | 7 | (43) | 15 | ||
Gain/ (Loss) recognized in Other income/expense | 0 | $ 0 | 0 | $ 0 | ||
Other Comprehensive Income (Loss) [Member] | ||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss), before Reclassification and Tax | $ (268) | $ (378) | $ (3) |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities at Fair Value (Details) - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 |
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | $ 433 | |
Derivatives designated as hedging instruments : Liabilities | 777 | |
Available-for-sale Securities, Equity Securities | 1,040 | $ 1,209 |
Available-for-sale Securities | 3,599 | 12,087 |
Quoted prices in active markets for identical assets and liabilities Level 1 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 0 | |
Derivatives designated as hedging instruments : Liabilities | 0 | |
Available-for-sale Securities, Equity Securities | 1,040 | 1,209 |
Available-for-sale Securities | 0 | |
Significant other observable inputs Level 2 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 433 | 778 |
Derivatives designated as hedging instruments : Liabilities | 777 | 1,162 |
Available-for-sale Securities, Equity Securities | 0 | |
Available-for-sale Securities | 3,599 | |
Significant unobservable inputs Level 3 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 0 | |
Derivatives designated as hedging instruments : Liabilities | 0 | |
Available-for-sale Securities, Equity Securities | 0 | |
Available-for-sale Securities | 0 | |
Interest Rate Contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 1,800 | 1,800 |
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 15 | |
Derivatives designated as hedging instruments : Liabilities | 273 | |
Derivative Assets, Noncurrent | 11 | 23 |
Derivative Liabilities, Noncurrent | 273 | 382 |
Interest Rate Contract | Quoted prices in active markets for identical assets and liabilities Level 1 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 0 | |
Derivatives designated as hedging instruments : Liabilities | 0 | |
Interest Rate Contract | Significant other observable inputs Level 2 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 15 | 31 |
Derivatives designated as hedging instruments : Liabilities | 273 | 382 |
Interest Rate Contract | Significant unobservable inputs Level 3 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 0 | |
Derivatives designated as hedging instruments : Liabilities | 0 | |
Equity Contract | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 200 | 300 |
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Liabilities | 50 | |
Equity Contract | Quoted prices in active markets for identical assets and liabilities Level 1 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Liabilities | 0 | |
Equity Contract | Significant other observable inputs Level 2 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Liabilities | 50 | 57 |
Equity Contract | Significant unobservable inputs Level 3 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Liabilities | 0 | |
Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 35,800 | 36,000 |
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 418 | |
Derivatives designated as hedging instruments : Liabilities | 454 | |
Derivatives not designated as hedging instruments : Assets | 56 | |
Derivatives not designated as hedging instruments : Liabilities | 31 | |
Foreign exchange contracts | Quoted prices in active markets for identical assets and liabilities Level 1 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 0 | |
Derivatives designated as hedging instruments : Liabilities | 0 | |
Derivatives not designated as hedging instruments : Assets | 0 | |
Derivatives not designated as hedging instruments : Liabilities | 0 | |
Foreign exchange contracts | Significant other observable inputs Level 2 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 418 | 747 |
Derivatives designated as hedging instruments : Liabilities | 454 | 723 |
Derivatives not designated as hedging instruments : Assets | 56 | 34 |
Derivatives not designated as hedging instruments : Liabilities | 31 | 57 |
Foreign exchange contracts | Significant unobservable inputs Level 3 | ||
Financial assets and liabilities at fair value | ||
Derivatives designated as hedging instruments : Assets | 0 | |
Derivatives designated as hedging instruments : Liabilities | 0 | |
Derivatives not designated as hedging instruments : Assets | 0 | |
Derivatives not designated as hedging instruments : Liabilities | 0 | |
Cross Currency Interest Rate Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 2,300 | 2,300 |
Equity Securities [Member] | ||
Financial assets and liabilities at fair value | ||
Available-for-sale Securities, Equity Securities | 496 | 520 |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 548 | 757 |
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 4 | $ 68 |
Other Current Assets [Member] | Equity Securities [Member] | ||
Financial assets and liabilities at fair value | ||
Available-for-sale Securities, Equity Securities | $ 204 |
Fair Value Measurements - Cash
Fair Value Measurements - Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 | Jul. 03, 2016 | Jan. 03, 2016 |
Available-for-sale Securities [Abstract] | ||||
Available-for-sale Securities - Estimated Fair Value | $ 3,599 | $ 12,087 | ||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 12,598 | 18,972 | $ 18,640 | $ 13,732 |
Marketable securities | 255 | $ 22,935 | ||
Held-to-maturity Securities | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 9,050 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 9,050 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 9,050 | |||
Marketable securities | 0 | |||
Held-to-maturity Securities | Cash | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 2,547 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 2,547 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 2,547 | |||
Held-to-maturity Securities | U.S. Gov't Securities(1) | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 0 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | ||||
Marketable securities | ||||
Held-to-maturity Securities | Other Sovereign Securities(1) | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 210 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 210 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 210 | |||
Marketable securities | ||||
Held-to-maturity Securities | U.S. Reverse repurchase agreements | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 2,841 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 2,841 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 2,841 | |||
Marketable securities | ||||
Held-to-maturity Securities | Other Reverse repurchase agreements | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 271 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 271 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 271 | |||
Held-to-maturity Securities | Corporate debt securities(1) | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 979 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 979 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 979 | |||
Marketable securities | ||||
Held-to-maturity Securities | Money market funds | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 1,076 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 1,076 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 1,076 | |||
Held-to-maturity Securities | Time deposits(1) | ||||
Held-to-maturity Securities [Abstract] | ||||
Held-to-maturity Securities - Carrying Amount | 1,126 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain | 0 | |||
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss | 0 | |||
Held-to-maturity Securities - Estimated Fair Value | 1,126 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 1,126 | |||
Available-for-sale Securities | ||||
Available-for-sale Securities [Abstract] | ||||
Available-for-sale Securities - Carrying Amount | 3,616 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 187 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |||
Available-for-sale Securities - Estimated Fair Value | 3,803 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 3,548 | |||
Marketable securities | 255 | |||
Available-for-sale Securities | U.S. Gov't Securities(1) | ||||
Available-for-sale Securities [Abstract] | ||||
Available-for-sale Securities - Carrying Amount | 3,548 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |||
Available-for-sale Securities - Estimated Fair Value | 3,548 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 3,548 | |||
Marketable securities | ||||
Available-for-sale Securities | Other Sovereign Securities(1) | ||||
Available-for-sale Securities [Abstract] | ||||
Available-for-sale Securities - Carrying Amount | 1 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |||
Available-for-sale Securities - Estimated Fair Value | 1 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 0 | |||
Marketable securities | 1 | |||
Available-for-sale Securities | Corporate debt securities(1) | ||||
Available-for-sale Securities [Abstract] | ||||
Available-for-sale Securities - Carrying Amount | 50 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |||
Available-for-sale Securities - Estimated Fair Value | 50 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 0 | |||
Marketable securities | 50 | |||
Available-for-sale Securities | Equity investments | ||||
Available-for-sale Securities [Abstract] | ||||
Available-for-sale Securities - Carrying Amount | 17 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 187 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | ||||
Available-for-sale Securities - Estimated Fair Value | 204 | |||
Available-for-sale Securities and Held-to-maturity Securities [Abstract] | ||||
Cash and Cash Equivalents | 0 | |||
Marketable securities | $ 204 |
Fair Value Measurements - Sche
Fair Value Measurements - Schedule of Available for Sale Securities Maturities (Details) $ in Millions | Jul. 02, 2017USD ($) |
Cost Basis | |
Due within one year | $ 3,588 |
Due after one year through five years | 11 |
Due after five years through ten years | 0 |
Total debt securities | 3,599 |
Fair Value | |
Due within one year | 3,588 |
Due after one year through five years | 11 |
Due after five years through ten years | 0 |
Total debt securities | $ 3,599 |
Fair Value Measurements - Fin39
Fair Value Measurements - Financial Liabilities not Measured at Fair Value (Details) - USD ($) $ in Millions | Jul. 02, 2017 | Jan. 01, 2017 |
Financial Liabilities | ||
Current Debt | $ 7,209 | $ 4,684 |
Non-Current Debt | ||
Non-Current Debt | 27,363 | $ 22,442 |
Carrying Amount | ||
Financial Liabilities | ||
Current Debt | 7,209 | |
Non-Current Debt | ||
Non-Current Debt | 27,363 | |
Estimated Fair Value | ||
Financial Liabilities | ||
Current Debt | 7,209 | |
Non-Current Debt | ||
Non-Current Debt | $ 29,319 | |
5.15% Debentures due 2018 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.15% | |
5.15% Debentures due 2018 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 899 | |
5.15% Debentures due 2018 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 933 | |
1.65% Notes due 2018 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.65% | |
1.65% Notes due 2018 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 599 | |
1.65% Notes due 2018 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 601 | |
4.75% Notes due 2019 (1B Euro 1.1397) | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | |
4.75% Notes due 2019 (1B Euro 1.1397) | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,136 | |
4.75% Notes due 2019 (1B Euro 1.1397) | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,266 | |
1.875% Notes due 2019 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.875% | |
1.875% Notes due 2019 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 500 | |
1.875% Notes due 2019 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 508 | |
0.89% Notes due 2019 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.89% | |
0.89% Notes due 2019 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 300 | |
0.89% Notes due 2019 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 301 | |
1.125% Notes due 2019 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.125% | |
1.125% Notes due 2019 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 699 | |
1.125% Notes due 2019 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 696 | |
3% Zero Coupon Convertible Subordinated Debentures due in 2020 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | |
3% Zero Coupon Convertible Subordinated Debentures due in 2020 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 69 | |
3% Zero Coupon Convertible Subordinated Debentures due in 2020 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 126 | |
2.95% Debentures due 2020 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.95% | |
2.95% Debentures due 2020 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 546 | |
2.95% Debentures due 2020 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 566 | |
3.55% Notes due 2021 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.55% | |
3.55% Notes due 2021 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 448 | |
3.55% Notes due 2021 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 476 | |
2.45% Notes due 2021 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.45% | |
2.45% Notes due 2021 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 349 | |
2.45% Notes due 2021 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 357 | |
1.65% Notes due 2021 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.65% | |
1.65% Notes due 2021 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 997 | |
1.65% Notes due 2021 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 991 | |
0.250% Notes due 2022 (1B Euro 1.1397) | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.25% | |
0.250% Notes due 2022 (1B Euro 1.1397) | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,136 | |
0.250% Notes due 2022 (1B Euro 1.1397) | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,136 | |
2.25% Notes due 2022 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | |
2.25% Notes due 2022 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 995 | |
2.25% Notes due 2022 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,003 | |
6.73% Debentures due 2023 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.73% | |
6.73% Debentures due 2023 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 250 | |
6.73% Debentures due 2023 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 311 | |
3.375% Notes due 2023 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.375% | |
3.375% Notes due 2023 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 807 | |
3.375% Notes due 2023 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 866 | |
2.05% Notes due 2023 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.05% | |
2.05% Notes due 2023 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 497 | |
2.05% Notes due 2023 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 493 | |
0.650% Notes due 2024 (750MM Euro 1.1397) | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 0.65% | |
0.650% Notes due 2024 (750MM Euro 1.1397) | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 850 | |
0.650% Notes due 2024 (750MM Euro 1.1397) | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 852 | |
5.50% Notes due 2024 (500 MM GBP 1.2965) | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | |
5.50% Notes due 2024 (500 MM GBP 1.2965) | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 642 | |
5.50% Notes due 2024 (500 MM GBP 1.2965) | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 823 | |
2.45% Notes due 2026 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.45% | |
2.45% Notes due 2026 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,990 | |
2.45% Notes due 2026 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,946 | |
2.95% Notes due 2027 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 2.95% | |
2.95% Notes due 2027 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 995 | |
2.95% Notes due 2027 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,034 | |
1.150% Notes due 2028 (750MM Euro 1.1397) | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.15% | |
1.150% Notes due 2028 (750MM Euro 1.1397) | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 846 | |
1.150% Notes due 2028 (750MM Euro 1.1397) | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 848 | |
6.95% Notes due 2029 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.95% | |
6.95% Notes due 2029 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 296 | |
6.95% Notes due 2029 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 409 | |
4.95% Debentures due 2033 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.95% | |
4.95% Debentures due 2033 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 498 | |
4.95% Debentures due 2033 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 596 | |
4.375% Notes due 2033 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.375% | |
4.375% Notes due 2033 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 857 | |
4.375% Notes due 2033 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 982 | |
1.650% Notes due 2035 (1.5B Euro 1.1397) | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 1.65% | |
1.650% Notes due 2035 (1.5B Euro 1.1397) | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,691 | |
1.650% Notes due 2035 (1.5B Euro 1.1397) | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,717 | |
3.55% Notes due 2036 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.55% | |
3.55% Notes due 2036 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 987 | |
3.55% Notes due 2036 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,027 | |
5.95% Notes due 2037 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.95% | |
5.95% Notes due 2037 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 990 | |
5.95% Notes due 2037 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,334 | |
3.625% Notes due 2037 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.625% | |
3.625% Notes due 2037 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,485 | |
3.625% Notes due 2037 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,556 | |
5.85% Debentures due 2038 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.85% | |
5.85% Debentures due 2038 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 695 | |
5.85% Debentures due 2038 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 933 | |
4.50% Debentures due 2040 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |
4.50% Debentures due 2040 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 537 | |
4.50% Debentures due 2040 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 608 | |
4.85% Notes due 2041 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.85% | |
4.85% Notes due 2041 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 296 | |
4.85% Notes due 2041 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 358 | |
4.50% Notes due 2043 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | |
4.50% Notes due 2043 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 495 | |
4.50% Notes due 2043 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 578 | |
3.70% Notes due 2046 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.70% | |
3.70% Notes due 2046 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 1,971 | |
3.70% Notes due 2046 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 2,030 | |
3.75% Notes due 2047 | ||
Non-Current Debt | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | |
3.75% Notes due 2047 | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | $ 990 | |
3.75% Notes due 2047 | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | 1,033 | |
Other | Carrying Amount | ||
Non-Current Debt | ||
Non-Current Debt | 25 | |
Other | Estimated Fair Value | ||
Non-Current Debt | ||
Non-Current Debt | $ 25 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Billions | 6 Months Ended | |
Jul. 02, 2017 | Jul. 03, 2016 | |
Income Tax (Textuals) | ||
Effective Income Tax Rate, Continuing Operations | 20.10% | 17.10% |
Effective Income Tax Rate Reconciliation, Business Combination, Percent | 2.10% | |
Excess tax benefit from share based compensation | 2.70% | 2.80% |
Unrecognized tax benefits | $ 3.2 |
Pensions and Other Postretire41
Pensions and Other Postretirement Benefits - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Retirement Plans | ||||
Components of net periodic benefit cost | ||||
Service cost | $ 255 | $ 226 | $ 506 | $ 452 |
Interest cost | 231 | 233 | 461 | 466 |
Expected return on plan assets | (509) | (493) | (1,014) | (985) |
Amortization of prior service cost/(credit) | 1 | (1) | 1 | 0 |
Recognized actuarial losses | 150 | 124 | 302 | 248 |
Curtailments and settlements | (1) | 4 | (1) | 5 |
Net periodic benefit cost | 127 | 93 | 255 | 186 |
Other Benefit Plans | ||||
Components of net periodic benefit cost | ||||
Service cost | 62 | 55 | 123 | 110 |
Interest cost | 40 | 39 | 79 | 79 |
Expected return on plan assets | (1) | (1) | (3) | (3) |
Amortization of prior service cost/(credit) | (8) | (8) | (15) | (16) |
Recognized actuarial losses | 35 | 34 | 69 | 68 |
Curtailments and settlements | 0 | 0 | 0 | 0 |
Net periodic benefit cost | $ 128 | $ 119 | $ 253 | $ 238 |
Pensions and Other Postretire42
Pensions and Other Postretirement Benefit (Details) $ in Millions | 6 Months Ended |
Jul. 02, 2017USD ($) | |
U.S. retirement plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution to pension plans | $ 34 |
International retirement plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Contribution to pension plans | $ 20 |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 70,418 | |||
Net change | $ 1,288 | $ (316) | 1,667 | $ 458 |
Ending balance | 71,922 | 71,922 | ||
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (9,047) | |||
Net change | 1,238 | |||
Ending balance | (7,809) | (7,809) | ||
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 411 | |||
Net change | (57) | |||
Ending balance | 354 | 354 | ||
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (5,980) | |||
Net change | 237 | |||
Ending balance | (5,743) | (5,743) | ||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (285) | |||
Net change | 249 | |||
Ending balance | (36) | (36) | ||
AOCI Attributable to Parent [Member] | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (14,901) | |||
Net change | 1,667 | |||
Ending balance | $ (13,234) | $ (13,234) |
Earnings Per Share (Details)
Earnings Per Share (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Reconciliation of basic net earnings per share to diluted net earnings per share | ||||
Basic net earnings per share | $ 1.42 | $ 1.46 | $ 3.06 | $ 3.07 |
Average shares outstanding — basic | 2,691,900,000 | 2,745,400,000 | 2,699,300,000 | 2,751,400,000 |
Potential shares exercisable under stock option plans | 143,200,000 | 146,300,000 | 142,200,000 | 145,800,000 |
Less: shares which could be repurchased under treasury stock method | (94,600,000) | (99,200,000) | (93,100,000) | (98,000,000) |
Convertible debt shares | 1,000,000 | 1,700,000 | 1,000,000 | 1,700,000 |
Average shares outstanding — diluted | 2,741,500,000 | 2,794,200,000 | 2,749,400,000 | 2,800,900,000 |
Diluted net earnings per share | $ 1.40 | $ 1.43 | $ 3 | $ 3.02 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 | 0 |
Segments of Business and Geog45
Segments of Business and Geographic Areas - Sales By Segment Of Business (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Segment Reporting Information [Line Items] | ||||
Gain (Loss) on Sale of Assets and Asset Impairment Charges | $ 53 | $ 185 | ||
Sales by segment of business | ||||
Sales | $ 18,839 | $ 18,482 | $ 36,605 | 35,964 |
Percentage Change In Sales By Segment Of Business | 1.90% | 1.80% | ||
United States | ||||
Sales by segment of business | ||||
Sales | $ 9,726 | 9,572 | $ 19,104 | 18,893 |
Percentage Change In Sales By Segment Of Business | 1.60% | 1.10% | ||
International | ||||
Sales by segment of business | ||||
Sales | $ 9,113 | 8,910 | $ 17,501 | 17,071 |
Percentage Change In Sales By Segment Of Business | 2.30% | 2.50% | ||
Consumer | ||||
Segment Reporting Information [Line Items] | ||||
Gain (Loss) on Sale of Assets and Asset Impairment Charges | ||||
Sales by segment of business | ||||
Sales | $ 3,478 | 3,419 | $ 6,706 | 6,614 |
Percentage Change In Sales By Segment Of Business | 1.70% | 1.40% | ||
Consumer | United States | ||||
Sales by segment of business | ||||
Sales | $ 1,487 | 1,384 | $ 2,901 | 2,742 |
Percentage Change In Sales By Segment Of Business | 7.40% | 5.80% | ||
Consumer | International | ||||
Sales by segment of business | ||||
Sales | $ 1,991 | 2,035 | $ 3,805 | 3,872 |
Percentage Change In Sales By Segment Of Business | (2.20%) | (1.70%) | ||
Pharmaceutical | ||||
Sales by segment of business | ||||
Sales | $ 8,635 | 8,654 | $ 16,880 | 16,832 |
Percentage Change In Sales By Segment Of Business | (0.20%) | 0.30% | ||
Pharmaceutical | United States | ||||
Sales by segment of business | ||||
Sales | $ 5,010 | 5,144 | $ 9,882 | 10,081 |
Percentage Change In Sales By Segment Of Business | (2.60%) | (2.00%) | ||
Pharmaceutical | International | ||||
Sales by segment of business | ||||
Sales | $ 3,625 | 3,510 | $ 6,998 | 6,751 |
Percentage Change In Sales By Segment Of Business | 3.30% | 3.70% | ||
Medical Devices | ||||
Sales by segment of business | ||||
Sales | $ 6,726 | 6,409 | $ 13,019 | 12,518 |
Percentage Change In Sales By Segment Of Business | 4.90% | 4.00% | ||
Medical Devices | United States | ||||
Sales by segment of business | ||||
Sales | $ 3,229 | 3,044 | $ 6,321 | 6,070 |
Percentage Change In Sales By Segment Of Business | 6.10% | 4.10% | ||
Medical Devices | International | ||||
Sales by segment of business | ||||
Sales | $ 3,497 | $ 3,365 | $ 6,698 | $ 6,448 |
Percentage Change In Sales By Segment Of Business | 3.90% | 3.90% |
Segments of Business and Geog46
Segments of Business and Geographic Areas - Operating Profit by Segment of Business (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Segment Reporting Information [Line Items] | ||||
Percentage Change in Operating Income Loss | (3.20%) | 1.20% | ||
Royalty Revenue, Monetization of Royalty | $ 200 | |||
Restructuring charges | 11 | $ 114 | $ 96 | $ 234 |
Asset write-downs | 270 | 187 | ||
Pharmaceutical | ||||
Segment Reporting Information [Line Items] | ||||
Valuation Allowances and Reserves, Additions for Adjustments | 300 | 500 | ||
Royalty Revenue, Monetization of Royalty | 200 | |||
Gain on sale of equity investments | 200 | 100 | ||
Litigation Expense | ||||
Medical Devices | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges | 100 | 100 | 300 | 300 |
Litigation Expense | 400 | 600 | 400 | 700 |
Asset write-downs | 200 | 200 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Segment Operating Income | $ 5,064 | 5,197 | $ 10,886 | 10,683 |
Percentage Change in Operating Income Loss | (2.60%) | 1.90% | ||
Operating Segments [Member] | Consumer | ||||
Segment Reporting Information [Line Items] | ||||
Total Segment Operating Income | $ 658 | 571 | $ 1,254 | 1,137 |
Percentage Change in Operating Income Loss | 15.20% | 10.30% | ||
Operating Segments [Member] | Pharmaceutical | ||||
Segment Reporting Information [Line Items] | ||||
Total Segment Operating Income | $ 3,414 | 3,687 | $ 7,077 | 7,031 |
Percentage Change in Operating Income Loss | (7.40%) | 0.70% | ||
Operating Segments [Member] | Medical Devices | ||||
Segment Reporting Information [Line Items] | ||||
Total Segment Operating Income | $ 992 | 939 | $ 2,555 | 2,515 |
Percentage Change in Operating Income Loss | 5.60% | 1.60% | ||
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total Segment Operating Income | $ 316 | $ 293 | $ 563 | $ 485 |
Actelion [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Business Combination, Acquisition Related Costs | 200 | |||
Actelion [Member] | Pharmaceutical | ||||
Segment Reporting Information [Line Items] | ||||
Business Combination, Acquisition Related Costs | $ 200 | $ 200 |
Segments of Business and Geog47
Segments of Business and Geographic Areas - Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Sales by geographic area | ||||
Sales | $ 18,839 | $ 18,482 | $ 36,605 | $ 35,964 |
Percentage Change In Sales By Geographic Area | 1.90% | 1.80% | ||
UNITED STATES | ||||
Sales by geographic area | ||||
Sales | $ 9,726 | 9,572 | $ 19,104 | 18,893 |
Percentage Change In Sales By Geographic Area | 1.60% | 1.10% | ||
Europe | ||||
Sales by geographic area | ||||
Sales | $ 4,232 | 4,090 | $ 8,090 | 7,937 |
Percentage Change In Sales By Geographic Area | 3.50% | 1.90% | ||
Western Hemisphere, excluding U.S. | ||||
Sales by geographic area | ||||
Sales | $ 1,499 | 1,542 | $ 2,953 | 2,873 |
Percentage Change In Sales By Geographic Area | (2.80%) | 2.80% | ||
Asia-Pacific, Africa | ||||
Sales by geographic area | ||||
Sales | $ 3,382 | 3,278 | $ 6,458 | 6,261 |
Percentage Change In Sales By Geographic Area | 3.20% | 3.10% | ||
Medical Devices [Member] | ||||
Sales by geographic area | ||||
Sales | $ 6,726 | 6,409 | $ 13,019 | 12,518 |
Medical Devices [Member] | UNITED STATES | ||||
Sales by geographic area | ||||
Sales | $ 3,229 | $ 3,044 | $ 6,321 | $ 6,070 |
Business Combinations and Div48
Business Combinations and Divestitures (Details) - USD ($) | Jun. 16, 2017 | Jan. 26, 2017 | Jul. 02, 2017 | Apr. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | Jan. 01, 2017 |
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses | $ 34,072,000,000 | $ 730,000,000 | ||||||
Goodwill | $ 31,234,000,000 | 31,234,000,000 | $ 22,805,000,000 | |||||
Earnings before provision for taxes on income | 4,748,000,000 | $ 4,904,000,000 | 10,323,000,000 | 10,198,000,000 | ||||
Asset write-downs | 270,000,000 | 187,000,000 | ||||||
Proceeds from Sale of Productive Assets | 125,000,000 | 685,000,000 | ||||||
Codman Neurosurgery [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from Divestiture of Businesses | $ 1,000,000,000 | |||||||
API [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from Sale of Productive Assets | 600,000,000 | |||||||
Medical Devices [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 13,714,000,000 | 13,714,000,000 | $ 11,702,000,000 | |||||
Asset write-downs | 200,000,000 | 200,000,000 | ||||||
Inventories [Member] | Codman Neurosurgery [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | 58,000,000 | 58,000,000 | ||||||
Property, Plant and Equipment [Member] | Codman Neurosurgery [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | 33,000,000 | 33,000,000 | ||||||
Goodwill [Member] | Codman Neurosurgery [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent | 106,000,000 | 106,000,000 | ||||||
Actelion [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Acquisition, Share Price | $ 280 | |||||||
Payments to acquire businesses | 28,800,000,000 | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 97.86% | |||||||
Business Combination, Consideration Transferred, Liabilities Incurred | 700,000,000 | |||||||
Goodwill | $ 5,986,000,000 | |||||||
Weighted average useful life | 9 years | |||||||
Business Combination, Revenue of acquiree since acquisition date, actual | 91,000,000 | |||||||
Business Acquisition, Net Income (Loss) of acquiree since acquisition date, actual | (116,000,000) | |||||||
Business Combination, Acquisition Related Costs | 200,000,000 | |||||||
Actelion [Member] | Minimum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 4 years | |||||||
Actelion [Member] | Maximum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite-Lived Intangible Asset, Useful Life | 10 years | |||||||
Actelion [Member] | In-process research and development | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair Value Inputs, Discount Rate | 9.00% | |||||||
Idorsia [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 9.90% | |||||||
Convertible Note, Equity Interest, Percentage | 22.10% | |||||||
Idorsia [Member] | Convertible Debt [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Long-term Debt | $ 500,000,000 | |||||||
Debt Instrument, Term | 10 years | |||||||
Idorsia [Member] | Line of Credit [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 250,000,000 | |||||||
Idorsia [Member] | Debt Instrument, Redemption, Period One [Member] | Convertible Debt [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Convertible Note, Equity Interest, Percentage | 16.00% | |||||||
Debt Instrument, Restrictive Covenants, Shareholder Ownership Threshold, Percent | 20.00% | |||||||
AMO [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted average useful life | 14 years 6 months | |||||||
AMO [Member] | Medical Devices [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire businesses | $ 4,400,000,000 | |||||||
Goodwill | 1,800,000,000 | 1,800,000,000 | $ 1,800,000,000 | |||||
Total amortizable intangibles | $ 2,300,000,000 | $ 2,300,000,000 |
Business Combinations and Div49
Business Combinations and Divestitures - Schedule of Preliminary Amounts Recognized for Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 16, 2017 | Jul. 02, 2017 | Jan. 01, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 31,234 | $ 22,805 | |
Actelion [Member] | |||
Business Acquisition [Line Items] | |||
Cash & Cash equivalents | $ 469 | ||
Inventory | 759 | ||
Accounts Receivable | 485 | ||
Other current assets | 93 | ||
Property, plant and equipment | 104 | ||
Goodwill | 5,986 | ||
Intangible assets | 25,010 | ||
Deferred Taxes | 3 | ||
Other non-current assets | 19 | ||
Total Assets Acquired | 32,928 | ||
Current liabilities | 531 | ||
Deferred Taxes | 1,960 | ||
Other non-current liabilities | 383 | ||
Total Liabilities Assumed | 2,874 | ||
Net Assets Acquired | 30,054 | ||
Inventory write up | $ 642 |
Business Combinations and Div50
Business Combinations and Divestitures - Purchase Price Allocation of Identifiable Intangible Assets (Details) - Actelion [Member] $ in Millions | Jun. 16, 2017USD ($) |
Business Acquisition [Line Items] | |
Total intangible assets | $ 25,010 |
In-process research and development | |
Business Acquisition [Line Items] | |
Indefinite-lived Intangible Assets Acquired | 780 |
Patents and trademarks | |
Business Acquisition [Line Items] | |
Total amortizable intangibles | $ 24,230 |
Business Combinations and Div51
Business Combinations and Divestitures - Schedule of Pro Forma Results (Details) - Actelion [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Business Acquisition [Line Items] | ||||
Net Sales | $ 19,426 | $ 19,090 | $ 37,836 | $ 37,165 |
Net Earnings | $ 3,788 | $ 3,495 | $ 7,890 | $ 6,875 |
Diluted Net Earnings per Common Share | $ 1.38 | $ 1.25 | $ 2.87 | $ 2.45 |
Legal Proceedings (Details)
Legal Proceedings (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017USD ($)patientclaimant | Jul. 03, 2016USD ($) | Jul. 02, 2017USD ($)patentsclaimpatientclaimant | Jul. 03, 2016USD ($) | |
ASR | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 2,000 | 2,000 | ||
Pinnacle Acetabular Cup System | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 9,700 | 9,700 | ||
Pelvic Meshes | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 55,500 | 55,500 | ||
Risperdal | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 13,800 | 13,800 | ||
Xarelto | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 20,000 | 20,000 | ||
Talc | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 4,800 | 4,800 | ||
Invokana | ||||
Legal Proceeding (Textuals) | ||||
Product Liability Contingency Number Of Claimants | 800 | 800 | ||
Pending Litigation | Talc | ||||
Legal Proceeding (Textuals) | ||||
Loss Contingency, New Claims Filed, Number | claim | 2 | |||
Investigative Demands [Member] | ||||
Legal Proceeding (Textuals) | ||||
Litigation Settlement, Expense | $ | $ 4 | |||
DePuy ASR U.S. | settled litigation | ||||
Legal Proceeding (Textuals) | ||||
Number of patients in settlement | patient | 9,500 | 9,500 | ||
Medinol Ltd. [Member] | ||||
Legal Proceeding (Textuals) | ||||
Loss Contingency, Patents Allegedly Infringed, Number | patents | 4 | |||
Medical Devices [Member] | ||||
Legal Proceeding (Textuals) | ||||
Litigation Settlement, Expense | $ | $ 400 | $ 600 | $ 400 | $ 700 |
Restructuring (Details)
Restructuring (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017USD ($) | Jul. 03, 2016USD ($) | Jul. 02, 2017USD ($)Employee | Jul. 03, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 11 | $ 114 | $ 96 | $ 234 |
Medical Devices [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charge, Net of Accrual Adjustment | 289 | |||
Restructuring charges | 128 | 379 | ||
Restructuring charges recorded to date | 1,600 | $ 1,600 | ||
Period of workforce reduction | 18 months | |||
Number of positions eliminated | Employee | 2,100 | |||
Number of positions eliminated and receiving severance | Employee | 1,650 | |||
Medical Devices [Member] | Cost of Sales [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 13 | $ 17 | ||
Medical Devices [Member] | Other Income Expense Net [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 104 | 176 | ||
Medical Devices [Member] | Asset Write-off [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 112 | |||
Restructuring Reserve, Accrual Adjustment | 0 | |||
Medical Devices [Member] | Other Restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 267 | |||
Restructuring Reserve, Accrual Adjustment | 0 | |||
Medical Devices [Member] | Employee Severance [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring estimated cost | 400 | 400 | ||
Restructuring charges | 0 | |||
Restructuring Reserve, Accrual Adjustment | (90) | |||
Medical Devices [Member] | Minimum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring estimated cost | 2,000 | $ 2,000 | ||
Positions eliminated (as a percent) | 4.00% | |||
Medical Devices [Member] | Maximum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring estimated cost | $ 2,400 | $ 2,400 | ||
Positions eliminated (as a percent) | 6.00% |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring Reserve (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2017 | Jul. 03, 2016 | Jul. 02, 2017 | Jul. 03, 2016 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring charges | $ 11 | $ 114 | $ 96 | $ 234 |
Medical Devices [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Reserve balance beginning | 381 | |||
Restructuring charges | 128 | 379 | ||
Payments for Restructuring | (303) | |||
Restructuring Reserve, Settled without Cash | (112) | |||
Reserve balance ending | 255 | 255 | ||
Medical Devices [Member] | Employee Severance [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Reserve balance beginning | 380 | |||
Restructuring charges | 0 | |||
Payments for Restructuring | (39) | |||
Restructuring Reserve, Settled without Cash | 0 | |||
Restructuring Reserve, Accrual Adjustment | (90) | |||
Reserve balance ending | 251 | 251 | ||
Medical Devices [Member] | Asset Write-off [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Reserve balance beginning | 0 | |||
Restructuring charges | 112 | |||
Payments for Restructuring | 0 | |||
Restructuring Reserve, Settled without Cash | (112) | |||
Restructuring Reserve, Accrual Adjustment | 0 | |||
Reserve balance ending | 0 | 0 | ||
Medical Devices [Member] | Other Restructuring [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Reserve balance beginning | 1 | |||
Restructuring charges | 267 | |||
Payments for Restructuring | (264) | |||
Restructuring Reserve, Settled without Cash | 0 | |||
Restructuring Reserve, Accrual Adjustment | 0 | |||
Reserve balance ending | $ 4 | $ 4 |