Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 28, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Amgen Inc. | |
Entity Central Index Key | 318,154 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 758,250,346 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Product sales | $ 5,225 | $ 4,949 | $ 10,099 | $ 9,305 |
Other revenues | 145 | 231 | 304 | 396 |
Total revenues | 5,370 | 5,180 | 10,403 | 9,701 |
Operating expenses: | ||||
Cost of sales | 1,089 | 1,081 | 2,122 | 2,171 |
Research and development | 964 | 1,018 | 1,858 | 2,045 |
Selling, general and administrative | 1,160 | 1,136 | 2,186 | 2,159 |
Other | 81 | 43 | 139 | 60 |
Total operating expenses | 3,294 | 3,278 | 6,305 | 6,435 |
Operating income | 2,076 | 1,902 | 4,098 | 3,266 |
Interest expense, net | 277 | 282 | 529 | 541 |
Interest and other income, net | 198 | 138 | 304 | 237 |
Income before income taxes | 1,997 | 1,758 | 3,873 | 2,962 |
Provision for income taxes | 344 | 211 | 597 | 342 |
Net income | $ 1,653 | $ 1,547 | $ 3,276 | $ 2,620 |
Earnings per share: | ||||
Basic (in usd per share) | $ 2.18 | $ 2.04 | $ 4.30 | $ 3.46 |
Diluted (in usd per share) | $ 2.15 | $ 2.01 | $ 4.26 | $ 3.41 |
Shares used in calculation of earnings per share: | ||||
Basic (in shares) | 760 | 759 | 761 | 758 |
Diluted (in shares) | 768 | 768 | 769 | 768 |
Dividends paid per share (in usd per share) | $ 0.79 | $ 0.61 | $ 1.58 | $ 1.22 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,653 | $ 1,547 | $ 3,276 | $ 2,620 |
Other comprehensive income (loss), net of reclassification adjustments and taxes: | ||||
Foreign currency translation gains (losses) | 18 | 7 | (155) | (1) |
Effective portion of cash flow hedges | (115) | (25) | 63 | (23) |
Net unrealized (losses) gains on available-for-sale securities | (108) | 21 | 32 | 61 |
Other | 0 | 0 | 0 | 1 |
Other comprehensive (loss) income, net of tax | (205) | 3 | (60) | 38 |
Comprehensive income | $ 1,448 | $ 1,550 | $ 3,216 | $ 2,658 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 3,795 | $ 3,731 |
Marketable securities | 26,198 | 23,295 |
Trade receivables, net | 2,779 | 2,546 |
Inventories | 2,567 | 2,647 |
Other current assets | 2,397 | 2,494 |
Total current assets | 37,736 | 34,713 |
Property, plant and equipment, net | 5,050 | 5,223 |
Intangible assets, net | 11,988 | 12,693 |
Goodwill | 14,723 | 14,788 |
Other assets | 1,712 | 1,592 |
Total assets | 71,209 | 69,009 |
Current liabilities: | ||
Accounts payable | 934 | 1,212 |
Accrued liabilities | 4,707 | 5,296 |
Current portion of long-term debt | 1,250 | 500 |
Total current liabilities | 6,891 | 7,008 |
Long-term debt | 30,702 | 30,215 |
Long-term deferred tax liability | 3,227 | 3,461 |
Other noncurrent liabilities | $ 2,905 | $ 2,547 |
Contingencies and commitments | ||
Stockholders’ equity: | ||
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding - 759.1 shares in 2015 and 760.4 shares in 2014 | $ 30,464 | $ 30,410 |
Accumulated deficit | (2,912) | (4,624) |
Accumulated other comprehensive loss | (68) | (8) |
Total stockholders’ equity | 27,484 | 25,778 |
Total liabilities and stockholders’ equity | $ 71,209 | $ 69,009 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock and additional paid-in capital, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock and additional paid-in capital, shares authorized | 2,750,000,000 | 2,750,000,000 |
Common stock and additional paid-in capital, shares outstanding | 759,100,000 | 760,400,000 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 3,276 | $ 2,620 |
Depreciation and amortization | 1,043 | 1,024 |
Stock-based compensation expense | 160 | 199 |
Deferred income taxes | (126) | 108 |
Other items, net | (228) | (107) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade receivables, net | (199) | 0 |
Inventories | 196 | 40 |
Other assets | 85 | (11) |
Accounts payable | (269) | 125 |
Accrued income taxes | 369 | (131) |
Other liabilities | (164) | (498) |
Net cash provided by operating activities | 4,143 | 3,369 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (251) | (345) |
Proceeds from sale of property, plant and equipment | 226 | 0 |
Cash paid for acquisitions, net of cash acquired | 0 | (115) |
Purchases of marketable securities | (13,530) | (15,593) |
Proceeds from sales of marketable securities | 8,021 | 9,137 |
Proceeds from maturities of marketable securities | 2,500 | 3,295 |
Change in restricted investments | 0 | 533 |
Other | (277) | (135) |
Net cash used in investing activities | (3,311) | (3,223) |
Cash flows from financing activities: | ||
Net proceeds from issuance of debt | 3,464 | 4,476 |
Repayment of debt | (2,150) | (3,355) |
Repurchases of common stock | (940) | 0 |
Dividends paid | (1,201) | (923) |
Net proceeds from issuance of common stock in connection with the Company’s equity award programs | 52 | 99 |
Settlement of contingent consideration obligation | (225) | 0 |
Other | 232 | 104 |
Net cash (used in) provided by financing activities | (768) | 401 |
Increase in cash and cash equivalents | 64 | 547 |
Cash and cash equivalents at beginning of period | 3,731 | 3,805 |
Cash and cash equivalents at end of period | $ 3,795 | $ 4,352 |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. Basis of presentation The financial information for the three and six months ended June 30, 2015 and 2014 , is unaudited but includes all adjustments (consisting of only normal recurring adjustments, unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2014 , and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2015 . Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $7.3 billion and $7.0 billion as of June 30, 2015 , and December 31, 2014 , respectively. Recent accounting pronouncements In May 2014, a new accounting standard was issued that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. This new standard, as originally issued, would be effective for interim and annual periods beginning January 1, 2017, and would be required to be adopted using either a full retrospective or a modified retrospective approach, with early adoption not permitted. In July 2015, the Financial Accounting Standards Board voted to delay the required date of adoption of this standard by one year and allow early adoption, but not before the original effective date of January 1, 2017. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In April 2015, a new accounting standard was issued that amends the presentation for debt issuance costs. Upon adoption of the standard, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This new standard will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. Adoption of this new standard is not expected to have a material impact on our consolidated balance sheets or related disclosures. |
Restructuring
Restructuring | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the second half of 2014, we initiated a restructuring plan to invest in continuing innovation and the launch of our new pipeline molecules, while improving our cost structure. As part of the plan, we are closing our facilities in Washington State and Colorado and reducing the number of buildings we occupy at our headquarters in Thousand Oaks, California, as well as at other locations. We continue to estimate that $935 million to $1,035 million of pre-tax charges will be incurred in connection with our restructuring plan, including: (i) separation and other headcount-related costs of $535 million to $585 million with respect to staff reductions, and (ii) asset-related charges of $400 million to $450 million consisting primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. A total of $478 million of separation and other headcount-related costs and $235 million of asset-related charges were incurred through June 30, 2015 . During the three and six months ended June 30, 2015 , we incurred $63 million and $155 million , respectively, of restructuring costs. We expect that most of the remaining estimated costs, as discussed above, will be incurred during the remainder of 2015 to support our ongoing transformation and process improvement efforts. The following tables summarize recorded charges related to the restructuring plan by type of activity and the locations recognized within the Condensed Consolidated Statements of Income (in millions): Three months ended June 30, 2015 Separation costs Asset impairments Accelerated depreciation Other Total Cost of sales $ — $ — $ 13 $ 2 $ 15 Research and development — — 7 11 18 Selling, general and administrative — — 5 15 20 Other 7 — — 3 10 Total $ 7 $ — $ 25 $ 31 $ 63 Six months ended June 30, 2015 Separation costs Asset impairments Accelerated depreciation Other Total Cost of sales $ — $ — $ 26 $ 3 $ 29 Research and development — — 21 14 35 Selling, general and administrative — — 6 18 24 Other 55 — — 12 67 Total $ 55 $ — $ 53 $ 47 $ 155 Asset impairment and accelerated depreciation charges were recognized in connection with our decision to exit Boulder and Longmont, Colorado, Bothell and Seattle, Washington and the consolidation of facilities in Thousand Oaks, California. The decision to close these manufacturing and research and development (R&D) facilities was based principally on optimizing the utilization of our sites in the United States, which includes an expansion of our presence in the key U.S. biotechnology hubs of South San Francisco, California and Cambridge, Massachusetts. The following table summarizes the charges (excluding non-cash items) and payments related to the restructuring plan (in millions): During the six months ended June 30, 2015 Separation costs Other Total Restructuring liabilities as of December 31, 2014 $ 221 $ 23 $ 244 Expense 56 39 95 Payments (145 ) (35 ) (180 ) Restructuring liabilities as of June 30, 2015 $ 132 $ 27 $ 159 |
Income taxes
Income taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rates for the three and six months ended June 30, 2015, were 17.2% and 15.4% , respectively, compared with 12.0% and 11.5% for the corresponding periods of the prior year. The effective rates are different from the federal statutory rates primarily as a result of indefinitely reinvested earnings of our foreign operations. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be invested indefinitely outside of the United States. In addition, the effective tax rates for the three and six months ended June 30, 2015 and 2014, were reduced by foreign tax credits associated with the Puerto Rico excise tax described below. The increase in our effective tax rate for the three months ended June 30, 2015, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses. The increase in our effective tax rate for the six months ended June 30, 2015, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses, offset partially by a state tax audit settlement in the three months ended March 31, 2015. Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturing subsidiary in Puerto Rico. The rate is 4.0% effective July 1, 2013, through December 31, 2017. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred. One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes may arise with these tax authorities involving issues of the timing and amount of income and deductions, the use of tax credits and the allocations of income among various tax jurisdictions because of differing interpretations of tax laws and regulations. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009, or to California state income tax examinations for years ended on or before December 31, 2008. During the three and six months ended June 30, 2015, the gross amount of our unrecognized tax benefits (UTBs) increased by approximately $110 million and $210 million , respectively, as a result of tax positions taken during the current year. The UTB balance decreased by approximately $70 million during the six months ended June 30, 2015, due to state tax audit settlements. Substantially all of the UTBs as of June 30, 2015, if recognized, would affect our effective tax rate. |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally shares that may be issued under our stock option awards and restricted stock and performance unit awards, determined using the treasury stock method (collectively “dilutive securities”). The computations for basic and diluted EPS were as follows (in millions, except per share data): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Income (Numerator): Net income for basic and diluted EPS $ 1,653 $ 1,547 $ 3,276 $ 2,620 Shares (Denominator): Weighted-average shares for basic EPS 760 759 761 758 Effect of dilutive securities 8 9 8 10 Weighted-average shares for diluted EPS 768 768 769 768 Basic EPS $ 2.18 $ 2.04 $ 4.30 $ 3.46 Diluted EPS $ 2.15 $ 2.01 $ 4.26 $ 3.41 For the three and six months ended June 30, 2015 and 2014 , the number of anti-dilutive employee stock-based awards excluded from the computation of diluted EPS was not significant. |
Collaborative arrangements
Collaborative arrangements | 6 Months Ended |
Jun. 30, 2015 | |
Collaborative Arrangements [Abstract] | |
Collaborative arrangements | Collaborative arrangements A collaborative arrangement is a contractual arrangement that involves a joint operating activity. These arrangements involve two or more parties who are both: (i) active participants in the activity; and (ii) exposed to significant risks and rewards dependent on the commercial success of the activity. From time to time, we enter into collaborative arrangements for the R&D, manufacture and/or commercialization of products and/or product candidates. These collaborations generally provide for non-refundable upfront license fees, development and commercial performance milestone payments, cost sharing, royalty payments and/or profit sharing. Our collaboration agreements are performed with no guarantee of either technological or commercial success and each is unique in nature. Below are our significant arrangements which have had material changes in their terms since the filing of our Annual Report on Form 10-K for the year ended December 31, 2014. AstraZeneca Plc. We are in a collaboration with AstraZeneca Plc. (AstraZeneca) to jointly develop and commercialize certain antibodies from Amgen's clinical inflammation portfolio, including AMG 157, AMG 181, AMG 557 and AMG 570. The agreement covers the worldwide development and commercialization of these antibodies, except for AMG 557 and AMG 570 in Japan. AMG 139 and brodalumab were formerly part of the collaboration in certain territories. As of April 1, 2015, we have suspended our participation in the co-development and commercialization of AMG 139, with the option of resuming such participation at a later date. As of May 22, 2015, we have commenced termination of our participation in the co-development and commercialization of brodalumab base d on events of suicidal ideation and behavior in the program. Under the terms of the agreement, approximately 65% of related development costs for the 2012-2014 periods were funded by AstraZeneca; beginning in 2015, the companies share costs equally. For each remaining collaboration product approved for sale, Amgen would receive a mid-single-digit royalty, after which the worldwide commercialization profits and losses related to such remaining collaboration products would be shared equally. During the three months ended June 30, 2015 and 2014, cost recoveries recognized for development costs, which included brodalumab and AMG 139, were $3 million and $39 million , respectively, which were included in Research and development expense in the Condensed Consolidated Statements of Income. During the six months ended June 30, 2015 and 2014, the cost recoveries were $23 million and $49 million , respectively. After Amgen's participation in the brodalumab program terminates under the agreement, which is expected to occur in the third quarter of 2015, the clinical development and commercialization of brodalumab will be at the sole discretion and expense of AstraZeneca. If AstraZeneca commercializes brodalumab, Amgen would receive a mid-single-digit to low-double-digit royalty on net sales of brodalumab. The collaboration agreement will continue in effect unless terminated in accordance with its terms. Bayer HealthCare Pharmaceuticals Inc. We are in a collaboration with Bayer HealthCare Pharmaceuticals Inc. (Bayer) to jointly develop and commercialize Nexavar ® (sorafenib) worldwide, except in Japan. The rights to develop and market Nexavar ® in Japan are reserved to Bayer. Bayer has no obligation to pay royalties to Amgen for sales of Nexavar ® in Japan. Nexavar ® is currently marketed and sold in more than 100 countries around the world for the treatment of unresectable liver cancer and advanced kidney cancer. In the United States, Nexavar ® is also approved for the treatment of patients with locally recurrent or metastatic, progressive, differentiated thyroid carcinoma refractory to radioactive iodine treatment. In May 2015, we and Bayer amended the terms of the collaboration, which terminated the co-promotion agreement in the United States. The termination was effective as of June 30, 2015 and transferred all U.S. operational responsibilities to Bayer, including commercial and medical affairs activities. Prior to the termination of the co-promotion agreement, we co-promoted Nexavar ® with Bayer and shared equally in the profits or losses in the United States. In lieu of this profit share, Bayer will now pay Amgen a royalty on U.S. sales of Nexavar ® at a percentage rate in the high 30 s. Amgen will no longer contribute sales force personnel or medical liaisons to support Nexavar ® in the United States. There are no changes to the global research and development or non-U.S. profit share arrangements in the original agreement, as discussed below. In all countries outside of the United States, excluding Japan, Bayer manages all commercialization activities and incurs all of the sales and marketing expenditures and mutually agreed R&D expenses, for which we continue to reimburse Bayer for half. In these countries, we continue to receive 50% of net profits on sales of Nexavar ® after deducting certain Bayer-related costs. The collaboration with Bayer will terminate at the later of the date when patents expire that were issued in connection with product candidates discovered under the agreement, or on the last day when we or Bayer market or sell collaboration products anywhere in the world. The amendment to the collaboration is not expected to have a material impact on our consolidated results of operations. Prior to the amendment, Amgen was acting as an agent under the collaboration and as such, revenue was derived by calculating net sales of Nexavar ® to third-party customers and deducting the cost of goods sold, distribution costs, marketing costs, phase 4 clinical trial costs, allocable overhead costs and certain other costs. During the three months ended June 30, 2015 and 2014, Amgen recorded net Nexavar ® collaboration profits of $84 million and $87 million , respectively, which were recognized as Other revenues in the Condensed Consolidated Statements of Income. During the six months ended June 30, 2015 and 2014, the net collaboration profits were $156 million and $165 million , respectively. In addition, during the three months ended June 30, 2015 and 2014, net R&D expenses related to the collaboration were $7 million and $10 million , respectively, which were recognized in the Condensed Consolidated Statements of Income. During the six months ended June 30, 2015 and 2014, the net R&D expenses were $12 million and $21 million , respectively. |
Available-for-sale investments
Available-for-sale investments | 6 Months Ended |
Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale investments | Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions): Type of security as of June 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 3,604 $ 14 $ (8 ) $ 3,610 Other government-related debt securities: U.S. 551 1 (1 ) 551 Foreign and other 1,718 19 (14 ) 1,723 Corporate debt securities: Financial 7,425 22 (21 ) 7,426 Industrial 7,657 27 (55 ) 7,629 Other 830 3 (4 ) 829 Residential mortgage-backed securities 1,498 7 (8 ) 1,497 Other mortgage- and asset-backed securities 2,053 1 (40 ) 2,014 Money market mutual funds 2,951 — — 2,951 Other short-term interest-bearing securities 1,284 — — 1,284 Total interest-bearing securities 29,571 94 (151 ) 29,514 Equity securities 97 82 (4 ) 175 Total available-for-sale investments $ 29,668 $ 176 $ (155 ) $ 29,689 Type of security as of December 31, 2014 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 3,632 $ 22 $ (8 ) $ 3,646 Other government-related debt securities: U.S. 530 1 (3 ) 528 Foreign and other 1,572 21 (24 ) 1,569 Corporate debt securities: Financial 6,036 21 (16 ) 6,041 Industrial 6,394 23 (66 ) 6,351 Other 650 3 (4 ) 649 Residential mortgage-backed securities 1,708 4 (10 ) 1,702 Other mortgage- and asset-backed securities 1,837 — (41 ) 1,796 Money market mutual funds 3,004 — — 3,004 Other short-term interest-bearing securities 1,302 — — 1,302 Total interest-bearing securities 26,665 95 (172 ) 26,588 Equity securities 98 48 (2 ) 144 Total available-for-sale investments $ 26,763 $ 143 $ (174 ) $ 26,732 The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions): Classification in the Condensed Consolidated Balance Sheets June 30, December 31, Cash and cash equivalents $ 3,316 $ 3,293 Marketable securities 26,198 23,295 Other assets — noncurrent 175 144 Total available-for-sale investments $ 29,689 $ 26,732 Cash and cash equivalents in the table above excludes cash of $479 million and $438 million as of June 30, 2015 , and December 31, 2014 , respectively. The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions): Contractual maturity June 30, December 31, Maturing in one year or less $ 4,701 $ 4,936 Maturing after one year through three years 8,712 6,829 Maturing after three years through five years 8,900 7,840 Maturing after five years through ten years 3,468 3,267 Maturing after ten years 222 218 Mortgage- and asset-backed securities 3,511 3,498 Total interest-bearing securities $ 29,514 $ 26,588 For the three months ended June 30, 2015 and 2014 , realized gains totaled $18 million and $57 million , respectively, and realized losses totaled $27 million and $17 million , respectively. For the six months ended June 30, 2015 and 2014 , realized gains totaled $54 million and $85 million , respectively, and realized losses totaled $98 million and $43 million , respectively. The cost of securities sold is based on the specific identification method. The unrealized losses on available-for-sale investments and their related fair values were as follows (in millions): Less than 12 months 12 months or greater Type of security as of June 30, 2015 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 1,522 $ (7 ) $ 30 $ (1 ) Other government-related debt securities: U.S. 275 (1 ) 20 — Foreign and other 701 (12 ) 71 (2 ) Corporate debt securities: Financial 3,539 (20 ) 156 (1 ) Industrial 4,364 (51 ) 307 (4 ) Other 358 (4 ) 24 — Residential mortgage-backed securities 464 (3 ) 305 (5 ) Other mortgage- and asset-backed securities 1,020 (11 ) 401 (29 ) Equity securities — — 2 (4 ) Total $ 12,243 $ (109 ) $ 1,316 $ (46 ) Less than 12 months 12 months or greater Type of security as of December 31, 2014 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 1,770 $ (7 ) $ 171 $ (1 ) Other government-related debt securities: U.S. 160 — 178 (3 ) Foreign and other 514 (14 ) 159 (10 ) Corporate debt securities: Financial 3,150 (14 ) 158 (2 ) Industrial 3,931 (62 ) 222 (4 ) Other 354 (4 ) 5 — Residential mortgage-backed securities 614 (4 ) 413 (6 ) Other mortgage- and asset-backed securities 1,071 (8 ) 561 (33 ) Equity securities 5 (2 ) — — Total $ 11,569 $ (115 ) $ 1,867 $ (59 ) The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings and places restrictions on maturities and concentration by asset class and issuer. We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether we will more likely than not be required to sell, the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. As of June 30, 2015 , and December 31, 2014 , we believe the cost bases for our available-for-sale investments were recoverable in all material respects. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in millions): June 30, December 31, Raw materials $ 221 $ 198 Work in process 1,320 1,551 Finished goods 1,026 898 Total inventories $ 2,567 $ 2,647 |
Goodwill and other intangible a
Goodwill and other intangible assets | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill Changes in the carrying amounts of goodwill were as follows (in millions): Six months ended June 30, 2015 2014 Beginning balance $ 14,788 $ 14,968 Goodwill related to acquisitions of businesses (1) — (128 ) Currency translation adjustments (65 ) 4 Ending balance $ 14,723 $ 14,844 (1) Composed of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods. Identifiable intangible assets Identifiable intangible assets consisted of the following (in millions): June 30, 2015 December 31, 2014 Gross carrying amount Accumulated amortization Intangible assets, net Gross carrying amount Accumulated amortization Intangible assets, net Finite-lived intangible assets: Developed product technology rights $ 10,796 $ (4,568 ) $ 6,228 $ 10,826 $ (4,155 ) $ 6,671 Licensing rights 3,283 (847 ) 2,436 3,236 (696 ) 2,540 R&D technology rights 1,143 (600 ) 543 1,167 (569 ) 598 Marketing-related rights 1,222 (582 ) 640 1,241 (512 ) 729 Total finite-lived intangible assets 16,444 (6,597 ) 9,847 16,470 (5,932 ) 10,538 Indefinite-lived intangible assets: In-process research and development 2,141 — 2,141 2,155 — 2,155 Total identifiable intangible assets $ 18,585 $ (6,597 ) $ 11,988 $ 18,625 $ (5,932 ) $ 12,693 Developed product technology rights consist of rights related to marketed products acquired in business combinations. Licensing rights are composed primarily of contractual rights acquired in business combinations to receive future milestones, royalties and profit sharing payments, capitalized payments to third parties for milestones related to regulatory approvals to commercialize products and up-front payments associated with royalty obligations for marketed products. R&D technology rights consist of technology used in R&D with alternative future uses. Marketing-related intangible assets are composed primarily of rights related to the sale and distribution of marketed products. In-process research and development (IPR&D) consists of R&D projects acquired in a business combination which are not complete due to remaining technological risks and/or lack of receipt of the required regulatory approvals. These projects include Kyprolis ® (carfilzomib) for Injection and oprozomib acquired in the acquisition of Onyx Pharmaceuticals Inc. (Onyx), AMG 416 acquired in the acquisition of KAI Pharmaceuticals and talimogene laherparepvec acquired in the acquisition of BioVex Group, Inc. (BioVex). The U.S. Food and Drug Administration (FDA) is reviewing our talimogene laherparepvec Biologics License Application (BLA) for the treatment of patients with injectable regionally or distantly metastatic melanoma. The Prescription Drug User Fee Act (PDUFA) target action date for completion of the FDA's review is October 27, 2015. As of June 30, 2015, the carrying value of the IPR&D for talimogene laherparepvec was $675 million . For all IPR&D projects, there are major risks and uncertainties associated with the timely and successful completion of development and commercialization of these product candidates, including our ability to confirm their safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. We are not able to market a human therapeutic without obtaining regulatory approvals, and such approvals require completing clinical trials that demonstrate a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans, impact the revenues a product can generate. Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values. IPR&D projects are reviewed annually for impairment and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For example, if the BLA for talimogene laherparepvec is not approved for treatment of patients with injectable regionally or distantly metastatic melanoma, we would be required to test the talimogene laherparepvec IPR&D asset for impairment again. During the three months ended June 30, 2015 and 2014 , we recognized amortization charges associated with our finite-lived intangible assets of $345 million and $341 million , respectively. During the six months ended June 30, 2015 and 2014 , we recognized amortization charges associated with our finite-lived intangible assets of $686 million and $698 million , respectively. The total estimated amortization charges for our finite-lived intangible assets for the six months ending December 31, 2015 , and the years ending December 31, 2016, 2017, 2018, 2019 and 2020, are $672 million , $1.3 billion , $1.2 billion , $1.0 billion , $948 million and $892 million , respectively. |
Financing arrangements
Financing arrangements | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Financing arrangements | Financing arrangements The carrying values and the fixed contractual coupon rates, as applicable, of our long-term borrowings were as follows (in millions): June 30, December 31, 2.30% notes due 2016 (2.30% 2016 Notes) $ 750 $ 749 2.50% notes due 2016 (2.50% 2016 Notes) 1,000 1,000 Floating Rate Notes due 2017 600 600 1.25% notes due 2017 (1.25% 2017 Notes) 849 849 2.125% notes due 2017 (2.125% 2017 Notes) 1,249 1,249 5.85% notes due 2017 (5.85% 2017 Notes) 1,100 1,100 6.15% notes due 2018 (6.15% 2018 Notes) 500 500 Term Loan due 2018 2,225 4,375 4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes) 615 668 Floating Rate Notes due 2019 250 250 2.20% notes due 2019 (2.20% 2019 Notes) 1,398 1,398 5.70% notes due 2019 (5.70% 2019 Notes) 999 999 2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes) 750 814 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 749 — 3.45% notes due 2020 (3.45% 2020 Notes) 898 898 4.10% notes due 2021 (4.10% 2021 Notes) 998 998 3.875% notes due 2021 (3.875% 2021 Notes) 1,747 1,747 2.70% notes due 2022 (2.70% 2022 Notes) 499 — 3.625% notes due 2022 (3.625% 2022 Notes) 747 747 3.625% notes due 2024 (3.625% 2024 Notes) 1,398 1,398 3.125% notes due 2025 (3.125% 2025 Notes) 995 — 5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes) 742 735 4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes) 1,086 1,076 6.375% notes due 2037 (6.375% 2037 Notes) 899 899 6.90% notes due 2038 (6.90% 2038 Notes) 499 499 6.40% notes due 2039 (6.40% 2039 Notes) 996 996 5.75% notes due 2040 (5.75% 2040 Notes) 697 697 4.95% notes due 2041 (4.95% 2041 Notes) 596 596 5.15% notes due 2041 (5.15% 2041 Notes) 2,233 2,233 5.65% notes due 2042 (5.65% 2042 Notes) 1,245 1,245 5.375% notes due 2043 (5.375% 2043 Notes) 1,000 1,000 4.40% notes due 2045 (4.40% 2045 Notes) 1,243 — Other notes 100 100 Total debt 31,952 30,715 Less current portion (1,250 ) (500 ) Total noncurrent debt $ 30,702 $ 30,215 Debt repayments During the six months ended June 30, 2015 , we repaid $2.15 billion of principal on our Term Loan Credit Facility. Debt issuances In May 2015, we issued $3.5 billion aggregate principal amount of notes, composed of the 2.125% 2020 Notes, the 2.70% 2022 Notes, the 3.125% 2025 Notes and the 4.40% 2045 Notes. The notes may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and, except as discussed below, a make-whole amount, as defined. The 2.125% 2020 Notes, the 2.70% 2022 Notes, the 3.125% 2025 Notes and the 4.40% 2045 Notes may be redeemed without payment of a make-whole amount if they are redeemed on or after one , two , three or six months , respectively, prior to their maturity dates. In the event of a change in control triggering event, as defined, we may be required to purchase all or a portion of the notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. Debt issuance costs incurred in connection with the issuance of these notes totaling approximately $21 million are being amortized over the respective lives of the notes, and the related charge is included in Interest expense, net in the Condensed Consolidated Statements of Income. |
Stockholders' equity
Stockholders' equity | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders’ equity Stock repurchase program Activity under our stock repurchase program was as follows (in millions): 2015 2014 Shares Dollars Shares Dollars First quarter 2.9 $ 451 — $ — Second quarter 3.3 515 — — Total stock repurchases 6.2 $ 966 — $ — As of June 30, 2015 , $2.9 billion remained available under our stock repurchase program. Dividends On December 17, 2014 and March 4, 2015 the Board of Directors declared quarterly cash dividends of $0.79 per share of common stock, which were paid on March 6 and June 5, 2015, respectively. On July 28, 2015, the Board of Directors declared a cash dividend of $0.79 per share of common stock, which will be paid on September 8, 2015, to all stockholders of record as of the close of business on August 17, 2015. Accumulated other comprehensive income The components of accumulated other comprehensive income (AOCI) were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2014 $ (264 ) $ 290 $ (19 ) $ (15 ) $ (8 ) Foreign currency translation adjustments (184 ) — — — (184 ) Unrealized gains — 168 188 — 356 Reclassification adjustments to income — 114 35 — 149 Income taxes 11 (104 ) (83 ) — (176 ) Balance as of March 31, 2015 $ (437 ) $ 468 $ 121 $ (15 ) $ 137 Foreign currency translation adjustments 24 — — — 24 Unrealized gains (losses) — 44 (180 ) — (136 ) Reclassification adjustments to income — (226 ) 9 — (217 ) Income taxes (6 ) 67 63 — 124 Balance as of June 30, 2015 $ (419 ) $ 353 $ 13 $ (15 ) $ (68 ) The reclassifications out of AOCI to earnings were as follows (in millions): Amounts reclassified out of AOCI Components of AOCI Three months ended June 30, 2015 Three months ended June 30, 2014 Line item affected in the Statements of Income Cash flow hedges: Foreign currency contract gains $ 91 $ — Product sales Cross-currency swap contract gains 136 48 Interest and other income, net Forward interest rate contract losses (1 ) — Interest expense 226 48 Total before income tax (81 ) (18 ) Tax expense $ 145 $ 30 Net of taxes Available-for-sale securities: Net realized (losses) gains $ (9 ) $ 40 Interest and other income, net 3 (15 ) Tax benefit/(expense) $ (6 ) $ 25 Net of taxes Amounts reclassified out of AOCI Components of AOCI Six months ended June 30, 2015 Six months ended June 30, 2014 Line item affected in the Statements of Income Cash flow hedges: Foreign currency contract gains $ 160 $ — Product sales Cross-currency swap contract (losses) gains (47 ) 62 Interest and other income, net Forward interest rate contract losses (1 ) — Interest expense 112 62 Total before income tax (40 ) (23 ) Tax expense $ 72 $ 39 Net of taxes Available-for-sale securities: Net realized (losses) gains $ (44 ) $ 42 Interest and other income, net 16 (16 ) Tax benefit/(expense) $ (28 ) $ 26 Net of taxes |
Fair value measurement
Fair value measurement | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement To estimate the fair values of our financial assets and liabilities we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access Level 2 — Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement. The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Quoted prices in Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of June 30, 2015, using: Total Assets: Available-for-sale investments: U.S. Treasury securities $ 3,610 $ — $ — $ 3,610 Other government-related debt securities: U.S. — 551 — 551 Foreign and other — 1,723 — 1,723 Corporate debt securities: Financial — 7,426 — 7,426 Industrial — 7,629 — 7,629 Other — 829 — 829 Residential mortgage-backed securities — 1,497 — 1,497 Other mortgage- and asset-backed securities — 2,014 — 2,014 Money market mutual funds 2,951 — — 2,951 Other short-term interest-bearing securities — 1,284 — 1,284 Equity securities 175 — — 175 Derivatives: Foreign currency contracts — 238 — 238 Cross-currency swap contracts — 22 — 22 Interest rate swap contracts — 50 — 50 Total assets $ 6,736 $ 23,263 $ — $ 29,999 Liabilities: Derivatives: Foreign currency contracts $ — $ 7 $ — $ 7 Cross-currency swap contracts — 80 — 80 Interest rate swap contracts — 24 — 24 Contingent consideration obligations in connection with business combinations — — 215 215 Total liabilities $ — $ 111 $ 215 $ 326 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of December 31, 2014, using: Total Assets: Available-for-sale investments: U.S. Treasury securities $ 3,646 $ — $ — $ 3,646 Other government-related debt securities: U.S. — 528 — 528 Foreign and other — 1,569 — 1,569 Corporate debt securities: Financial — 6,041 — 6,041 Industrial — 6,351 — 6,351 Other — 649 — 649 Residential mortgage-backed securities — 1,702 — 1,702 Other mortgage- and asset-backed securities — 1,796 — 1,796 Money market mutual funds 3,004 — — 3,004 Other short-term interest-bearing securities — 1,302 — 1,302 Equity securities 144 — — 144 Derivatives: Foreign currency contracts — 360 — 360 Cross-currency swap contracts — 32 — 32 Interest rate swap contracts — 46 — 46 Total assets $ 6,794 $ 20,376 $ — $ 27,170 Liabilities: Derivatives: Foreign currency contracts $ — $ 4 $ — $ 4 Cross-currency swap contracts — 12 — 12 Interest rate swap contracts — 26 — 26 Contingent consideration obligations in connection with business combinations — — 215 215 Total liabilities $ — $ 42 $ 215 $ 257 The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets with no valuation adjustment. Most of our other government-related and corporate debt securities are investment grade with maturity dates of five years or less from the balance sheet date. Our other government-related debt securities portfolio is composed of securities with weighted-average credit ratings of A- or equivalent by Standard & Poor's Financial Services LLC (S&P) or Fitch Ratings, Inc. (Fitch), A by Moody's Investors Service, Inc. (Moody's); and our corporate debt securities portfolio has a weighted-average credit rating of BBB+ or equivalent by S&P or Moody's, and A- by Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. Our residential mortgage-, other mortgage- and asset-backed securities portfolio is composed entirely of senior tranches, with credit ratings of AAA or equivalent by S&P, Moody's or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs. We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates. All of our foreign currency forward and option derivatives contracts have maturities of three years or less and all are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimated the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency rates, London Interbank Offered Rates (LIBOR) cash and swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts also include implied volatility measures. These inputs, where applicable, are at commonly quoted intervals. See Note 12, Derivative instruments. Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimated the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. See Note 12, Derivative instruments. Our interest rate swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimated the fair values of these contracts by using an income-based industry standard valuation model for which all significant inputs were observable either directly or indirectly. These inputs included LIBOR, swap rates and obligor credit default swap rates. Contingent consideration obligations We have incurred contingent consideration obligations as a result of our acquisition of a business and upon the assumption of contingent consideration obligations incurred by an acquired company discussed below. These contingent consideration obligations are recorded at their estimated fair values, and we revalue these obligations each reporting period until the related contingencies are resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to product candidates acquired in the business combinations and are reviewed quarterly by management in our R&D and commercial sales organizations. These inputs include, as applicable, estimated probabilities and timing of achieving specified regulatory and commercial milestones and estimated annual sales. Significant changes which increase or decrease the probabilities of achieving the related regulatory and commercial events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of these obligations, as applicable. Changes in fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income. Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Beginning balance $ 215 $ 596 $ 215 $ 595 Net changes in valuation — 14 — 15 Ending balance $ 215 $ 610 $ 215 $ 610 As a result of our acquisition of BioVex in March 2011, we are obligated to pay its former shareholders up to $575 million of additional consideration contingent upon achieving separate regulatory and sales-related milestones with regard to talimogene laherparepvec, which was acquired in the acquisition. As a result of filing the BLA in the United States, we made a milestone payment of $125 million to the former BioVex shareholders during 2014. The largest remaining potential milestone payments include: (i) $125 million upon the first commercial sale in the United States following receipt of marketing approval for use of the product in specified patient populations and (ii) $125 million upon achievement of an agreed level of worldwide sales within a specified period of time. In addition, up to $200 million of additional consideration of varying amounts may be payable upon achievement of certain other regulatory and sales-related milestones. We estimate the fair values of the obligations to the former shareholders of BioVex by using probability-adjusted discounted cash flows. As a result of our quarterly review of the key assumptions, there was no change in the estimated aggregate fair value of the contingent consideration during the three and six months ended June 30, 2015 . As a result of our acquisition of Onyx in October 2013, we assumed contingent consideration obligations arising from Onyx's 2009 acquisition of Proteolix, Inc. These contingent consideration obligations were composed of two separate milestone payments of $150 million each payable if Kyprolis ® received specified marketing approvals for relapsed multiple myeloma on or before March 31, 2016, by each of the FDA and the European Medicines Agency (EMA). In December 2014, we renegotiated the terms of these milestones and settled the contingent consideration obligations with the former shareholders of Proteolix, Inc. by agreeing to make a single payment of $225 million . This amount was paid during the first quarter of 2015. During the six months ended June 30, 2015 and 2014 , there were no transfers of assets or liabilities between the fair value measurement levels and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis. Summary of the fair value of other financial instruments Cash equivalents The estimated fair values of cash equivalents approximate their carrying values due to the short-term nature of these financial instruments. Borrowings We estimated the fair value of our long-term debt (Level 2) by taking into consideration indicative prices obtained from a third-party financial institution that utilizes industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; credit spreads; benchmark yields; foreign currency exchange rates, as applicable; and other observable inputs. As of June 30, 2015 , and December 31, 2014 , the aggregate fair values of our long-term debt were $33.6 billion and $33.6 billion , respectively, and the carrying values were $32.0 billion and $30.7 billion , respectively. |
Derivative instruments
Derivative instruments | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative instruments | Derivative instruments The Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. To reduce our risks related to these exposures, we utilize or have utilized certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes. Cash flow hedges We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates, associated primarily with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are offset partially by the corresponding increases and decreases in our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations on our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales primarily over a three-year time horizon , with, at any given point in time, a higher percentage of nearer-term projected product sales being hedged than in successive periods. As of June 30, 2015 , and December 31, 2014 , we had open foreign currency forward contracts with notional amounts of $3.2 billion and $3.8 billion , respectively, and open foreign currency option contracts with notional amounts of $382 million and $271 million , respectively. These foreign currency forward and option contracts, primarily euro based, have been designated as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI on the Condensed Consolidated Balance Sheets and reclassified to earnings in the same periods during which the hedged transactions affect earnings. During the three months ended June 30, 2015, we effectively terminated outstanding foreign currency forward contracts, with a notional amount of $1.7 billion , to manage counterparty risk resulting from favorable movements in U.S. dollar/euro exchange rates. We received $247 million from the counterparties, which was included in Net cash provided by operating activities in the Condensed Consolidated Statement of Cash Flows. This amount remains in AOCI and will be recognized in Product sales in the Condensed Consolidated Statements of Income when the related international product sales affect earnings. In addition, during the three months ended June 30, 2015, we entered into new foreign currency forward contracts that hedge these forecasted international product sales. These contracts are included in the notional amounts of cash flow hedges outstanding at June 30, 2015. To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term notes denominated in foreign currencies, we entered into cross-currency swap contracts. Under the terms of these contracts, we paid euros/pounds sterling and received U.S. dollars for the notional amounts at the inception of the contracts, and we exchange interest payments based on these notional amounts at fixed rates over the lives of the contracts in which we pay U.S. dollars and receive euros/pounds sterling. In addition, we will pay U.S. dollars to and receive euros/pounds sterling from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged notes, effectively converting the interest payments and principal repayment on these notes from euros/pounds sterling to U.S. dollars. These cross-currency swap contracts have been designated as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI on the Condensed Consolidated Balance Sheets and reclassified to earnings in the same periods during which the hedged debt affects earnings. The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions): Foreign currency U.S. dollars Hedged notes Notional amount Interest rate Notional amount Interest rate 2.125% 2019 euro Notes € 675 2.125 % $ 864 2.6 % 5.50% 2026 pound sterling Notes £ 475 5.50 % $ 747 6.0 % 4.00% 2029 pound sterling Notes £ 700 4.00 % $ 1,111 4.5 % The effective portions of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended June 30, June 30, Derivatives in cash flow hedging relationships 2015 2014 2015 2014 Foreign currency contracts $ (99 ) $ (13 ) $ 293 $ — Cross-currency swap contracts 143 21 (81 ) 25 Total $ 44 $ 8 $ 212 $ 25 The locations in the Condensed Consolidated Statements of Income and the effective portions of the gain/(loss) reclassified out of AOCI into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended June 30, June 30, Derivatives in cash flow hedging relationships Statements of Income location 2015 2014 2015 2014 Foreign currency contracts Product sales $ 91 $ — $ 160 $ — Cross-currency swap contracts Interest and other income, net 136 48 (47 ) 62 Forward interest rate contracts Interest expense, net (1 ) — (1 ) — Total $ 226 $ 48 $ 112 $ 62 No portions of our cash flow hedge contracts are excluded from the assessment of hedge effectiveness, and the gains and losses of the ineffective portions of these hedging instruments were not material for the three and six months ended June 30, 2015 and 2014. As of June 30, 2015 , the amounts expected to be reclassified out of AOCI into earnings over the next 12 months are approximately $427 million of net gains on our foreign currency and cross-currency swap contracts and approximately $1 million of losses on forward interest rate contracts. Fair value hedges To achieve a desired mix of fixed and floating interest rates on our long-term debt, we entered into interest rate swap contracts, which qualified and are designated as fair value hedges. The terms of these interest rate swap contracts correspond to the related hedged debt instruments and effectively converted a fixed interest rate coupon to a floating LIBOR-based coupon over the lives of the respective notes. We had interest rate swap agreements as of June 30, 2015 and December 31, 2014, with aggregate notional amounts of $6.65 billion . The contracts have rates that range from three-month LIBOR plus 0.4% to three-month LIBOR plus 2.0% . For derivative instruments that are designated and qualify as fair value hedges, the unrealized gain or loss on the derivative resulting from the change in fair value during the period as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk is recognized in current earnings. For the three and six months ended June 30, 2015 , we included the unrealized gains on the hedged debt of $83 million and losses of $6 million , respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized losses of $83 million and gains of $6 million , respectively, on the related interest rate swap agreements. For the three and six months ended June 30, 2014, we included the unrealized losses on the hedged debt of $63 million and $125 million , respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized gains of $63 million and $125 million , respectively, on the related interest rate swap agreements. Derivatives not designated as hedges We enter into foreign currency forward contracts that are not designated as hedging transactions to reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies. These exposures are hedged on a month-to-month basis. As of June 30, 2015 , and December 31, 2014 , the total notional amounts of these foreign currency forward contracts were $928 million and $875 million , respectively. The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions): Three months ended Six months ended June 30, June 30, Derivatives not designated as hedging instruments Statements of Income location 2015 2014 2015 2014 Foreign currency contracts Interest and other income, net $ 20 $ (14 ) $ (9 ) $ (12 ) The fair values of derivatives included on the Condensed Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities June 30, 2015 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Cross-currency swap contracts Other current assets/ Other noncurrent assets $ 22 Accrued liabilities/ Other noncurrent liabilities $ 80 Foreign currency contracts Other current assets/ Other noncurrent assets 234 Accrued liabilities/ Other noncurrent liabilities 3 Interest rate swap contracts Other current assets/ Other noncurrent assets 50 Accrued liabilities/ Other noncurrent liabilities 24 Total derivatives designated as hedging instruments 306 107 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets 4 Accrued liabilities 4 Total derivatives not designated as hedging instruments 4 4 Total derivatives $ 310 $ 111 Derivative assets Derivative liabilities December 31, 2014 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Cross-currency swap contracts Other current assets/ Other noncurrent assets $ 32 Accrued liabilities/ Other noncurrent liabilities $ 12 Foreign currency contracts Other current assets/ Other noncurrent assets 356 Accrued liabilities/ Other noncurrent liabilities — Interest rate swap contracts Other current assets/ Other noncurrent assets 46 Accrued liabilities/ Other noncurrent liabilities 26 Total derivatives designated as hedging instruments 434 38 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets 4 Accrued liabilities 4 Total derivatives not designated as hedging instruments 4 4 Total derivatives $ 438 $ 42 Our derivative contracts that were in liability positions as of June 30, 2015 , contain certain credit-risk-related contingent provisions that would be triggered if: (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due to or from a counterparty under these contracts may only be offset against other amounts due to or from the same counterparty if an event of default or termination, as defined, were to occur. The cash flow effects of our derivative contracts for the six months ended June 30, 2015 and 2014 , are included within Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows. |
Contingencies and commitments
Contingencies and commitments | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and commitments | Contingencies and commitments Contingencies In the ordinary course of business, we are involved in various legal proceedings and other matters—including those discussed in this Note—that are complex in nature and have outcomes that are difficult to predict. See Note 18, Contingencies and commitments, to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014 , and Note 12, Contingencies and commitments, to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2015, for further discussion of certain of our legal proceedings and other matters. We record accruals for loss contingencies to the extent that we conclude that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously. Our legal proceedings range from cases brought by a single plaintiff to class actions with thousands of putative class members. These legal proceedings, as well as other matters, involve various aspects of our business and a variety of claims—including but not limited to patent infringement, marketing, pricing and trade practices and securities law—some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing or in Note 18, Contingencies and commitments, to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2014 , or in Note 12, Contingencies and commitments, to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2015, plaintiffs seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process (which in complex proceedings of the sort faced by us often extend for several years). As a result, none of the matters described in this filing have progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows. Certain recent developments concerning our legal proceedings and other matters are discussed below: Sandoz Filgrastim Litigation On May 5, 2015, the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit Court) entered an injunction prohibiting Sandoz Inc. (Sandoz) from marketing, selling, offering for sale, or importing into the United States Sandoz’s FDA-approved Zarxio ™ biosimilar product until the Federal Circuit Court resolves the appeal. On July 21, 2015, the Federal Circuit Court affirmed the district court’s dismissal of Amgen’s state law claims of unfair competition and conversion and directed the district court to enter judgment on Sandoz’s counter-claims consistent with the Federal Circuit’s interpretation of the Biologics Price Competition and Innovation Act. The Federal Circuit Court concluded that the only remedies available for a biosimilar applicant’s failure to provide its BLA by the statutory deadline is to bring a patent infringement claim and seek those patent remedies provided by the statute. The court also concluded that a biosimilar applicant must give 180-day advance notice of first commercial marketing after the FDA has licensed the biosimilar product. Accordingly, the Federal Circuit Court entered an order that its previously entered injunction be extended through September 2, 2015 (180 days from Sandoz’s notice given after FDA approval) and remanded for the district court to consider the patent infringement claim and counterclaims. ERISA Litigation On May 26, 2015, the U.S. Court of Appeals for the Ninth Circuit denied Amgen’s petition for rehearing en banc in this Employee Retirement Income Security Act (ERISA) class action case, and on June 9, 2015 that court granted Amgen’s motion to stay the issuance of the court’s mandate pending Amgen’s filing of a petition for certiorari with the U.S. Supreme Court, such petition presently due on August 24, 2015. |
Summary of significant accoun20
Summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Business | Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. |
Basis of presentation | Basis of presentation The financial information for the three and six months ended June 30, 2015 and 2014 , is unaudited but includes all adjustments (consisting of only normal recurring adjustments, unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2014 , and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2015 . |
Principles of consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $7.3 billion and $7.0 billion as of June 30, 2015 , and December 31, 2014 , respectively. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, a new accounting standard was issued that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. This new standard, as originally issued, would be effective for interim and annual periods beginning January 1, 2017, and would be required to be adopted using either a full retrospective or a modified retrospective approach, with early adoption not permitted. In July 2015, the Financial Accounting Standards Board voted to delay the required date of adoption of this standard by one year and allow early adoption, but not before the original effective date of January 1, 2017. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In April 2015, a new accounting standard was issued that amends the presentation for debt issuance costs. Upon adoption of the standard, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This new standard will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. Adoption of this new standard is not expected to have a material impact on our consolidated balance sheets or related disclosures. |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring plan charges by type of activity | The following tables summarize recorded charges related to the restructuring plan by type of activity and the locations recognized within the Condensed Consolidated Statements of Income (in millions): Three months ended June 30, 2015 Separation costs Asset impairments Accelerated depreciation Other Total Cost of sales $ — $ — $ 13 $ 2 $ 15 Research and development — — 7 11 18 Selling, general and administrative — — 5 15 20 Other 7 — — 3 10 Total $ 7 $ — $ 25 $ 31 $ 63 Six months ended June 30, 2015 Separation costs Asset impairments Accelerated depreciation Other Total Cost of sales $ — $ — $ 26 $ 3 $ 29 Research and development — — 21 14 35 Selling, general and administrative — — 6 18 24 Other 55 — — 12 67 Total $ 55 $ — $ 53 $ 47 $ 155 |
Restructuring liabilities roll forward | The following table summarizes the charges (excluding non-cash items) and payments related to the restructuring plan (in millions): During the six months ended June 30, 2015 Separation costs Other Total Restructuring liabilities as of December 31, 2014 $ 221 $ 23 $ 244 Expense 56 39 95 Payments (145 ) (35 ) (180 ) Restructuring liabilities as of June 30, 2015 $ 132 $ 27 $ 159 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation for basic and diluted earnings per share | The computations for basic and diluted EPS were as follows (in millions, except per share data): Three months ended Six months ended June 30, June 30, 2015 2014 2015 2014 Income (Numerator): Net income for basic and diluted EPS $ 1,653 $ 1,547 $ 3,276 $ 2,620 Shares (Denominator): Weighted-average shares for basic EPS 760 759 761 758 Effect of dilutive securities 8 9 8 10 Weighted-average shares for diluted EPS 768 768 769 768 Basic EPS $ 2.18 $ 2.04 $ 4.30 $ 3.46 Diluted EPS $ 2.15 $ 2.01 $ 4.26 $ 3.41 |
Available-for-sale investments
Available-for-sale investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions): Type of security as of June 30, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 3,604 $ 14 $ (8 ) $ 3,610 Other government-related debt securities: U.S. 551 1 (1 ) 551 Foreign and other 1,718 19 (14 ) 1,723 Corporate debt securities: Financial 7,425 22 (21 ) 7,426 Industrial 7,657 27 (55 ) 7,629 Other 830 3 (4 ) 829 Residential mortgage-backed securities 1,498 7 (8 ) 1,497 Other mortgage- and asset-backed securities 2,053 1 (40 ) 2,014 Money market mutual funds 2,951 — — 2,951 Other short-term interest-bearing securities 1,284 — — 1,284 Total interest-bearing securities 29,571 94 (151 ) 29,514 Equity securities 97 82 (4 ) 175 Total available-for-sale investments $ 29,668 $ 176 $ (155 ) $ 29,689 Type of security as of December 31, 2014 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 3,632 $ 22 $ (8 ) $ 3,646 Other government-related debt securities: U.S. 530 1 (3 ) 528 Foreign and other 1,572 21 (24 ) 1,569 Corporate debt securities: Financial 6,036 21 (16 ) 6,041 Industrial 6,394 23 (66 ) 6,351 Other 650 3 (4 ) 649 Residential mortgage-backed securities 1,708 4 (10 ) 1,702 Other mortgage- and asset-backed securities 1,837 — (41 ) 1,796 Money market mutual funds 3,004 — — 3,004 Other short-term interest-bearing securities 1,302 — — 1,302 Total interest-bearing securities 26,665 95 (172 ) 26,588 Equity securities 98 48 (2 ) 144 Total available-for-sale investments $ 26,763 $ 143 $ (174 ) $ 26,732 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions): Classification in the Condensed Consolidated Balance Sheets June 30, December 31, Cash and cash equivalents $ 3,316 $ 3,293 Marketable securities 26,198 23,295 Other assets — noncurrent 175 144 Total available-for-sale investments $ 29,689 $ 26,732 |
Fair values of available-for-sale interest-bearing security investments by contractual maturity | The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions): Contractual maturity June 30, December 31, Maturing in one year or less $ 4,701 $ 4,936 Maturing after one year through three years 8,712 6,829 Maturing after three years through five years 8,900 7,840 Maturing after five years through ten years 3,468 3,267 Maturing after ten years 222 218 Mortgage- and asset-backed securities 3,511 3,498 Total interest-bearing securities $ 29,514 $ 26,588 |
Available-for-sale securities, fair value and unrealized losses | The unrealized losses on available-for-sale investments and their related fair values were as follows (in millions): Less than 12 months 12 months or greater Type of security as of June 30, 2015 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 1,522 $ (7 ) $ 30 $ (1 ) Other government-related debt securities: U.S. 275 (1 ) 20 — Foreign and other 701 (12 ) 71 (2 ) Corporate debt securities: Financial 3,539 (20 ) 156 (1 ) Industrial 4,364 (51 ) 307 (4 ) Other 358 (4 ) 24 — Residential mortgage-backed securities 464 (3 ) 305 (5 ) Other mortgage- and asset-backed securities 1,020 (11 ) 401 (29 ) Equity securities — — 2 (4 ) Total $ 12,243 $ (109 ) $ 1,316 $ (46 ) Less than 12 months 12 months or greater Type of security as of December 31, 2014 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 1,770 $ (7 ) $ 171 $ (1 ) Other government-related debt securities: U.S. 160 — 178 (3 ) Foreign and other 514 (14 ) 159 (10 ) Corporate debt securities: Financial 3,150 (14 ) 158 (2 ) Industrial 3,931 (62 ) 222 (4 ) Other 354 (4 ) 5 — Residential mortgage-backed securities 614 (4 ) 413 (6 ) Other mortgage- and asset-backed securities 1,071 (8 ) 561 (33 ) Equity securities 5 (2 ) — — Total $ 11,569 $ (115 ) $ 1,867 $ (59 ) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in millions): June 30, December 31, Raw materials $ 221 $ 198 Work in process 1,320 1,551 Finished goods 1,026 898 Total inventories $ 2,567 $ 2,647 |
Goodwill and other intangible25
Goodwill and other intangible assets (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amounts of goodwill were as follows (in millions): Six months ended June 30, 2015 2014 Beginning balance $ 14,788 $ 14,968 Goodwill related to acquisitions of businesses (1) — (128 ) Currency translation adjustments (65 ) 4 Ending balance $ 14,723 $ 14,844 (1) Composed of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods. |
Schedule of identifiable intangible assets | Identifiable intangible assets consisted of the following (in millions): June 30, 2015 December 31, 2014 Gross carrying amount Accumulated amortization Intangible assets, net Gross carrying amount Accumulated amortization Intangible assets, net Finite-lived intangible assets: Developed product technology rights $ 10,796 $ (4,568 ) $ 6,228 $ 10,826 $ (4,155 ) $ 6,671 Licensing rights 3,283 (847 ) 2,436 3,236 (696 ) 2,540 R&D technology rights 1,143 (600 ) 543 1,167 (569 ) 598 Marketing-related rights 1,222 (582 ) 640 1,241 (512 ) 729 Total finite-lived intangible assets 16,444 (6,597 ) 9,847 16,470 (5,932 ) 10,538 Indefinite-lived intangible assets: In-process research and development 2,141 — 2,141 2,155 — 2,155 Total identifiable intangible assets $ 18,585 $ (6,597 ) $ 11,988 $ 18,625 $ (5,932 ) $ 12,693 |
Financing arrangements (Tables)
Financing arrangements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Carrying values and the fixed contractual coupon rates of long-term borrowings | The carrying values and the fixed contractual coupon rates, as applicable, of our long-term borrowings were as follows (in millions): June 30, December 31, 2.30% notes due 2016 (2.30% 2016 Notes) $ 750 $ 749 2.50% notes due 2016 (2.50% 2016 Notes) 1,000 1,000 Floating Rate Notes due 2017 600 600 1.25% notes due 2017 (1.25% 2017 Notes) 849 849 2.125% notes due 2017 (2.125% 2017 Notes) 1,249 1,249 5.85% notes due 2017 (5.85% 2017 Notes) 1,100 1,100 6.15% notes due 2018 (6.15% 2018 Notes) 500 500 Term Loan due 2018 2,225 4,375 4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes) 615 668 Floating Rate Notes due 2019 250 250 2.20% notes due 2019 (2.20% 2019 Notes) 1,398 1,398 5.70% notes due 2019 (5.70% 2019 Notes) 999 999 2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes) 750 814 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 749 — 3.45% notes due 2020 (3.45% 2020 Notes) 898 898 4.10% notes due 2021 (4.10% 2021 Notes) 998 998 3.875% notes due 2021 (3.875% 2021 Notes) 1,747 1,747 2.70% notes due 2022 (2.70% 2022 Notes) 499 — 3.625% notes due 2022 (3.625% 2022 Notes) 747 747 3.625% notes due 2024 (3.625% 2024 Notes) 1,398 1,398 3.125% notes due 2025 (3.125% 2025 Notes) 995 — 5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes) 742 735 4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes) 1,086 1,076 6.375% notes due 2037 (6.375% 2037 Notes) 899 899 6.90% notes due 2038 (6.90% 2038 Notes) 499 499 6.40% notes due 2039 (6.40% 2039 Notes) 996 996 5.75% notes due 2040 (5.75% 2040 Notes) 697 697 4.95% notes due 2041 (4.95% 2041 Notes) 596 596 5.15% notes due 2041 (5.15% 2041 Notes) 2,233 2,233 5.65% notes due 2042 (5.65% 2042 Notes) 1,245 1,245 5.375% notes due 2043 (5.375% 2043 Notes) 1,000 1,000 4.40% notes due 2045 (4.40% 2045 Notes) 1,243 — Other notes 100 100 Total debt 31,952 30,715 Less current portion (1,250 ) (500 ) Total noncurrent debt $ 30,702 $ 30,215 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Share repurchase program activity | Activity under our stock repurchase program was as follows (in millions): 2015 2014 Shares Dollars Shares Dollars First quarter 2.9 $ 451 — $ — Second quarter 3.3 515 — — Total stock repurchases 6.2 $ 966 — $ — |
Components of accumulated other comprehensive income | The components of accumulated other comprehensive income (AOCI) were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2014 $ (264 ) $ 290 $ (19 ) $ (15 ) $ (8 ) Foreign currency translation adjustments (184 ) — — — (184 ) Unrealized gains — 168 188 — 356 Reclassification adjustments to income — 114 35 — 149 Income taxes 11 (104 ) (83 ) — (176 ) Balance as of March 31, 2015 $ (437 ) $ 468 $ 121 $ (15 ) $ 137 Foreign currency translation adjustments 24 — — — 24 Unrealized gains (losses) — 44 (180 ) — (136 ) Reclassification adjustments to income — (226 ) 9 — (217 ) Income taxes (6 ) 67 63 — 124 Balance as of June 30, 2015 $ (419 ) $ 353 $ 13 $ (15 ) $ (68 ) |
Reclassifications out of accumulated other comprehensive income | The reclassifications out of AOCI to earnings were as follows (in millions): Amounts reclassified out of AOCI Components of AOCI Three months ended June 30, 2015 Three months ended June 30, 2014 Line item affected in the Statements of Income Cash flow hedges: Foreign currency contract gains $ 91 $ — Product sales Cross-currency swap contract gains 136 48 Interest and other income, net Forward interest rate contract losses (1 ) — Interest expense 226 48 Total before income tax (81 ) (18 ) Tax expense $ 145 $ 30 Net of taxes Available-for-sale securities: Net realized (losses) gains $ (9 ) $ 40 Interest and other income, net 3 (15 ) Tax benefit/(expense) $ (6 ) $ 25 Net of taxes Amounts reclassified out of AOCI Components of AOCI Six months ended June 30, 2015 Six months ended June 30, 2014 Line item affected in the Statements of Income Cash flow hedges: Foreign currency contract gains $ 160 $ — Product sales Cross-currency swap contract (losses) gains (47 ) 62 Interest and other income, net Forward interest rate contract losses (1 ) — Interest expense 112 62 Total before income tax (40 ) (23 ) Tax expense $ 72 $ 39 Net of taxes Available-for-sale securities: Net realized (losses) gains $ (44 ) $ 42 Interest and other income, net 16 (16 ) Tax benefit/(expense) $ (28 ) $ 26 Net of taxes |
Fair value measurement (Tables)
Fair value measurement (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis | The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Quoted prices in Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of June 30, 2015, using: Total Assets: Available-for-sale investments: U.S. Treasury securities $ 3,610 $ — $ — $ 3,610 Other government-related debt securities: U.S. — 551 — 551 Foreign and other — 1,723 — 1,723 Corporate debt securities: Financial — 7,426 — 7,426 Industrial — 7,629 — 7,629 Other — 829 — 829 Residential mortgage-backed securities — 1,497 — 1,497 Other mortgage- and asset-backed securities — 2,014 — 2,014 Money market mutual funds 2,951 — — 2,951 Other short-term interest-bearing securities — 1,284 — 1,284 Equity securities 175 — — 175 Derivatives: Foreign currency contracts — 238 — 238 Cross-currency swap contracts — 22 — 22 Interest rate swap contracts — 50 — 50 Total assets $ 6,736 $ 23,263 $ — $ 29,999 Liabilities: Derivatives: Foreign currency contracts $ — $ 7 $ — $ 7 Cross-currency swap contracts — 80 — 80 Interest rate swap contracts — 24 — 24 Contingent consideration obligations in connection with business combinations — — 215 215 Total liabilities $ — $ 111 $ 215 $ 326 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fair value measurement as of December 31, 2014, using: Total Assets: Available-for-sale investments: U.S. Treasury securities $ 3,646 $ — $ — $ 3,646 Other government-related debt securities: U.S. — 528 — 528 Foreign and other — 1,569 — 1,569 Corporate debt securities: Financial — 6,041 — 6,041 Industrial — 6,351 — 6,351 Other — 649 — 649 Residential mortgage-backed securities — 1,702 — 1,702 Other mortgage- and asset-backed securities — 1,796 — 1,796 Money market mutual funds 3,004 — — 3,004 Other short-term interest-bearing securities — 1,302 — 1,302 Equity securities 144 — — 144 Derivatives: Foreign currency contracts — 360 — 360 Cross-currency swap contracts — 32 — 32 Interest rate swap contracts — 46 — 46 Total assets $ 6,794 $ 20,376 $ — $ 27,170 Liabilities: Derivatives: Foreign currency contracts $ — $ 4 $ — $ 4 Cross-currency swap contracts — 12 — 12 Interest rate swap contracts — 26 — 26 Contingent consideration obligations in connection with business combinations — — 215 215 Total liabilities $ — $ 42 $ 215 $ 257 |
Changes in carrying amounts of contingent consideration obligations | Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Beginning balance $ 215 $ 596 $ 215 $ 595 Net changes in valuation — 14 — 15 Ending balance $ 215 $ 610 $ 215 $ 610 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts and interest rates for cross-currency swaps | The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions): Foreign currency U.S. dollars Hedged notes Notional amount Interest rate Notional amount Interest rate 2.125% 2019 euro Notes € 675 2.125 % $ 864 2.6 % 5.50% 2026 pound sterling Notes £ 475 5.50 % $ 747 6.0 % 4.00% 2029 pound sterling Notes £ 700 4.00 % $ 1,111 4.5 % |
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | The effective portions of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended June 30, June 30, Derivatives in cash flow hedging relationships 2015 2014 2015 2014 Foreign currency contracts $ (99 ) $ (13 ) $ 293 $ — Cross-currency swap contracts 143 21 (81 ) 25 Total $ 44 $ 8 $ 212 $ 25 |
Location in the Condensed Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges | The locations in the Condensed Consolidated Statements of Income and the effective portions of the gain/(loss) reclassified out of AOCI into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Six months ended June 30, June 30, Derivatives in cash flow hedging relationships Statements of Income location 2015 2014 2015 2014 Foreign currency contracts Product sales $ 91 $ — $ 160 $ — Cross-currency swap contracts Interest and other income, net 136 48 (47 ) 62 Forward interest rate contracts Interest expense, net (1 ) — (1 ) — Total $ 226 $ 48 $ 112 $ 62 |
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for the derivative instruments not designated as hedging instruments | The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions): Three months ended Six months ended June 30, June 30, Derivatives not designated as hedging instruments Statements of Income location 2015 2014 2015 2014 Foreign currency contracts Interest and other income, net $ 20 $ (14 ) $ (9 ) $ (12 ) |
Fair values of derivatives included in the Condensed Consolidated Balance Sheets | The fair values of derivatives included on the Condensed Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities June 30, 2015 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Cross-currency swap contracts Other current assets/ Other noncurrent assets $ 22 Accrued liabilities/ Other noncurrent liabilities $ 80 Foreign currency contracts Other current assets/ Other noncurrent assets 234 Accrued liabilities/ Other noncurrent liabilities 3 Interest rate swap contracts Other current assets/ Other noncurrent assets 50 Accrued liabilities/ Other noncurrent liabilities 24 Total derivatives designated as hedging instruments 306 107 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets 4 Accrued liabilities 4 Total derivatives not designated as hedging instruments 4 4 Total derivatives $ 310 $ 111 Derivative assets Derivative liabilities December 31, 2014 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Cross-currency swap contracts Other current assets/ Other noncurrent assets $ 32 Accrued liabilities/ Other noncurrent liabilities $ 12 Foreign currency contracts Other current assets/ Other noncurrent assets 356 Accrued liabilities/ Other noncurrent liabilities — Interest rate swap contracts Other current assets/ Other noncurrent assets 46 Accrued liabilities/ Other noncurrent liabilities 26 Total derivatives designated as hedging instruments 434 38 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets 4 Accrued liabilities 4 Total derivatives not designated as hedging instruments 4 4 Total derivatives $ 438 $ 42 |
Summary of significant accoun30
Summary of significant accounting policies (Details) $ in Billions | 6 Months Ended | |
Jun. 30, 2015USD ($)segment | Dec. 31, 2014USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | 1 | |
Accumulated depreciation and amortization on property, plant and equipment | $ | $ 7.3 | $ 7 |
Restructuring (Details Textual)
Restructuring (Details Textual) - Jun. 30, 2015 - USD ($) $ in Millions | Total | Total |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 63 | $ 155 |
Minimum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected pre-tax accounting charges | 935 | 935 |
Separation and other headcount-related costs | 535 | 535 |
Accelerated depreciation and asset impairment and other related charges | 400 | |
Maximum [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected pre-tax accounting charges | 1,035 | 1,035 |
Separation and other headcount-related costs | 585 | 585 |
Accelerated depreciation and asset impairment and other related charges | 450 | |
Separation and Other Headcount-related Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total costs incurred to date | 478 | 478 |
Asset-related Costs [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Total costs incurred to date | $ 235 | $ 235 |
Restructuring (Summary of Charg
Restructuring (Summary of Charges by Type) (Details) - Jun. 30, 2015 - USD ($) $ in Millions | Total | Total |
Restructuring Cost and Reserve [Line Items] | ||
Separation costs | $ 7 | $ 55 |
Asset impairments | 0 | 0 |
Accelerated depreciation | 25 | 53 |
Other | 31 | 47 |
Total | 63 | 155 |
Cost of Sales [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation costs | 0 | 0 |
Asset impairments | 0 | 0 |
Accelerated depreciation | 13 | 26 |
Other | 2 | 3 |
Total | 15 | 29 |
Research and Development [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation costs | 0 | 0 |
Asset impairments | 0 | 0 |
Accelerated depreciation | 7 | 21 |
Other | 11 | 14 |
Total | 18 | 35 |
Selling, General and Administrative [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation costs | 0 | 0 |
Asset impairments | 0 | 0 |
Accelerated depreciation | 5 | 6 |
Other | 15 | 18 |
Total | 20 | 24 |
Other [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation costs | 7 | 55 |
Asset impairments | 0 | 0 |
Accelerated depreciation | 0 | 0 |
Other | 3 | 12 |
Total | $ 10 | $ 67 |
Restructuring (Summary of Expen
Restructuring (Summary of Expenses and Payments) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Restructuring Liabilities [Roll Forward] | |
Restructuring liabilities as of beginning of period | $ 244 |
Expense | 95 |
Payments | (180) |
Restructuring liabilities as of end of period | 159 |
Separation Costs [Member] | |
Restructuring Liabilities [Roll Forward] | |
Restructuring liabilities as of beginning of period | 221 |
Expense | 56 |
Payments | (145) |
Restructuring liabilities as of end of period | 132 |
Other [Member] | |
Restructuring Liabilities [Roll Forward] | |
Restructuring liabilities as of beginning of period | 23 |
Expense | 39 |
Payments | (35) |
Restructuring liabilities as of end of period | $ 27 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income taxes (Textual) [Abstract] | ||||
Effective income tax rate | 17.20% | 12.00% | 15.40% | 11.50% |
Increase in gross amount of unrecognized tax benefits for period | $ 110 | $ 210 | ||
State and Local Jurisdiction [Member] | ||||
Income taxes (Textual) [Abstract] | ||||
Decrease in unrecognized tax benefits resulting from settlements with taxing authorities | $ 70 | |||
Puerto Rico Excise Tax [Member] | ||||
Puerto Rico Excise Tax Rate [Line Items] | ||||
Excise tax rate effective July 1, 2013 through 2017 | 4.00% |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income (Numerator): | ||||
Net income for basic and diluted EPS | $ 1,653 | $ 1,547 | $ 3,276 | $ 2,620 |
Shares (Denominator): | ||||
Weighted-average shares for basic EPS | 760 | 759 | 761 | 758 |
Effect of dilutive securities | 8 | 9 | 8 | 10 |
Weighted-average shares for diluted EPS | 768 | 768 | 769 | 768 |
Basic EPS (in usd per share) | $ 2.18 | $ 2.04 | $ 4.30 | $ 3.46 |
Diluted EPS (in usd per share) | $ 2.15 | $ 2.01 | $ 4.26 | $ 3.41 |
Collaborative arrangements (Det
Collaborative arrangements (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)country | Jun. 30, 2014USD ($) | |
Astrazeneca Plc. [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Percentage of related development costs for the 2012-2014 period that were funded by partner | 65.00% | |||
Astrazeneca Plc. [Member] | Research and Development Expense [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Cost recoveries | $ 3 | $ 39 | $ 23 | $ 49 |
Bayer HealthCare Pharmaceuticals Inc. [Member] | Nexavar [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Number of countries product is marketed and sold | country | 100 | |||
Collaboration, royalty percentage in the high 30s | 30.00% | |||
Percentage of net profits after deducting certain partner related costs | 50.00% | |||
Collaboration, net R&D expenses | 7 | 10 | $ 12 | 21 |
Bayer HealthCare Pharmaceuticals Inc. [Member] | Nexavar [Member] | Other revenues [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaboration profit | $ 84 | $ 87 | $ 156 | $ 165 |
Available-for-sale investment37
Available-for-sale investments (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | $ 29,668 | $ 26,763 |
Gross unrealized gains | 176 | 143 |
Gross unrealized losses | (155) | (174) |
Estimated fair value | 29,689 | 26,732 |
U.S. Treasury securities [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 3,604 | 3,632 |
Gross unrealized gains | 14 | 22 |
Gross unrealized losses | (8) | (8) |
Estimated fair value | 3,610 | 3,646 |
Other government-related debt securities - U.S. [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 551 | 530 |
Gross unrealized gains | 1 | 1 |
Gross unrealized losses | (1) | (3) |
Estimated fair value | 551 | 528 |
Other government-related debt securities - Foreign and other [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 1,718 | 1,572 |
Gross unrealized gains | 19 | 21 |
Gross unrealized losses | (14) | (24) |
Estimated fair value | 1,723 | 1,569 |
Corporate debt securities - Financial [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 7,425 | 6,036 |
Gross unrealized gains | 22 | 21 |
Gross unrealized losses | (21) | (16) |
Estimated fair value | 7,426 | 6,041 |
Corporate debt securities - Industrial [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 7,657 | 6,394 |
Gross unrealized gains | 27 | 23 |
Gross unrealized losses | (55) | (66) |
Estimated fair value | 7,629 | 6,351 |
Corporate debt securities - Other [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 830 | 650 |
Gross unrealized gains | 3 | 3 |
Gross unrealized losses | (4) | (4) |
Estimated fair value | 829 | 649 |
Residential mortgage-backed securities [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 1,498 | 1,708 |
Gross unrealized gains | 7 | 4 |
Gross unrealized losses | (8) | (10) |
Estimated fair value | 1,497 | 1,702 |
Other mortgage- and asset-backed securities [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 2,053 | 1,837 |
Gross unrealized gains | 1 | 0 |
Gross unrealized losses | (40) | (41) |
Estimated fair value | 2,014 | 1,796 |
Money market mutual funds [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 2,951 | 3,004 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 2,951 | 3,004 |
Other short-term interest-bearing securities [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 1,284 | 1,302 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 1,284 | 1,302 |
Total interest-bearing securities [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 29,571 | 26,665 |
Gross unrealized gains | 94 | 95 |
Gross unrealized losses | (151) | (172) |
Estimated fair value | 29,514 | 26,588 |
Equity securities [Member] | ||
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security | ||
Amortized cost | 97 | 98 |
Gross unrealized gains | 82 | 48 |
Gross unrealized losses | (4) | (2) |
Estimated fair value | $ 175 | $ 144 |
Available-for-sale investment38
Available-for-sale investments (Fair Values by Classification) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||||
Cash and cash equivalents | $ 3,795 | $ 3,731 | $ 4,352 | $ 3,805 |
Marketable securities | 26,198 | 23,295 | ||
Other assets — noncurrent | 1,712 | 1,592 | ||
Total available-for-sale investments | 29,689 | 26,732 | ||
Available-for-sale investments [Member] | ||||
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||||
Cash and cash equivalents | 3,316 | 3,293 | ||
Other assets — noncurrent | $ 175 | $ 144 |
Available-for-sale investment39
Available-for-sale investments (Fair Values by Contractual Maturity) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Fair values of available-for-sale debt security investments by contractual maturity | ||
Maturing in one year or less | $ 4,701 | $ 4,936 |
Maturing after one year through three years | 8,712 | 6,829 |
Maturing after three years through five years | 8,900 | 7,840 |
Maturing after five years through ten years | 3,468 | 3,267 |
Maturing after ten years | 222 | 218 |
Mortgage- and asset-backed securities | 3,511 | 3,498 |
Total available-for-sale investments | 29,689 | 26,732 |
Total interest-bearing securities [Member] | ||
Fair values of available-for-sale debt security investments by contractual maturity | ||
Total available-for-sale investments | $ 29,514 | $ 26,588 |
Available-for-sale investment40
Available-for-sale investments (Unrealized Losses and Fair Values) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | $ 12,243 | $ 11,569 |
Less than 12 months, Unrealized losses | (109) | (115) |
12 months or greater, Fair value | 1,316 | 1,867 |
12 months or greater, Unrealized losses | (46) | (59) |
U.S. Treasury securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,522 | 1,770 |
Less than 12 months, Unrealized losses | (7) | (7) |
12 months or greater, Fair value | 30 | 171 |
12 months or greater, Unrealized losses | (1) | (1) |
Other government-related debt securities - U.S. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 275 | 160 |
Less than 12 months, Unrealized losses | (1) | 0 |
12 months or greater, Fair value | 20 | 178 |
12 months or greater, Unrealized losses | 0 | (3) |
Other government-related debt securities - Foreign and other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 701 | 514 |
Less than 12 months, Unrealized losses | (12) | (14) |
12 months or greater, Fair value | 71 | 159 |
12 months or greater, Unrealized losses | (2) | (10) |
Corporate debt securities - Financial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 3,539 | 3,150 |
Less than 12 months, Unrealized losses | (20) | (14) |
12 months or greater, Fair value | 156 | 158 |
12 months or greater, Unrealized losses | (1) | (2) |
Corporate debt securities - Industrial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 4,364 | 3,931 |
Less than 12 months, Unrealized losses | (51) | (62) |
12 months or greater, Fair value | 307 | 222 |
12 months or greater, Unrealized losses | (4) | (4) |
Corporate debt securities - Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 358 | 354 |
Less than 12 months, Unrealized losses | (4) | (4) |
12 months or greater, Fair value | 24 | 5 |
12 months or greater, Unrealized losses | 0 | 0 |
Residential mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 464 | 614 |
Less than 12 months, Unrealized losses | (3) | (4) |
12 months or greater, Fair value | 305 | 413 |
12 months or greater, Unrealized losses | (5) | (6) |
Other mortgage- and asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,020 | 1,071 |
Less than 12 months, Unrealized losses | (11) | (8) |
12 months or greater, Fair value | 401 | 561 |
12 months or greater, Unrealized losses | (29) | (33) |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 0 | 5 |
Less than 12 months, Unrealized losses | 0 | (2) |
12 months or greater, Fair value | 2 | 0 |
12 months or greater, Unrealized losses | $ (4) | $ 0 |
Available-for-sale investment41
Available-for-sale investments (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Investments [Line Items] | |||||
Total realized gains | $ 18 | $ 57 | $ 54 | $ 85 | |
Total realized losses | 27 | $ 17 | 98 | $ 43 | |
Available-for-sale investments [Member] | |||||
Investments [Line Items] | |||||
Cash and cash equivalents | $ 479 | $ 479 | $ 438 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 221 | $ 198 |
Work in process | 1,320 | 1,551 |
Finished goods | 1,026 | 898 |
Total inventories | $ 2,567 | $ 2,647 |
Goodwill and other intangible43
Goodwill and other intangible assets (Goodwill Roll Forward) (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | ||
Goodwill [Roll Forward] | |||
Beginning balance | $ 14,788 | $ 14,968 | |
Goodwill related to acquisitions of businesses | [1] | 0 | (128) |
Currency translation adjustments | (65) | 4 | |
Ending balance | $ 14,723 | $ 14,844 | |
[1] | Composed of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods. |
Goodwill and other intangible44
Goodwill and other intangible assets (Idenfitiable Intangible Assets) (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross carrying amount | $ 18,585 | $ 18,625 |
Accumulated amortization | (6,597) | (5,932) |
Intangible assets, net | 11,988 | 12,693 |
Finite-lived intangible assets: | ||
Gross carrying amount | 16,444 | 16,470 |
Accumulated amortization | (6,597) | (5,932) |
Intangible assets, net | 9,847 | 10,538 |
In-process Research and Development (IPR&D) [Member] | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 2,141 | 2,155 |
Developed Product Technology Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 10,796 | 10,826 |
Accumulated amortization | (4,568) | (4,155) |
Intangible assets, net | 6,228 | 6,671 |
Licensing Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 3,283 | 3,236 |
Accumulated amortization | (847) | (696) |
Intangible assets, net | 2,436 | 2,540 |
R&D Technology Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 1,143 | 1,167 |
Accumulated amortization | (600) | (569) |
Intangible assets, net | 543 | 598 |
Marketing-related Rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 1,222 | 1,241 |
Accumulated amortization | (582) | (512) |
Intangible assets, net | $ 640 | $ 729 |
Goodwill and other intangible45
Goodwill and other intangible assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization charges associated with finite-lived intangible assets | $ 345 | $ 341 | $ 686 | $ 698 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Total estimated amortization of finite- lived intangible assets for the six months ending 2015 | 672 | 672 | ||
Total estimated amortization of finite- lived intangible assets for 2016 | 1,300 | 1,300 | ||
Total estimated amortization of finite- lived intangible assets for 2017 | 1,200 | 1,200 | ||
Total estimated amortization of finite- lived intangible assets for 2018 | 1,000 | 1,000 | ||
Total estimated amortization of finite- lived intangible assets for 2019 | 948 | 948 | ||
Total estimated amortization of finite- lived intangible assets for 2020 | 892 | 892 | ||
IPR&D - Talimogene Laherparepvec [Member] | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Carrying value | $ 675 | $ 675 |
Financing arrangements (Details
Financing arrangements (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||
May. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Carrying values of long-term borrowings | ||||
Other notes | $ 100,000,000 | $ 100,000,000 | ||
Total debt | 31,952,000,000 | 30,715,000,000 | ||
Less current portion | (1,250,000,000) | (500,000,000) | ||
Total noncurrent debt | 30,702,000,000 | 30,215,000,000 | ||
Term Loan Credit Facility, repayment of principal | 2,150,000,000 | $ 3,355,000,000 | ||
Aggregate principal amount of notes issued | $ 3,500,000,000 | |||
Interest Expense [Member] | ||||
Carrying values of long-term borrowings | ||||
Debt issuance costs | 21,000,000 | |||
2.30% notes due 2016 (2.30% 2016 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 750,000,000 | $ 749,000,000 | ||
Interest rate, stated percentage | 2.30% | 2.30% | ||
2.50% notes due 2016 (2.50% 2016 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,000,000,000 | $ 1,000,000,000 | ||
Interest rate, stated percentage | 2.50% | 2.50% | ||
Floating Rate Notes due 2017 [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 600,000,000 | $ 600,000,000 | ||
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 849,000,000 | $ 849,000,000 | ||
Interest rate, stated percentage | 1.25% | 1.25% | ||
2.125% notes due 2017 (2.125% 2017 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,249,000,000 | $ 1,249,000,000 | ||
Interest rate, stated percentage | 2.125% | 2.125% | ||
5.85% notes due 2017 (5.85% 2017 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,100,000,000 | $ 1,100,000,000 | ||
Interest rate, stated percentage | 5.85% | 5.85% | ||
6.15% notes due 2018 (6.15% 2018 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 500,000,000 | $ 500,000,000 | ||
Interest rate, stated percentage | 6.15% | 6.15% | ||
Term Loan Due 2018 [Member] | ||||
Carrying values of long-term borrowings | ||||
Loans payable to bank | $ 2,225,000,000 | $ 4,375,000,000 | ||
Term Loan Credit Facility, repayment of principal | 2,150,000,000 | |||
4.375% euro denominated notes due 2018 (4.375% 2018 euro Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 615,000,000 | $ 668,000,000 | ||
Interest rate, stated percentage | 4.375% | 4.375% | ||
Floating Rate Notes due 2019 [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 250,000,000 | $ 250,000,000 | ||
2.20% notes due 2019 (2.20% 2019 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,398,000,000 | $ 1,398,000,000 | ||
Interest rate, stated percentage | 2.20% | 2.20% | ||
5.70% notes due 2019 (5.70% 2019 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 999,000,000 | $ 999,000,000 | ||
Interest rate, stated percentage | 5.70% | 5.70% | ||
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 750,000,000 | $ 814,000,000 | ||
Interest rate, stated percentage | 2.125% | 2.125% | ||
4.50% notes due 2020 (4.50% 2020 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 300,000,000 | $ 300,000,000 | ||
Interest rate, stated percentage | 4.50% | 4.50% | ||
2.125% notes due 2020 (2.125% 2020 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 749,000,000 | |||
Interest rate, stated percentage | 2.125% | |||
Redemption period without payment of a make-whole amount | 1 month | |||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | |||
3.45% notes due 2020 (3.45% 2020 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 898,000,000 | $ 898,000,000 | ||
Interest rate, stated percentage | 3.45% | 3.45% | ||
4.10% notes due 2021 (4.10% 2021 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 998,000,000 | $ 998,000,000 | ||
Interest rate, stated percentage | 4.10% | 4.10% | ||
3.875% notes due 2021 (3.875% 2021 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,747,000,000 | $ 1,747,000,000 | ||
Interest rate, stated percentage | 3.875% | 3.875% | ||
2.70% notes due 2022 (2.70% 2022 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 499,000,000 | |||
Interest rate, stated percentage | 2.70% | |||
Redemption period without payment of a make-whole amount | 2 months | |||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | |||
3.625% notes due 2022 (3.625% 2022 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 747,000,000 | $ 747,000,000 | ||
Interest rate, stated percentage | 3.625% | 3.625% | ||
3.625% notes due 2024 (3.625% 2024 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,398,000,000 | $ 1,398,000,000 | ||
Interest rate, stated percentage | 3.625% | 3.625% | ||
3.125% notes due 2025 (3.125% 2025 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 995,000,000 | |||
Interest rate, stated percentage | 3.125% | |||
Redemption period without payment of a make-whole amount | 3 months | |||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | |||
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 742,000,000 | $ 735,000,000 | ||
Interest rate, stated percentage | 5.50% | 5.50% | ||
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,086,000,000 | $ 1,076,000,000 | ||
Interest rate, stated percentage | 4.00% | 4.00% | ||
6.375% notes due 2037 (6.375% 2037 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 899,000,000 | $ 899,000,000 | ||
Interest rate, stated percentage | 6.375% | 6.375% | ||
6.90% notes due 2038 (6.90% 2038 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 499,000,000 | $ 499,000,000 | ||
Interest rate, stated percentage | 6.90% | 6.90% | ||
6.40% notes due 2039 (6.40% 2039 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 996,000,000 | $ 996,000,000 | ||
Interest rate, stated percentage | 6.40% | 6.40% | ||
5.75% notes due 2040 (5.75% 2040 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 697,000,000 | $ 697,000,000 | ||
Interest rate, stated percentage | 5.75% | 5.75% | ||
4.95% notes due 2041 (4.95% 2041 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 596,000,000 | $ 596,000,000 | ||
Interest rate, stated percentage | 4.95% | 4.95% | ||
5.15% notes due 2041 (5.15% 2041 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 2,233,000,000 | $ 2,233,000,000 | ||
Interest rate, stated percentage | 5.15% | 5.15% | ||
5.65% notes due 2042 (5.65% 2042 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,245,000,000 | $ 1,245,000,000 | ||
Interest rate, stated percentage | 5.65% | 5.65% | ||
5.375% notes due 2043 (5.375% 2043 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,000,000,000 | $ 1,000,000,000 | ||
Interest rate, stated percentage | 5.375% | 5.375% | ||
4.40% notes due 2045 (4.40% 2045 Notes) [Member] | ||||
Carrying values of long-term borrowings | ||||
Notes payable, noncurrent | $ 1,243,000,000 | |||
Interest rate, stated percentage | 4.40% | |||
Redemption period without payment of a make-whole amount | 6 months | |||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% |
Stockholders' equity (Details T
Stockholders' equity (Details Textual) - USD ($) $ / shares in Units, $ in Billions | Jul. 28, 2015 | Jun. 05, 2015 | Mar. 06, 2015 | Mar. 04, 2015 | Dec. 17, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 |
Subsequent Event [Line Items] | |||||||||
Common stock, dividends declared per share (in usd per share) | $ 0.79 | $ 0.79 | |||||||
Amount available for stock repurchases under a board approved stock repurchase plan | $ 2.9 | $ 2.9 | |||||||
Dividends paid per share (in usd per share) | $ 0.79 | $ 0.79 | $ 0.79 | $ 0.61 | $ 1.58 | $ 1.22 | |||
Subsequent Event [Member] | |||||||||
Subsequent Event [Line Items] | |||||||||
Common stock, dividends declared per share (in usd per share) | $ 0.79 |
Stockholders' equity (Share Rep
Stockholders' equity (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Equity [Abstract] | ||||||
Stock repurchased, Shares | 3.3 | 2.9 | 0 | 0 | 6.2 | 0 |
Stock repurchased | $ 515 | $ 451 | $ 0 | $ 0 | $ 966 | $ 0 |
Stockholders' equity (Component
Stockholders' equity (Components of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2015 | Mar. 31, 2015 | |
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward] | ||
Beginning balance, Foreign currency translation | $ (437) | $ (264) |
Beginning balance, Cash flow hedges | 468 | 290 |
Beginning balance, Available-for-sale securities | 121 | (19) |
Beginning balance, Other | (15) | (15) |
Beginning balance, AOCI | 137 | (8) |
Other Comprehensive Income (Loss), before Tax [Abstract] | ||
Foreign currency translation adjustments | 24 | (184) |
Unrealized gains (losses), Cash flow hedges | 44 | 168 |
Unrealized gains (losses), Available-for-sale securities | (180) | 188 |
Unrealized gains (losses), AOCI | (136) | 356 |
Reclassification adjustments to income, Cash flow hedges | (226) | 114 |
Reclassification adjustments to income, Available-for-sale securities | 9 | 35 |
Reclassification adjustments to income, AOCI | (217) | 149 |
Income taxes, Foreign currency translation | (6) | 11 |
Income taxes, Cash flow hedges | 67 | (104) |
Income taxes, Available-for-sale securities | 63 | (83) |
Income taxes, AOCI | 124 | (176) |
Ending balance, Foreign currency translation | (419) | (437) |
Ending balance, Cash flow hedges | 353 | 468 |
Ending balance, Available-for-sale securities | 13 | 121 |
Ending balance, Other | (15) | (15) |
Ending balance, AOCI | $ (68) | $ 137 |
Stockholders' equity (Relcassif
Stockholders' equity (Relcassifications out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Product sales | $ 5,225 | $ 4,949 | $ 10,099 | $ 9,305 |
Interest and other income, net | 198 | 138 | 304 | 237 |
Interest expense | (277) | (282) | (529) | (541) |
Income before income taxes | 1,997 | 1,758 | 3,873 | 2,962 |
Tax benefit/(expense) | (344) | (211) | (597) | (342) |
Net income | 1,653 | 1,547 | 3,276 | 2,620 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Product sales | 91 | 0 | 160 | 0 |
Interest and other income, net | 136 | 48 | (47) | 62 |
Interest expense | (1) | 0 | (1) | 0 |
Income before income taxes | 226 | 48 | 112 | 62 |
Tax benefit/(expense) | (81) | (18) | (40) | (23) |
Net income | 145 | 30 | 72 | 39 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Realized Gains and Losses on Available-for-sale Securities [Member] | ||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest and other income, net | (9) | 40 | (44) | 42 |
Tax benefit/(expense) | 3 | (15) | 16 | (16) |
Net income | $ (6) | $ 25 | $ (28) | $ 26 |
Fair value measurement (Details
Fair value measurement (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Assets: | ||||||
Total available-for-sale investments | $ 29,689 | $ 26,732 | ||||
Fair Value, Measurements, Recurring [Member] | ||||||
Derivative Assets: | ||||||
Interest rate swap contracts | 50 | 46 | ||||
Total assets | 29,999 | 27,170 | ||||
Derivative Liabilities: | ||||||
Interest rate swap contracts | 24 | 26 | ||||
Contingent consideration obligations in connection with business combinations | 215 | 215 | ||||
Total liabilities | 326 | 257 | ||||
Fair Value, Measurements, Recurring [Member] | Foreign currency contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 238 | 360 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 7 | 4 | ||||
Fair Value, Measurements, Recurring [Member] | Cross currency swap contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 22 | 32 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 80 | 12 | ||||
Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 3,610 | 3,646 | ||||
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 551 | 528 | ||||
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 1,723 | 1,569 | ||||
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 7,426 | 6,041 | ||||
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 7,629 | 6,351 | ||||
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 829 | 649 | ||||
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 1,497 | 1,702 | ||||
Fair Value, Measurements, Recurring [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 2,014 | 1,796 | ||||
Fair Value, Measurements, Recurring [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 2,951 | 3,004 | ||||
Fair Value, Measurements, Recurring [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 1,284 | 1,302 | ||||
Fair Value, Measurements, Recurring [Member] | Equity securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 175 | 144 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||||
Derivative Assets: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Total assets | 6,736 | 6,794 | ||||
Derivative Liabilities: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Contingent consideration obligations in connection with business combinations | 0 | 0 | ||||
Total liabilities | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Foreign currency contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Cross currency swap contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 3,610 | 3,646 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 2,951 | 3,004 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Equity securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 175 | 144 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||||||
Derivative Assets: | ||||||
Interest rate swap contracts | 50 | 46 | ||||
Total assets | 23,263 | 20,376 | ||||
Derivative Liabilities: | ||||||
Interest rate swap contracts | 24 | 26 | ||||
Contingent consideration obligations in connection with business combinations | 0 | 0 | ||||
Total liabilities | 111 | 42 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 238 | 360 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 7 | 4 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross currency swap contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 22 | 32 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 80 | 12 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 551 | 528 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 1,723 | 1,569 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 7,426 | 6,041 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 7,629 | 6,351 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 829 | 649 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 1,497 | 1,702 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 2,014 | 1,796 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 1,284 | 1,302 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Equity securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||||||
Derivative Assets: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Total assets | 0 | 0 | ||||
Derivative Liabilities: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Contingent consideration obligations in connection with business combinations | 215 | $ 215 | 215 | $ 610 | $ 596 | $ 595 |
Total liabilities | 215 | 215 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Foreign currency contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Cross currency swap contracts [Member] | ||||||
Derivative Assets: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Derivative Liabilities: | ||||||
Foreign currency contracts | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | U.S. Treasury securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - U.S. [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Financial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Industrial [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Other [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Residential mortgage-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other mortgage- and asset-backed securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Money market mutual funds [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other short-term interest-bearing securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Equity securities [Member] | ||||||
Assets: | ||||||
Total available-for-sale investments | $ 0 | $ 0 |
Fair value measurement (Changes
Fair value measurement (Changes in Contingent Consideration Obligation) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Business Combination, Contingent Consideration [Roll Forward] | ||||
Beginning balance | $ 215 | |||
Ending balance | $ 215 | 215 | ||
Significant unobservable inputs (Level 3) [Member] | ||||
Business Combination, Contingent Consideration [Roll Forward] | ||||
Beginning balance | 215 | $ 596 | 215 | $ 595 |
Net changes in valuation | 0 | 14 | 0 | 15 |
Ending balance | $ 215 | $ 610 | $ 215 | $ 610 |
Fair value measurements (Detail
Fair value measurements (Details Textual) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2015USD ($) | Jun. 30, 2015USD ($)payment | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2011USD ($) | |
Business Acquisition [Line Items] | |||||
Length of time hedged in foreign currency contracts (or less) | 3 years | ||||
Payment of contingent consideration obligation | $ 225,000,000 | $ 0 | |||
Fair Value Measurement (Textual) [Abstract] | |||||
Aggregate fair value of long-term debt, including current portion | 33,600,000,000 | $ 33,600,000,000 | |||
Carrying value of long-term debt, including current portion | 31,952,000,000 | 30,715,000,000 | |||
BioVex Group Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Maximum additional consideration due contingent on milestones | $ 575,000,000 | ||||
BioVex Group Inc [Member] | Due to Filing of BLA in the US [Member] | |||||
Business Acquisition [Line Items] | |||||
Payment of contingent consideration obligation | $ 125,000,000 | ||||
BioVex Group Inc [Member] | Upon First Commercial Sale in the US [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional contingent consideration upon achievement of milestones | 125,000,000 | ||||
BioVex Group Inc [Member] | Upon Achievement of Agreed Level of Worldwide Sales [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional contingent consideration upon achievement of milestones | 125,000,000 | ||||
BioVex Group Inc [Member] | Upon Achievement of Certain Other Regulatory and Sales-related Milestones [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional contingent consideration upon achievement of milestones | 200,000,000 | ||||
Onyx Pharmaceuticals, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Payment of contingent consideration obligation | $ 225,000,000 | ||||
Additional contingent consideration upon achievement of milestones | $ 150,000,000 | ||||
Number of milestone payments | payment | 2 | ||||
Other Government-related and Corporate Debt Securities [Member] | |||||
Business Acquisition [Line Items] | |||||
Investment maturity period | 5 years |
Derivative instruments (Cross-c
Derivative instruments (Cross-currency Swaps) (Details) - Jun. 30, 2015 - Cash flow hedge [Member] - Cross currency swap contracts [Member] € in Millions, £ in Millions, $ in Millions | USD ($) | EUR (€) | GBP (£) |
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member] | |||
Derivative [Line Items] | |||
Notional amount | $ 864 | € 675 | |
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member] | Interest rate received [Member] | |||
Derivative [Line Items] | |||
Interest rate | 2.125% | 2.125% | 2.125% |
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member] | Interest rate paid [Member] | |||
Derivative [Line Items] | |||
Interest rate | 2.60% | 2.60% | 2.60% |
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member] | |||
Derivative [Line Items] | |||
Notional amount | $ 747 | £ 475 | |
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member] | Interest rate received [Member] | |||
Derivative [Line Items] | |||
Interest rate | 5.50% | 5.50% | 5.50% |
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member] | Interest rate paid [Member] | |||
Derivative [Line Items] | |||
Interest rate | 6.00% | 6.00% | 6.00% |
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member] | |||
Derivative [Line Items] | |||
Notional amount | $ 1,111 | £ 700 | |
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member] | Interest rate received [Member] | |||
Derivative [Line Items] | |||
Interest rate | 4.00% | 4.00% | 4.00% |
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member] | Interest rate paid [Member] | |||
Derivative [Line Items] | |||
Interest rate | 4.50% | 4.50% | 4.50% |
Derivative instruments (Effecti
Derivative instruments (Effective Potion of Unrealized Gain (Loss)) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | ||||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | $ 44 | $ 8 | $ 212 | $ 25 |
Foreign currency contracts [Member] | ||||
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | ||||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | (99) | (13) | 293 | 0 |
Cross currency swap contracts [Member] | ||||
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | ||||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | $ 143 | $ 21 | $ (81) | $ 25 |
Derivative instruments (Locatio
Derivative instruments (Locations and Effective Potions of Gain (Loss) Reclassified out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Product sales | $ 5,225 | $ 4,949 | $ 10,099 | $ 9,305 |
Interest and other income, net | 198 | 138 | 304 | 237 |
Interest expense, net | (277) | (282) | (529) | (541) |
Income before income taxes | 1,997 | 1,758 | 3,873 | 2,962 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Product sales | 91 | 0 | 160 | 0 |
Interest and other income, net | 136 | 48 | (47) | 62 |
Interest expense, net | (1) | 0 | (1) | 0 |
Income before income taxes | 226 | 48 | 112 | 62 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Income before income taxes | 226 | 48 | 112 | 62 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Foreign currency contracts [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Product sales | 91 | 0 | 160 | 0 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Cross currency swap contracts [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Interest and other income, net | 136 | 48 | (47) | 62 |
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Forward interest rate contracts [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Interest expense, net | $ (1) | $ 0 | $ (1) | $ 0 |
Derivative instruments (Locat57
Derivative instruments (Locations and Gain (Loss) for Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Foreign currency contracts [Member] | Interest and other income, net [Member] | ||||
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for our derivative instruments not designated as hedging instruments | ||||
Amount of gain (loss) recognized in interest and other income, net | $ 20 | $ (14) | $ (9) | $ (12) |
Derivative instruments (Details
Derivative instruments (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Total derivative assets, fair value | $ 310 | $ 438 |
Liabilities | ||
Total derivative liabilities, fair value | 111 | 42 |
Derivatives designated as hedging instrument [Member] | ||
Assets | ||
Total derivative assets, fair value | 306 | 434 |
Liabilities | ||
Total derivative liabilities, fair value | 107 | 38 |
Derivatives designated as hedging instrument [Member] | Cross currency swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 22 | 32 |
Derivatives designated as hedging instrument [Member] | Cross currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 80 | 12 |
Derivatives designated as hedging instrument [Member] | Foreign currency contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 234 | 356 |
Derivatives designated as hedging instrument [Member] | Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 3 | 0 |
Derivatives designated as hedging instrument [Member] | Interest rate swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 50 | 46 |
Derivatives designated as hedging instrument [Member] | Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 24 | 26 |
Derivatives not designated as hedging instrument [Member] | ||
Assets | ||
Total derivative assets, fair value | 4 | 4 |
Liabilities | ||
Total derivative liabilities, fair value | 4 | 4 |
Derivatives not designated as hedging instrument [Member] | Foreign currency contracts [Member] | Other current assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 4 | 4 |
Derivatives not designated as hedging instrument [Member] | Foreign currency contracts [Member] | Accrued liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | $ 4 | $ 4 |
Derivative instruments (Detai59
Derivative instruments (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Derivative Instruments Gain Loss [Line Items] | |||||
Length of time hedged in foreign currency contracts | 3 years | ||||
Interest expense, net [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Unrealized gain (loss) on the hedged debt | $ 83 | $ (63) | $ (6) | $ (125) | |
Unrealized gain (loss) on interest rate swaps | (83) | $ 63 | 6 | $ 125 | |
Foreign currency forward contracts [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Notional amount of terminated derivatives | 1,700 | ||||
Foreign currency forward contracts [Member] | Net cash provided by operating activities [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Proceeds from counterparties on termination of derivatives | 247 | ||||
Foreign currency forward contracts [Member] | Derivatives designated as hedging instrument [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Derivative, notional amount | 3,200 | 3,200 | $ 3,800 | ||
Foreign currency forward contracts [Member] | Derivatives not designated as hedging instrument [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Derivative, notional amount | 928 | 928 | 875 | ||
Foreign currency option contracts [Member] | Derivatives designated as hedging instrument [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Derivative, notional amount | 382 | 382 | 271 | ||
Foreign currency and cross currency swap contracts [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amounts expected to be reclassified from AOCI into earnings over the next 12 months | 427 | 427 | |||
Forward interest rate contracts [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Amounts expected to be reclassified from AOCI into earnings over the next 12 months | (1) | (1) | |||
Interest rate swap [Member] | Derivatives designated as hedging instrument [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Derivative, notional amount | $ 6,650 | $ 6,650 | $ 6,650 | ||
Rate adjustment to LIBOR on interest rate swap agreements [Member] | LIBOR [Member] | |||||
Derivative Instruments Gain Loss [Line Items] | |||||
Derivative lower range variable interest rate | 0.40% | 0.40% | |||
Derivative higher range variable interest rate | 2.00% | 2.00% |