Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 09, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | AMGEN INC | ||
Entity Central Index Key | 318,154 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 101,183,706,509 | ||
Entity Common Stock, Shares Outstanding | 736,452,791 | ||
Shares of common stock held by directors and executive officers | 83,869,173 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Product sales | $ 21,892 | $ 20,944 | $ 19,327 |
Other revenues | 1,099 | 718 | 736 |
Total revenues | 22,991 | 21,662 | 20,063 |
Operating expenses: | |||
Cost of sales | 4,162 | 4,227 | 4,422 |
Research and development | 3,840 | 4,070 | 4,297 |
Selling, general and administrative | 5,062 | 4,846 | 4,699 |
Other | 133 | 49 | 454 |
Total operating expenses | 13,197 | 13,192 | 13,872 |
Operating income | 9,794 | 8,470 | 6,191 |
Interest expense, net | 1,260 | 1,095 | 1,071 |
Interest and other income, net | 629 | 603 | 465 |
Income before income taxes | 9,163 | 7,978 | 5,585 |
Provision for income taxes | 1,441 | 1,039 | 427 |
Net income | $ 7,722 | $ 6,939 | $ 5,158 |
Earnings per share: | |||
Basic (in usd per share) | $ 10.32 | $ 9.15 | $ 6.80 |
Diluted (in usd per share) | $ 10.24 | $ 9.06 | $ 6.70 |
Shares used in the calculation of earnings per share: | |||
Basic (in shares) | 748 | 758 | 759 |
Diluted (in shares) | 754 | 766 | 770 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 7,722 | $ 6,939 | $ 5,158 |
Other comprehensive income (loss), net of reclassification adjustments and taxes: | |||
Foreign currency translation losses | (99) | (247) | (196) |
Effective portion of cash flow hedges | (15) | 7 | 323 |
Net unrealized gains (losses) on available-for-sale securities | 122 | (241) | 24 |
Other | 1 | 9 | 2 |
Other comprehensive income (loss), net of tax | 9 | (472) | 153 |
Comprehensive income | $ 7,731 | $ 6,467 | $ 5,311 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 3,241 | $ 4,144 |
Marketable securities | 34,844 | 27,238 |
Trade receivables, net | 3,165 | 2,995 |
Inventories | 2,745 | 2,435 |
Other current assets | 2,015 | 1,703 |
Total current assets | 46,010 | 38,515 |
Property, plant and equipment, net | 4,961 | 4,907 |
Intangible assets, net | 10,279 | 11,641 |
Goodwill | 14,751 | 14,787 |
Other assets | 1,625 | 1,599 |
Total assets | 77,626 | 71,449 |
Current liabilities: | ||
Accounts payable | 917 | 965 |
Accrued liabilities | 5,884 | 5,452 |
Current portion of long-term debt | 4,403 | 2,247 |
Total current liabilities | 11,204 | 8,664 |
Long-term debt | 30,193 | 29,182 |
Long-term deferred tax liability | 2,436 | 2,239 |
Long-term tax liabilities | 2,419 | 1,973 |
Other noncurrent liabilities | 1,499 | 1,308 |
Contingencies and commitments | ||
Stockholders’ equity: | ||
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding — 738.2 shares in 2016 and 754.0 shares in 2015 | 30,784 | 30,649 |
Accumulated deficit | (438) | (2,086) |
Accumulated other comprehensive loss | (471) | (480) |
Total stockholders’ equity | 29,875 | 28,083 |
Total liabilities and stockholders’ equity | $ 77,626 | $ 71,449 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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 | 738,200,000 | 754,000,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Number of shares of common stock [Member] | Common stock and additional paid-in capital [Member] | Accumulated deficit [Member] | Accumulated other comprehensive income (loss) [Member] |
Beginning Balance, Shares at Dec. 31, 2013 | 754.6 | ||||
Beginning Balance at Dec. 31, 2013 | $ 22,096 | $ 29,891 | $ (7,634) | $ (161) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,158 | 5,158 | |||
Other comprehensive income (loss), net of tax | 153 | 153 | |||
Dividends | (1,995) | (1,995) | |||
Issuance of common stock in connection with the Company’s equity award programs, Shares | 6.7 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 186 | 186 | |||
Stock-based compensation | 404 | 404 | |||
Tax impact related to employee stock-based compensation | (71) | (71) | |||
Repurchases of common stock, Shares | (0.9) | ||||
Repurchases of common stock | (153) | (153) | |||
Ending Balance, Shares at Dec. 31, 2014 | 760.4 | ||||
Ending Balance at Dec. 31, 2014 | 25,778 | 30,410 | (4,624) | (8) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 6,939 | 6,939 | |||
Other comprehensive income (loss), net of tax | (472) | (472) | |||
Dividends | (2,548) | (2,548) | |||
Issuance of common stock in connection with the Company’s equity award programs, Shares | 5.6 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 82 | 82 | |||
Stock-based compensation | 319 | 319 | |||
Tax impact related to employee stock-based compensation | (162) | (162) | |||
Repurchases of common stock, Shares | (12) | ||||
Repurchases of common stock | $ (1,853) | (1,853) | |||
Ending Balance, Shares at Dec. 31, 2015 | 754 | 754 | |||
Ending Balance at Dec. 31, 2015 | $ 28,083 | 30,649 | (2,086) | (480) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 7,722 | 7,722 | |||
Other comprehensive income (loss), net of tax | 9 | 9 | |||
Dividends | (3,120) | (3,120) | |||
Issuance of common stock in connection with the Company’s equity award programs, Shares | 3.9 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 55 | 55 | |||
Stock-based compensation | 342 | 342 | |||
Tax impact related to employee stock-based compensation | (189) | (262) | 73 | ||
Repurchases of common stock, Shares | (19.7) | ||||
Repurchases of common stock | $ (3,027) | (3,027) | |||
Ending Balance, Shares at Dec. 31, 2016 | 738.2 | 738.2 | |||
Ending Balance at Dec. 31, 2016 | $ 29,875 | $ 30,784 | $ (438) | $ (471) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 7,722 | $ 6,939 | $ 5,158 |
Depreciation and amortization | 2,105 | 2,108 | 2,092 |
Stock-based compensation expense | 311 | 322 | 408 |
Deferred income taxes | 183 | (607) | (108) |
Other items, net | 32 | (146) | 56 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Trade receivables, net | (214) | (420) | 136 |
Inventories | (80) | 481 | 327 |
Other assets | (128) | 155 | (1) |
Accounts payable | (44) | (12) | 228 |
Accrued income taxes | (301) | 509 | (103) |
Other liabilities | 768 | 402 | 759 |
Net cash provided by operating activities | 10,354 | 9,731 | 8,952 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (738) | (594) | (718) |
Cash paid for acquisitions, net of cash acquired | 0 | (359) | (165) |
Purchases of intangible assets | (99) | (55) | (285) |
Purchases of marketable securities | (28,094) | (25,977) | (25,878) |
Proceeds from sales of marketable securities | 17,958 | 18,029 | 16,697 |
Proceeds from maturities of marketable securities | 2,459 | 3,527 | 4,199 |
Proceeds from sale of property, plant and equipment | 78 | 274 | 3 |
Change in restricted investments, net | 0 | 0 | 533 |
Other | (222) | (392) | (138) |
Net cash used in investing activities | (8,658) | (5,547) | (5,752) |
Cash flows from financing activities: | |||
Net proceeds from issuance of debt | 7,318 | 3,465 | 4,476 |
Repayment of debt | (3,725) | (2,400) | (5,605) |
Repurchases of common stock | (2,965) | (1,867) | (138) |
Dividends paid | (2,998) | (2,396) | (1,851) |
Net proceeds from issuance of common stock in connection with the Company’s equity award programs | 55 | 82 | 186 |
Settlement of contingent consideration obligations | 0 | (253) | (92) |
Withholding taxes arising from shares withheld for share-based payments | (260) | (401) | (225) |
Other | (24) | (1) | (25) |
Net cash used in financing activities | (2,599) | (3,771) | (3,274) |
(Decrease) increase in cash and cash equivalents | (903) | 413 | (74) |
Cash and cash equivalents at beginning of period | 4,144 | 3,731 | 3,805 |
Cash and cash equivalents at end of period | $ 3,241 | $ 4,144 | $ 3,731 |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2016 | |
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. Principles of consolidation The 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 consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Product sales Sales of our products are recognized when shipped and title and risk of loss have passed. Product sales are recorded net of accruals for estimated rebates, wholesaler chargebacks, discounts and other deductions (collectively, sales deductions) and returns. Taxes collected from customers and remitted to government authorities related to the sales of the Company’s products, primarily in Europe, are excluded from revenues. Other revenues Other revenues consist primarily of royalty income and corporate partner revenues. Royalties from licensees are based on third-party sales of licensed products and are recorded in accordance with contract terms when third-party results are reliably measurable and collectability is reasonably assured. Royalty estimates are made in advance of amounts collected using historical and forecasted trends. Corporate partner revenues are composed mainly of license fees and milestones earned, our share of commercial profits generated from collaborations and amounts earned for certain research and development (R&D) services performed for others including Kirin-Amgen, Inc. (K-A), which are recognized as the R&D services are performed. See Multiple-deliverable revenue arrangements, discussed below, Note 7, Collaborative arrangements, and Note 8, Related party transactions. Multiple-deliverable revenue arrangements From time to time, we enter into arrangements for the R&D, manufacture and/or commercialization of products and product candidates. These arrangements may require us to deliver various rights, services and/or goods across the entire life cycle of a product or product candidate, including (i) intellectual property rights/licenses; (ii) R&D services; (iii) manufacturing services; and/or (iv) commercialization services. The underlying terms of these arrangements generally provide for consideration to Amgen in the form of non-refundable upfront license payments, R&D and commercial performance milestone payments, cost sharing and/or royalty payments. In arrangements involving the delivery of more than one element, each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting. For Amgen, this determination is generally based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration that is fixed and determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price (BESP). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold by us on a stand-alone basis. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Consideration associated with at-risk substantive performance milestones is recognized as revenue upon the achievement of the related milestone, as defined in the respective contracts. Research and development costs R&D costs are expensed as incurred and include primarily salaries, benefits and other staff-related costs; facilities and overhead costs; clinical trial and related clinical manufacturing costs; contract services and other outside costs; information systems’ costs and amortization of acquired technology used in R&D with alternative future uses. R&D expenses also include costs and cost recoveries associated with third-party R&D arrangements such as with K-A, including upfront fees and milestones paid to third parties in connection with technologies which had not reached technological feasibility and did not have an alternative future use. Net payment or reimbursement of R&D costs is recognized when the obligations are incurred or as we become entitled to the cost recovery. See Note 7, Collaborative arrangements, and Note 8, Related party transactions. Selling, general and administrative costs Selling, general and administrative (SG&A) costs are composed primarily of salaries, benefits and other staff-related costs associated with sales and marketing, finance, legal and other administrative personnel; facilities and overhead costs; outside marketing, advertising and legal expenses; the U.S. healthcare reform federal excise fee on Branded Prescription Pharmaceutical Manufacturers and Importers; and other general and administrative costs. Advertising costs are expensed as incurred. SG&A expenses also include costs and cost recoveries associated with marketing and promotion efforts under certain collaboration arrangements. Net payment or reimbursement of SG&A costs is recognized when the obligations are incurred or we become entitled to the cost recovery. See Note 7, Collaborative arrangements. Stock-based compensation We have stock-based compensation plans under which various types of equity-based awards are granted, including restricted stock units (RSUs), performance units and stock options. The estimated fair values of RSUs and stock option awards which are subject only to service conditions with graded vesting are generally recognized as compensation expense on a straight-line basis over the service period, net of estimated forfeitures. The estimated fair values of performance unit awards are generally recognized as compensation expense ratably from the grant date to the end of the performance period. See Note 4, Stock-based compensation. Income taxes We provide for income taxes based on pretax income and applicable tax rates available in the various jurisdictions in which we operate. Deferred income taxes are recorded for the expected tax consequences of temporary differences between the bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. We record a valuation allowance to reduce our deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits (UTBs) is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. We recognize both accrued interest and penalties, where appropriate, related to UTBs in income tax expense. See Note 5, Income taxes. Business combinations Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired, including in-process research and development (IPR&D) projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date in our consolidated financial statements. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with a business combination (including the assumption of an acquiree’s liability arising from a business combination it consummated prior to our acquisition) are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair values are recorded in earnings. See Note 3, Business combinations, and Note 16, Fair value measurement. Cash equivalents We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase. Available-for-sale investments We consider our investment portfolio available-for-sale and, accordingly, these investments are recorded at fair value with unrealized gains and losses generally recorded in other comprehensive income. Investments with maturities beyond one year may be classified as short-term marketable securities in the Consolidated Balance Sheets due to their highly liquid nature and because they represent the Company’s investments that are available for current operations. See Note 9, Available-for-sale investments, and Note 16, Fair value measurement. Inventories Inventories are stated at the lower of cost or market. Cost, which includes amounts related to materials, labor and overhead, is determined in a manner that approximates the first-in, first-out method. See Note 10, Inventories. Derivatives We recognize all of our derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. The accounting for changes in the fair value of a derivative instrument depends upon whether the derivative has been formally designated and qualifies as part of a hedging relationship under the applicable accounting standards and, further, on the type of hedging relationship. For derivatives formally designated as hedges, we assess both at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. Our derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings. See Note 16, Fair value measurement, and Note 17, Derivative instruments. Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation, amortization and, if applicable, impairment charges. We review our property, plant and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation is provided over the assets’ useful lives on a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. See Note 11, Property, plant and equipment. Goodwill and other intangible assets Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis or the pattern in which economic benefits are consumed, if reliably determinable. We review our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Note 12, Goodwill and other intangible assets. The estimated fair values of IPR&D projects acquired in a business combination which are not complete are capitalized and accounted for as indefinite-lived intangible assets until completion or abandonment of the related R&D efforts. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If a project is abandoned, all remaining capitalized amounts are written-off immediately. There are often major risks and uncertainties associated with IPR&D projects as we are required to obtain regulatory approvals in order to be able to market the resulting products. Such approvals require completing clinical trials that demonstrate a product candidate is safe and effective. Consequently, the eventual realized value of the acquired IPR&D project may vary from its estimated fair value at the date of acquisition, and IPR&D impairment charges may occur in future periods. Capitalized IPR&D projects are tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We consider various factors for potential impairment, including the current legal and regulatory environment and the competitive landscape. Adverse clinical trial results, significant delays in obtaining marketing approval, the inability to bring a product to market and the introduction or advancement of competitors’ products could result in partial or full impairment of the related intangible assets. We perform an impairment test of goodwill annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To date, an impairment of goodwill has not been recorded. See Note 12, Goodwill and other intangible assets. Contingencies In the ordinary course of business, we are involved in various legal proceedings and other matters such as intellectual property disputes, contractual disputes, governmental investigations and class action suits which are complex in nature and have outcomes that are difficult to predict. (Certain of these proceedings are discussed in Note 18, Contingencies and commitments.) 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 consider all relevant factors when making assessments regarding these contingencies. Foreign currency translation The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating net assets of these subsidiaries at changing rates are recognized in other comprehensive income. The earnings of these subsidiaries are translated into U.S. dollars using average exchange rates. Recent accounting pronouncements In 2016, we retrospectively adopted a new accounting standard that amends the presentation of debt issuance costs. Such costs are now presented as a direct deduction from the carrying amount of the debt liability and not as deferred charges presented as assets on our Consolidated Balance Sheets. As a result of adopting this new accounting standard, our Consolidated Balance Sheet as of December 31, 2015, was restated to reflect this impact, which reduced both Other current assets and the Current portion of long-term debt by $3 million and both Other assets and Long-term debt by $124 million . In 2016, we adopted a new accounting standard that amends certain aspects of the accounting for employee share-based payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. See Note 5, Income taxes. Previously, such amounts were recognized as increases and decreases in common stock and additional paid-in capital. This aspect of the standard was adopted prospectively , and accordingly, the Provision for income taxes for the year ended December 31, 2016, includes $122 million of excess tax benefits arising from share-based payments. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring (i) that excess income tax benefits and deficiencies be classified in Cash flows from operating activities (such amounts were previously included in Cash flows from financing activities) and (ii) that cash paid to taxing authorities arising from the withholding of shares from employees be classified in Cash flows from financing activities (such amounts were previously included in Cash flows from operating activities). We adopted the aspects of the standard affecting the cash flow presentation retrospectively, and accordingly, to conform to the current year presentation, in the Consolidated Statement of Cash Flows for the years ended December 31, 2015 and 2014, we reclassified: (i) $253 million and $172 million , respectively, of excess tax benefits from Net cash used in financing activities to Net cash provided by operating activities and (ii) $401 million and $225 million , respectively, of cash paid to taxing authorities arising from withholding of shares from employees from Net cash provided by operating activities to Net cash used in financing activities. In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue standard. The new revenue standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The new standards are required to be adopted using either a full retrospective or a modified retrospective approach. We expect to adopt this standard using the modified retrospective approach beginning in 2018. We have substantially completed our impact assessment and do not currently anticipate a material impact to our Total revenues. We continue to review the impact that this new standard will have on collaboration and license arrangements as well our financial statement disclosures. In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. The impact that this new standard will have on our consolidated financial statements is dependent on the fair value of available-for-sale equity securities in our portfolio in the future. See Note 9, Available-for-sale investments for the fair value of equity securities as of December 31, 2016. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019, and may be adopted earlier. We continue to evaluate the impact that this new standard will have on our consolidated financial statements. We do not expect that this standard will have a material impact to our Consolidated Statements of Income but expect that this standard will have a material impact to assets and liabilities on our Consolidated Balance Sheets upon adoption. In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The new standard also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with evaluating when a set of assets acquired or disposed of should be considered a business. The new standard requires an entity to evaluate if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set would not be considered a business. The new standard also requires a business to include at least one substantive process and narrows the definition of outputs. We expect that these provisions will reduce the number of transactions that will be considered a business. The new standard is effective for interim and annual periods beginning on January 1, 2018, and may be adopted earlier. The standard would be applied prospectively to any transaction occurring on or after the adoption date. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. |
Restructuring and other cost sa
Restructuring and other cost savings initiatives | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and other cost savings initiatives | Restructuring In 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 have closed facilities in Washington state and Colorado and are 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 we will incur $800 million to $900 million of pre-tax charges 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 $265 million to $315 million consisting primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. We have incurred a total of $477 million of separation and other headcount-related costs and $232 million of net asset-related charges through December 31, 2016. In order to support our ongoing transformation and process improvement efforts, we expect that we will incur most of the remaining estimated costs in 2017. The charges recorded in 2016 were not material for all types of activities presented below. The following tables summarize the 2015 and 2014 charges recorded related to the restructuring plan by type of activity and the locations recognized within the Consolidated Statements of Income (in millions): During the year ended December 31, 2015 Separation Costs Asset Impairments/ Disposals Accelerated Depreciation Other Total Cost of sales $ — $ — $ 50 $ 2 $ 52 Research and development — — 36 28 64 Selling, general and administrative — — 14 42 56 Other 49 (111 ) — 4 (58 ) Total $ 49 $ (111 ) $ 100 $ 76 $ 114 During the year ended December 31, 2014 Separation Costs Asset Impairments Accelerated Depreciation Other Total Cost of sales $ — $ 81 $ 23 $ — $ 104 Research and development — — 28 21 49 Selling, general and administrative — — 4 5 9 Other 377 6 — 13 396 Total $ 377 $ 87 $ 55 $ 39 $ 558 We recognized asset impairment and accelerated depreciation charges in connection with our decision to exit Boulder and Longmont, Colorado, and Bothell and Seattle, Washington, and in connection with the consolidation of facilities in Thousand Oaks, California. The decision to close these manufacturing and 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. During the year ended December 31, 2015, we recognized gains from the sale of assets related to these site closures. The following table summarizes the expenses (excluding non-cash charges) and payments related to the restructuring plan (in millions): During the years ended December 31, Separation Costs Other Total Restructuring liabilities as of December 31, 2013 $ — $ — $ — Expense 353 32 385 Payments (132 ) (9 ) (141 ) Restructuring liabilities as of December 31, 2014 221 23 244 Expense 52 80 132 Payments (178 ) (80 ) (258 ) Restructuring liabilities as of December 31, 2015 95 23 118 Expense 6 13 19 Payments (90 ) (27 ) (117 ) Restructuring liabilities as of December 31, 2016 $ 11 $ 9 $ 20 |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business combinations | Business combinations Dezima Pharma B.V. In 2015, we acquired all of the outstanding stock of Dezima Pharma B.V. (Dezima), a privately-held, Netherlands-based biotechnology company focused on developing innovative treatments for dyslipidemia. Dezima’s lead molecule is AMG 899 (formerly TA-8995), an oral, once-daily cholesteryl ester transfer protein inhibitor that has completed certain phase 2 trials. This transaction was accounted for as a business combination. Upon its acquisition, Dezima became a wholly owned subsidiary of Amgen, and its operations have been included in our consolidated financial statements commencing on the acquisition date. The aggregate acquisition date consideration to acquire Dezima consisted of (in millions): Total cash paid to former shareholders of Dezima $ 300 Fair value of contingent consideration obligations 110 Total consideration $ 410 In connection with this acquisition, we are obligated to make additional payments to the former shareholders of Dezima of up to $1.25 billion contingent upon the achievement of certain development and sales-related milestones. In addition, low single-digit royalties will be paid on net product sales above a certain threshold. The estimated fair values of the contingent consideration obligations aggregated to $110 million as of the acquisition date. See Note 16, Fair value measurement for information regarding the estimated fair values of these obligations as of December 31, 2016. The contingent consideration obligations relating to payments for regulatory milestones were valued based on assumptions regarding the probability of achieving the milestones and making the related payments, with such amounts discounted to present value based on our credit risk. The contingent consideration obligations relating to sales milestones were valued based on assumptions regarding the probability of achieving specified product sales thresholds to determine the required payments, with such amounts discounted to present value based on our credit risk. The fair values of assets acquired and liabilities assumed primarily included IPR&D of $400 million , goodwill of $108 million and deferred tax liabilities of $100 million . This valuation reflects delayed development pending competitor clinical trials in this class, expected in 2017. The estimated fair value of acquired IPR&D related to AMG 899 was determined using a probability-weighted income approach, which discounts expected future cash flows to present value using a discount rate that represents the estimated rate that market participants would use to value the assets. The projected cash flows were based on certain assumptions, including estimates of future revenues and expenses, the time and resources needed to complete development and the probabilities of obtaining marketing approval from regulatory agencies. The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $108 million was recorded as goodwill, which is not deductible for tax purposes. Goodwill is attributable primarily to the expected synergies and other benefits that we believe will result from expanding our cardiovascular portfolio with AMG 899; and the deferred tax consequences of acquired IPR&D recorded for financial statement purposes. Pro forma results of operations for this acquisition have not been presented because this acquisition is not material to our consolidated results of operations. For the IPR&D project discussed above, there are major risks and uncertainties associated with the timely and successful completion of development and commercialization of the product candidate, including our ability to confirm 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. Consequently, the eventual realized value, if any, of the acquired IPR&D project may vary from its estimated fair value at the date of acquisition. |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | Stock-based compensation Our Amended and Restated 2009 Equity Incentive Plan (the Amended 2009 Plan) authorizes for issuance, shares of our common stock pursuant to grants of equity-based awards, including RSUs, stock options and performance units to employees and consultants of Amgen, its subsidiaries and non-employee members of our Board of Directors. The pool of shares available under the Amended 2009 Plan is reduced by one share for each stock option granted and by 1.9 shares for other types of awards granted, including RSUs and performance units (full-value awards). In general, if any shares subject to an award granted under the Amended 2009 Plan expire, or are forfeited, terminated or canceled without the issuance of shares, the shares subject to such awards are added back into the authorized pool on the same basis that they were removed. In addition, under the Amended 2009 Plan, shares withheld to pay for minimum statutory tax obligations with respect to full value awards are added back into the authorized pool on the basis of 1.9 shares. As of December 31, 2016 , the Amended 2009 Plan provides for future grants and/or issuances of up to approximately 41 million shares of our common stock. Stock-based awards under our employee compensation plans are made with newly issued shares reserved for this purpose. The following table reflects the components of stock-based compensation expense recognized in our Consolidated Statements of Income (in millions): Years ended December 31, 2016 2015 2014 RSUs $ 177 $ 190 $ 219 Performance units 123 132 171 Stock options 11 — 18 Total stock-based compensation expense, pretax 311 322 408 Tax benefit from stock-based compensation expense (112 ) (120 ) (152 ) Total stock-based compensation expense, net of tax $ 199 $ 202 $ 256 Restricted stock units and stock options Eligible employees generally receive an annual grant of RSUs and, for certain executive level employees, stock options, with the size and type of award generally determined by the employee’s salary grade and performance level. In 2016, we reinstated the practice of granting stock options to eligible employees annually, which had been suspended from 2012 through 2015. In addition, certain management and professional-level employees typically receive RSU grants upon commencement of employment. Non-employee members of our Board of Directors also receive an annual grant of RSUs. Our RSU and stock option grants provide for accelerated or continued vesting in certain circumstances as defined in the plans and related grant agreements, including upon death, disability, termination in connection with a change in control and the retirement of employees who meet certain service and/or age requirements. RSUs and stock options generally vest in approximately equal amounts on the second, third and fourth anniversaries of the grant date. RSUs accrue dividend equivalents which are typically payable in shares only when and to the extent the underlying RSUs vest and are issued to the recipient. Restricted stock units The grant date fair value of an RSU equals the closing price of our common stock on the grant date, as RSUs accrue dividend equivalents during their vesting period. The weighted-average grant date fair values of RSUs granted in 2016 , 2015 and 2014 were $156.76 , $166.74 and $115.63 , respectively. The following summarizes select information regarding our RSUs: During the year ended December 31, 2016 Units (in millions) Weighted-average grant date fair value Balance nonvested at December 31, 2015 5.0 $ 118.89 Granted 1.3 $ 156.76 Vested (2.0 ) $ 96.91 Forfeited (0.4 ) $ 131.43 Balance nonvested at December 31, 2016 3.9 $ 141.07 The total grant date fair values of shares associated with RSUs that vested during the years ended December 31, 2016 , 2015 and 2014 , were $193 million , $206 million and $191 million , respectively. As of December 31, 2016 , there were approximately $303 million of unrecognized compensation costs related to nonvested RSU awards, which are expected to be recognized over a weighted-average period of 1.7 years. Stock options The exercise price for stock options is set as the closing price of our common stock on the date of grant and the related number of shares granted is fixed at that point in time. Awards expire 10 years from the date of grant. We use a Black-Scholes option valuation model to estimate the grant date fair values of stock options. The weighted-average assumptions used in the option valuation model and the resulting weighted-average estimated grant date fair value of stock options granted during the year ended December 31, 2016, were as follows: Closing price of our common stock on grant date $156.35 Expected volatility (average of implied and historical volatility) 24.3 % Expected life (in years) 5.8 Risk-free interest rate 1.5 % Expected dividend yield 2.6 % Fair value of stock options granted $27.55 The following summarizes select information regarding our stock options: During the year ended December 31, 2016 Options (in millions) Weighted- average exercise price Weighted- average remaining contractual life (years) Aggregate intrinsic value (in millions) Balance unexercised at December 31, 2015 2.8 $ 56.19 Granted 1.4 $ 156.35 Exercised (1.0 ) $ 52.98 Expired/forfeited (0.1 ) $ 150.70 Balance unexercised at December 31, 2016 3.1 $ 100.21 6.1 $ 158 Vested or expected to vest at December 31, 2016 3.0 $ 96.92 6.0 $ 158 Exercisable at December 31, 2016 1.8 $ 57.95 3.7 $ 158 The total intrinsic values of options exercised during the years ended December 31, 2016 , 2015 and 2014 , were $102 million , $150 million and $228 million , respectively. The actual tax benefits realized from tax deductions from option exercises during the three years ended December 31, 2016 , 2015 and 2014 , were $37 million , $55 million and $83 million , respectively. Performance units Certain management-level employees also receive annual grants of performance units, which give the recipient the right to receive common stock that is contingent upon achievement of specified pre-established goals over the performance period, which is generally three years . The performance goals for the units granted in 2016, 2015 and 2014, which are accounted for as equity awards, are based upon Amgen’s stockholder return compared with a comparator group of companies, which are considered market conditions and are reflected in the grant date fair values of the units, and for units granted in 2016, Amgen’s standalone financial performance measures, which are considered performance conditions. The expense recognized for awards granted in 2016 is based on the grant date fair value of a unit multiplied by the number of units expected to be earned with respect to the performance conditions, net of estimated forfeitures. The expense recognized for the awards granted in 2015 and 2014 is based on the grant date fair value of a unit multiplied by the number of units granted, net of estimated forfeitures. Depending on the outcome of these performance goals, a recipient may ultimately earn a number of units greater or less than the number of units granted. Shares of our common stock are issued on a one-for-one basis for each performance unit earned. In general, performance unit awards vest at the end of the performance period. The performance award program provides for accelerated or continued vesting in certain circumstances as defined in the plan, including upon death, disability, a change in control and retirement of employees who meet certain service and/or age requirements. Performance units accrue dividend equivalents which are typically payable in shares only when and to the extent the underlying performance units vest and are issued to the recipient, including with respect to market and performance conditions that affect the number of performance units earned. We used payout simulation models to estimate the grant date fair value of performance units granted in 2016 , 2015 and 2014 . The weighted-average assumptions used in these models and the resulting weighted-average grant date fair values of our performance units were as follows: Years ended December 31, 2016 2015 2014 Closing price of our common stock on grant date $ 156.35 $ 164.26 $ 112.43 Volatility 25.8 % 24.3 % 23.8 % Risk-free interest rate 0.9 % 0.8 % 0.8 % Fair value of unit $ 170.56 $ 182.55 $ 104.47 The payout simulation models also assumed correlations of returns of the stock prices of our common stock and the common stocks of the comparator groups of companies and stock price volatilities of the comparator groups of companies. As of December 31, 2016 and 2015 , a total of 2.8 million and 3.8 million performance units were outstanding with weighted-average grant date fair values of $144.43 and $121.34 per unit, respectively. During the year ended December 31, 2016 , 0.8 million performance units with a weighted-average grant date fair value of $170.56 were granted and 0.2 million performance units with a weighted-average grant date fair value of $140.31 were forfeited. The total fair values of performance units that vested during 2016 and 2014 were $347 million and $587 million , respectively based upon the number of performance units earned multiplied by the closing stock price of our common stock on the last day of the performance period. No performance units vested during the year ended December 31, 2015. As of December 31, 2016 , there was approximately $144 million of unrecognized compensation cost related to the 2016 and 2015 performance unit grants that is expected to be recognized over a weighted-average period of approximately one year. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Income before income taxes included the following (in millions): Years ended December 31, 2016 2015 2014 Domestic $ 4,478 $ 3,532 $ 1,456 Foreign 4,685 4,446 4,129 Total income before income taxes $ 9,163 $ 7,978 $ 5,585 The provision for income taxes included the following (in millions): Years ended December 31, 2016 2015 2014 Current provision: Federal $ 984 $ 1,129 $ 251 State 65 40 58 Foreign 176 272 194 Total current provision 1,225 1,441 503 Deferred provision (benefit): Federal 372 (290 ) (22 ) State (69 ) (78 ) (4 ) Foreign (87 ) (34 ) (50 ) Total deferred provision (benefit) 216 (402 ) (76 ) Total provision $ 1,441 $ 1,039 $ 427 Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, tax credit carryforwards and the tax effects of net operating loss (NOL) carryforwards. Significant components of our deferred tax assets and liabilities were as follows (in millions): December 31, 2016 2015 Deferred income tax assets: NOL and credit carryforwards $ 688 $ 620 Expense accruals 562 706 Expenses capitalized for tax 255 199 Stock-based compensation 167 179 Undistributed earnings of foreign subsidiaries — 144 Other 117 161 Total deferred income tax assets 1,789 2,009 Valuation allowance (381 ) (327 ) Net deferred income tax assets 1,408 1,682 Deferred income tax liabilities: Acquired intangibles (3,139 ) (3,633 ) Debt (345 ) — Other (307 ) (227 ) Total deferred income tax liabilities (3,791 ) (3,860 ) Total deferred income taxes, net $ (2,383 ) $ (2,178 ) Valuation allowances are provided to reduce the amounts of our deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. The valuation allowance increased in 2016 due primarily to the Company’s expectation that some state R&D credits will not be utilized. This increase was offset partially by valuation allowance releases due to sufficient positive evidence to conclude that it is more likely than not that certain foreign NOL carryforwards are realizable. The valuation allowance decreased in 2015 due primarily to the release of valuation allowances against U.S. and foreign deferred tax assets due to the existence of sufficient taxable temporary differences that enable the use of the tax benefit of existing deferred tax assets. At December 31, 2016 , we had $20 million of federal tax credit carryforwards available to reduce future federal income taxes and have provided no valuation allowance for those federal tax credit carryforwards. The federal tax credit carryforwards expire between 2026 and 2034. We had $385 million of state tax credit carryforwards available to reduce future state income taxes and have provided a valuation allowance for $363 million of those state tax credit carryforwards. The state credits for which no valuation allowance has been provided expire between 2022 and 2030. At December 31, 2016, we had $147 million of NOL carryforwards available to reduce future federal income taxes and have provided a valuation allowance for $6 million of those federal NOL carryforwards. The federal NOL carryforwards, for which no valuation allowance has been provided, expire between 2020 and 2035. We had $469 million of NOL carryforwards available to reduce future state income taxes and have provided a valuation allowance for $445 million of those state NOL carryforwards. The state NOLs for which no valuation allowance has been provided expire between 2017 and 2032. We had $1.8 billion of NOL carryforwards available to reduce future foreign income taxes and have provided a valuation allowance for $587 million of those foreign NOL carryforwards. $594 million of the foreign NOLs for which no valuation allowance has been provided have no expiry; the remaining NOLs for which no valuation allowance has been provided will expire between 2017 and 2023. The reconciliations of the total gross amounts of UTBs (excluding interest, penalties, foreign tax credits and the federal tax benefit of state taxes related to UTBs) were as follows (in millions): During the years ended December 31, 2016 2015 2014 Balance at beginning of year $ 2,114 $ 1,772 $ 1,415 Additions based on tax positions related to the current year 425 413 379 Additions based on tax positions related to prior years 18 9 37 Reductions for tax positions of prior years (7 ) (32 ) (45 ) Reductions for expiration of statute of limitations — — (12 ) Settlements (7 ) (48 ) (2 ) Balance at end of year $ 2,543 $ 2,114 $ 1,772 Substantially all of the UTBs as of December 31, 2016 , if recognized, would affect our effective tax rate. During the year ended December 31, 2016, we settled various examinations with state tax authorities for prior tax years. As a result of these developments, we remeasured our UTBs accordingly. As of December 31, 2016, we believe it is reasonably possible that our gross liabilities for UTBs may decrease by approximately $63 million within the succeeding 12 months due to the resolution of state audits. Interest and penalties related to UTBs are included in our provision for income taxes. During 2016 , 2015 and 2014 , we recognized income tax expense of approximately $125 million , $17 million and $35 million , respectively, of interest and penalties through the income tax provision in the Consolidated Statements of Income. At December 31, 2016 and 2015 , accrued interest and penalties associated with UTBs totaled approximately $276 million and $151 million , respectively. The reconciliations between the federal statutory tax rate applied to income before income taxes and our effective tax rate were as follows: Years ended December 31, 2016 2015 2014 Federal statutory tax rate 35.0 % 35.0 % 35.0 % Foreign earnings, including earnings invested indefinitely (15.5 )% (18.1 )% (22.4 )% Credits, Puerto Rico Excise Tax (2.3 )% (2.5 )% (4.4 )% Share-based payments (1.3 )% — % — % Credits, primarily federal R&D (0.7 )% (1.4 )% (1.5 )% State taxes 0.1 % 0.1 % 0.7 % Audit settlements (federal, state, foreign) — % (0.5 )% — % Other, net 0.4 % 0.4 % 0.2 % Effective tax rate 15.7 % 13.0 % 7.6 % The effective tax rates for the years ended December 31, 2016, 2015 and 2014, are different from the federal statutory rates primarily as a result of indefinitely invested 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 the United States. Substantially all of the benefit from foreign earnings on our effective tax rate results from foreign income associated with the Company’s operation conducted in Puerto Rico, a territory of the United States that is treated as a foreign jurisdiction for U.S. tax purposes, and is subject to tax incentive grants through 2035. At December 31, 2016 , the cumulative amount of these earnings was approximately $36.6 billion . If these earnings were repatriated to the United States, we would be required to recognize and pay approximately $12.8 billion of additional income taxes based on the current tax rates in effect. Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. The rate of 4% was recently extended and is now set to expire December 31, 2027. 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. Income taxes paid during the years ended December 31, 2016 , 2015 and 2014 , totaled $1.1 billion , $919 million and $269 million , respectively. 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 deductions, the use of tax credits and allocations of income and expense among various tax jurisdictions because of differing interpretations of tax laws, regulations and the interpretation of the relevant facts. We are no longer subject to U.S. federal income tax examinations for tax years ended on or before December 31, 2009, or to California state income tax examinations for tax years ended on or before December 31, 2008. We are currently under audit by the IRS for tax years ended December 31, 2010, 2011 and 2012. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2016 | |
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 primarily shares that may be issued under our stock option, restricted stock and performance unit award programs, as determined using the treasury stock method (collectively, dilutive securities). The computation for basic and diluted EPS was as follows (in millions, except per share data): Years ended December 31, 2016 2015 2014 Income (Numerator): Net income for basic and diluted EPS $ 7,722 $ 6,939 $ 5,158 Shares (Denominator): Weighted-average shares for basic EPS 748 758 759 Effect of dilutive securities 6 8 11 Weighted-average shares for diluted EPS 754 766 770 Basic EPS $ 10.32 $ 9.15 $ 6.80 Diluted EPS $ 10.24 $ 9.06 $ 6.70 For each of the three years ended December 31, 2016 , the number of anti-dilutive employee stock-based awards excluded from the computation of diluted EPS was not significant. |
Collaborative arrangements
Collaborative arrangements | 12 Months Ended |
Dec. 31, 2016 | |
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. Our significant arrangements are discussed below. Pfizer Inc. The co-promotion term of our Enbrel ® collaboration agreement with Pfizer Inc. (Pfizer) in the United States and Canada expired on October 31, 2013. Under this agreement, we paid Pfizer a profit share until October 31, 2013, and residual royalties from November 1, 2013 to October 31, 2016, which were significantly less than the profit share payments. In 2016, the residual royalty payments were 10% of the annual net ENBREL sales in the United States and Canada. Effective November 1, 2016, there are no further royalty payments. During the years ended December 31, 2016, 2015 and 2014, residual royalties due to Pfizer on ENBREL sales were $470 million , $561 million , and $509 million respectively. These amounts are included in Selling, general and administrative expense in the Consolidated Statements of Income. UCB We are in a collaboration with UCB for the development and commercialization of EVENITY ™ . In 2016, we amended the commercialization rights and responsibilities of the parties. Under the amended agreement, we have the rights to commercialize EVENITY ™ for all indications in the United States and Japan. UCB has the rights for Europe, China and Brazil. The rest of the countries have been allocated to Amgen. Generally, development costs and future worldwide commercialization profits and losses related to the collaboration after accounting for expenses are shared equally. The collaboration agreement will continue in effect unless terminated earlier in accordance with its terms. During the years ended December 31, 2016 , 2015 and 2014 , the net costs recovered from UCB were $48 million , $60 million and $96 million , respectively, which are included primarily in Research and development expense in the Consolidated Statements of Income. Bayer HealthCare Pharmaceuticals Inc. We are in a collaboration with Bayer HealthCare Pharmaceuticals Inc. (Bayer) to jointly develop and commercialize Nexavar ® worldwide, except in Japan. The rights to develop and market Nexavar ® in Japan are reserved to Bayer. 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 2015, we amended the terms of our collaboration agreement with Bayer, which terminated the co-promotion agreement in the United States, 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 now pays Amgen a royalty on U.S. sales of Nexavar ® at a percentage rate in the high 30 s. Amgen no longer contributes 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 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 agreement 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 products commercialized under the agreement anywhere in the world. During the years ended December 31, 2016, 2015 and 2014, Amgen recorded Nexavar ® net profits of $167 million , $257 million and $324 million , respectively, which were recognized as Other revenues in the Consolidated Statements of Income. Pursuant to the 2015 amendment to the agreement, Amgen recorded royalty income on the U.S. sales of Nexavar ® subsequent to the termination of the co-promotion. During the years ended December 31, 2016 and 2015, Amgen recorded royalty income of $137 million and $72 million , respectively, in Other revenues in the Consolidated Statements of Income. In addition, during the years ended December 31, 2016, 2015, and 2014, net R&D expenses related to the agreement were not material. Other In addition to the collaborations discussed above, we have various others that are not individually significant to our business at this time. Pursuant to the terms of those agreements, we may be required to pay or we may receive additional amounts upon the achievement of various development and commercial milestones which in the aggregate could be significant. We may also incur or have reimbursed to us significant R&D costs if the related product candidate were to advance to late stage clinical trials. In addition, if any products related to these collaborations are approved for sale, we may be required to pay or we may receive significant royalties on future sales. The payment of these amounts, however, is contingent upon the occurrence of various future events, which have a high degree of uncertainty of occurrence. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions We own a 50% interest in K-A, a corporation formed in 1984 with Kirin Holdings Company, Limited (Kirin) for the development and commercialization of certain products based on advanced biotechnology. All of our rights to manufacture and market certain products including pegfilgrastim, granulocyte colony-stimulating factor, darbepoetin alfa, recombinant human erythropoietin and romiplostim are pursuant to exclusive licenses from K-A, which we currently market under the brand names Neulasta ® , NEUPOGEN ® /GRANULOKINE ® , Aranesp ® , EPOGEN ® , and Nplate ® , respectively. We account for our interest in K-A using the equity method and include our share of K-A’s profits or losses in Selling, general and administrative expense in the Consolidated Statements of Income. For the years ended December 31, 2016 , 2015 and 2014 , our share of K-A’s profits were $58 million , $65 million and $30 million , respectively. The carrying value of our equity method investment in K-A was approximately $501 million and $443 million as of December 31, 2016 and 2015 , respectively, and is included in noncurrent Other assets in the Consolidated Balance Sheets. K-A’s revenues consist of royalty income related to its licensed technology rights. K-A receives royalty income from us, as well as from Kirin and Johnson & Johnson under separate product license contracts for certain geographic areas outside the United States. During the years ended December 31, 2016 , 2015 and 2014 , K-A earned royalties from us of $239 million , $264 million and $301 million , respectively. These amounts are included in Cost of sales in the Consolidated Statements of Income. K-A’s expenses consist primarily of costs related to R&D activities conducted on its behalf by Amgen and Kirin. K-A pays Amgen and Kirin for such services at negotiated rates. During the years ended December 31, 2016 , 2015 and 2014 , we earned revenues from K-A of $31 million , $65 million and $119 million , respectively, for certain R&D activities performed on K-A’s behalf. These amounts are recognized as Other revenues in the Consolidated Statements of Income. During the years ended December 31, 2016 , 2015 and 2014 , we recorded cost recoveries from K-A of $7 million , $90 million and $108 million , respectively, related to certain third-party costs. These amounts are included in Research and development expense in the Consolidated Statements of Income. As of December 31, 2016 and 2015 , we owed K-A $69 million and $34 million , respectively, which is included in Accrued liabilities in the Consolidated Balance Sheets. |
Available-for-sale investments
Available-for-sale investments | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 6,681 $ 1 $ (68 ) $ 6,614 Other government-related debt securities: U.S. 302 — (3 ) 299 Foreign and other 1,784 9 (34 ) 1,759 Corporate debt securities: Financial 8,476 21 (37 ) 8,460 Industrial 8,793 59 (63 ) 8,789 Other 1,079 5 (7 ) 1,077 Residential mortgage-backed securities 1,968 1 (29 ) 1,940 Other mortgage- and asset-backed securities 1,731 1 (13 ) 1,719 Money market mutual funds 2,782 — — 2,782 Other short-term interest-bearing securities 4,188 — — 4,188 Total interest-bearing securities 37,784 97 (254 ) 37,627 Equity securities 127 31 (4 ) 154 Total available-for-sale investments $ 37,911 $ 128 $ (258 ) $ 37,781 Type of security as of December 31, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 4,298 $ — $ (24 ) $ 4,274 Other government-related debt securities: U.S. 536 — (2 ) 534 Foreign and other 1,768 7 (36 ) 1,739 Corporate debt securities: Financial 7,904 7 (40 ) 7,871 Industrial 7,961 11 (136 ) 7,836 Other 905 1 (21 ) 885 Residential mortgage-backed securities 1,484 1 (15 ) 1,470 Other mortgage- and asset-backed securities 2,524 — (55 ) 2,469 Money market mutual funds 3,370 — — 3,370 Other short-term interest-bearing securities 528 — — 528 Total interest-bearing securities 31,278 27 (329 ) 30,976 Equity securities 88 48 — 136 Total available-for-sale investments $ 31,366 $ 75 $ (329 ) $ 31,112 The fair values of available-for-sale investments by classification in the Consolidated Balance Sheets were as follows (in millions): December 31, Classification in the Consolidated Balance Sheets 2016 2015 Cash and cash equivalents $ 2,783 $ 3,738 Marketable securities 34,844 27,238 Other assets — noncurrent 154 136 Total available-for-sale investments $ 37,781 $ 31,112 Cash and cash equivalents in the table above excludes bank account cash of $458 million and $406 million as of December 31, 2016 and 2015 , 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): December 31, Contractual maturity 2016 2015 Maturing in one year or less $ 8,393 $ 4,578 Maturing after one year through three years 10,404 9,370 Maturing after three years through five years 12,157 9,932 Maturing after five years through ten years 2,974 3,087 Maturing after ten years 40 70 Mortgage- and asset-backed securities 3,659 3,939 Total interest-bearing securities $ 37,627 $ 30,976 For the years ended December 31, 2016 , 2015 and 2014 , realized gains totaled $306 million , $132 million and $149 million , respectively, and realized losses totaled $367 million , $208 million and $150 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 December 31, 2016 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 5,774 $ (68 ) $ — $ — Other government-related debt securities: U.S. 201 (3 ) — — Foreign and other 1,192 (34 ) 17 — Corporate debt securities: Financial 3,975 (37 ) 44 — Industrial 3,913 (61 ) 149 (2 ) Other 486 (7 ) 7 — Residential mortgage-backed securities 1,631 (26 ) 158 (3 ) Other mortgage- and asset-backed securities 1,087 (10 ) 118 (3 ) Equity securities 22 (4 ) — — Total $ 18,281 $ (250 ) $ 493 $ (8 ) Less than 12 months 12 months or greater Type of security as of December 31, 2015 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 4,196 $ (24 ) $ — $ — Other government-related debt securities: U.S. 494 (2 ) 20 — Foreign and other 1,306 (32 ) 56 (4 ) Corporate debt securities: Financial 5,988 (38 ) 228 (2 ) Industrial 5,427 (108 ) 679 (28 ) Other 807 (19 ) 39 (2 ) Residential mortgage-backed securities 804 (8 ) 304 (7 ) Other mortgage- and asset-backed securities 1,834 (19 ) 561 (36 ) Total $ 20,856 $ (250 ) $ 1,887 $ (79 ) 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 it 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. The 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 based on new developments or changes in assumptions related to that particular security. As of December 31, 2016 and 2015, we believe the cost bases for our available-for-sale investments were recoverable in all material aspects. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in millions): December 31, 2016 2015 Raw materials $ 225 $ 201 Work in process 1,608 1,529 Finished goods 912 705 Total inventories $ 2,745 $ 2,435 |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment consisted of the following (dollar amounts in millions): December 31, Useful life (in years) 2016 2015 Land — $ 295 $ 319 Buildings and improvements 10-40 3,640 3,638 Manufacturing equipment 8-12 2,275 2,051 Laboratory equipment 8-12 1,092 1,140 Other 3-15 4,380 4,278 Construction in progress — 745 746 Property, plant and equipment, gross 12,427 12,172 Less accumulated depreciation and amortization (7,466 ) (7,265 ) Property, plant and equipment, net $ 4,961 $ 4,907 During the years ended December 31, 2016 , 2015 and 2014 , we recognized depreciation and amortization charges associated with our property, plant and equipment of $619 million , $727 million and $716 million , respectively. |
Goodwill and intangible assets
Goodwill and intangible assets | 12 Months Ended |
Dec. 31, 2016 | |
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): During the years ended December 31, 2016 2015 Beginning balance $ 14,787 $ 14,788 Goodwill related to acquisitions of businesses (1) 2 108 Currency translation adjustments (38 ) (109 ) Ending balance $ 14,751 $ 14,787 (1) Consists 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): December 31, 2016 2015 Gross carrying amount Accumulated amortization Intangible assets, net Gross carrying amount Accumulated amortization Intangible assets, net Finite-lived intangible assets: Developed product technology rights $ 12,534 $ (5,947 ) $ 6,587 $ 12,310 $ (4,996 ) $ 7,314 Licensing rights 3,275 (1,300 ) 1,975 3,275 (998 ) 2,277 Marketing-related rights 1,333 (793 ) 540 1,186 (650 ) 536 R&D technology rights 1,122 (704 ) 418 1,134 (635 ) 499 Total finite-lived intangible assets 18,264 (8,744 ) 9,520 17,905 (7,279 ) 10,626 Indefinite-lived intangible assets: IPR&D 759 — 759 1,015 — 1,015 Total identifiable intangible assets $ 19,023 $ (8,744 ) $ 10,279 $ 18,920 $ (7,279 ) $ 11,641 Developed product technology rights consist of rights related to marketed products acquired in business combinations. Licensing rights consist 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. Marketing-related intangible assets consist primarily of rights related to the sale and distribution of marketed products. R&D technology rights consist of technology used in R&D with alternative future uses. IPR&D consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of the required regulatory approvals. As of December 31, 2016, the projects include primarily AMG 899, acquired in the acquisition of Dezima (see Note 3, Business combinations) and oprozomib, acquired in the acquisition of Onyx Pharmaceuticals, Inc. (Onyx) in 2013. In November 2016, we announced that the European Commission (EC) granted marketing authorization for Parsabiv ™ acquired in the acquisition of KAI Pharmaceuticals in 2012, for the treatment of secondary hyperparathyroidism (sHPT) in adult patients with chronic kidney disease on hemodialysis. As a result, the $240 million carrying value of Parsabiv ™ was reclassified from IPR&D to Developed product technology rights during 2016 and is being amortized over its useful life. All IPR&D projects have 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 permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require our 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, as well as competitive product launches, 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. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and upon the establishment of technological feasibility or regulatory approval. During the years ended December 31, 2016 , 2015 and 2014 , we recognized amortization charges associated with our finite-lived intangible assets, included primarily in Cost of sales in the Consolidated Statements of Income, of $1.5 billion , $1.4 billion and $1.4 billion , respectively. The total estimated amortization for each of the next five years for our intangible assets is $1.3 billion , $1.2 billion , $1.1 billion , $1.1 billion and $0.9 billion in 2017 , 2018 , 2019 , 2020 and 2021 , respectively. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities Accrued liabilities consisted of the following (in millions): December 31, 2016 2015 Sales deductions $ 1,874 $ 1,486 Employee compensation and benefits 920 916 Dividends payable 849 754 Clinical development costs 395 491 Sales returns reserve 437 390 Other 1,409 1,415 Total accrued liabilities $ 5,884 $ 5,452 |
Financing arrangements
Financing arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Financing arrangements | Financing arrangements The carrying values and the fixed contractual coupon rates of our borrowings were as follows (in millions): December 31, 2016 2015 2.30% notes due 2016 (2.30% 2016 Notes) $ — $ 750 2.50% notes due 2016 (2.50% 2016 Notes) — 1,000 Short-term loan 605 — 2.125% notes due 2017 (2.125% 2017 Notes) 1,250 1,250 Floating Rate Notes due 2017 600 600 1.25% notes due 2017 (1.25% 2017 Notes) 850 850 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 — 1,975 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) 577 599 5.70% notes due 2019 (5.70% 2019 Notes) 1,000 1,000 Floating Rate Notes due 2019 250 250 2.20% notes due 2019 (2.20% 2019 Notes) 1,400 1,400 2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) 710 733 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 750 750 3.45% notes due 2020 (3.45% 2020 Notes) 900 900 4.10% notes due 2021 (4.10% 2021 Notes) 1,000 1,000 1.85% notes due 2021 (1.85% 2021 Notes) 750 — 3.875% notes due 2021 (3.875% 2021 Notes) 1,750 1,750 1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) 1,315 — 2.70% notes due 2022 (2.70% 2022 Notes) 500 500 3.625% notes due 2022 (3.625% 2022 Notes) 750 750 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 687 — 2.25% notes due 2023 (2.25% 2023 Notes) 750 — 3.625% notes due 2024 (3.625% 2024 Notes) 1,400 1,400 3.125% notes due 2025 (3.125% 2025 Notes) 1,000 1,000 2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) 789 — 2.60% notes due 2026 (2.60% 2026 notes) 1,250 — 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 586 700 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 864 1,032 6.375% notes due 2037 (6.375% 2037 Notes) 552 900 6.90% notes due 2038 (6.90% 2038 Notes) 291 500 6.40% notes due 2039 (6.40% 2039 Notes) 466 1,000 5.75% notes due 2040 (5.75% 2040 Notes) 412 700 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 974 2,250 5.65% notes due 2042 (5.65% 2042 Notes) 487 1,250 5.375% notes due 2043 (5.375% 2043 Notes) 261 1,000 4.40% notes due 2045 (4.40% 2045 Notes) 2,250 1,250 4.563% notes due 2048 (4.563% 2048 Notes) 1,415 — 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 — Other notes due 2097 100 100 Unamortized bond discounts, premiums and issuance costs, net (936 ) (210 ) Total carrying value of debt 34,596 31,429 Less current portion (4,403 ) (2,247 ) Total noncurrent debt $ 30,193 $ 29,182 There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563% 2048 Notes and the 4.663% 2051 Notes, which have effective interest rates of approximately 6.3% and 5.6% , respectively. Under the terms of all of our outstanding notes (including debt exchange issuances discussed below), except our Other notes, in the event of a change-in-control triggering event, we may be required to purchase all or a portion of these debt securities at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, all of our outstanding notes, except for our floating rate notes, 0.41% 2023 Swiss franc Bonds and Other 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, which is defined by the terms of the notes. Redeemable notes that were issued during 2016, 2015 and 2014 (discussed below), except the 1.25% 2017 Notes, may be redeemed without payment of the make-whole amount if redemption occurs during a specified period of time immediately prior to the maturity dates of the notes. Such time periods range from one to six months prior to the maturity date. Debt repayments In 2016, we repaid $3.7 billion of debt, including the remaining $1.975 billion of principal on our Term Loan Credit Facility (Term Loan), the $750 million aggregate principal amount of the 2.30% 2016 Notes and the $1.0 billion aggregate principal amount of the 2.50% 2016 Notes. In 2015, we repaid $2.4 billion of principal on our Term Loan. In 2014, we repaid $5.6 billion of debt, including $500 million of principal on our Term Loan. Debt issuances We issued debt and debt securities in various offerings during the years ended December 31, 2016 , 2015 and 2014 including: • In 2016, we issued $6.7 billion principal amount of notes, consisting of the 1.85% 2021 Notes, 1.25% 2022 euro Notes, 0.41% 2023 Swiss franc Bonds, 2.25% 2023 Notes, 2.00% 2026 euro Notes, 2.60% 2026 Notes and $1.0 billion of the 4.40% 2045 Notes. We received a $79 million premium on the 4.40% 2045 Notes. In addition, we borrowed $605 million under a short-term floating rate loan, which was repaid in January 2017. • In 2015, we issued $3.5 billion aggregate principal amount of notes, consisting of the 2.125% 2020 Notes, the 2.70% 2022 Notes, the 3.125% 2025 Notes and $1.25 billion of the 4.40% 2045 Notes. • In 2014, we issued $4.5 billion aggregate principal amount of notes, composed of the Floating Rate Notes due 2017, the 1.25% 2017 Notes, the Floating Rate Notes due 2019, the 2.20% 2019 Notes and the 3.625% 2024 Notes. The Floating Rate Notes due in 2017 and 2019 bear interest equal to three-month London Interbank Offered Rates (LIBOR) plus 0.38% and three-month LIBOR plus 0.60% , respectively, and are not subject to redemption at our option. Debt exchange During 2016, we completed a private offering to exchange portions of certain outstanding senior notes due 2037 through 2043 (collectively, the Old Notes), listed below, for new senior notes, consisting of principal amounts of $1.4 billion of 4.563% 2048 Notes and $3.5 billion of 4.663% 2051 Notes (collectively, the New Notes). The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled (in millions): Principal Amount Exchanged 6.375% 2037 Notes $ 348 6.90% 2038 Notes 209 6.40% 2039 Notes 534 5.75% 2040 Notes 288 5.15% 2041 Notes 1,276 5.65% 2042 Notes 763 5.375% 2043 Notes 739 The New Notes bear lower fixed coupon rates while requiring higher principal repayments on extended maturity dates, compared with the Old Notes that were exchanged. There were no other significant changes to the terms between the Old Notes and the New Notes. The exchange was accounted for as a debt modification, and there were no cash payments to or cash receipts from the note holders as a result of the exchange. Existing deferred financing costs associated with the Old Notes, as well as discounts associated with the New Notes aggregating $801 million , are being accreted over the term of the New Notes and recorded as Interest expense, net. Transaction costs of $24 million incurred for the exchange were expensed immediately in Interest and other income, net. Term Loan Credit Facility In 2013, we borrowed $5.0 billion under a Term Loan which bears interest at a floating rate based on LIBOR plus additional interest, initially 1% , which could have varied based on the credit ratings assigned to our long-term debt by Standard & Poor’s Financial Services LLC (S&P) and Moody’s Investor Service, Inc. (Moody’s). A minimum of $125 million of the principal amount of the loan was to be repaid at the end of each quarter, with the balance due on October 1, 2018. The outstanding balance of this loan was repaid in whole during 2016 without penalty. Interest rate swaps To achieve a desired mix of fixed and floating interest rate debt, we entered into interest rate swap contracts that effectively converted a fixed-rate interest coupon for certain of our debt issuances to a floating LIBOR-based coupon over the life of the respective note. These interest rate swap contracts qualified and are designated as fair value hedges. As of December 31, 2016 and 2015, we had $6.65 billion aggregate notional amount of interest rate swap contracts outstanding. The effective interest rates on these notes after giving effect to the related interest rate swap contracts and the related notional amounts of the contracts were as follows as of December 31, 2016 (dollar amounts in millions): Notes Effective interest rate Notional amount 1.25% 2017 Notes LIBOR + 0.4% $ 850 2.20% 2019 Notes LIBOR + 0.6% 1,400 3.45% 2020 Notes LIBOR + 1.1% 900 4.10% 2021 Notes LIBOR + 1.7% 1,000 3.875% 2021 Notes LIBOR + 2.0% 1,750 3.625% 2022 Notes LIBOR + 1.6% 750 $ 6,650 Cross-currency swaps In order 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. The terms of these contracts effectively convert the interest payments and principal repayment on our 2.125% 2019 euro Notes, 1.25% 2022 euro Notes, 0.41% 2023 Swiss franc Bonds, 2.00% 2026 euro Notes, 5.50% 2026 pound sterling Notes and 4.00% 2029 pound sterling Notes from euros, pounds sterling and Swiss francs to U.S. dollars. These cross-currency swap contracts have been designated as cash flow hedges. For information regarding the terms of these contracts, see Note 17, Derivative instruments. Shelf registration statements and other facilities As of December 31, 2016 , we have a commercial paper program that allows us to issue up to $2.5 billion of unsecured commercial paper to fund our working capital needs. At December 31, 2016 and 2015 , we had no amounts outstanding under our commercial paper program. In 2014, we entered into a $2.5 billion syndicated, unsecured, revolving credit agreement which is available for general corporate purposes or as a liquidity backstop to our commercial paper program. The commitments under the revolving credit agreement may be increased by up to $500 million with the agreement of the banks. Each bank which is a party to the agreement has an initial commitment term of five years. We extended this term by one year during 2016 and may extend the term for an additional year with the agreement of the banks. Annual commitment fees for this agreement are 0.09% of the unused portion of the facility based on our current credit rating. Generally, we would be charged interest at LIBOR plus 1% for any amounts borrowed under this facility. As of December 31, 2016 and 2015 , no amounts were outstanding under this facility. In 2014, we filed a shelf registration statement with the SEC that allows us to issue unspecified amounts of debt securities; common stock; preferred stock; warrants to purchase debt securities, common stock, preferred stock or depositary shares; rights to purchase common stock or preferred stock; securities purchase contracts; securities purchase units; and depositary shares. Under this shelf registration statement, all of the securities available for issuance may be offered from time to time with terms to be determined at the time of issuance. This shelf registration statement expires on February 23, 2017, and is expected to be renewed before its expiration date. In 1997, we established a $400 million medium-term note program under which medium-term debt securities may be offered from time to time with terms to be determined at the time of issuance. As of December 31, 2016 and 2015 , no securities were outstanding under this medium-term note program. Certain of our financing arrangements contain non-financial covenants. In addition, our revolving credit agreement includes a financial covenant with respect to the level of our borrowings in relation to our equity, as defined. We were in compliance with all applicable covenants under these arrangements as of December 31, 2016 . Contractual maturities of debt obligations The aggregate contractual maturities of all borrowings due subsequent to December 31, 2016 , are as follows (in millions): Maturity date Amount 2017 $ 4,405 2018 1,076 2019 3,360 2020 1,950 2021 3,500 Thereafter 21,241 Total $ 35,532 Interest costs Interest costs are expensed as incurred, except to the extent such interest is related to construction in progress, in which case interest is capitalized. Interest expense, net, for the years ended December 31, 2016 , 2015 and 2014 , was $1.3 billion , $1.1 billion and $1.1 billion , respectively. Interest costs capitalized for the years ended December 31, 2016 , 2015 and 2014 , were not material. Interest paid, including the ongoing impact and settlements of interest rate and cross-currency swap contracts, during the years ended December 31, 2016 , 2015 and 2014 , totaled $1.2 billion , $1.0 billion and $1.1 billion , respectively. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders’ equity Stock repurchase program Activity under our stock repurchase program, on a trade date basis, was as follows (in millions): During the years ended December 31, 2016 2015 2014 Shares Dollars Shares Dollars Shares Dollars First quarter 4.7 $ 690 2.9 $ 451 — $ — Second quarter 3.9 591 3.3 515 — — Third quarter 4.4 747 4.6 703 — — Fourth quarter 6.7 999 1.2 184 0.9 153 Total stock repurchases 19.7 $ 3,027 12.0 $ 1,853 0.9 $ 153 As of December 31, 2016, $4.1 billion , remained available under our stock repurchase program. Dividends Our Board of Directors declared quarterly dividends per share of $1.00 , $0.79 , and $0.61 that were paid in each of the four quarters of 2016, 2015, and 2014, respectively. Historically, each year we have declared dividends in December that were paid in the first quarter of the following fiscal year, and in March, July and October that were paid in the second, third and fourth quarters, respectively, of the same fiscal year. Additionally, on December 20, 2016, the Board of Directors declared a quarterly cash dividend of $1.15 per share of common stock, which will be paid on March 8, 2017, to all stockholders of record as of the close of business on February 15, 2017. Accumulated other comprehensive income The components of accumulated other comprehensive income/(loss) (AOCI) were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2013 $ (68 ) $ (33 ) $ (43 ) $ (17 ) $ (161 ) Foreign currency translation adjustments (218 ) — — — (218 ) Unrealized gains — 298 37 1 336 Reclassification adjustments to income — 203 1 — 204 Other — — — 1 1 Income taxes 22 (178 ) (14 ) — (170 ) Balance as of December 31, 2014 (264 ) 290 (19 ) (15 ) (8 ) Foreign currency translation adjustments (257 ) — — — (257 ) Unrealized gains (losses) — 150 (299 ) 8 (141 ) Reclassification adjustments to income — (143 ) 76 — (67 ) Other — — — 1 1 Income taxes 10 — (18 ) — (8 ) Balance as of December 31, 2015 (511 ) 297 (260 ) (6 ) (480 ) Foreign currency translation adjustments (93 ) — — — (93 ) Unrealized (losses) gains — (176 ) 63 — (113 ) Reclassification adjustments to income — 139 61 — 200 Other — — — 1 1 Income taxes (6 ) 22 (2 ) — 14 Balance as of December 31, 2016 $ (610 ) $ 282 $ (138 ) $ (5 ) $ (471 ) Income tax expenses/benefits for unrealized gains and losses and the related reclassification adjustments to income for cash flow hedges were a $68 million benefit and $46 million expense in 2016 , a $53 million expense and $53 million benefit in 2015 and a $104 million expense and $74 million expense in 2014 , respectively. Income tax expenses/benefits for unrealized gains and losses and the related reclassification adjustments to income for available-for-sale securities were a $9 million benefit and $11 million expense for 2016 , a $0 million and $18 million expense in 2015 and a $14 million expense and $0 million in 2014 , respectively. The reclassifications out of AOCI to earnings were as follows (in millions): Year ended December 31, Components of AOCI 2016 2015 2014 Line item affected in the Consolidated Statements of Income Cash flow hedges: Foreign currency contract gains $ 308 $ 326 $ 28 Product sales Cross-currency swap contract losses (446 ) (182 ) (230 ) Interest and other income, net Forward interest rate contract losses (1 ) (1 ) (1 ) Interest expense, net (139 ) 143 (203 ) Income before income taxes 46 (53 ) 74 Provision for income taxes $ (93 ) $ 90 $ (129 ) Net income Available-for-sale securities: Net realized losses $ (61 ) $ (76 ) $ (1 ) Interest and other income, net 11 18 — Provision for income taxes $ (50 ) $ (58 ) $ (1 ) Net income Other In addition to common stock, our authorized capital includes 5 million shares of preferred stock, $0.0001 par value. As of December 31, 2016 and 2015 , no shares of preferred stock were issued or outstanding. |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement To estimate the fair value 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 an 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 an 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 value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions): Fair value measurement as of December 31, 2016, using: Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Available-for-sale investments: U.S. Treasury securities $ 6,614 $ — $ — $ 6,614 Other government-related debt securities: U.S. — 299 — 299 Foreign and other — 1,759 — 1,759 Corporate debt securities: Financial — 8,460 — 8,460 Industrial — 8,789 — 8,789 Other — 1,077 — 1,077 Residential mortgage-backed securities — 1,940 — 1,940 Other mortgage- and asset-backed securities — 1,719 — 1,719 Money market mutual funds 2,782 — — 2,782 Other short-term interest-bearing securities — 4,188 — 4,188 Equity securities 154 — — 154 Derivatives: Foreign currency contracts — 203 — 203 Interest rate swap contracts — 41 — 41 Total assets $ 9,550 $ 28,475 $ — $ 38,025 Liabilities: Derivatives: Foreign currency contracts $ — $ 4 $ — $ 4 Cross-currency swap contracts — 523 — 523 Interest rate swap contracts — 7 — 7 Contingent consideration obligations in connection with business combinations — — 179 179 Total liabilities $ — $ 534 $ 179 $ 713 Fair value measurement as of December 31, 2015, using: Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Available-for-sale investments: U.S. Treasury securities $ 4,274 $ — $ — $ 4,274 Other government-related debt securities: U.S. — 534 — 534 Foreign and other — 1,739 — 1,739 Corporate debt securities: Financial — 7,871 — 7,871 Industrial — 7,836 — 7,836 Other — 885 — 885 Residential mortgage-backed securities — 1,470 — 1,470 Other mortgage- and asset-backed securities — 2,469 — 2,469 Money market mutual funds 3,370 — — 3,370 Other short-term interest-bearing securities — 528 — 528 Equity securities 136 — — 136 Derivatives: Foreign currency contracts — 142 — 142 Interest rate swap contracts — 71 — 71 Total assets $ 7,780 $ 23,545 $ — $ 31,325 Liabilities: Derivatives: Foreign currency contracts $ — $ 8 $ — $ 8 Cross-currency swap contracts — 250 — 250 Interest rate swap contracts — 3 — 3 Contingent consideration obligations in connection with business combinations — — 188 188 Total liabilities $ — $ 261 $ 188 $ 449 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 S&P, Moody’s or Fitch Ratings Inc. (Fitch); 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 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 or Moody’s. We estimate 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 and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts include implied volatility measures. These inputs, where applicable, are at commonly quoted intervals. See Note 17, Derivative instruments. Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimate 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 17, Derivative instruments. Our interest rate swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimate 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 As a result of our business acquisitions, we incurred contingent consideration obligations, as 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 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 that 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 the fair values of contingent consideration obligations are recognized in Other operating expenses in the Consolidated Statements of Income. Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): During the years ended December 31, 2016 2015 Beginning balance $ 188 $ 215 Additions from Dezima acquisition — 110 Payment to former BioVex Group, Inc. shareholders — (125 ) Net changes in valuation (9 ) (12 ) Ending balance $ 179 $ 188 As a result of our acquisition of Dezima in 2015, we are obligated to pay its former shareholders up to $1.25 billion of additional consideration contingent upon achieving certain development and sales-related milestones and low single-digit royalties on net product sales above a certain threshold. The estimated fair values of the contingent consideration obligations had an aggregate value of $110 million at acquisition. See Note 3, Business combinations. As a result of our acquisition of Biovex Group Inc. (BioVex) in 2011, we are obligated to pay its former shareholders additional consideration contingent upon achieving separate regulatory and sales-related milestones with regard to IMLYGIC ® , including a $125 million milestone payment made in 2015 as a result of the first commercial sale of this product in the United States following marketing approval. The remaining milestone payments of up to $325 million will become payable if certain sales thresholds are achieved within specified periods of time. We estimate the fair values of the obligations to the former shareholders of Dezima and BioVex by using probability-adjusted discounted cash flows and we review underlying key assumptions on a quarterly basis. There were no significant changes in the estimated aggregate fair values of the contingent consideration obligations for the years ended December 31, 2016 and 2015 . During the years ended December 31, 2016 and 2015 , there were no transfers of assets or liabilities between 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 values of other financial instruments Cash equivalents The estimated fair values of cash equivalents approximate their carrying values due to the short-term nature of such 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 December 31, 2016 and 2015 , the aggregate fair values of our long-term debt were $36.5 billion and $33.1 billion , respectively, and the carrying values were $34.6 billion and $31.4 billion , respectively. |
Derivative instruments
Derivative instruments | 12 Months Ended |
Dec. 31, 2016 | |
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 corresponding increases and decreases in the cash flows from 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 December 31, 2016 , 2015 and 2014 , we had open foreign currency forward contracts with notional amounts of $3.4 billion , $3.3 billion and $3.8 billion , respectively, and open foreign currency option contracts with notional amounts of $608 million , $225 million and $271 million , respectively. We have designated these foreign currency forward and foreign currency option contracts, which are primarily euro based, as cash flow hedges; and accordingly, we report the effective portions of the unrealized gains and losses on these contracts in AOCI in the Consolidated Balance Sheets, and we reclassify them to earnings in the same periods during which the hedged transactions affect earnings. To manage counterparty risk resulting from favorable movements in U.S. dollar/foreign currency exchange rates, we effectively terminated outstanding foreign currency forward and option contracts with a notional amount of $2.3 billion during the year ended December 31, 2015. We received $340 million from the counterparties, which was included in Net cash provided by operating activities in the Consolidated Statement of Cash Flows. This amount was recorded in AOCI and is being recognized in Product sales in the Consolidated Statements of Income when the related international product sales affect earnings. In addition, during the year ended December 31, 2015, we entered into new foreign currency forward and option contracts that hedge these forecasted international product sales. To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term debt denominated in foreign currencies, including long-term debt issued during the year ended December 31, 2016, (see Note 14, Financing arrangements), we entered into cross-currency swap contracts. Under the terms of these contracts, we paid euros/pounds sterling and Swiss francs and received U.S. dollars for the notional amounts at the inception of the contracts; and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S. dollars and receiving euros, pounds sterling and Swiss francs. In addition, we will pay U.S. dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged debt, effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S. dollars. We have designated these cross-currency swap contracts as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI in the 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 % 1.25% 2022 euro Notes € 1,250 1.25 % $ 1,388 3.2 % 0.41 % 2023 Swiss franc Bonds CHF 700 0.41 % $ 704 3.4 % 2.00% 2026 euro Notes € 750 2.00 % $ 833 3.9 % 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 % In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts in order to hedged the variability in cash flows due to changes in the applicable Treasury rate between the time we enter into these contracts and the time the related debt is issued. Gains and losses realized on such contracts, which were designated as cash flow hedges, are recognized in AOCI and amortized into earnings over the lives of the associated debt issuances. 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): Years ended December 31, Derivatives in cash flow hedging relationships 2016 2015 2014 Foreign currency contracts $ 115 $ 425 $ 452 Cross-currency swap contracts (281 ) (275 ) (154 ) Forward interest rate contracts (10 ) — — Total $ (176 ) $ 150 $ 298 The locations in the 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): Years ended December 31, Derivatives in cash flow hedging relationships Statements of Income location 2016 2015 2014 Foreign currency contracts Product sales $ 308 $ 326 $ 28 Cross-currency swap contracts Interest and other income, net (446 ) (182 ) (230 ) Forward interest rate contracts Interest expense, net (1 ) (1 ) (1 ) Total $ (139 ) $ 143 $ (203 ) 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 years ended December 31, 2016 , 2015 and 2014 . As of December 31, 2016 , the amounts expected to be reclassified out of AOCI into earnings over the next 12 months are approximately $80 million of net gains on our foreign currency and cross-currency swap contracts and approximately $2 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 that 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 convert a fixed interest rate coupon to a floating LIBOR-based coupon over the lives of the respective notes. As of December 31, 2016, 2015 and 2014, we had interest rate swap agreements with aggregate notional amounts of $6.65 billion that hedge certain of our long-term debt issuances (see Note 14, Financing arrangements — Interest rate swaps). These contracts have rates that range from three-month LIBOR plus 0.4% to three-month LIBOR plus 2.0% . For derivative instruments that qualify for and are designated as fair value hedges, we recognize in current earnings 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. During the year ended December 31, 2016 , we included the unrealized gains on the hedged debt of $34 million in the same line item, Interest expense, net, in the Consolidated Statement of Income, as the offsetting unrealized losses of $34 million on the related interest rate swap agreements. During the years ended December 31, 2015 and 2014 , we included the unrealized losses on the hedged debt of $48 million and $181 million in the same line item, Interest expense, net, in the Consolidated Statements of Income, as the offsetting unrealized gains of $48 million and $181 million on the related interest rate swap agreements. Derivatives not designated as hedges To reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. These exposures are hedged on a month-to-month basis. As of December 31, 2016 , 2015 and 2014 , the total notional amounts of these foreign currency forward contracts were $666 million , $911 million and $875 million , respectively. The location in the 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): Years ended December 31, Derivatives not designated as hedging instruments Statements of Income location 2016 2015 2014 Foreign currency contracts Interest and other income, net $ (56 ) $ (16 ) $ (10 ) The fair values of derivatives included on the Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities December 31, 2016 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 203 Accrued liabilities/ Other noncurrent liabilities $ 4 Cross-currency swap contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities 523 Interest rate swap contracts Other current assets/ Other noncurrent assets 41 Accrued liabilities/ Other noncurrent liabilities 7 Total derivatives designated as hedging instruments 244 534 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets — Accrued liabilities — Total derivatives not designated as hedging instruments — — Total derivatives $ 244 $ 534 Derivative assets Derivative liabilities December 31, 2015 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 142 Accrued liabilities/ Other noncurrent liabilities $ 7 Cross-currency swap contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities 250 Interest rate swap contracts Other current assets/ Other noncurrent assets 71 Accrued liabilities/ Other noncurrent liabilities 3 Total derivatives designated as hedging instruments 213 260 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets — Accrued liabilities 1 Total derivatives not designated as hedging instruments — 1 Total derivatives $ 213 $ 261 Our derivative contracts that were in liability positions as of December 31, 2016 , 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 each of the three years ended December 31, 2016 , are included within Net cash provided by operating activities in the Consolidated Statements of Cash Flows. |
Contingencies and commitments
Contingencies and commitments | 12 Months Ended |
Dec. 31, 2016 | |
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, government investigations and other matters that are complex in nature and have outcomes that are difficult to predict. (See Part I, Item 1A. Risk Factors—Our business may be affected by litigation and government investigations.) We describe our legal proceedings and other matters that are significant or that we believe could become significant in this Note. We record accruals for loss contingencies to the extent that we conclude 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, 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 pending against us 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 matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows. Certain of our legal proceedings and other matters are discussed below: PCSK9 Antibody Patent Litigation U.S. Patent Litigation—Sanofi/Regeneron On October 17, 2014, Amgen initiated a series of lawsuits in the U.S. District Court of Delaware (the Delaware District Court) against Sanofi, Aventisub LLC, formerly doing business as Aventis Pharmaceuticals Inc., and Regeneron Pharmaceuticals, Inc. (Regeneron) for patent infringement. On December 15, 2014, these lawsuits were consolidated by the Delaware District Court into a single case against Sanofi, Sanofi-Aventis U.S. LLC and Aventisub LLC, formerly doing business as Aventis Pharmaceuticals Inc. (collectively, Sanofi) and Regeneron, addressing seven of our patents: U.S. Patent Nos. 8,563,698; 8,829,165 (the ‘165 Patent); 8,859,741 (the ‘741 Patent); 8,871,913; 8,871,914; 8,883,983; and 8,889,834. These patents describe and claim monoclonal antibodies to proprotein convertase subtilisin/kexin type 9 (PCSK9). By its complaints, Amgen sought an injunction to prevent the infringing manufacture, use and sale of Sanofi and Regeneron’s alirocumab, a monoclonal antibody targeting PCSK9. On January 29, 2016, the Delaware District Court granted Amgen’s motion to amend the complaint to add Amgen Manufacturing, Limited and Amgen USA Inc. as plaintiffs and to add the allegation that defendants’ infringement of Amgen’s patents is willful. On February 22, 2016, the Delaware District Court entered a stipulated order finding alirocumab and the drug product containing it, PRALUENT ® , infringe certain of Amgen’s patents, including claims 2, 7, 9, 15, 19 and 29 of the ‘165 Patent and claim 7 of the ‘741 Patent. On March 18, 2016, the Delaware District Court entered judgment in favor of Amgen following a five-day jury trial and a unanimous jury verdict that these patent claims from the ‘165 Patent and the ‘741 Patent are all valid. On April 15, 2016, Sanofi and Regeneron filed post-trial motions seeking a new trial and judgment as a matter of law. On January 3, 2017, the Delaware District Court denied Sanofi and Regeneron’s post-trial motions seeking a new trial and for judgment as a matter of law, and on January 5, 2017, granted Amgen’s motion for a permanent injunction prohibiting the infringing manufacture, use, sale, offer for sale or import of alirocumab in the United States. On January 9, 2017, the Delaware District Court denied Sanofi and Regeneron’s motion to stay the injunction pending appeal, but ordered that the injunction will not take effect for forty-five days (until February 21, 2017) to give Sanofi and Regeneron an opportunity to seek a stay from the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit Court”). On January 12, 2017, Sanofi and Regeneron filed an appeal of the judgment and the permanent injunction to the Federal Circuit Court. Following a motion by Sanofi and Regeneron, the Federal Circuit Court ordered an expedited briefing schedule for the appeal and, on February 8, 2017, entered a stay of the permanent injunction during the pendency of the appeal. Patent Disputes in the European Region On February 24, 2016, the European Patent Office (EPO) granted European Patent No. 2,215,124 (EP 2,215,124) to Amgen. This patent describes and claims monoclonal antibodies to PCSK9 and methods of treatment. On February 24, 2016, Sanofi filed an opposition to the patent in the EPO seeking to invalidate it. In November 2016, Sanofi-Aventis Deutschland GmbH, Sanofi-Aventis Groupe S.A. and Sanofi Winthrop Industrie S.A. filed a joint opposition against Amgen’s patent, and each of Eli Lilly and Company, Regeneron, and Strawman Ltd., also filed oppositions to Amgen’s patent. Amgen’s response is due by May 10, 2017. On March 24, 2016, Amgen was served with a patent revocation action in the Patent Court of the Chancery Division of the High Court of Justice of England and Wales by Pfizer seeking to revoke European Patent (UK) No. 2,215,124, the patent issuing in the United Kingdom from EP 2,215,124. On November 16, 2016, following Pfizer’s announcement that it was terminating its PCSK9 program, the court entered an order staying the case by consent of the parties. We are also involved in and expect future involvement in additional disputes regarding our PCSK9 patents in other jurisdictions and regions, including matters filed against us and that we have filed in the United Kingdom, Germany and France. AMJEVITA ™ Patent Litigation On August 4, 2016, AbbVie Inc. and AbbVie Biotechnology Ltd. (collectively, AbbVie) filed a lawsuit in the Delaware District Court against Amgen Inc. and Amgen Manufacturing, Ltd. (collectively, Amgen), alleging infringement of U.S Patent Nos. 8,663,945; 8,911,964; 8,916,157; 8,961,973; 8,986,693; 9,096,666; 9,220,781; 9,272,041; 9,359,434; and 9,365,645. AbbVie seeks an injunction prohibiting Amgen from commercializing ABP 501 (also known as AMJEVITA ™ , a biosimilar to AbbVie’s HUMIRA ® ) prior to the expiration of the patents-in-suit and compelling Amgen to provide AbbVie with at least 180 days-notice of first commercial marketing. On September 13, 2016, Amgen responded to the complaint denying AbbVie’s allegations and counterclaimed, seeking judgment that the patents-in-suit are invalid and/or not infringed by Amgen. On September 23, 2016, the FDA approved AMJEVITA ™ . On October 7, 2016, AbbVie responded to Amgen’s counterclaims. Trial is scheduled to begin November 4, 2019. Sensipar ® Patent Litigation Amgen filed 13 separate lawsuits in the Delaware District Court for infringement of our U.S. Patent No. 9,375,405 (the ‘405 Patent) against: (1) Aurobindo Pharma Ltd. and Aurobindo Pharma USA, Inc., (2) MicroLabs Ltd. and Micro Labs USA, Inc., (3) Watson Laboratories, Inc., Actavis, Inc. and Actavis Pharma, Inc., and (4) Cipla Limited and Cipla USA, Inc. (collectively, Cipla), each on September 22, 2016; (5) Strides Pharma Global PTE Limited and Strides Pharma, Inc., and (6) Sun Pharma Global FZE and Sun Pharmaceutical Industries, Inc., each on September 29, 2016; (7) Dr. Reddy’s Laboratories, Ltd., and Dr. Reddy’s Laboratories, Inc., and (8) Ajanta Pharma Limited and Ajanta Pharma USA, Inc., each on October 5, 2016; (9) Amneal Pharmaceuticals LLC, Amneal Pharmaceuticals of New York, LLC, and Amneal Pharmaceuticals Co. India Private Limited, (10) Apotex Inc. and Apotex Corp., (collectively, Apotex), (11) Hetero USA Inc., Hetero Labs Ltd. and Hetero Labs Ltd. Unit V, and (12) Breckenridge Pharmaceutical, Inc., each on October 11, 2016; and (13) Mylan Pharmaceuticals Inc. and Mylan Inc. (collectively, Mylan) on February 3, 2017. The ’405 Patent is entitled “Rapid Dissolution Formulation of a Calcium Receptor-Active Compound” and expires in 2026. In each of the 13 lawsuits, Amgen seeks an order of the Delaware District Court making any U.S. Food and Drug Administration (FDA) approval of the defendants’ generic versions of Sensipar ® effective no earlier than the expiration of the ‘405 Patent. In each lawsuit, all defendants except Mylan have responded to the complaint denying infringement and seeking judgment that the ‘405 Patent is invalid and/or not infringed. KYPROLIS ® Patent Litigation Our subsidiary Onyx Therapeutics, Inc. (Onyx Therapeutics), filed four separate lawsuits in the Delaware District Court against: Cipla, on October 24, 2016; Sagent Pharmaceuticals, Inc., on October 26, 2016; Breckenridge Pharmaceutical, Inc., on October 27, 2016; and Fresenius Kabi, USA LLC, Fresenius Kabi USA, Inc., Fresenius Pharmaceuticals Holding, Inc., and Fresenius Kabi Oncology Limited, on November 1, 2016; each for infringing U.S. Patent Nos. 7,232,818; 7,417,042; 7,491,704; 7,737,112; 8,129,346; 8,207,125; 8,207,126; 8,207,127; and 8,207,297. By joint stipulation of the parties, Fresenius Pharmaceuticals Holding, Inc. and Fresenius Kabi Oncology Limited were subsequently dismissed from that lawsuit. Onyx Therapeutics also filed four separate lawsuits in the Delaware District Court against: MSN Laboratories Private Limited and MSN Pharmaceuticals, Inc., on October 26, 2016; Dr. Reddy’s Laboratories, Inc. and Dr. Reddy’s Laboratories, Ltd., on November 1, 2016; Qilu Pharma, Inc. and Qilu Pharmaceutical Co. Ltd. (collectively, Qilu) on November 1, 2016; and Apotex, on November 8, 2016; each for infringing U.S. Patent No. 7,737,112. Onyx Therapeutics also filed a separate lawsuit in the Delaware District Court against InnoPharma, Inc. on November 7, 2016 for infringement of U.S. Patent Nos. 7,417,042; 7,737,112; and 8,207,297. These lawsuits are based on Abbreviated New Drug Applications (ANDAs) that seek approval to market generic versions of KYPROLIS ® before expiration of the asserted patent or patents. In each lawsuit, Onyx Therapeutics seeks an order of the Delaware District Court making any FDA approval of the defendant’s ANDA effective no earlier than the expiration of all asserted patents. Responses to the complaints have been filed by defendants alleging non-infringement and invalidity of the patents in all the lawsuits. Other Biosimilars Patent Litigations We have filed a number of lawsuits against manufacturers of products that purport to be biosimilars of certain of our products. In each case, our complaint alleges that the manufacturer’s actions infringe certain patents we hold and that the manufacturer has failed to comply with certain provisions of the Biologics Price Competition and Innovation Act (BPCIA). Sandoz Pegfilgrastim Litigation On May 12, 2016, Amgen filed a lawsuit in the U.S. District Court for the Northern District of California (the California Northern District Court) against Sandoz Inc., Sandoz International GmbH and Sandoz GmbH (collectively Sandoz) and Lek Pharmaceuticals d.d. for infringement of U.S. Patent Nos. 8,940,878 and 5,824,784 in accordance with the patent provisions of the BPCIA. On June 23, 2016, Sandoz responded to the complaint, denying infringement and seeking judgment that the patents-in-suit are invalid and/or not infringed. On December 7, 2016, by joint stipulation of the parties, the California Northern District Court dismissed from the case all claims and counterclaims related to U.S. Patent No. 5,824,784. Trial is scheduled to begin December 18, 2017. Sandoz Filgrastim Litigation On October 24, 2014, Amgen and Amgen Manufacturing, Limited (collectively Amgen) filed a lawsuit in the California Northern District Court against Sandoz for infringement of our U.S. Patent No. 6,162,427 (the ‘427 Patent) and various state law claims. The lawsuit stems from Sandoz filing an application for FDA licensure of a filgrastim product as biosimilar to NEUPOGEN ® under the BPCIA, while having deliberately failed to comply with the BPCIA’s disclosure requirement to Amgen as the reference product sponsor. By its complaint, Amgen sought, among other remedies, an injunction to cease Sandoz’s unauthorized reliance on Amgen’s BLA for filgrastim, including an order compelling Sandoz to suspend FDA review of their application until there is restitution for its non-compliance with the BPCIA, an injunction to prevent Sandoz from commercially marketing the biosimilar product until Amgen is restored to the position it would have been in had Sandoz met their obligations under the BPCIA and an injunction to prevent Sandoz from infringing, or inducing any infringing use of, filgrastim. On March 19, 2015, the California Northern District Court issued an order dismissing with prejudice Amgen’s state law claims, and entered judgment in favor of Sandoz Inc. on its cross-motion for partial judgment on the pleadings. The order also denied Amgen’s motion for a preliminary injunction, as well as Amgen’s motion for partial judgment on the pleadings. On a joint motion of the parties, on March 25, 2015, the California Northern District Court entered final judgment on the claims and counterclaims decided by the court’s March 19 order. The remaining patent infringement claim, counterclaim and defenses were stayed by the court pending appeal. On March 25, 2015, Amgen appealed both the judgment in favor of Sandoz Inc. and the denial of Amgen’s motion for preliminary injunction to the Federal Circuit Court. On May 5, 2015, the Federal Circuit Court entered an injunction prohibiting Sandoz Inc. from marketing, selling, offering for sale, or importing into the United States Sandoz’s FDA-approved Zarxio ® biosimilar product until the Federal Circuit Court resolved the appeal. On July 21, 2015, the Federal Circuit Court affirmed the district court’s dismissal of Amgen’s state law claims and directed the California Northern District Court to enter judgment on Sandoz’s counter-claims consistent with the Federal Circuit’s interpretation of the BPCIA. 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 Federal Circuit 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 Inc.’s notice given after FDA approval), and remanded for the district court to consider the patent infringement claim and counterclaims. Sandoz launched Zarxio ® in the United States on September 3, 2015. On August 20, 2015, Amgen and Sandoz each petitioned the Federal Circuit Court requesting rehearing en banc of various aspects of the Federal Circuit Court opinion on which the other had prevailed. On October 16, 2015, the Federal Circuit Court denied each of Amgen’s and Sandoz’s petitions for rehearing en banc. On September 8, 2015, the California Northern District Court granted the parties’ joint motion to lift the stay of the case, allowing the remaining patent infringement claim, counterclaim and defenses to proceed. Amgen filed a first supplemental and amended complaint on October 15, 2015, adding to the lawsuit Sandoz’s infringement of U.S. Patent No. 8,940,878, which covers methods of purifying proteins. On August 4, 2016, the California Northern District Court entered an order construing patent claim terms of the ‘427 Patent and our U.S. Patent No 8,940,878. Trial is scheduled to begin December 18, 2017. On February 16, 2016, Sandoz filed a petition for certiorari with the U.S. Supreme Court seeking review of the Federal Circuit Court ruling concluding that a biosimilar applicant must give 180-day advance notice of first marketing and that notice can be given only after the FDA has licensed the biosimilar product. On March 21, 2016, Amgen filed a brief in opposition to Sandoz’s petition and a conditional cross-petition for certiorari requesting that the U.S. Supreme Court also review the Federal Circuit Court’s ruling that the only remedy available when a biosimilar applicant refuses to provide its BLA is to bring a patent infringement claim. On January 13, 2017, the U.S. Supreme Court granted certiorari on both Sandoz’s petition and Amgen’s conditional cross-petition. Sandoz Etanercept Litigation On February 26, 2016, two affiliates of Amgen Inc. (Immunex Corporation and Amgen Manufacturing, Limited (collectively Amgen)), along with Hoffmann-La Roche Inc. (Roche), filed a lawsuit in U.S. District Court for the District of New Jersey (the New Jersey District Court) against Sandoz. This lawsuit stems from Sandoz’s submission of an application for FDA licensure of an etanercept product as biosimilar to Amgen’s ENBREL. Amgen and Roche have asserted infringement of five patents: U.S. Patent Nos. 8,063,182; 8,163,522; 7,915,225; 8,119,605; and 8,722,631. By its complaint, Amgen and Roche are seeking an injunction to prohibit Sandoz from commercializing its biosimilar etanercept product in the United States prior to the expiry of such patents. Responses have been filed by all Sandoz defendants denying infringement and/or asserting that the patents at issue are valid. On August 11, 2016, and subject to the terms of a confidential stipulation, the New Jersey District Court entered a preliminary injunction prohibiting Sandoz from making, using, importing, selling or offering for sale Sandoz’s etanercept product. Trial is scheduled to start on April 17, 2018. On August 30, 2016, the FDA approved Sandoz’s Erelzi ™ , a biosimilar to ENBREL. Apotex Pegfilgrastim/Filgrastim Litigation On August 6, 2015, Amgen filed a lawsuit in the U.S. District Court for the Southern District of Florida (the Florida Southern District Court) against Apotex for infringement of our U.S. Patent Nos. 8,952,138 (the ‘138 Patent) and 5,824,784 (the ‘784 Patent) in accordance with the patent provisions of the BPCIA and for a declaration that Apotex’s pre-licensure notice of commercial marketing is legally ineffective. This lawsuit stems from Apotex’s submission of an application for FDA licensure of a pegfilgrastim product as biosimilar to Amgen’s Neulasta ® . By its complaint, Amgen seeks, among other remedies, an injunction prohibiting Apotex from infringing the ‘138 and ‘784 patents and enjoining Apotex from commencing commercial marketing of any biosimilar pegfilgrastim product until a date that is at least 180 days after Apotex provides legally effective notice to Amgen. Apotex answered the complaint on October 5, 2015, denying patent infringement, alleging that the patents are invalid, alleging sham litigation in violation of the Sherman Antitrust Act, seeking a declaration that the ‘138 patent is unenforceable for patent misuse and seeking a declaration on the interpretation of the BPCIA commercial notice provision. On October 2, 2015, Amgen filed a second lawsuit in the Florida Southern District Court against Apotex for infringement of the ‘138 Patent and the ‘427 Patent and in accordance with the patent provisions of the BPCIA and for a declaration that Apotex’s pre-licensure notice of commercial marketing is legally ineffective. This lawsuit stems from Apotex’s submission of an application for FDA licensure of a filgrastim product as biosimilar to NEUPOGEN ® . By its complaint, Amgen seeks, amongst other remedies, an injunction prohibiting Apotex from infringing the ‘138 and ‘427 patents and enjoining Apotex from commencing commercial marketing of any biosimilar filgrastim product until a date that is at least 180 days after Apotex provides legally effective notice to Amgen. On November 3, 2015, the Florida Southern District Court consolidated the two lawsuits into a single case. On December 9, 2015, the Florida Southern District Court granted Amgen’s motion for preliminary injunction prohibiting Apotex from commercializing its biosimilar pegfilgrastim product until a date that is at least 180 days after Apotex provides legally effective commercial notice to Amgen. On July 5, 2016, the Federal Circuit Court affirmed the Florida Southern District Court injunction, holding that the 180-day notice of commercial marketing is mandatory under the BPCIA and can be given only post-FDA licensure of the biosimilar product. On September 9, 2016, Apotex petitioned the U.S. Supreme Court for certiorari, seeking review of the Federal Circuit Court holding. On December 12, 2016, the U.S. Supreme Court denied Apotex’s petition for certiorari. On June 24, 2016, the Florida Southern District Court issued a further claim construction decision granting the motion for summary judgment of no literal infringement of the ‘138 Patent filed by Apotex and denying the motion with respect to no infringement under the doctrine of equivalents. On June 15, 2016, the Florida Southern District Court dismissed without prejudice all claims and counterclaims related to the ‘427 Patent and the ‘784 Patent on the parties’ joint stipulation of dismissal. In a separate order that same day, the Florida Southern District Court also dismissed without prejudice all counterclaims related to unlawful monopolization in violation of the Sherman Antitrust Act on the parties’ joint stipulation of dismissal. On July 11, 2016, trial began on infringement of the ‘138 Patent and Apotex’s counterclaims and defenses. On September 16, 2016, the Florida Southern District Court entered final judgment that Apotex’s process of manufacturing its filgrastim and pegfilgrastim products do not infringe the ’138 Patent, dismissing without prejudice Apotex’s remaining invalidity counterclaim for patent invalidity, and making permanent the injunction compelling Apotex to provide 180-day advance notice of first commercial marketing of its filgrastim and pegfilgrastim products if and when the FDA approves these products. On October 3, 2016, Amgen filed an appeal of the final judgment to the Federal Circuit Court. Hospira Epoetin Alfa Litigation On September 18, 2015, Amgen filed a lawsuit in the Delaware District Court against Hospira, Inc. (Hospira), a subsidiary of Pfizer, for infringement of Amgen’s U.S. Patent Nos. 5,856,298 (the ‘298 Patent) and 5,756,349 (the ‘349 Patent) in accordance with the patent provisions of the BPCIA and for a declaration that Hospira has failed to comply with certain requirements of the BPCIA. This lawsuit stems from the submission by Hospira under the BPCIA of an application for FDA licensure of an epoetin product as biosimilar to Amgen’s EPOGEN ® . Amgen seeks a declaration that the BPCIA requires that Hospira provide Amgen with notice of commercial marketing 180 days before it first begins commercial marketing of any biosimilar epoetin product and that this notice can be given only after the FDA has licensed Hospira’s biosimilar product. By its complaint, Amgen seeks, among other remedies, an injunction prohibiting Hospira from using or selling infringing cells and/or product manufactured during the ‘298 or the ‘349 patent terms and enjoining Hospira from commencing commercial marketing of any biosimilar epoetin product until a date that is at least 180 days after Hospira provides legally effective notice to Amgen. On November 12, 2015, Hospira filed a motion to dismiss the one count of Amgen’s complaint which seeks a declaration that Hospira has failed to comply with the notice requirements of the BPCIA. On August 5, 2016, the Delaware District Court denied the motion filed by Hospira to dismiss Amgen’s complaint. On August 19, 2016, Hospira responded to the complaint denying the allegations of the First Amended Complaint and seeking judgment that the patents-in-suit are invalid and not infringed by Hospira. On August 15, 2016, Amgen moved to amend the First Amended Complaint to add additional bases for infringement of our ‘349 Patent and to add three additional third-party defendants. On October 3, 2016, the Delaware District Court granted-in-part and denied-in-part Amgen’s motion to amend, permitting Amgen to add the additional bases for infringement but not the additional parties to the existing lawsuit. On January 23, 2017, the Delaware District Court entered an order construing the claims of the ‘349 patent and the ‘298 patent and holding that two claims of the ‘298 patent are invalid for failure to properly narrow the claim from which they depend. The Delaware District Court has set a September 18, 2017 trial date. On June 3, 2016, Amgen filed a notice of appeal seeking review of the Delaware District Court’s order that Hospira need not provide Amgen discovery of certain of its manufacturing processes that Hospira withheld during the BPCIA dispute resolution process. On August 5, 2016, the Federal Circuit Court denied Hospira’s motion to dismiss Amgen’s appeal. Onyx Litigation Between August 28, 2013 and September 16, 2013, nine plaintiffs filed purported class action lawsuits against Onyx, its directors, Amgen and Arena Acquisition Company (Arena), and unnamed “John Doe” defendants in connection with Amgen’s acquisition of Onyx. Seven of those purported class actions were brought in the Superior Court of the State of California for the County of San Mateo (the San Mateo County Superior Court), captioned Lawrence I. Silverstein and Phil Rosen v. Onyx Pharmaceuticals, Inc., et al. (August 28, 2013) (“ Silverstein ”), Laura Robinson v. Onyx Pharmaceuticals, Inc., et al. (originally filed in the Superior Court for the County of San Francisco on August 28, 2013, and re-filed in the San Mateo County Superior Court on August 29, 2013) (“ Robinson ”), John Solak v. Onyx Pharmaceuticals, Inc., et al. (August 30, 2013) (“ John Solak ”), Louisiana Municipal Police Employees’ Retirement System and Hubert Chow v. Onyx Pharmaceuticals, Inc., et al. (September 3, 2013) (“ Louisiana Municipal ”), Laurine Jonopulos v. Onyx Pharmaceuticals, Inc., et al. (September 4, 2013) (“ Jonopulos ”), Clifford G. Martin v. Onyx Pharmaceuticals, Inc., et al . (September 9, 2013) (“ Martin ”) and Merrill L. Magowan v. Onyx Pharmaceuticals, Inc. et al. (September 9, 2013) (“ Magowan ”). The eighth and ninth purported class actions were brought in the Court of Chancery of the State of Delaware, captioned Mark D. Smilow, IRA v. Onyx Pharmaceuticals Inc., et al. (August 29, 2013) (“ Smilow ”) and William L. Fitzpatric v. Onyx Pharmaceuticals, Inc., et al. (September 16, 2013) (“ Fitzpatric ”). On September 5, 2013, the plaintiff in the John Solak case dismissed his case. On September 10, 2013, the plaintiff in the Smilow case dismissed his case. On September 10, 2013, plaintiffs in the Silverstein and Louisiana Municipal cases filed an amended complaint alleging substantially the same claims and seeking substantially the same relief as in their individual purported class action lawsuits. Each of the lawsuits alleges that the Onyx director defendants breached their fiduciary duties to Onyx shareholders, and that the other defendants aided and abetted such breaches, by seeking to sell Onyx through an allegedly unfair process and for an unfair price and on unfair terms. The Magowan and Fitzpatric complaints and the amended complaint filed in the Silverstein and Louisiana Municipal cases also alleged that the individual defendants breached their fiduciary duties with respect to the contents of the tender offer solicitation material. Each of the lawsuits sought, among other things, rescission of the merger agreement and attorneys’ fees and costs, and certain of the lawsuits sought other relief. The Silverstein , Robinson , Louisiana Municipal and Jonopulos cases were designated as “complex” and assigned to the Honorable Marie S. Weiner of the San Mateo County Superior Court, who subsequently entered an order consolidating the Silverstein , Robinson , Louisiana Municipal , Jonopulos , Martin and Magowan cases (the Consolidated Cases). On October 31, 2013, the plaintiffs in the Consolidated Cases filed a consolidated class action complaint seeking certification of a class and alleging breach of fiduciary duties of loyalty and good faith against the Onyx directors and aiding and abetting breach of fiduciary duties against Onyx. The complaint sought certification of a class of all Onyx shareholders, damages (including pre- and post-judgment interest), attorneys’ fees and expenses plus other relief. The plaintiffs in the Consolidated Cases simultaneously filed a notice of dismissal without prejudice of Amgen and Arena. On January 9, 2014, the court sustained a demurrer without leave to amend as to Onyx. The plaintiff in the Fitzpatric case dismissed his case on August 22, 2014. On January 30, 2015, the court granted class certification and appointed Mr. Rosen as class representative in the Consolidated Cases. Following a March 2, 2016, notice of settlement filed by the plaintiffs and the Onyx director defendants, on November 21, 2016, the San Mateo Superior Court entered an order granting final approval of the settlement for an amount immaterial to Amgen. State Derivative Litigation The three state stockholder derivative complaints filed against Amgen, Kevin W. Sharer, George J. Morrow, Dennis M. Fenton, Brian M. McNamee, Roger M. Perlmutter, David Baltimore, Gilbert S. Omenn, Judith C. Pelham, Frederick W. Gluck, Jerry D. Choate, J. Paul Reason, Frank J. Biondi, Jr., Leonard D. Schaeffer, Frank C. Herringer, Richard D. Nanula, Willard H. Dere, Edward V. Fritzky, Franklin P. Johnson, Jr. and Donald B. Rice as defendants (the State Defendants) on May 1, 2007 ( Larson v. Sharer, et al. , & Anderson v. Sharer, et al. ), and August 13, 2007 ( Weil v. Sharer, et al. ) in the Superior Court of the State of California, Ventura County (the Ventura County Superior Court) were consolidated by the Ventura County Superior Court under one action captioned Larson v. Sharer, et al . The consolidated complaint was filed on July 5, 2007. The complaint alleges that the State Defendants breached their fiduciary duties, wasted corporate assets, were unjustly enriched and violated the California Corporations Code. Plaintiffs allege that the State Defendants failed to disclose and/or misrepresented results of Aranesp ® clinical studies, marketed both Aranesp ® and EPOGEN ® for off-label uses and that these actions or inactions caused stockholders to suffer damages. The complaints also allege insider trading by the State Defendants. The plaintiffs seek treble damages based on various causes of action, reformed corporate governance, equitable and/or injunctive relief, restitution, disgorgement of profits, benefits and other compensation, and legal costs. An amended consolidated complaint was filed on March 13, 2008, adding Anthony Gringeri as a State Defendant and removing the causes of action for insider selling and misappropriation of information, violation of California Corporations Code Section 25402 and violation of California Corporations Code Section 25403. On July 14, 2008, the Ventura County Superior Court dismissed without prejudice the consolidated state derivative class action. On July 24, 2013, the plaintiffs filed an amended complaint asserting additional grounds for the defendants’ alleged breaches of fiduciary duty. By stipulation of the parties, the case was stayed pending resolution of the In re Amgen Inc. Securities Litigation action. Final settlement by the parties of the In re Amgen Inc. Securities Litigation action was approved by the court in October 2016, and on February 10, 2017, the Ventura County Superior Court lifted the stay in Larson v. Sharer, et al . Federal |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment information | Segment information We operate in one business segment—human therapeutics. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting, consistent with internal management reporting. Enterprise-wide disclosures about product sales; revenues and long-lived assets by geographic area; and revenues from major customers are presented below. Revenues Revenues were as follows (in millions): Years ended December 31, 2016 2015 2014 Product sales: ENBREL $ 5,965 $ 5,364 $ 4,688 Neulasta ® 4,648 4,715 4,596 Aranesp ® 2,093 1,951 1,930 Prolia ® 1,635 1,312 1,030 Sensipar ® /Mimpara ® 1,582 1,415 1,158 XGEVA ® 1,529 1,405 1,221 EPOGEN ® 1,282 1,856 2,031 NEUPOGEN ® 765 1,049 1,159 KYPROLIS ® 692 512 331 Vectibix ® 611 549 505 Nplate ® 584 525 469 Repatha ® 141 10 — BLINCYTO ® 115 77 3 Other 250 204 206 Total product sales 21,892 20,944 19,327 Other revenues 1,099 718 736 Total revenues $ 22,991 $ 21,662 $ 20,063 Geographic information Outside the United States, we sell products principally in Europe. The geographic classification of product sales was based on the location of the customer. The geographic classification of all other revenues was based on the domicile of the entity from which the revenues were earned. Certain geographic information with respect to revenues and long-lived assets (consisting of property, plant and equipment, net) was as follows (in millions): Years ended December 31, 2016 2015 2014 Revenues: United States $ 18,326 $ 17,167 $ 15,396 Rest of the world (ROW) 4,665 4,495 4,667 Total revenues $ 22,991 $ 21,662 $ 20,063 December 31, 2016 2015 Long-lived assets: United States $ 2,328 $ 2,275 Puerto Rico 1,591 1,679 ROW 1,042 953 Total long-lived assets $ 4,961 $ 4,907 Major customers In the United States, we sell primarily to pharmaceutical wholesale distributors that we utilize as the principal means of distributing our products to healthcare providers. Outside the United States, we sell principally to healthcare providers and/or pharmaceutical wholesale distributors depending on the distribution practice in each country. We monitor the financial condition of our larger customers and limit our credit exposure by setting credit limits and, in certain circumstances, by requiring letters of credit. We had product sales to three customers each accounting for more than 10% of total revenues for each of the years ended December 31, 2016 , 2015 and 2014 . For 2016, on a combined basis, these customers accounted for 81% and 96% of total gross revenues and U.S. gross product sales, respectively, as noted in the following table. Certain information with respect to these customers was as follows (dollar amounts in millions): Years ended December 31, 2016 2015 2014 AmerisourceBergen Corporation: Gross product sales $ 10,100 $ 10,038 $ 9,142 % of total gross revenues 31 % 34 % 34 % % of U.S. gross product sales 38 % 42 % 43 % McKesson Corporation: Gross product sales $ 9,710 $ 8,766 $ 8,011 % of total gross revenues 30 % 30 % 30 % % of U.S. gross product sales 34 % 34 % 35 % Cardinal Health, Inc.: Gross product sales $ 6,520 $ 5,045 $ 3,407 % of total gross revenues 20 % 17 % 13 % % of U.S. gross product sales 24 % 21 % 16 % At December 31, 2016 and 2015 , amounts due from these three customers each exceeded 10% of gross trade receivables and accounted for 76% and 75% , respectively, of net trade receivables on a combined basis. At December 31, 2016 and 2015 , 21% and 23% , respectively, of trade receivables, net, were due from customers located outside the United States, primarily in Europe. Our total allowance for doubtful accounts as of December 31, 2016 and 2015 was not material. |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | Quarterly financial data (unaudited) 2016 Quarters ended (In millions, except per share data) December 31 September 30 June 30 March 31 Product sales $ 5,663 $ 5,516 $ 5,474 $ 5,239 Gross profit from product sales $ 4,596 $ 4,489 $ 4,424 $ 4,221 Net income $ 1,935 $ 2,017 $ 1,870 $ 1,900 Earnings per share: Basic $ 2.61 $ 2.70 $ 2.49 $ 2.52 Diluted $ 2.59 $ 2.68 $ 2.47 $ 2.50 2015 Quarters ended (In millions, except per share data) December 31 September 30 June 30 March 31 Product sales $ 5,329 $ 5,516 $ 5,225 $ 4,874 Gross profit from product sales $ 4,258 $ 4,482 $ 4,136 $ 3,841 Net income $ 1,800 $ 1,863 $ 1,653 $ 1,623 Earnings per share: Basic $ 2.39 $ 2.46 $ 2.18 $ 2.13 Diluted $ 2.37 $ 2.44 $ 2.15 $ 2.11 |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II AMGEN INC. VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2016, 2015 and 2014 (In millions) Allowance for doubtful accounts Balance at beginning of period Additions charged to costs and expenses Other additions Deductions Balance at end of period Year ended December 31, 2016 $ 55 $ 11 $ — $ 15 $ 51 Year ended December 31, 2015 $ 50 $ 18 $ — $ 13 $ 55 Year ended December 31, 2014 $ 59 $ 3 $ — $ 12 $ 50 |
Summary of significant accoun29
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
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. |
Principles of consolidation | Principles of consolidation The 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 consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
Product sales | Product sales Sales of our products are recognized when shipped and title and risk of loss have passed. Product sales are recorded net of accruals for estimated rebates, wholesaler chargebacks, discounts and other deductions (collectively, sales deductions) and returns. Taxes collected from customers and remitted to government authorities related to the sales of the Company’s products, primarily in Europe, are excluded from revenues. |
Other revenues | Other revenues Other revenues consist primarily of royalty income and corporate partner revenues. Royalties from licensees are based on third-party sales of licensed products and are recorded in accordance with contract terms when third-party results are reliably measurable and collectability is reasonably assured. Royalty estimates are made in advance of amounts collected using historical and forecasted trends. Corporate partner revenues are composed mainly of license fees and milestones earned, our share of commercial profits generated from collaborations and amounts earned for certain research and development (R&D) services performed for others including Kirin-Amgen, Inc. (K-A), which are recognized as the R&D services are performed. See Multiple-deliverable revenue arrangements, discussed below, Note 7, Collaborative arrangements, and Note 8, Related party transactions. |
Multiple-deliverable revenue arrangements | Multiple-deliverable revenue arrangements From time to time, we enter into arrangements for the R&D, manufacture and/or commercialization of products and product candidates. These arrangements may require us to deliver various rights, services and/or goods across the entire life cycle of a product or product candidate, including (i) intellectual property rights/licenses; (ii) R&D services; (iii) manufacturing services; and/or (iv) commercialization services. The underlying terms of these arrangements generally provide for consideration to Amgen in the form of non-refundable upfront license payments, R&D and commercial performance milestone payments, cost sharing and/or royalty payments. In arrangements involving the delivery of more than one element, each required deliverable is evaluated to determine whether it qualifies as a separate unit of accounting. For Amgen, this determination is generally based on whether the deliverable has “stand-alone value” to the customer. The arrangement’s consideration that is fixed and determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price (BESP). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold by us on a stand-alone basis. In general, the consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Consideration associated with at-risk substantive performance milestones is recognized as revenue upon the achievement of the related milestone, as defined in the respective contracts. |
Research and development costs | Research and development costs R&D costs are expensed as incurred and include primarily salaries, benefits and other staff-related costs; facilities and overhead costs; clinical trial and related clinical manufacturing costs; contract services and other outside costs; information systems’ costs and amortization of acquired technology used in R&D with alternative future uses. R&D expenses also include costs and cost recoveries associated with third-party R&D arrangements such as with K-A, including upfront fees and milestones paid to third parties in connection with technologies which had not reached technological feasibility and did not have an alternative future use. Net payment or reimbursement of R&D costs is recognized when the obligations are incurred or as we become entitled to the cost recovery. See Note 7, Collaborative arrangements, and Note 8, Related party transactions. |
Selling, general and administrative costs | Selling, general and administrative costs Selling, general and administrative (SG&A) costs are composed primarily of salaries, benefits and other staff-related costs associated with sales and marketing, finance, legal and other administrative personnel; facilities and overhead costs; outside marketing, advertising and legal expenses; the U.S. healthcare reform federal excise fee on Branded Prescription Pharmaceutical Manufacturers and Importers; and other general and administrative costs. Advertising costs are expensed as incurred. SG&A expenses also include costs and cost recoveries associated with marketing and promotion efforts under certain collaboration arrangements. Net payment or reimbursement of SG&A costs is recognized when the obligations are incurred or we become entitled to the cost recovery. See Note 7, Collaborative arrangements. |
Stock-based compensation | Stock-based compensation We have stock-based compensation plans under which various types of equity-based awards are granted, including restricted stock units (RSUs), performance units and stock options. The estimated fair values of RSUs and stock option awards which are subject only to service conditions with graded vesting are generally recognized as compensation expense on a straight-line basis over the service period, net of estimated forfeitures. The estimated fair values of performance unit awards are generally recognized as compensation expense ratably from the grant date to the end of the performance period. See Note 4, Stock-based compensation. |
Income taxes | Income taxes We provide for income taxes based on pretax income and applicable tax rates available in the various jurisdictions in which we operate. Deferred income taxes are recorded for the expected tax consequences of temporary differences between the bases of assets and liabilities for financial reporting purposes and amounts recognized for income tax purposes. We record a valuation allowance to reduce our deferred tax assets to the amount of future tax benefit that is more likely than not to be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits (UTBs) is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. We recognize both accrued interest and penalties, where appropriate, related to UTBs in income tax expense. See Note 5, Income taxes. |
Business combinations | Business combinations Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired, including in-process research and development (IPR&D) projects, and liabilities assumed are recorded at their respective fair values as of the acquisition date in our consolidated financial statements. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Contingent consideration obligations incurred in connection with a business combination (including the assumption of an acquiree’s liability arising from a business combination it consummated prior to our acquisition) are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair values are recorded in earnings. See Note 3, Business combinations, and Note 16, Fair value measurement. |
Cash equivalents | Cash equivalents We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and which mature within three months from the date of purchase. |
Available-for-sale investments | Available-for-sale investments We consider our investment portfolio available-for-sale and, accordingly, these investments are recorded at fair value with unrealized gains and losses generally recorded in other comprehensive income. Investments with maturities beyond one year may be classified as short-term marketable securities in the Consolidated Balance Sheets due to their highly liquid nature and because they represent the Company’s investments that are available for current operations. See Note 9, Available-for-sale investments, and Note 16, Fair value measurement. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost, which includes amounts related to materials, labor and overhead, is determined in a manner that approximates the first-in, first-out method. See Note 10, Inventories. |
Derivatives | Derivatives We recognize all of our derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. The accounting for changes in the fair value of a derivative instrument depends upon whether the derivative has been formally designated and qualifies as part of a hedging relationship under the applicable accounting standards and, further, on the type of hedging relationship. For derivatives formally designated as hedges, we assess both at inception and quarterly thereafter, whether the hedging derivatives are highly effective in offsetting changes in either the fair value or cash flows of the hedged item. Our derivatives that are not designated and do not qualify as hedges are adjusted to fair value through current earnings. See Note 16, Fair value measurement, and Note 17, Derivative instruments. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation, amortization and, if applicable, impairment charges. We review our property, plant and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation is provided over the assets’ useful lives on a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or lease terms. See Note 11, Property, plant and equipment. |
Goodwill and other intangible assets | Goodwill and other intangible assets Finite-lived intangible assets are recorded at cost, net of accumulated amortization and, if applicable, impairment charges. Amortization of finite-lived intangible assets is provided over their estimated useful lives on a straight-line basis or the pattern in which economic benefits are consumed, if reliably determinable. We review our finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. See Note 12, Goodwill and other intangible assets. The estimated fair values of IPR&D projects acquired in a business combination which are not complete are capitalized and accounted for as indefinite-lived intangible assets until completion or abandonment of the related R&D efforts. Upon successful completion of the project, the capitalized amount is amortized over its estimated useful life. If a project is abandoned, all remaining capitalized amounts are written-off immediately. There are often major risks and uncertainties associated with IPR&D projects as we are required to obtain regulatory approvals in order to be able to market the resulting products. Such approvals require completing clinical trials that demonstrate a product candidate is safe and effective. Consequently, the eventual realized value of the acquired IPR&D project may vary from its estimated fair value at the date of acquisition, and IPR&D impairment charges may occur in future periods. Capitalized IPR&D projects are tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We consider various factors for potential impairment, including the current legal and regulatory environment and the competitive landscape. Adverse clinical trial results, significant delays in obtaining marketing approval, the inability to bring a product to market and the introduction or advancement of competitors’ products could result in partial or full impairment of the related intangible assets. We perform an impairment test of goodwill annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To date, an impairment of goodwill has not been recorded. See Note 12, Goodwill and other intangible assets. |
Contingencies | Contingencies In the ordinary course of business, we are involved in various legal proceedings and other matters such as intellectual property disputes, contractual disputes, governmental investigations and class action suits which are complex in nature and have outcomes that are difficult to predict. (Certain of these proceedings are discussed in Note 18, Contingencies and commitments.) 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 consider all relevant factors when making assessments regarding these contingencies. |
Foreign currency translation | Foreign currency translation The net assets of international subsidiaries where the local currencies have been determined to be the functional currencies are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating net assets of these subsidiaries at changing rates are recognized in other comprehensive income. The earnings of these subsidiaries are translated into U.S. dollars using average exchange rates. |
Recent accounting pronouncements | Recent accounting pronouncements In 2016, we retrospectively adopted a new accounting standard that amends the presentation of debt issuance costs. Such costs are now presented as a direct deduction from the carrying amount of the debt liability and not as deferred charges presented as assets on our Consolidated Balance Sheets. As a result of adopting this new accounting standard, our Consolidated Balance Sheet as of December 31, 2015, was restated to reflect this impact, which reduced both Other current assets and the Current portion of long-term debt by $3 million and both Other assets and Long-term debt by $124 million . In 2016, we adopted a new accounting standard that amends certain aspects of the accounting for employee share-based payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. See Note 5, Income taxes. Previously, such amounts were recognized as increases and decreases in common stock and additional paid-in capital. This aspect of the standard was adopted prospectively , and accordingly, the Provision for income taxes for the year ended December 31, 2016, includes $122 million of excess tax benefits arising from share-based payments. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring (i) that excess income tax benefits and deficiencies be classified in Cash flows from operating activities (such amounts were previously included in Cash flows from financing activities) and (ii) that cash paid to taxing authorities arising from the withholding of shares from employees be classified in Cash flows from financing activities (such amounts were previously included in Cash flows from operating activities). We adopted the aspects of the standard affecting the cash flow presentation retrospectively, and accordingly, to conform to the current year presentation, in the Consolidated Statement of Cash Flows for the years ended December 31, 2015 and 2014, we reclassified: (i) $253 million and $172 million , respectively, of excess tax benefits from Net cash used in financing activities to Net cash provided by operating activities and (ii) $401 million and $225 million , respectively, of cash paid to taxing authorities arising from withholding of shares from employees from Net cash provided by operating activities to Net cash used in financing activities. In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional, clarifying standards to address issues arising from implementation of the new revenue standard. The new revenue standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The new standards are required to be adopted using either a full retrospective or a modified retrospective approach. We expect to adopt this standard using the modified retrospective approach beginning in 2018. We have substantially completed our impact assessment and do not currently anticipate a material impact to our Total revenues. We continue to review the impact that this new standard will have on collaboration and license arrangements as well our financial statement disclosures. In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. The impact that this new standard will have on our consolidated financial statements is dependent on the fair value of available-for-sale equity securities in our portfolio in the future. See Note 9, Available-for-sale investments for the fair value of equity securities as of December 31, 2016. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019, and may be adopted earlier. We continue to evaluate the impact that this new standard will have on our consolidated financial statements. We do not expect that this standard will have a material impact to our Consolidated Statements of Income but expect that this standard will have a material impact to assets and liabilities on our Consolidated Balance Sheets upon adoption. In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The new standard also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In January 2017, the FASB issued a new accounting standard that changes the definition of a business to assist entities with evaluating when a set of assets acquired or disposed of should be considered a business. The new standard requires an entity to evaluate if substantially all the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set would not be considered a business. The new standard also requires a business to include at least one substantive process and narrows the definition of outputs. We expect that these provisions will reduce the number of transactions that will be considered a business. The new standard is effective for interim and annual periods beginning on January 1, 2018, and may be adopted earlier. The standard would be applied prospectively to any transaction occurring on or after the adoption date. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. |
Restructuring and other cost 30
Restructuring and other cost savings initiatives (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring charges by type of activity | The following tables summarize the 2015 and 2014 charges recorded related to the restructuring plan by type of activity and the locations recognized within the Consolidated Statements of Income (in millions): During the year ended December 31, 2015 Separation Costs Asset Impairments/ Disposals Accelerated Depreciation Other Total Cost of sales $ — $ — $ 50 $ 2 $ 52 Research and development — — 36 28 64 Selling, general and administrative — — 14 42 56 Other 49 (111 ) — 4 (58 ) Total $ 49 $ (111 ) $ 100 $ 76 $ 114 During the year ended December 31, 2014 Separation Costs Asset Impairments Accelerated Depreciation Other Total Cost of sales $ — $ 81 $ 23 $ — $ 104 Research and development — — 28 21 49 Selling, general and administrative — — 4 5 9 Other 377 6 — 13 396 Total $ 377 $ 87 $ 55 $ 39 $ 558 |
Restructuring liabilities roll forward | The following table summarizes the expenses (excluding non-cash charges) and payments related to the restructuring plan (in millions): During the years ended December 31, Separation Costs Other Total Restructuring liabilities as of December 31, 2013 $ — $ — $ — Expense 353 32 385 Payments (132 ) (9 ) (141 ) Restructuring liabilities as of December 31, 2014 221 23 244 Expense 52 80 132 Payments (178 ) (80 ) (258 ) Restructuring liabilities as of December 31, 2015 95 23 118 Expense 6 13 19 Payments (90 ) (27 ) (117 ) Restructuring liabilities as of December 31, 2016 $ 11 $ 9 $ 20 |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Dezima [Member] | |
Business Acquisition [Line Items] | |
Aggregate acquisition date consideration to acquire an entity | The aggregate acquisition date consideration to acquire Dezima consisted of (in millions): Total cash paid to former shareholders of Dezima $ 300 Fair value of contingent consideration obligations 110 Total consideration $ 410 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Components of stock-based compensation expense recognized in the Consolidated Statements of Income | The following table reflects the components of stock-based compensation expense recognized in our Consolidated Statements of Income (in millions): Years ended December 31, 2016 2015 2014 RSUs $ 177 $ 190 $ 219 Performance units 123 132 171 Stock options 11 — 18 Total stock-based compensation expense, pretax 311 322 408 Tax benefit from stock-based compensation expense (112 ) (120 ) (152 ) Total stock-based compensation expense, net of tax $ 199 $ 202 $ 256 |
Summary of RSUs | The following summarizes select information regarding our RSUs: During the year ended December 31, 2016 Units (in millions) Weighted-average grant date fair value Balance nonvested at December 31, 2015 5.0 $ 118.89 Granted 1.3 $ 156.76 Vested (2.0 ) $ 96.91 Forfeited (0.4 ) $ 131.43 Balance nonvested at December 31, 2016 3.9 $ 141.07 |
Summary of stock options | The following summarizes select information regarding our stock options: During the year ended December 31, 2016 Options (in millions) Weighted- average exercise price Weighted- average remaining contractual life (years) Aggregate intrinsic value (in millions) Balance unexercised at December 31, 2015 2.8 $ 56.19 Granted 1.4 $ 156.35 Exercised (1.0 ) $ 52.98 Expired/forfeited (0.1 ) $ 150.70 Balance unexercised at December 31, 2016 3.1 $ 100.21 6.1 $ 158 Vested or expected to vest at December 31, 2016 3.0 $ 96.92 6.0 $ 158 Exercisable at December 31, 2016 1.8 $ 57.95 3.7 $ 158 |
Weighted average assumptions used and the resulting weighted average grant date fair value of performance units | The weighted-average assumptions used in the option valuation model and the resulting weighted-average estimated grant date fair value of stock options granted during the year ended December 31, 2016, were as follows: Closing price of our common stock on grant date $156.35 Expected volatility (average of implied and historical volatility) 24.3 % Expected life (in years) 5.8 Risk-free interest rate 1.5 % Expected dividend yield 2.6 % Fair value of stock options granted $27.55 The weighted-average assumptions used in these models and the resulting weighted-average grant date fair values of our performance units were as follows: Years ended December 31, 2016 2015 2014 Closing price of our common stock on grant date $ 156.35 $ 164.26 $ 112.43 Volatility 25.8 % 24.3 % 23.8 % Risk-free interest rate 0.9 % 0.8 % 0.8 % Fair value of unit $ 170.56 $ 182.55 $ 104.47 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of income before income tax, domestic and foreign | Income before income taxes included the following (in millions): Years ended December 31, 2016 2015 2014 Domestic $ 4,478 $ 3,532 $ 1,456 Foreign 4,685 4,446 4,129 Total income before income taxes $ 9,163 $ 7,978 $ 5,585 |
Provision for income taxes | The provision for income taxes included the following (in millions): Years ended December 31, 2016 2015 2014 Current provision: Federal $ 984 $ 1,129 $ 251 State 65 40 58 Foreign 176 272 194 Total current provision 1,225 1,441 503 Deferred provision (benefit): Federal 372 (290 ) (22 ) State (69 ) (78 ) (4 ) Foreign (87 ) (34 ) (50 ) Total deferred provision (benefit) 216 (402 ) (76 ) Total provision $ 1,441 $ 1,039 $ 427 |
Significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities were as follows (in millions): December 31, 2016 2015 Deferred income tax assets: NOL and credit carryforwards $ 688 $ 620 Expense accruals 562 706 Expenses capitalized for tax 255 199 Stock-based compensation 167 179 Undistributed earnings of foreign subsidiaries — 144 Other 117 161 Total deferred income tax assets 1,789 2,009 Valuation allowance (381 ) (327 ) Net deferred income tax assets 1,408 1,682 Deferred income tax liabilities: Acquired intangibles (3,139 ) (3,633 ) Debt (345 ) — Other (307 ) (227 ) Total deferred income tax liabilities (3,791 ) (3,860 ) Total deferred income taxes, net $ (2,383 ) $ (2,178 ) |
Reconciliation of total gross amounts of unrecognized tax benefits (excluding interest, penalties, foreign tax credits and the federal tax benefit of state taxes related to unrecognized tax benefits) | The reconciliations of the total gross amounts of UTBs (excluding interest, penalties, foreign tax credits and the federal tax benefit of state taxes related to UTBs) were as follows (in millions): During the years ended December 31, 2016 2015 2014 Balance at beginning of year $ 2,114 $ 1,772 $ 1,415 Additions based on tax positions related to the current year 425 413 379 Additions based on tax positions related to prior years 18 9 37 Reductions for tax positions of prior years (7 ) (32 ) (45 ) Reductions for expiration of statute of limitations — — (12 ) Settlements (7 ) (48 ) (2 ) Balance at end of year $ 2,543 $ 2,114 $ 1,772 |
Reconciliation between the federal statutory tax rate and effective tax rate | The reconciliations between the federal statutory tax rate applied to income before income taxes and our effective tax rate were as follows: Years ended December 31, 2016 2015 2014 Federal statutory tax rate 35.0 % 35.0 % 35.0 % Foreign earnings, including earnings invested indefinitely (15.5 )% (18.1 )% (22.4 )% Credits, Puerto Rico Excise Tax (2.3 )% (2.5 )% (4.4 )% Share-based payments (1.3 )% — % — % Credits, primarily federal R&D (0.7 )% (1.4 )% (1.5 )% State taxes 0.1 % 0.1 % 0.7 % Audit settlements (federal, state, foreign) — % (0.5 )% — % Other, net 0.4 % 0.4 % 0.2 % Effective tax rate 15.7 % 13.0 % 7.6 % |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation for basic and diluted earnings per share | The computation for basic and diluted EPS was as follows (in millions, except per share data): Years ended December 31, 2016 2015 2014 Income (Numerator): Net income for basic and diluted EPS $ 7,722 $ 6,939 $ 5,158 Shares (Denominator): Weighted-average shares for basic EPS 748 758 759 Effect of dilutive securities 6 8 11 Weighted-average shares for diluted EPS 754 766 770 Basic EPS $ 10.32 $ 9.15 $ 6.80 Diluted EPS $ 10.24 $ 9.06 $ 6.70 |
Available-for-sale investments
Available-for-sale investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 December 31, 2016 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 6,681 $ 1 $ (68 ) $ 6,614 Other government-related debt securities: U.S. 302 — (3 ) 299 Foreign and other 1,784 9 (34 ) 1,759 Corporate debt securities: Financial 8,476 21 (37 ) 8,460 Industrial 8,793 59 (63 ) 8,789 Other 1,079 5 (7 ) 1,077 Residential mortgage-backed securities 1,968 1 (29 ) 1,940 Other mortgage- and asset-backed securities 1,731 1 (13 ) 1,719 Money market mutual funds 2,782 — — 2,782 Other short-term interest-bearing securities 4,188 — — 4,188 Total interest-bearing securities 37,784 97 (254 ) 37,627 Equity securities 127 31 (4 ) 154 Total available-for-sale investments $ 37,911 $ 128 $ (258 ) $ 37,781 Type of security as of December 31, 2015 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value U.S. Treasury securities $ 4,298 $ — $ (24 ) $ 4,274 Other government-related debt securities: U.S. 536 — (2 ) 534 Foreign and other 1,768 7 (36 ) 1,739 Corporate debt securities: Financial 7,904 7 (40 ) 7,871 Industrial 7,961 11 (136 ) 7,836 Other 905 1 (21 ) 885 Residential mortgage-backed securities 1,484 1 (15 ) 1,470 Other mortgage- and asset-backed securities 2,524 — (55 ) 2,469 Money market mutual funds 3,370 — — 3,370 Other short-term interest-bearing securities 528 — — 528 Total interest-bearing securities 31,278 27 (329 ) 30,976 Equity securities 88 48 — 136 Total available-for-sale investments $ 31,366 $ 75 $ (329 ) $ 31,112 |
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 Consolidated Balance Sheets were as follows (in millions): December 31, Classification in the Consolidated Balance Sheets 2016 2015 Cash and cash equivalents $ 2,783 $ 3,738 Marketable securities 34,844 27,238 Other assets — noncurrent 154 136 Total available-for-sale investments $ 37,781 $ 31,112 |
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): December 31, Contractual maturity 2016 2015 Maturing in one year or less $ 8,393 $ 4,578 Maturing after one year through three years 10,404 9,370 Maturing after three years through five years 12,157 9,932 Maturing after five years through ten years 2,974 3,087 Maturing after ten years 40 70 Mortgage- and asset-backed securities 3,659 3,939 Total interest-bearing securities $ 37,627 $ 30,976 |
Available-for-sale securities, continuous unrealized loss position, fair value | 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 December 31, 2016 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 5,774 $ (68 ) $ — $ — Other government-related debt securities: U.S. 201 (3 ) — — Foreign and other 1,192 (34 ) 17 — Corporate debt securities: Financial 3,975 (37 ) 44 — Industrial 3,913 (61 ) 149 (2 ) Other 486 (7 ) 7 — Residential mortgage-backed securities 1,631 (26 ) 158 (3 ) Other mortgage- and asset-backed securities 1,087 (10 ) 118 (3 ) Equity securities 22 (4 ) — — Total $ 18,281 $ (250 ) $ 493 $ (8 ) Less than 12 months 12 months or greater Type of security as of December 31, 2015 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 4,196 $ (24 ) $ — $ — Other government-related debt securities: U.S. 494 (2 ) 20 — Foreign and other 1,306 (32 ) 56 (4 ) Corporate debt securities: Financial 5,988 (38 ) 228 (2 ) Industrial 5,427 (108 ) 679 (28 ) Other 807 (19 ) 39 (2 ) Residential mortgage-backed securities 804 (8 ) 304 (7 ) Other mortgage- and asset-backed securities 1,834 (19 ) 561 (36 ) Total $ 20,856 $ (250 ) $ 1,887 $ (79 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in millions): December 31, 2016 2015 Raw materials $ 225 $ 201 Work in process 1,608 1,529 Finished goods 912 705 Total inventories $ 2,745 $ 2,435 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | Property, plant and equipment consisted of the following (dollar amounts in millions): December 31, Useful life (in years) 2016 2015 Land — $ 295 $ 319 Buildings and improvements 10-40 3,640 3,638 Manufacturing equipment 8-12 2,275 2,051 Laboratory equipment 8-12 1,092 1,140 Other 3-15 4,380 4,278 Construction in progress — 745 746 Property, plant and equipment, gross 12,427 12,172 Less accumulated depreciation and amortization (7,466 ) (7,265 ) Property, plant and equipment, net $ 4,961 $ 4,907 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amounts of goodwill were as follows (in millions): During the years ended December 31, 2016 2015 Beginning balance $ 14,787 $ 14,788 Goodwill related to acquisitions of businesses (1) 2 108 Currency translation adjustments (38 ) (109 ) Ending balance $ 14,751 $ 14,787 (1) Consists 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): December 31, 2016 2015 Gross carrying amount Accumulated amortization Intangible assets, net Gross carrying amount Accumulated amortization Intangible assets, net Finite-lived intangible assets: Developed product technology rights $ 12,534 $ (5,947 ) $ 6,587 $ 12,310 $ (4,996 ) $ 7,314 Licensing rights 3,275 (1,300 ) 1,975 3,275 (998 ) 2,277 Marketing-related rights 1,333 (793 ) 540 1,186 (650 ) 536 R&D technology rights 1,122 (704 ) 418 1,134 (635 ) 499 Total finite-lived intangible assets 18,264 (8,744 ) 9,520 17,905 (7,279 ) 10,626 Indefinite-lived intangible assets: IPR&D 759 — 759 1,015 — 1,015 Total identifiable intangible assets $ 19,023 $ (8,744 ) $ 10,279 $ 18,920 $ (7,279 ) $ 11,641 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities consisted of the following (in millions): December 31, 2016 2015 Sales deductions $ 1,874 $ 1,486 Employee compensation and benefits 920 916 Dividends payable 849 754 Clinical development costs 395 491 Sales returns reserve 437 390 Other 1,409 1,415 Total accrued liabilities $ 5,884 $ 5,452 |
Financing arrangements (Tables)
Financing arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Carrying values and the fixed contractual coupon rates of long-term borrowings | The carrying values and the fixed contractual coupon rates of our borrowings were as follows (in millions): December 31, 2016 2015 2.30% notes due 2016 (2.30% 2016 Notes) $ — $ 750 2.50% notes due 2016 (2.50% 2016 Notes) — 1,000 Short-term loan 605 — 2.125% notes due 2017 (2.125% 2017 Notes) 1,250 1,250 Floating Rate Notes due 2017 600 600 1.25% notes due 2017 (1.25% 2017 Notes) 850 850 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 — 1,975 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) 577 599 5.70% notes due 2019 (5.70% 2019 Notes) 1,000 1,000 Floating Rate Notes due 2019 250 250 2.20% notes due 2019 (2.20% 2019 Notes) 1,400 1,400 2.125% €675 million notes due 2019 (2.125% 2019 euro Notes) 710 733 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 750 750 3.45% notes due 2020 (3.45% 2020 Notes) 900 900 4.10% notes due 2021 (4.10% 2021 Notes) 1,000 1,000 1.85% notes due 2021 (1.85% 2021 Notes) 750 — 3.875% notes due 2021 (3.875% 2021 Notes) 1,750 1,750 1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes) 1,315 — 2.70% notes due 2022 (2.70% 2022 Notes) 500 500 3.625% notes due 2022 (3.625% 2022 Notes) 750 750 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 687 — 2.25% notes due 2023 (2.25% 2023 Notes) 750 — 3.625% notes due 2024 (3.625% 2024 Notes) 1,400 1,400 3.125% notes due 2025 (3.125% 2025 Notes) 1,000 1,000 2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) 789 — 2.60% notes due 2026 (2.60% 2026 notes) 1,250 — 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 586 700 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 864 1,032 6.375% notes due 2037 (6.375% 2037 Notes) 552 900 6.90% notes due 2038 (6.90% 2038 Notes) 291 500 6.40% notes due 2039 (6.40% 2039 Notes) 466 1,000 5.75% notes due 2040 (5.75% 2040 Notes) 412 700 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 974 2,250 5.65% notes due 2042 (5.65% 2042 Notes) 487 1,250 5.375% notes due 2043 (5.375% 2043 Notes) 261 1,000 4.40% notes due 2045 (4.40% 2045 Notes) 2,250 1,250 4.563% notes due 2048 (4.563% 2048 Notes) 1,415 — 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 — Other notes due 2097 100 100 Unamortized bond discounts, premiums and issuance costs, net (936 ) (210 ) Total carrying value of debt 34,596 31,429 Less current portion (4,403 ) (2,247 ) Total noncurrent debt $ 30,193 $ 29,182 |
Schedule of long-term debt instruments exchanged | The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled (in millions): Principal Amount Exchanged 6.375% 2037 Notes $ 348 6.90% 2038 Notes 209 6.40% 2039 Notes 534 5.75% 2040 Notes 288 5.15% 2041 Notes 1,276 5.65% 2042 Notes 763 5.375% 2043 Notes 739 |
Schedule of interest rate derivatives | The effective interest rates on these notes after giving effect to the related interest rate swap contracts and the related notional amounts of the contracts were as follows as of December 31, 2016 (dollar amounts in millions): Notes Effective interest rate Notional amount 1.25% 2017 Notes LIBOR + 0.4% $ 850 2.20% 2019 Notes LIBOR + 0.6% 1,400 3.45% 2020 Notes LIBOR + 1.1% 900 4.10% 2021 Notes LIBOR + 1.7% 1,000 3.875% 2021 Notes LIBOR + 2.0% 1,750 3.625% 2022 Notes LIBOR + 1.6% 750 $ 6,650 |
Aggregate contractual maturities of long-term debt obligations | The aggregate contractual maturities of all borrowings due subsequent to December 31, 2016 , are as follows (in millions): Maturity date Amount 2017 $ 4,405 2018 1,076 2019 3,360 2020 1,950 2021 3,500 Thereafter 21,241 Total $ 35,532 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Summary of activity under our stock repurchase program | Activity under our stock repurchase program, on a trade date basis, was as follows (in millions): During the years ended December 31, 2016 2015 2014 Shares Dollars Shares Dollars Shares Dollars First quarter 4.7 $ 690 2.9 $ 451 — $ — Second quarter 3.9 591 3.3 515 — — Third quarter 4.4 747 4.6 703 — — Fourth quarter 6.7 999 1.2 184 0.9 153 Total stock repurchases 19.7 $ 3,027 12.0 $ 1,853 0.9 $ 153 |
Components of accumulated other comprehensive income | The components of accumulated other comprehensive income/(loss) (AOCI) were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2013 $ (68 ) $ (33 ) $ (43 ) $ (17 ) $ (161 ) Foreign currency translation adjustments (218 ) — — — (218 ) Unrealized gains — 298 37 1 336 Reclassification adjustments to income — 203 1 — 204 Other — — — 1 1 Income taxes 22 (178 ) (14 ) — (170 ) Balance as of December 31, 2014 (264 ) 290 (19 ) (15 ) (8 ) Foreign currency translation adjustments (257 ) — — — (257 ) Unrealized gains (losses) — 150 (299 ) 8 (141 ) Reclassification adjustments to income — (143 ) 76 — (67 ) Other — — — 1 1 Income taxes 10 — (18 ) — (8 ) Balance as of December 31, 2015 (511 ) 297 (260 ) (6 ) (480 ) Foreign currency translation adjustments (93 ) — — — (93 ) Unrealized (losses) gains — (176 ) 63 — (113 ) Reclassification adjustments to income — 139 61 — 200 Other — — — 1 1 Income taxes (6 ) 22 (2 ) — 14 Balance as of December 31, 2016 $ (610 ) $ 282 $ (138 ) $ (5 ) $ (471 ) |
Reclassifications out of accumulated other comprehensive income | The reclassifications out of AOCI to earnings were as follows (in millions): Year ended December 31, Components of AOCI 2016 2015 2014 Line item affected in the Consolidated Statements of Income Cash flow hedges: Foreign currency contract gains $ 308 $ 326 $ 28 Product sales Cross-currency swap contract losses (446 ) (182 ) (230 ) Interest and other income, net Forward interest rate contract losses (1 ) (1 ) (1 ) Interest expense, net (139 ) 143 (203 ) Income before income taxes 46 (53 ) 74 Provision for income taxes $ (93 ) $ 90 $ (129 ) Net income Available-for-sale securities: Net realized losses $ (61 ) $ (76 ) $ (1 ) Interest and other income, net 11 18 — Provision for income taxes $ (50 ) $ (58 ) $ (1 ) Net income |
Fair value measurement (Tables)
Fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions): Fair value measurement as of December 31, 2016, using: Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Available-for-sale investments: U.S. Treasury securities $ 6,614 $ — $ — $ 6,614 Other government-related debt securities: U.S. — 299 — 299 Foreign and other — 1,759 — 1,759 Corporate debt securities: Financial — 8,460 — 8,460 Industrial — 8,789 — 8,789 Other — 1,077 — 1,077 Residential mortgage-backed securities — 1,940 — 1,940 Other mortgage- and asset-backed securities — 1,719 — 1,719 Money market mutual funds 2,782 — — 2,782 Other short-term interest-bearing securities — 4,188 — 4,188 Equity securities 154 — — 154 Derivatives: Foreign currency contracts — 203 — 203 Interest rate swap contracts — 41 — 41 Total assets $ 9,550 $ 28,475 $ — $ 38,025 Liabilities: Derivatives: Foreign currency contracts $ — $ 4 $ — $ 4 Cross-currency swap contracts — 523 — 523 Interest rate swap contracts — 7 — 7 Contingent consideration obligations in connection with business combinations — — 179 179 Total liabilities $ — $ 534 $ 179 $ 713 Fair value measurement as of December 31, 2015, using: Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Assets: Available-for-sale investments: U.S. Treasury securities $ 4,274 $ — $ — $ 4,274 Other government-related debt securities: U.S. — 534 — 534 Foreign and other — 1,739 — 1,739 Corporate debt securities: Financial — 7,871 — 7,871 Industrial — 7,836 — 7,836 Other — 885 — 885 Residential mortgage-backed securities — 1,470 — 1,470 Other mortgage- and asset-backed securities — 2,469 — 2,469 Money market mutual funds 3,370 — — 3,370 Other short-term interest-bearing securities — 528 — 528 Equity securities 136 — — 136 Derivatives: Foreign currency contracts — 142 — 142 Interest rate swap contracts — 71 — 71 Total assets $ 7,780 $ 23,545 $ — $ 31,325 Liabilities: Derivatives: Foreign currency contracts $ — $ 8 $ — $ 8 Cross-currency swap contracts — 250 — 250 Interest rate swap contracts — 3 — 3 Contingent consideration obligations in connection with business combinations — — 188 188 Total liabilities $ — $ 261 $ 188 $ 449 |
Change in carrying amounts of contingent consideration obligations | Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): During the years ended December 31, 2016 2015 Beginning balance $ 188 $ 215 Additions from Dezima acquisition — 110 Payment to former BioVex Group, Inc. shareholders — (125 ) Net changes in valuation (9 ) (12 ) Ending balance $ 179 $ 188 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 % 1.25% 2022 euro Notes € 1,250 1.25 % $ 1,388 3.2 % 0.41 % 2023 Swiss franc Bonds CHF 700 0.41 % $ 704 3.4 % 2.00% 2026 euro Notes € 750 2.00 % $ 833 3.9 % 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): Years ended December 31, Derivatives in cash flow hedging relationships 2016 2015 2014 Foreign currency contracts $ 115 $ 425 $ 452 Cross-currency swap contracts (281 ) (275 ) (154 ) Forward interest rate contracts (10 ) — — Total $ (176 ) $ 150 $ 298 |
Location in the 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 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): Years ended December 31, Derivatives in cash flow hedging relationships Statements of Income location 2016 2015 2014 Foreign currency contracts Product sales $ 308 $ 326 $ 28 Cross-currency swap contracts Interest and other income, net (446 ) (182 ) (230 ) Forward interest rate contracts Interest expense, net (1 ) (1 ) (1 ) Total $ (139 ) $ 143 $ (203 ) |
Location in the 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 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): Years ended December 31, Derivatives not designated as hedging instruments Statements of Income location 2016 2015 2014 Foreign currency contracts Interest and other income, net $ (56 ) $ (16 ) $ (10 ) |
Fair values of derivatives included in the Consolidated Balance Sheets | The fair values of derivatives included on the Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities December 31, 2016 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 203 Accrued liabilities/ Other noncurrent liabilities $ 4 Cross-currency swap contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities 523 Interest rate swap contracts Other current assets/ Other noncurrent assets 41 Accrued liabilities/ Other noncurrent liabilities 7 Total derivatives designated as hedging instruments 244 534 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets — Accrued liabilities — Total derivatives not designated as hedging instruments — — Total derivatives $ 244 $ 534 Derivative assets Derivative liabilities December 31, 2015 Balance Sheet location Fair value Balance Sheet location Fair value Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 142 Accrued liabilities/ Other noncurrent liabilities $ 7 Cross-currency swap contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities 250 Interest rate swap contracts Other current assets/ Other noncurrent assets 71 Accrued liabilities/ Other noncurrent liabilities 3 Total derivatives designated as hedging instruments 213 260 Derivatives not designated as hedging instruments: Foreign currency contracts Other current assets — Accrued liabilities 1 Total derivatives not designated as hedging instruments — 1 Total derivatives $ 213 $ 261 |
Contingencies and commitments (
Contingencies and commitments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Minimum future rental commitments under non-cancelable operating leases | The following table summarizes the minimum future rental commitments under noncancelable operating leases as of December 31, 2016 , (in millions): 2017 $ 156 2018 149 2019 135 2020 123 2021 108 Thereafter 116 Total minimum operating lease commitments $ 787 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenues | Revenues were as follows (in millions): Years ended December 31, 2016 2015 2014 Product sales: ENBREL $ 5,965 $ 5,364 $ 4,688 Neulasta ® 4,648 4,715 4,596 Aranesp ® 2,093 1,951 1,930 Prolia ® 1,635 1,312 1,030 Sensipar ® /Mimpara ® 1,582 1,415 1,158 XGEVA ® 1,529 1,405 1,221 EPOGEN ® 1,282 1,856 2,031 NEUPOGEN ® 765 1,049 1,159 KYPROLIS ® 692 512 331 Vectibix ® 611 549 505 Nplate ® 584 525 469 Repatha ® 141 10 — BLINCYTO ® 115 77 3 Other 250 204 206 Total product sales 21,892 20,944 19,327 Other revenues 1,099 718 736 Total revenues $ 22,991 $ 21,662 $ 20,063 |
Geographical information with respect to revenues and long-lived assets | Certain geographic information with respect to revenues and long-lived assets (consisting of property, plant and equipment, net) was as follows (in millions): Years ended December 31, 2016 2015 2014 Revenues: United States $ 18,326 $ 17,167 $ 15,396 Rest of the world (ROW) 4,665 4,495 4,667 Total revenues $ 22,991 $ 21,662 $ 20,063 December 31, 2016 2015 Long-lived assets: United States $ 2,328 $ 2,275 Puerto Rico 1,591 1,679 ROW 1,042 953 Total long-lived assets $ 4,961 $ 4,907 |
Revenues earned from major customers | Certain information with respect to these customers was as follows (dollar amounts in millions): Years ended December 31, 2016 2015 2014 AmerisourceBergen Corporation: Gross product sales $ 10,100 $ 10,038 $ 9,142 % of total gross revenues 31 % 34 % 34 % % of U.S. gross product sales 38 % 42 % 43 % McKesson Corporation: Gross product sales $ 9,710 $ 8,766 $ 8,011 % of total gross revenues 30 % 30 % 30 % % of U.S. gross product sales 34 % 34 % 35 % Cardinal Health, Inc.: Gross product sales $ 6,520 $ 5,045 $ 3,407 % of total gross revenues 20 % 17 % 13 % % of U.S. gross product sales 24 % 21 % 16 % |
Quarterly financial data (una46
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | 2016 Quarters ended (In millions, except per share data) December 31 September 30 June 30 March 31 Product sales $ 5,663 $ 5,516 $ 5,474 $ 5,239 Gross profit from product sales $ 4,596 $ 4,489 $ 4,424 $ 4,221 Net income $ 1,935 $ 2,017 $ 1,870 $ 1,900 Earnings per share: Basic $ 2.61 $ 2.70 $ 2.49 $ 2.52 Diluted $ 2.59 $ 2.68 $ 2.47 $ 2.50 2015 Quarters ended (In millions, except per share data) December 31 September 30 June 30 March 31 Product sales $ 5,329 $ 5,516 $ 5,225 $ 4,874 Gross profit from product sales $ 4,258 $ 4,482 $ 4,136 $ 3,841 Net income $ 1,800 $ 1,863 $ 1,653 $ 1,623 Earnings per share: Basic $ 2.39 $ 2.46 $ 2.18 $ 2.13 Diluted $ 2.37 $ 2.44 $ 2.15 $ 2.11 |
Summary of significant accoun47
Summary of significant accounting policies (Details Textual) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Accounting Policies [Abstract] | |||
Number of business segment | segment | 1 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Provision for income taxes | $ 122 | ||
Net cash provided by (used in) operating activities | 10,354 | $ 9,731 | $ 8,952 |
Net cash provided by (used in) financing activities | (2,599) | (3,771) | (3,274) |
Accounting Standards Update 2016-09, Excess Tax Benefit Component [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by (used in) operating activities | 253 | 172 | |
Net cash provided by (used in) financing activities | (253) | (172) | |
Accounting Standards Update 2016-09, Withholding Taxes on Shares Withheld [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by (used in) operating activities | 401 | 225 | |
Net cash provided by (used in) financing activities | (401) | $ (225) | |
Long-term debt [Member] | Accounting Standards Update 2015-03 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt issuance costs | 0 | (124) | |
Short-term debt [Member] | Accounting Standards Update 2015-03 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt issuance costs | $ 0 | $ 3 |
Restructuring and other cost 48
Restructuring and other cost savings initiatives (Details Textual) $ in Millions | Dec. 31, 2016USD ($) |
Separation and other headcount-related costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | $ 477 |
Asset-related charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 232 |
Minimum [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring expected cost | 800 |
Restructuring expected separation and other headcount-related cost | 535 |
Restructuring expected asset impairments, accelerated depreciation and other related costs | 265 |
Maximum [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring expected cost | 900 |
Restructuring expected separation and other headcount-related cost | 585 |
Restructuring expected asset impairments, accelerated depreciation and other related costs | $ 315 |
Restructuring and other cost 49
Restructuring and other cost savings initiatives (Summary of Charges by Type) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||
Separation Costs | $ 49 | $ 377 |
Asset Impairments/Disposals | (111) | 87 |
Accelerated Depreciation | 100 | 55 |
Other | 76 | 39 |
Total | 114 | 558 |
Cost of sales [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation Costs | 0 | 0 |
Asset Impairments/Disposals | 0 | 81 |
Accelerated Depreciation | 50 | 23 |
Other | 2 | 0 |
Total | 52 | 104 |
Research and development [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation Costs | 0 | 0 |
Asset Impairments/Disposals | 0 | 0 |
Accelerated Depreciation | 36 | 28 |
Other | 28 | 21 |
Total | 64 | 49 |
Selling, general and administrative [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation Costs | 0 | 0 |
Asset Impairments/Disposals | 0 | 0 |
Accelerated Depreciation | 14 | 4 |
Other | 42 | 5 |
Total | 56 | 9 |
Other [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Separation Costs | 49 | 377 |
Asset Impairments/Disposals | (111) | 6 |
Accelerated Depreciation | 0 | 0 |
Other | 4 | 13 |
Total | $ (58) | $ 396 |
Restructuring and other cost 50
Restructuring and other cost savings initiatives (Summary of Expenses and Payments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring liabilities as of beginning of period | $ 118 | $ 244 | $ 0 |
Expense | 19 | 132 | 385 |
Payments | (117) | (258) | (141) |
Restructuring liabilities as of end of period | 20 | 118 | 244 |
Separation costs [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring liabilities as of beginning of period | 95 | 221 | 0 |
Expense | 6 | 52 | 353 |
Payments | (90) | (178) | (132) |
Restructuring liabilities as of end of period | 11 | 95 | 221 |
Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring liabilities as of beginning of period | 23 | 23 | 0 |
Expense | 13 | 80 | 32 |
Payments | (27) | (80) | (9) |
Restructuring liabilities as of end of period | $ 9 | $ 23 | $ 23 |
Business combinations (Aggregat
Business combinations (Aggregate Consideration Paid - Dezima) (Details) - Dezima [Member] $ in Millions | Oct. 14, 2015USD ($) |
Business Acquisition [Line Items] | |
Total cash paid to former shareholders of Dezima | $ 300 |
Fair value of contingent consideration obligations | 110 |
Total consideration | $ 410 |
Business combinations (Details
Business combinations (Details Textual) - USD ($) | Oct. 14, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 14,751,000,000 | $ 14,787,000,000 | $ 14,788,000,000 | ||
Dezima [Member] | |||||
Business Acquisition [Line Items] | |||||
Maximum additional consideration due contingent on certain milestones | $ 1,250,000,000 | $ 1,250,000,000 | |||
Estimated fair values of contingent consideration obligations | 110,000,000 | ||||
Indefinite-lived intangible assets - IPR&D | 400,000,000 | ||||
Goodwill | 108,000,000 | ||||
Deferred tax liabilities | $ 100,000,000 |
Stock-based compensation (Compo
Stock-based compensation (Components of Stock-based Compensation Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | $ 311 | $ 322 | $ 408 |
Tax benefit from stock-based compensation expense | (112) | (120) | (152) |
Total stock-based compensation expense, net of tax | 199 | 202 | 256 |
RSUs [Member] | |||
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | 177 | 190 | 219 |
Performance units [Member] | |||
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | 123 | 132 | 171 |
Stock options [Member] | |||
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | $ 11 | $ 0 | $ 18 |
Stock-based compensation (Summa
Stock-based compensation (Summary of RSUs) (Details) - RSUs [Member] - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Units | |||
Balance nonvested at beginning of period (in shares) | 5 | ||
Granted (in shares) | 1.3 | ||
Vested (in shares) | (2) | ||
Forfeited (in shares) | (0.4) | ||
Balance nonvested at end of period (in shares) | 3.9 | 5 | |
Weighted-average grant date fair value | |||
Balance nonvested at beginning of period (in usd per share) | $ 118.89 | ||
Granted (in usd per share) | 156.76 | $ 166.74 | $ 115.63 |
Vested (in usd per share) | 96.91 | ||
Forfeited (in usd per share) | 131.43 | ||
Balance nonvested at end of period (in usd per share) | $ 141.07 | $ 118.89 |
Stock-based compensation Stock-
Stock-based compensation Stock-based compensation (Summary of Stock Options) (Details) - Employee Stock Option [Member] | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Closing price of our common stock on grant date (in usd per share) | $ 156.35 |
Volatility | 24.30% |
Expected life | 5 years 9 months 18 days |
Risk-free interest rate | 1.50% |
Expected dividend yield | 2.60% |
Granted (in usd per share) | $ 27.55 |
Stock-based compensation (Sum56
Stock-based compensation (Summary of Stock Options) (Details) - Stock options [Member] $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Options | |
Balance unexercised at beginning of period (in shares) | shares | 2.8 |
Granted (in shares) | shares | 1.4 |
Exercised (in shares) | shares | (1) |
Expired/forfeited (in shares) | shares | (0.1) |
Balance unexercised at end of period (in shares) | shares | 3.1 |
Vested or expected to vest (in shares) | shares | 3 |
Exercisable (in shares) | shares | 1.8 |
Weighted- average exercise price | |
Balance unexercised at beginning of period (in usd per share) | $ / shares | $ 56.19 |
Granted (in usd per share) | $ / shares | 156.35 |
Exercised (in usd per share) | $ / shares | 52.98 |
Expired/forfeited (in usd per share) | $ / shares | 150.70 |
Balance unexercised at end of period (in shares) | $ / shares | 100.21 |
Weighted-average exercise price, vested or expected to vest (in usd per share) | $ / shares | 96.92 |
Weighted-average exercise price, exercisable (in usd per share) | $ / shares | $ 57.95 |
Stock options information [Abstract] | |
Weighted-average remaining contractual life (years), unexercised | 6 years 1 month 18 days |
Weighted-average remaining contractual life (years), vested or expected to vest | 6 years 18 days |
Weighted-average remaining contractual life (years), exercisable | 3 years 8 months 18 days |
Aggregate intrinsic value, unexercised | $ | $ 158 |
Aggregate intrinsic value, vested or expected to vest | $ | 158 |
Aggregate intrinsic value, exercisable | $ | $ 158 |
Stock-based compensation (Weigh
Stock-based compensation (Weighted-average Assumptions) (Details) - Performance units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted-average assumptions and resulting weighted-average grant date fair values [Abstract] | |||
Closing price of our common stock on grant date (in usd per share) | $ 156.35 | $ 164.26 | $ 112.43 |
Volatility | 25.80% | 24.30% | 23.80% |
Risk-free interest rate | 0.90% | 0.80% | 0.80% |
Fair value of unit (in usd per share) | $ 170.56 | $ 182.55 | $ 104.47 |
Stock-based compensation (Detai
Stock-based compensation (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Amount by which the pool of available shares will be reduced for each stock option granted | 1 | ||
Number of shares added back for tax withholding on full value awards | 1.9 | ||
The amount of common stock available under the plan for future grants and/or issuances (in shares) | 41,000,000 | ||
Description of vesting of restricted stock units and stock options | RSUs and stock options generally vest in approximately equal amounts on the second, third and fourth anniversaries of the grant date. RSUs | ||
Number of common shares issued for each performance unit earned | 1 | ||
RSUs [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The number of shares by which the pool of available shares will be reduced for other types of awards granted | 1.9 | ||
Weighted average grant date fair value, granted (in usd per share) | $ 156.76 | $ 166.74 | $ 115.63 |
Total fair value of units that vested during the year | $ 193,000,000 | $ 206,000,000 | $ 191,000,000 |
Total unrecognized compensation cost related to nonvested awards | $ 303,000,000 | ||
Weighted average number of years over which compensation cost related to nonvested awards is expected to be recognized | 1 year 8 months 18 days | ||
Units outstanding (in shares) | 3,900,000 | 5,000,000 | |
Weighted-average grant date fair value | $ 141.07 | $ 118.89 | |
Units granted (in shares) | 1,300,000 | ||
Units, forfeited (in shares) | 400,000 | ||
Weighted average grant date fair value, forfeited (in usd per share) | $ 131.43 | ||
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value, granted (in usd per share) | $ 27.55 | ||
Total intrinsic value of stock options exercised during the year | $ 102,000,000 | $ 150,000,000 | 228,000,000 |
Actual tax benefits realized from tax deductions from option exercises | $ 37,000,000 | $ 55,000,000 | $ 83,000,000 |
Stock options [Member] | Granted on and after April 26, 2010 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period of stock options from date of grant | 10 years | ||
Performance units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The number of shares by which the pool of available shares will be reduced for other types of awards granted | 1.9 | ||
Weighted average grant date fair value, granted (in usd per share) | $ 170.56 | $ 182.55 | $ 104.47 |
Total fair value of units that vested during the year | $ 347,000,000 | $ 0 | $ 587,000,000 |
Total unrecognized compensation cost related to nonvested awards | $ 144,000,000 | ||
Weighted average number of years over which compensation cost related to nonvested awards is expected to be recognized | 1 year | ||
Period over which the grants of equity instruments vest | 3 years | ||
Units outstanding (in shares) | 2,800,000 | 3,800,000 | |
Weighted-average grant date fair value | $ 144.43 | $ 121.34 | |
Units granted (in shares) | 800,000 | ||
Units, forfeited (in shares) | 200,000 | ||
Weighted average grant date fair value, forfeited (in usd per share) | $ 140.31 |
Income taxes (Income Before Inc
Income taxes (Income Before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Examination [Line Items] | |||
Income before income taxes | $ 9,163 | $ 7,978 | $ 5,585 |
Domestic | |||
Income Tax Examination [Line Items] | |||
Income before income taxes | 4,478 | 3,532 | 1,456 |
Foreign | |||
Income Tax Examination [Line Items] | |||
Income before income taxes | $ 4,685 | $ 4,446 | $ 4,129 |
Income taxes (Provision for Inc
Income taxes (Provision for Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current provision: | |||
Federal | $ 984 | $ 1,129 | $ 251 |
State | 65 | 40 | 58 |
Foreign | 176 | 272 | 194 |
Total current provision | 1,225 | 1,441 | 503 |
Deferred provision (benefit): | |||
Federal | 372 | (290) | (22) |
State | (69) | (78) | (4) |
Foreign | (87) | (34) | (50) |
Total deferred provision (benefit) | 216 | (402) | (76) |
Total provision | $ 1,441 | $ 1,039 | $ 427 |
Income taxes (Components of Def
Income taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred income tax assets: | ||
NOL and credit carryforwards | $ 688 | $ 620 |
Expense accruals | 562 | 706 |
Expenses capitalized for tax | 255 | 199 |
Stock-based compensation | 167 | 179 |
Undistributed earnings of foreign subsidiaries | 0 | 144 |
Other | 117 | 161 |
Total deferred income tax assets | 1,789 | 2,009 |
Valuation allowance | (381) | (327) |
Net deferred income tax assets | 1,408 | 1,682 |
Deferred income tax liabilities: | ||
Acquired intangibles | (3,139) | (3,633) |
Debt | (345) | 0 |
Other | (307) | (227) |
Total deferred income tax liabilities | (3,791) | (3,860) |
Total deferred income taxes, net | $ (2,383) | $ (2,178) |
Income taxes (Reconciliation of
Income taxes (Reconciliation of Total Gross Amounts of UTBs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of total gross amounts of unrecognized tax benefits (excluding interest, penalties, foreign tax credits and the federal tax benefit of state taxes related to unrecognized tax benefits) | |||
Balance at beginning of year | $ 2,114 | $ 1,772 | $ 1,415 |
Additions based on tax positions related to the current year | 425 | 413 | 379 |
Additions based on tax positions related to prior years | 18 | 9 | 37 |
Reductions for tax positions of prior years | (7) | (32) | (45) |
Reductions for expiration of statute of limitations | 0 | 0 | (12) |
Settlements | (7) | (48) | (2) |
Balance at end of year | $ 2,543 | $ 2,114 | $ 1,772 |
Income taxes (Reconciliation 63
Income taxes (Reconciliation of Federal Statutory Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
Foreign earnings, including earnings invested indefinitely | (15.50%) | (18.10%) | (22.40%) |
Credits, Puerto Rico Excise Tax | (2.30%) | (2.50%) | (4.40%) |
Share-based payments | (1.30%) | (0.00%) | (0.00%) |
Credits, primarily federal R&D | (0.70%) | (1.40%) | (1.50%) |
State taxes | 0.10% | 0.10% | 0.70% |
Audit settlements (federal, state, foreign) | (0.00%) | (0.50%) | (0.00%) |
Other, net | 0.40% | 0.40% | 0.20% |
Effective tax rate | 15.70% | 13.00% | 7.60% |
Income taxes (Details Textual)
Income taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Interest and penalties related to unrecognized tax benefits recognized in income tax provision | $ 125,000,000 | $ 17,000,000 | $ 35,000,000 |
Accrued interest and penalties associated with unrecognized tax benefits | 276,000,000 | 151,000,000 | |
Tax Credit Carryforward [Line Items] | |||
Significant change in UTB is reasonably possible, amount of unrecorded benefit | 63,000,000 | ||
Undistributed earnings of our foreign operations that are intended to be invested indefinitely outside of the United States | 36,600,000,000 | ||
Additional income taxes required to be accrued and paid if earnings of foreign operations that are intended to be indefinitely invested outside of the United States were repatriated | 12,800,000,000 | ||
Excise Tax Rate [Abstract] | |||
Income taxes paid | $ 1,100,000,000 | $ 919,000,000 | $ 269,000,000 |
Puerto Rico [Member] | |||
Excise Tax Rate [Abstract] | |||
Effective excise tax rate for first half of 2013 | 4.00% | ||
Domestic | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards available to reduce income taxes | $ 20,000,000 | ||
Tax credit carryforwards, valuation allowance | 0 | ||
NOL carryforwards available to reduce income taxes | 147,000,000 | ||
Domestic | Valuation allowance, operating loss carryforwards [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards available to reduce income taxes | 6,000,000 | ||
State [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards available to reduce income taxes | 385,000,000 | ||
Tax credit carryforwards, valuation allowance | 363,000,000 | ||
NOL carryforwards available to reduce income taxes | 469,000,000 | ||
State [Member] | Valuation allowance, operating loss carryforwards [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards available to reduce income taxes | 445,000,000 | ||
Foreign | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards available to reduce income taxes | 1,800,000,000 | ||
NOLs with no valuation allowance and no expiration | 594,000,000 | ||
Foreign | Valuation allowance, operating loss carryforwards [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards available to reduce income taxes | 587,000,000 | ||
Expiration in tax years 2022-2030 [Member] | State [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards, valuation allowance | $ 0 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income (Numerator): | |||||||||||
Net income for basic and diluted EPS | $ 1,935 | $ 2,017 | $ 1,870 | $ 1,900 | $ 1,800 | $ 1,863 | $ 1,653 | $ 1,623 | $ 7,722 | $ 6,939 | $ 5,158 |
Shares (Denominator): | |||||||||||
Weighted-average shares for basic EPS | 748 | 758 | 759 | ||||||||
Effect of dilutive securities (in shares) | 6 | 8 | 11 | ||||||||
Weighted-average shares for diluted EPS | 754 | 766 | 770 | ||||||||
Basic EPS (in usd per share) | $ 2.61 | $ 2.70 | $ 2.49 | $ 2.52 | $ 2.39 | $ 2.46 | $ 2.18 | $ 2.13 | $ 10.32 | $ 9.15 | $ 6.80 |
Diluted EPS (in usd per share) | $ 2.59 | $ 2.68 | $ 2.47 | $ 2.50 | $ 2.37 | $ 2.44 | $ 2.15 | $ 2.11 | $ 10.24 | $ 9.06 | $ 6.70 |
Collaborative arrangements (Pfi
Collaborative arrangements (Pfizer Inc.) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Annual residual royalty payments | 10.00% | ||
Pfizer [Member] | Selling, general and administrative [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Royalties due | $ 470 | $ 561 | $ 509 |
Collaborative arrangements (UCB
Collaborative arrangements (UCB) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
UCB [Member] | Research and development expense [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Cost recoveries | $ 48 | $ 60 | $ 96 |
Collaborative arrangements (Bay
Collaborative arrangements (Bayer HealthCare Pharmaceuticals Inc.) (Details) - Bayer [Member] - Nexavar [Member] $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)country | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
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% | ||
Other revenues [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Collaboration profit | $ 167 | $ 257 | $ 324 |
Royalty income | $ 137 | $ 72 |
Related party transactions (Det
Related party transactions (Details) - Kirin-Amgen [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||
Ownership interest (in percent) in related party | 50.00% | ||
Noncurrent other assets [Member] | |||
Related Party Transaction [Line Items] | |||
Approximate carrying value of the company's equity method investment | $ 501 | $ 443 | |
Accrued liabilities [Member] | |||
Related Party Transaction [Line Items] | |||
Amount due to related party | 69 | 34 | |
Selling, general and administrative [Member] | |||
Related Party Transaction [Line Items] | |||
Company's share of profits (losses) of related party | 58 | 65 | $ 30 |
Cost of sales [Member] | |||
Related Party Transaction [Line Items] | |||
Royalties earned by related party from Amgen | 239 | 264 | 301 |
Other revenues [Member] | |||
Related Party Transaction [Line Items] | |||
Revenues earned by Amgen from related party | 31 | 65 | 119 |
Research and development expense [Member] | |||
Related Party Transaction [Line Items] | |||
Cost recoveries by Amgen from related party | $ 7 | $ 90 | $ 108 |
Available-for-sale investment70
Available-for-sale investments (Schedule) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 37,911 | $ 31,366 |
Gross unrealized gains | 128 | 75 |
Gross unrealized losses | (258) | (329) |
Estimated fair value | 37,781 | 31,112 |
U.S. Treasury securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 6,681 | 4,298 |
Gross unrealized gains | 1 | 0 |
Gross unrealized losses | (68) | (24) |
Estimated fair value | 6,614 | 4,274 |
Other government-related debt securities - U.S. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 302 | 536 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (3) | (2) |
Estimated fair value | 299 | 534 |
Other government-related debt securities - Foreign and other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,784 | 1,768 |
Gross unrealized gains | 9 | 7 |
Gross unrealized losses | (34) | (36) |
Estimated fair value | 1,759 | 1,739 |
Corporate debt securities - Financial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8,476 | 7,904 |
Gross unrealized gains | 21 | 7 |
Gross unrealized losses | (37) | (40) |
Estimated fair value | 8,460 | 7,871 |
Corporate debt securities - Industrial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8,793 | 7,961 |
Gross unrealized gains | 59 | 11 |
Gross unrealized losses | (63) | (136) |
Estimated fair value | 8,789 | 7,836 |
Corporate debt securities - Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,079 | 905 |
Gross unrealized gains | 5 | 1 |
Gross unrealized losses | (7) | (21) |
Estimated fair value | 1,077 | 885 |
Residential mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,968 | 1,484 |
Gross unrealized gains | 1 | 1 |
Gross unrealized losses | (29) | (15) |
Estimated fair value | 1,940 | 1,470 |
Other mortgage- and asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,731 | 2,524 |
Gross unrealized gains | 1 | 0 |
Gross unrealized losses | (13) | (55) |
Estimated fair value | 1,719 | 2,469 |
Money market mutual funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,782 | 3,370 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 2,782 | 3,370 |
Other short-term interest-bearing securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 4,188 | 528 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 4,188 | 528 |
Total interest-bearing securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 37,784 | 31,278 |
Gross unrealized gains | 97 | 27 |
Gross unrealized losses | (254) | (329) |
Estimated fair value | 37,627 | 30,976 |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 127 | 88 |
Gross unrealized gains | 31 | 48 |
Gross unrealized losses | (4) | 0 |
Estimated fair value | $ 154 | $ 136 |
Available-for-sale investment71
Available-for-sale investments (Fair Values by Classification) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Classification in the Consolidated Balance Sheets | ||||
Cash and cash equivalents | $ 3,241 | $ 4,144 | $ 3,731 | $ 3,805 |
Marketable securities | 34,844 | 27,238 | ||
Other assets — noncurrent | 1,625 | 1,599 | ||
Total available-for-sale investments | 37,781 | 31,112 | ||
Available-for-sale investments [Member] | ||||
Classification in the Consolidated Balance Sheets | ||||
Cash and cash equivalents | 2,783 | 3,738 | ||
Marketable securities | 34,844 | 27,238 | ||
Other assets — noncurrent | 154 | 136 | ||
Total available-for-sale investments | $ 37,781 | $ 31,112 |
Available-for-sale investment72
Available-for-sale investments (Fair Values by Contractual Maturity) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Contractual maturity | ||
Total available-for-sale investments | $ 37,781 | $ 31,112 |
Total interest-bearing securities [Member] | ||
Contractual maturity | ||
Maturing in one year or less | 8,393 | 4,578 |
Maturing after one year through three years | 10,404 | 9,370 |
Maturing after three years through five years | 12,157 | 9,932 |
Maturing after five years through ten years | 2,974 | 3,087 |
Maturing after ten years | 40 | 70 |
Mortgage- and asset-backed securities | 3,659 | 3,939 |
Total available-for-sale investments | $ 37,627 | $ 30,976 |
Available-for-sale investment73
Available-for-sale investments (Unrealized Losses and Fair Values) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | $ 18,281 | $ 20,856 |
Less than 12 months, Unrealized losses | (250) | (250) |
12 months or greater, Fair value | 493 | 1,887 |
12 months or greater, Unrealized losses | (8) | (79) |
U.S. Treasury securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 5,774 | 4,196 |
Less than 12 months, Unrealized losses | (68) | (24) |
12 months or greater, Fair value | 0 | 0 |
12 months or greater, Unrealized losses | 0 | 0 |
Other government-related debt securities - U.S. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 201 | 494 |
Less than 12 months, Unrealized losses | (3) | (2) |
12 months or greater, Fair value | 0 | 20 |
12 months or greater, Unrealized losses | 0 | 0 |
Other government-related debt securities - Foreign and other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,192 | 1,306 |
Less than 12 months, Unrealized losses | (34) | (32) |
12 months or greater, Fair value | 17 | 56 |
12 months or greater, Unrealized losses | 0 | (4) |
Corporate debt securities - Financial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 3,975 | 5,988 |
Less than 12 months, Unrealized losses | (37) | (38) |
12 months or greater, Fair value | 44 | 228 |
12 months or greater, Unrealized losses | 0 | (2) |
Corporate debt securities - Industrial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 3,913 | 5,427 |
Less than 12 months, Unrealized losses | (61) | (108) |
12 months or greater, Fair value | 149 | 679 |
12 months or greater, Unrealized losses | (2) | (28) |
Corporate debt securities - Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 486 | 807 |
Less than 12 months, Unrealized losses | (7) | (19) |
12 months or greater, Fair value | 7 | 39 |
12 months or greater, Unrealized losses | 0 | (2) |
Residential mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,631 | 804 |
Less than 12 months, Unrealized losses | (26) | (8) |
12 months or greater, Fair value | 158 | 304 |
12 months or greater, Unrealized losses | (3) | (7) |
Other mortgage- and asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,087 | 1,834 |
Less than 12 months, Unrealized losses | (10) | (19) |
12 months or greater, Fair value | 118 | 561 |
12 months or greater, Unrealized losses | (3) | $ (36) |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 22 | |
Less than 12 months, Unrealized losses | (4) | |
12 months or greater, Fair value | 0 | |
12 months or greater, Unrealized losses | $ 0 |
Available-for-sale investment74
Available-for-sale investments (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investments, Debt and Equity Securities [Abstract] | |||
Cash and cash equivalents | $ 458 | $ 406 | |
Realized gains | 306 | 132 | $ 149 |
Realized losses | $ 367 | $ 208 | $ 150 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 225 | $ 201 |
Work in process | 1,608 | 1,529 |
Finished goods | 912 | 705 |
Total inventories | $ 2,745 | $ 2,435 |
Property, plant and equipment76
Property, plant and equipment (Schedule) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Land | $ 295 | $ 319 |
Buildings and improvements | 3,640 | 3,638 |
Manufacturing equipment | 2,275 | 2,051 |
Laboratory equipment | 1,092 | 1,140 |
Other | 4,380 | 4,278 |
Construction in progress | 745 | 746 |
Property, plant and equipment, gross | 12,427 | 12,172 |
Less accumulated depreciation and amortization | (7,466) | (7,265) |
Property, plant and equipment, net | $ 4,961 | $ 4,907 |
Buildings and improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 10 years | |
Buildings and improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 40 years | |
Manufacturing equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 8 years | |
Manufacturing equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 12 years | |
Laboratory equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 8 years | |
Laboratory equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 12 years | |
Other [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 3 years | |
Other [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life (in years) | 15 years |
Property, plant and equipment77
Property, plant and equipment (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization charges associated with property, plant and equipment | $ 619 | $ 727 | $ 716 |
Goodwill and intangible asset78
Goodwill and intangible assets (Goodwill Roll Forward) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Goodwill [Roll Forward] | |||
Beginning balance | $ 14,787 | $ 14,788 | |
Goodwill related to acquisitions of businesses | [1] | 2 | 108 |
Currency translation adjustments | (38) | (109) | |
Ending balance | $ 14,751 | $ 14,787 | |
[1] | Consists 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 intangible asset79
Goodwill and intangible assets (Identifiable Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Finite-lived intangible assets: | ||
Gross carrying amount | $ 18,264 | $ 17,905 |
Accumulated amortization | (8,744) | (7,279) |
Intangible assets, net | 9,520 | 10,626 |
Indefinite-lived intangible assets: | ||
Identifiable intangible assets | 19,023 | 18,920 |
Accumulated amortization | (8,744) | (7,279) |
Identifiable intangible assets, net | 10,279 | 11,641 |
IPR&D [Member] | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 759 | 1,015 |
Developed product technology rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 12,534 | 12,310 |
Accumulated amortization | (5,947) | (4,996) |
Intangible assets, net | 6,587 | 7,314 |
Licensing rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 3,275 | 3,275 |
Accumulated amortization | (1,300) | (998) |
Intangible assets, net | 1,975 | 2,277 |
Marketing-related rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 1,333 | 1,186 |
Accumulated amortization | (793) | (650) |
Intangible assets, net | 540 | 536 |
R&D technology rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 1,122 | 1,134 |
Accumulated amortization | (704) | (635) |
Intangible assets, net | $ 418 | $ 499 |
Goodwill and intangible asset80
Goodwill and intangible assets (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 18,264 | $ 17,905 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Amortization charges associated with finite-lived intangible assets | 1,500 | $ 1,400 | $ 1,400 |
Total estimated amortization of finite- lived intangible assets for 2017 | 1,300 | ||
Total estimated amortization of finite- lived intangible assets for 2018 | 1,200 | ||
Total estimated amortization of finite- lived intangible assets for 2019 | 1,100 | ||
Total estimated amortization of finite-lived intangible assets for 2020 | 1,100 | ||
Total estimated amortization of finite-lived intangible assets for 2021 | 900 | ||
Developed product technology rights [Member] | Parsabiv [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 240 |
Accrued liabilites (Details)
Accrued liabilites (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Sales deductions | $ 1,874 | $ 1,486 |
Employee compensation and benefits | 920 | 916 |
Dividends payable | 849 | 754 |
Clinical development costs | 395 | 491 |
Sales returns reserve | 437 | 390 |
Other | 1,409 | 1,415 |
Total accrued liabilities | $ 5,884 | $ 5,452 |
Financing arrangements (Long-te
Financing arrangements (Long-term Borrowings) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Carrying values of long-term borrowings | |||
Short-term loan | $ 605 | $ 0 | |
Unamortized bond discounts and issuance costs | (936) | (210) | |
Total carrying value of debt | 34,596 | 31,429 | |
Less current portion | (4,403) | (2,247) | |
Total noncurrent debt | $ 30,193 | 29,182 | |
2.30% notes due 2016 (2.30% 2016 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.30% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | 750 | ||
2.50% notes due 2016 (2.50% 2016 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.50% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | 1,000 | ||
2.125% notes due 2017 (2.125% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.125% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,250 | 1,250 | |
Floating rate notes due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 600 | 600 | |
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | 1.25% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 850 | 850 | |
5.85% notes due 2017 (5.85% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.85% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,100 | 1,100 | |
6.15% notes due 2018 (6.15% 2018 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.15% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 500 | 500 | |
Term loan due 2018 [Member] | |||
Carrying values of long-term borrowings | |||
Loans payable to bank | $ 0 | 1,975 | |
4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.375% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 577 | 599 | |
5.70% notes due 2019 (5.70% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.70% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,000 | 1,000 | |
Floating rate notes due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 250 | 250 | |
2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.20% | 2.20% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,400 | 1,400 | |
2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.125% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 710 | 733 | |
4.50% notes due 2020 (4.50% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.50% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 300 | $ 300 | |
2.125% notes due 2020 (2.125% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.125% | 2.125% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 750 | $ 750 | |
3.45% notes due 2020 (3.45% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.45% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 900 | 900 | |
4.10% notes due 2021 (4.10% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.10% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,000 | 1,000 | |
1.85% notes due 2021 (1.85% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.85% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 750 | 0 | |
3.875% notes due 2021 (3.875% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.875% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,750 | $ 1,750 | |
1.25% notes due 2022 (1.25% 2022 euro Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,315 | ||
2.70% notes due 2022 (2.70% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.70% | 2.70% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 500 | $ 500 | |
3.625% notes due 2022 (3.625% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.625% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 750 | 750 | |
0.41% 2023 Swiss franc Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 0.41% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 687 | ||
2017 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | ||
2.25% notes due 2023 (2.25% 2023 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.25% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 750 | ||
3.625% notes due 2024 (3.625% 2024 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.625% | 3.625% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,400 | $ 1,400 | |
3.125% notes due 2025 (3.125% 2025 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.125% | 3.125% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,000 | $ 1,000 | |
2.00% 2026 euro Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.00% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 789 | ||
2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.60% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,250 | ||
5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.50% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 586 | 700 | |
4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.00% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 864 | 1,032 | |
6.375% notes due 2037 (6.375% 2037 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.375% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 552 | 900 | |
6.90% notes due 2038 (6.90% 2038 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.90% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 291 | 500 | |
6.40% notes due 2039 (6.40% 2039 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.40% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 466 | 1,000 | |
5.75% notes due 2040 (5.75% 2040 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.75% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 412 | 700 | |
4.95% notes due 2041 (4.95% 2041 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.95% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 600 | 600 | |
5.15% notes due 2041 (5.15% 2041 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.15% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 974 | 2,250 | |
5.65% notes due 2042 (5.65% 2042 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.65% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 487 | 1,250 | |
5.375% notes due 2043 (5.375% 2043 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.375% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 261 | $ 1,000 | |
4.40% notes due 2045 (4.40% 2045 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.40% | 4.40% | |
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 2,250 | $ 1,250 | |
4.563% notes due 2048 (4.563% 2048 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.563% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Effective interest rate on note | 6.30% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,415 | ||
4.663% notes due 2051 (4.663% 2051 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.663% | ||
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event | 101.00% | ||
Effective interest rate on note | 5.60% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 3,541 | ||
Other notes due 2097 [Member] | |||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 100 | $ 100 |
Financing arrangements (Debt Re
Financing arrangements (Debt Repayments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Repayments of debt | $ 3,725 | $ 2,400 | $ 5,605 |
Repayments of notes payable | 5,600 | ||
Term loan due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | 1,975 | $ 2,400 | |
Debt instrument, periodic payment, principal | $ 500 | ||
2.30% notes due 2016 (2.30% 2016 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 750 | ||
Stated contractual interest rate on note | 2.30% | ||
2.50% notes due 2016 (2.50% 2016 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 1,000 | ||
Stated contractual interest rate on note | 2.50% |
Financing arrangements (Debt Is
Financing arrangements (Debt Issuances) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes issued | $ 4,500,000,000 | $ 6,700,000,000 | $ 3,500,000,000 |
Short-term loan | $ 605,000,000 | 0 | |
1.85% notes due 2021 (1.85% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.85% | ||
1.25% notes due 2022 (1.25% 2022 euro Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | ||
0.41% 2023 Swiss franc Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 0.41% | ||
2.25% notes due 2023 (2.25% 2023 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.25% | ||
2.00% 2026 euro Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.00% | ||
2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.60% | ||
4.40% notes due 2045 (4.40% 2045 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes issued | $ 1,000,000,000 | $ 1,250,000,000 | |
Stated contractual interest rate on note | 4.40% | 4.40% | |
2.125% notes due 2020 (2.125% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.125% | 2.125% | |
2.70% notes due 2022 (2.70% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.70% | 2.70% | |
3.125% notes due 2025 (3.125% 2025 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.125% | 3.125% | |
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | 1.25% | |
2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.20% | 2.20% | |
3.625% notes due 2024 (3.625% 2024 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.625% | 3.625% | |
Floating rate notes due 2017 [Member] | Three-Month LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.38% | ||
Floating rate notes due 2019 [Member] | Three-Month LIBOR [Member] | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 0.60% | ||
Senior Notes [Member] | 4.40% notes due 2045 (4.40% 2045 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, unamortized premium | $ 79,000,000 |
Financing arrangements (Debt Ex
Financing arrangements (Debt Exchange) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes issued | $ 6,700,000,000 | $ 3,500,000,000 | $ 4,500,000,000 |
Unamortized bond discounts and issuance costs | $ (936,000,000) | $ (210,000,000) | |
4.563% notes due 2048 (4.563% 2048 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.563% | ||
4.663% notes due 2051 (4.663% 2051 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.663% | ||
6.375% notes due 2037 (6.375% 2037 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.375% | ||
6.90% notes due 2038 (6.90% 2038 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.90% | ||
6.40% notes due 2039 (6.40% 2039 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 6.40% | ||
5.75% notes due 2040 (5.75% 2040 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.75% | ||
5.15% notes due 2041 (5.15% 2041 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.15% | ||
5.65% notes due 2042 (5.65% 2042 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.65% | ||
5.375% notes due 2043 (5.375% 2043 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.375% | ||
Notes payable to banks [Member] | |||
Debt Instrument [Line Items] | |||
Unamortized bond discounts and issuance costs | $ 801,000,000 | ||
Notes payable to banks [Member] | 6.375% notes due 2037 (6.375% 2037 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 348,000,000 | ||
Notes payable to banks [Member] | 6.90% notes due 2038 (6.90% 2038 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 209,000,000 | ||
Notes payable to banks [Member] | 6.40% notes due 2039 (6.40% 2039 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 534,000,000 | ||
Notes payable to banks [Member] | 5.75% notes due 2040 (5.75% 2040 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 288,000,000 | ||
Notes payable to banks [Member] | 5.15% notes due 2041 (5.15% 2041 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 1,276,000,000 | ||
Notes payable to banks [Member] | 5.65% notes due 2042 (5.65% 2042 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 763,000,000 | ||
Notes payable to banks [Member] | 5.375% notes due 2043 (5.375% 2043 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 739,000,000 | ||
Senior Notes [Member] | 4.563% notes due 2048 (4.563% 2048 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes issued | $ 1,400,000,000 | ||
Stated contractual interest rate on note | 4.563% | ||
Senior Notes [Member] | 4.663% notes due 2051 (4.663% 2051 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes issued | $ 3,500,000,000 | ||
Stated contractual interest rate on note | 4.663% | ||
Nonoperating Income (Expense) [Member] | Notes payable to banks [Member] | New senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt related commitment fees and debt issuance costs | $ 24,000,000 |
Financing arrangements (Term Lo
Financing arrangements (Term Loan) (Details) - Term loan due 2018 [Member] - USD ($) | Oct. 01, 2013 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Loans payable to bank, noncurrent | $ 5,000,000,000 | |
Debt instrument, periodic payment, principal | $ 125,000,000 | |
LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.00% |
Financing arrangements (Interes
Financing arrangements (Interest Rate and Cross-currency Swaps) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2014 |
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 1.25% | 1.25% |
2.20% notes due 2019 (2.20% 2019 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 2.20% | 2.20% |
3.45% notes due 2020 (3.45% 2020 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 3.45% | |
4.10% notes due 2021 (4.10% 2021 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 4.10% | |
3.875% notes due 2021 (3.875% 2021 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 3.875% | |
3.625% notes due 2022 (3.625% 2022 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 3.625% | |
2.125% 2019 euro Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 2.125% | |
1.25% notes due 2022 (1.25% 2022 euro Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 1.25% | |
0.41% 2023 Swiss franc Bonds [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 0.41% | |
2.00% 2026 euro Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 2.00% | |
5.50% 2026 pound sterling Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 5.50% | |
4.00% 2029 pound sterling Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 4.00% | |
Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 6,650 | |
Notes payable [Member] | 1.25% notes due 2017 (1.25% 2017 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 850 | |
Notes payable [Member] | 1.25% notes due 2017 (1.25% 2017 Notes) [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, effective interest rate | 0.40% | |
Notes payable [Member] | 2.20% notes due 2019 (2.20% 2019 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 1,400 | |
Notes payable [Member] | 2.20% notes due 2019 (2.20% 2019 Notes) [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, effective interest rate | 0.60% | |
Notes payable [Member] | 3.45% notes due 2020 (3.45% 2020 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 900 | |
Notes payable [Member] | 3.45% notes due 2020 (3.45% 2020 Notes) [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, effective interest rate | 1.10% | |
Notes payable [Member] | 4.10% notes due 2021 (4.10% 2021 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 1,000 | |
Notes payable [Member] | 4.10% notes due 2021 (4.10% 2021 Notes) [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, effective interest rate | 1.70% | |
Notes payable [Member] | 3.875% notes due 2021 (3.875% 2021 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 1,750 | |
Notes payable [Member] | 3.875% notes due 2021 (3.875% 2021 Notes) [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, effective interest rate | 2.00% | |
Notes payable [Member] | 3.625% notes due 2022 (3.625% 2022 Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 750 | |
Notes payable [Member] | 3.625% notes due 2022 (3.625% 2022 Notes) [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, effective interest rate | 1.60% | |
Notes payable [Member] | 2.125% 2019 euro Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 2.125% | |
Notes payable [Member] | 1.25% notes due 2022 (1.25% 2022 euro Notes) [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 1.25% | |
Notes payable [Member] | 0.41% 2023 Swiss franc Bonds [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 0.41% | |
Notes payable [Member] | 2.00% 2026 euro Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 2.00% | |
Notes payable [Member] | 4.00% 2029 pound sterling Notes [Member] | ||
Debt Instrument [Line Items] | ||
Stated contractual interest rate on note | 4.00% | |
Interest rate swap [Member] | Fair value hedging [Member] | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 6,650 |
Financing arrangements (Shelf R
Financing arrangements (Shelf Registration Statements and Other Facilities) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 1997 | |
Debt Instrument [Line Items] | ||||
Additional period for extension of commitment term | 1 year | |||
Commercial paper [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity under commercial paper program | $ 2,500,000,000 | |||
Amount outstanding under commercial paper program | 0 | $ 0 | ||
Line of credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum current borrowing capacity under a syndicated, unsecured, revolving credit agreement | $ 2,500,000,000 | |||
Amount by which borrowing capacity under a syndicated unsecured revolving credit agreement may be increased upon our request at discretion of banks | $ 500,000,000 | |||
Initial commitment term of each bank which is a party to the agreement | 5 years | |||
Additional period for extension of commitment term | 1 year | |||
Annual commitment fees for syndicated, unsecured, revolving credit agreement | 0.09% | |||
Basis spread on variable rate | 1.00% | |||
Amount outstanding under syndicated, unsecured, revolving credit facility | $ 0 | 0 | ||
Medium-term notes [Member] | Shelf registration statement [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount that may be issued under a medium term note program established under the shelf registration statement | $ 400,000,000 | |||
Amount outstanding under medium term note program | $ 0 | $ 0 |
Financing arrangements (Contrac
Financing arrangements (Contractual Maturities of Long-term Debt) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Maturities of Long-term Debt [Abstract] | |
2,017 | $ 4,405 |
2,018 | 1,076 |
2,019 | 3,360 |
2,020 | 1,950 |
2,021 | 3,500 |
Thereafter | 21,241 |
Total | $ 35,532 |
Financing arrangements (Inter90
Financing arrangements (Interest Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |||
Interest expense, net | $ 1,260 | $ 1,095 | $ 1,071 |
Interest paid, net of interest rate and cross currency swaps | $ 1,200 | $ 1,000 | $ 1,100 |
Stockholders' equity (Shares Re
Stockholders' equity (Shares Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | |||||||||||||||
Total stock repurchases, Shares | 6.7 | 4.4 | 3.9 | 4.7 | 1.2 | 4.6 | 3.3 | 2.9 | 0.9 | 0 | 0 | 0 | 19.7 | 12 | 0.9 |
Total stock repurchases | $ 999 | $ 747 | $ 591 | $ 690 | $ 184 | $ 703 | $ 515 | $ 451 | $ 153 | $ 0 | $ 0 | $ 0 | $ 3,027 | $ 1,853 | $ 153 |
Stockholders' equity (Component
Stockholders' equity (Components of AOCI) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | $ 28,083 | $ 25,778 | $ 22,096 |
Ending Balance | 29,875 | 28,083 | 25,778 |
Foreign currency translation [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (511) | (264) | (68) |
Other comprehensive income (loss), before reclassification adjustments, before tax | (93) | (257) | (218) |
Income taxes | (6) | 10 | 22 |
Ending Balance | (610) | (511) | (264) |
Cash flow hedges [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 297 | 290 | (33) |
Other comprehensive income (loss), before reclassification adjustments, before tax | (176) | 150 | 298 |
Reclassification adjustments to income | 139 | (143) | 203 |
Income taxes | 22 | 0 | (178) |
Ending Balance | 282 | 297 | 290 |
Available-for-sale securities [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (260) | (19) | (43) |
Other comprehensive income (loss), before reclassification adjustments, before tax | 63 | (299) | 37 |
Reclassification adjustments to income | 61 | 76 | 1 |
Income taxes | (2) | (18) | (14) |
Ending Balance | (138) | (260) | (19) |
Other [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (6) | (15) | (17) |
Other comprehensive income (loss), before reclassification adjustments, before tax | 0 | 8 | 1 |
Other | 1 | 1 | 1 |
Ending Balance | (5) | (6) | (15) |
AOCI [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (480) | (8) | (161) |
Other comprehensive income (loss), before reclassification adjustments, before tax | (113) | (141) | 336 |
Reclassification adjustments to income | 200 | (67) | 204 |
Other | 1 | 1 | 1 |
Income taxes | 14 | (8) | (170) |
Ending Balance | $ (471) | $ (480) | $ (8) |
Stockholders' equity (Reclassif
Stockholders' equity (Reclassifications out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Product sales | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 5,329 | $ 5,516 | $ 5,225 | $ 4,874 | $ 21,892 | $ 20,944 | $ 19,327 |
Interest and other income, net | 629 | 603 | 465 | ||||||||
Interest expense, net | (1,260) | (1,095) | (1,071) | ||||||||
Income before income taxes | 9,163 | 7,978 | 5,585 | ||||||||
Provision for income taxes | (1,441) | (1,039) | (427) | ||||||||
Net income | $ 1,935 | $ 2,017 | $ 1,870 | $ 1,900 | $ 1,800 | $ 1,863 | $ 1,653 | $ 1,623 | 7,722 | 6,939 | 5,158 |
Reclassification out of AOCI [Member] | Cash flow hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Product sales | 308 | 326 | 28 | ||||||||
Interest and other income, net | (446) | (182) | (230) | ||||||||
Interest expense, net | (1) | (1) | (1) | ||||||||
Income before income taxes | (139) | 143 | (203) | ||||||||
Provision for income taxes | 46 | (53) | 74 | ||||||||
Net income | (93) | 90 | (129) | ||||||||
Reclassification out of AOCI [Member] | Available-for-sale securities [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest and other income, net | (61) | (76) | (1) | ||||||||
Provision for income taxes | 11 | 18 | 0 | ||||||||
Net income | $ (50) | $ (58) | $ (1) |
Stockholders' equity (Details T
Stockholders' equity (Details Textual) - USD ($) $ / shares in Units, $ in Millions | Dec. 20, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Equity [Abstract] | ||||||||||||||||
Amount available for stock repurchases under a board approved stock repurchase plan | $ 4,100 | $ 4,100 | ||||||||||||||
Common stock, dividends paid per share (in usd per share) | $ 1 | $ 1 | $ 1 | $ 1 | $ 0.79 | $ 0.79 | $ 0.79 | $ 0.79 | $ 0.61 | $ 0.61 | $ 0.61 | $ 0.61 | ||||
Common stock, dividends declared per share (in usd per share) | $ 1.15 | |||||||||||||||
Income taxes expense or (benefit) for unrealized gains and losses for cash flow hedges | (68) | $ 53 | $ 104 | |||||||||||||
Income tax expense or (benefit) reclassification adjustments to income for cash flow hedges | (46) | 53 | (74) | |||||||||||||
Income taxes expense or (benefit) for unrealized gains and losses for available-for-sale securities | (9) | 0 | 14 | |||||||||||||
Income tax expense or (benefit) for reclassification adjustments to income for available-for-sale securities | $ 11 | $ 18 | $ 0 | |||||||||||||
Preferred stock shares authorized (in shares) | 5,000,000 | 5,000,000 | ||||||||||||||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | ||||||||||||||
Preferred stock, shares issued | 0 | 0 | 0 | 0 | ||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 |
Fair value measurement (Fair Va
Fair value measurement (Fair Value of Financial Assets and Liabilities on Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | |||
Total available-for-sale investments | $ 37,781 | $ 31,112 | |
Recurring [Member] | |||
Derivative Assets: | |||
Total assets | 38,025 | 31,325 | |
Derivative Liabilities: | |||
Contingent consideration obligations in connection with business combinations | 179 | 188 | |
Total liabilities | 713 | 449 | |
Recurring [Member] | Foreign currency contracts [Member] | |||
Derivative Assets: | |||
Foreign currency contracts | 203 | 142 | |
Derivative Liabilities: | |||
Foreign currency contracts | 4 | 8 | |
Recurring [Member] | Interest rate swap contracts [Member] | |||
Derivative Assets: | |||
Interest rate swap contracts | 41 | 71 | |
Derivative Liabilities: | |||
Interest rate swap contracts | 7 | 3 | |
Recurring [Member] | Cross-currency swap contracts [Member] | |||
Derivative Liabilities: | |||
Foreign currency contracts | 523 | 250 | |
Recurring [Member] | U.S. Treasury securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 6,614 | 4,274 | |
Recurring [Member] | Other government-related debt securities - U.S. [Member] | |||
Assets: | |||
Total available-for-sale investments | 299 | 534 | |
Recurring [Member] | Other government-related debt securities - Foreign and other [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,759 | 1,739 | |
Recurring [Member] | Corporate debt securities - Financial [Member] | |||
Assets: | |||
Total available-for-sale investments | 8,460 | 7,871 | |
Recurring [Member] | Corporate debt securities - Industrial [Member] | |||
Assets: | |||
Total available-for-sale investments | 8,789 | 7,836 | |
Recurring [Member] | Corporate debt securities - Other [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,077 | 885 | |
Recurring [Member] | Residential mortgage-backed securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,940 | 1,470 | |
Recurring [Member] | Other mortgage- and asset-backed securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,719 | 2,469 | |
Recurring [Member] | Money market mutual funds [Member] | |||
Assets: | |||
Total available-for-sale investments | 2,782 | 3,370 | |
Recurring [Member] | Other short-term interest-bearing securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 4,188 | 528 | |
Recurring [Member] | Equity securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 154 | 136 | |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||
Derivative Assets: | |||
Total assets | 9,550 | 7,780 | |
Derivative Liabilities: | |||
Contingent consideration obligations in connection with business combinations | 0 | 0 | |
Total liabilities | 0 | 0 | |
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 | |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Interest rate swap contracts [Member] | |||
Derivative Assets: | |||
Interest rate swap contracts | 0 | 0 | |
Derivative Liabilities: | |||
Interest rate swap contracts | 0 | 0 | |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Cross-currency swap contracts [Member] | |||
Derivative Liabilities: | |||
Foreign currency contracts | 0 | 0 | |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | U.S. Treasury securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 6,614 | 4,274 | |
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 | |
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 | |
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 | |
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 | |
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 | |
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 | |
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 | |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market mutual funds [Member] | |||
Assets: | |||
Total available-for-sale investments | 2,782 | 3,370 | |
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 | |
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Equity securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 154 | 136 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | |||
Derivative Assets: | |||
Total assets | 28,475 | 23,545 | |
Derivative Liabilities: | |||
Contingent consideration obligations in connection with business combinations | 0 | 0 | |
Total liabilities | 534 | 261 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member] | |||
Derivative Assets: | |||
Foreign currency contracts | 203 | 142 | |
Derivative Liabilities: | |||
Foreign currency contracts | 4 | 8 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Interest rate swap contracts [Member] | |||
Derivative Assets: | |||
Interest rate swap contracts | 41 | 71 | |
Derivative Liabilities: | |||
Interest rate swap contracts | 7 | 3 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross-currency swap contracts [Member] | |||
Derivative Liabilities: | |||
Foreign currency contracts | 523 | 250 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | U.S. Treasury securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - U.S. [Member] | |||
Assets: | |||
Total available-for-sale investments | 299 | 534 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,759 | 1,739 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member] | |||
Assets: | |||
Total available-for-sale investments | 8,460 | 7,871 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member] | |||
Assets: | |||
Total available-for-sale investments | 8,789 | 7,836 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,077 | 885 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,940 | 1,470 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 1,719 | 2,469 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Money market mutual funds [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other short-term interest-bearing securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 4,188 | 528 | |
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Equity securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | |||
Derivative Assets: | |||
Total assets | 0 | ||
Derivative Liabilities: | |||
Contingent consideration obligations in connection with business combinations | 179 | 188 | $ 215 |
Total liabilities | 179 | 188 | |
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 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Interest rate swap contracts [Member] | |||
Derivative Assets: | |||
Interest rate swap contracts | 0 | 0 | |
Derivative Liabilities: | |||
Interest rate swap contracts | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Cross-currency swap contracts [Member] | |||
Derivative Liabilities: | |||
Foreign currency contracts | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | U.S. Treasury securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - U.S. [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
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 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Financial [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Industrial [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Other [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Residential mortgage-backed securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other mortgage- and asset-backed securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Money market mutual funds [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other short-term interest-bearing securities [Member] | |||
Assets: | |||
Total available-for-sale investments | 0 | 0 | |
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) - USD ($) $ in Millions | Oct. 14, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Payment to former BioVex Group, Inc. shareholders | $ 0 | $ 253 | $ 92 | |
Dezima [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Additions from Dezima acquisition | $ 110 | |||
Biovex [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Payment to former BioVex Group, Inc. shareholders | 125 | |||
Recurring [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Beginning balance | 188 | |||
Ending balance | 179 | 188 | ||
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Beginning balance | 188 | 215 | ||
Net changes in valuation | (9) | (12) | ||
Ending balance | 179 | 188 | $ 215 | |
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Dezima [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Additions from Dezima acquisition | 0 | 110 | ||
Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Biovex [Member] | ||||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Payment to former BioVex Group, Inc. shareholders | $ 0 | $ 125 |
Fair value measurement (Details
Fair value measurement (Details Textual) - USD ($) | Oct. 14, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2015 |
Fair Value Measurement (Textual) [Abstract] | |||||
Length of time hedged in foreign currency contracts | 3 years | ||||
Payment of contingent consideration obligation | $ 0 | $ 253,000,000 | $ 92,000,000 | ||
Aggregate fair value of long-term debt, including current portion | 36,500,000,000 | 33,100,000,000 | |||
Carrying value of long-term debt, including current portion | 34,596,000,000 | 31,429,000,000 | |||
Dezima [Member] | |||||
Fair Value Measurement (Textual) [Abstract] | |||||
Maximum additional consideration due contingent on certain milestones | $ 1,250,000,000 | $ 1,250,000,000 | |||
Estimated fair values of contingent consideration obligations | $ 110,000,000 | ||||
Biovex [Member] | |||||
Fair Value Measurement (Textual) [Abstract] | |||||
Payment of contingent consideration obligation | $ 125,000,000 | ||||
Additional contingent consideration upon achievement of milestones | $ 325,000,000 | ||||
Other government-related and corporate debt securities [Member] | |||||
Fair Value Measurement (Textual) [Abstract] | |||||
Investment maturity period | 5 years |
Derivative instruments (Details
Derivative instruments (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | 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 | $ 34 | $ (48) | $ (181) |
Offsetting unrealized gain (loss) on related interest rate swaps | (34) | 48 | 181 |
Foreign currency option contracts [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | 608 | 225 | 271 |
Foreign currency forward and option contracts [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount of terminated derivatives | 2,300 | ||
Foreign currency forward and option contracts [Member] | Net cash provided by operating activities [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Proceeds from counterparties on termination of derivatives | 340 | ||
Foreign currency and cross currency swap contracts [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Amounts expected to be reclassified from accumulated other comprehensive income into earnings over the next 12 months - gains on foreign currency and cross currency swap | 80 | ||
Forward interest rate contracts [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Amounts expected to be reclassified from accumulated other comprehensive income into earnings over the next 12 months - gain (loss) | 2 | ||
Interest rate swap [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | 6,650 | 6,650 | 6,650 |
Foreign currency forward contracts [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | 3,400 | 3,300 | 3,800 |
Foreign currency forward contracts [Member] | Derivatives not designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | $ 666 | $ 911 | $ 875 |
Minimum [Member] | Rate adjustment to LIBOR on Interest Rate Swap Agreements [Member] | Three-Month LIBOR [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Derivative, effective interest rate | 0.40% | ||
Maximum [Member] | Rate adjustment to LIBOR on Interest Rate Swap Agreements [Member] | Three-Month LIBOR [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Derivative, effective interest rate | 2.00% |
Derivative Instruments (Cross-c
Derivative Instruments (Cross-currency Swaps) (Details) - Cash flow hedge [Member] - Cross-currency swap contracts [Member] € in Millions, £ in Millions, SFr in Millions, $ in Millions | Dec. 31, 2016USD ($) | Dec. 31, 2016GBP (£) | Dec. 31, 2016CHF (SFr) | Dec. 31, 2016EUR (€) |
2.125% 2019 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 864 | € 675 | ||
2.125% 2019 euro Notes [Member] | Euro [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 2.125% | 2.125% | 2.125% | 2.125% |
2.125% 2019 euro Notes [Member] | Dollars [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 2.60% | 2.60% | 2.60% | 2.60% |
1.25% 2022 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 1,388 | € 1,250 | ||
1.25% 2022 euro Notes [Member] | Euro [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 1.25% | 1.25% | 1.25% | 1.25% |
1.25% 2022 euro Notes [Member] | Dollars [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 3.20% | 3.20% | 3.20% | 3.20% |
0.41% 2023 Swiss franc Bonds [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 704 | SFr 700 | ||
0.41% 2023 Swiss franc Bonds [Member] | Switzerland, Francs [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 0.41% | 0.41% | 0.41% | 0.41% |
0.41% 2023 Swiss franc Bonds [Member] | Dollars [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 3.40% | 3.40% | 3.40% | 3.40% |
2.00% 2026 euro Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 833 | € 750 | ||
2.00% 2026 euro Notes [Member] | Euro [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 2.00% | 2.00% | 2.00% | 2.00% |
2.00% 2026 euro Notes [Member] | Dollars [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 3.90% | 3.90% | 3.90% | 3.90% |
5.50% 2026 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 747 | £ 475 | ||
5.50% 2026 pound sterling Notes [Member] | Sterling Pounds [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 5.50% | 5.50% | 5.50% | 5.50% |
5.50% 2026 pound sterling Notes [Member] | Dollars [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 6.00% | 6.00% | 6.00% | 6.00% |
4.00% 2029 pound sterling Notes [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 1,111 | £ 700 | ||
4.00% 2029 pound sterling Notes [Member] | Sterling Pounds [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 4.00% | 4.00% | 4.00% | 4.00% |
4.00% 2029 pound sterling Notes [Member] | Dollars [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 4.50% | 4.50% | 4.50% | 4.50% |
Derivative Instruments (Effecti
Derivative Instruments (Effective Portion of Unrealized Gain (Loss)) (Details) - Derivatives in cash flow hedging relationships [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges contracts [Abstract] | |||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | $ (176) | $ 150 | $ 298 |
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 contracts [Abstract] | |||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | 115 | 425 | 452 |
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 contracts [Abstract] | |||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | (281) | (275) | (154) |
Forward interest rate contract [Member] | |||
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges contracts [Abstract] | |||
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net | $ (10) | $ 0 | $ 0 |
Derivative instruments (Locatio
Derivative instruments (Locations and Effective Portions of Gain (Loss) Reclassified out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Product sales | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 5,329 | $ 5,516 | $ 5,225 | $ 4,874 | $ 21,892 | $ 20,944 | $ 19,327 |
Interest and other income, net | 629 | 603 | 465 | ||||||||
Interest expense, net | (1,260) | (1,095) | (1,071) | ||||||||
Income before income taxes | 9,163 | 7,978 | 5,585 | ||||||||
Accumulated net gain (loss) from designated or qualifying cash flow hedges [Member] | Reclassification out of AOCI [Member] | |||||||||||
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Product sales | 308 | 326 | 28 | ||||||||
Interest and other income, net | (446) | (182) | (230) | ||||||||
Interest expense, net | (1) | (1) | (1) | ||||||||
Income before income taxes | (139) | 143 | (203) | ||||||||
Accumulated net gain (loss) from designated or qualifying cash flow hedges [Member] | Reclassification out of AOCI [Member] | Derivatives in cash flow hedging relationships [Member] | |||||||||||
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Income before income taxes | (139) | 143 | (203) | ||||||||
Accumulated net gain (loss) from designated or qualifying cash flow hedges [Member] | Reclassification out of AOCI [Member] | Derivatives in cash flow hedging relationships [Member] | Foreign currency contracts [Member] | |||||||||||
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Product sales | 308 | 326 | 28 | ||||||||
Accumulated net gain (loss) from designated or qualifying cash flow hedges [Member] | Reclassification out of AOCI [Member] | Derivatives in cash flow hedging relationships [Member] | Cross-currency swap contracts [Member] | |||||||||||
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Interest and other income, net | (446) | (182) | (230) | ||||||||
Accumulated net gain (loss) from designated or qualifying cash flow hedges [Member] | Reclassification out of AOCI [Member] | Derivatives in cash flow hedging relationships [Member] | Forward interest rate contract [Member] | |||||||||||
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Interest expense, net | $ (1) | $ (1) | $ (1) |
Derivative instruments (Loca102
Derivative instruments (Locations and Gain (Loss) for Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign currency contracts [Member] | Interest and other income, net [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Amount of gain (loss) recognized in interest and other income, net | $ (56) | $ (16) | $ (10) |
Derivative instruments (Fair Va
Derivative instruments (Fair Value of Derivatives) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Total derivative assets, fair value | $ 244 | $ 213 |
Liabilities | ||
Total derivative liabilities, fair value | 534 | 261 |
Derivatives designated as hedging instruments [Member] | ||
Assets | ||
Total derivative assets, fair value | 244 | 213 |
Liabilities | ||
Total derivative liabilities, fair value | 534 | 260 |
Derivatives designated as hedging instruments [Member] | Foreign currency contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 203 | 142 |
Derivatives designated as hedging instruments [Member] | Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 4 | 7 |
Derivatives designated as hedging instruments [Member] | Cross-currency swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 0 | 0 |
Derivatives designated as hedging instruments [Member] | Cross-currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 523 | 250 |
Derivatives designated as hedging instruments [Member] | Interest rate swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 41 | 71 |
Derivatives designated as hedging instruments [Member] | Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 7 | 3 |
Derivatives not designated as hedging instruments [Member] | ||
Assets | ||
Total derivative assets, fair value | 0 | 0 |
Liabilities | ||
Total derivative liabilities, fair value | 0 | 1 |
Derivatives not designated as hedging instruments [Member] | Foreign currency contracts [Member] | Other current assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 0 | 0 |
Derivatives not designated as hedging instruments [Member] | Foreign currency contracts [Member] | Accrued liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | $ 0 | $ 1 |
Contingencies and commitment104
Contingencies and commitments (Details Textual) $ in Millions | Jan. 23, 2017lawsuit | Nov. 08, 2016lawsuit | Nov. 01, 2016lawsuit | Aug. 15, 2016defendants | Feb. 26, 2016patent | Nov. 12, 2015count | Nov. 03, 2015lawsuit | Sep. 16, 2013actionsplaintiffs | Dec. 31, 2015patent | Dec. 31, 2016USD ($)actionscomplaintsdefendantsplaintiffslawsuit | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Loss Contingencies [Line Items] | ||||||||||||
Future rental commitments for abandoned leases | $ | $ 309 | |||||||||||
Future rental income relating to noncancelable subleases of abandoned facilities | $ | 228 | |||||||||||
Rental expense on operating leases | $ | $ 134 | $ 133 | $ 126 | |||||||||
Onyx [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of plaintiffs | plaintiffs | 9 | |||||||||||
Sanofi/Regeneron Patent Litigation [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of patents allegedly infringed | patent | 7 | |||||||||||
Sensipar Patent Litigation [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of lawsuits filed | 13 | |||||||||||
Sandoz Etanercept [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of patents allegedly infringed | patent | 5 | |||||||||||
Apotex Pegfilgrastim/Filgrastim Litigation [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of lawsuits filed | 2 | |||||||||||
Hospira Epoetin Alfa Litigation [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of counts in a complaint in a motion for dismissal | count | 1 | |||||||||||
Gain contingency, number of defendants | defendants | 3 | |||||||||||
Superior Court State of California [Member] | Onyx [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of purported class actions | actions | 7 | |||||||||||
Larson v. Sharer, et al [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of stockholder complaints | complaints | 3 | |||||||||||
Loss Contingency, Action | actions | 1 | |||||||||||
Ramos v. Amgen Inc., et al. [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of new defendants | defendants | 4 | |||||||||||
Harris, et. al. v. Amgen Inc. [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss Contingency, Action | actions | 1 | |||||||||||
Number of additional plaintiffs | plaintiffs | 2 | |||||||||||
Onyx Therapeutics, Inc [Member] | Breckenridge Pharmaceutical and Fresenius Kabi [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of lawsuits filed | 4 | |||||||||||
Onyx Therapeutics, Inc [Member] | MSN Laboratories/Pharmaceuticals, Dr. Reddy's Laboratories, and Qilu Pharma [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of lawsuits filed | 4 | |||||||||||
Subsequent Event [Member] | Hospira Epoetin Alfa Litigation [Member] | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Gain contingency, claims dismissed, number | 2 |
Contingencies and commitment105
Contingencies and commitments (Future Minimum Rental Commitments) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 156 |
2,018 | 149 |
2,019 | 135 |
2,020 | 123 |
2,021 | 108 |
Thereafter | 116 |
Total minimum operating lease commitments | $ 787 |
Segment information (Revenues b
Segment information (Revenues by Product) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues [Abstract] | |||||||||||
Product sales | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 5,329 | $ 5,516 | $ 5,225 | $ 4,874 | $ 21,892 | $ 20,944 | $ 19,327 |
Other revenues | 1,099 | 718 | 736 | ||||||||
Total revenues | 22,991 | 21,662 | 20,063 | ||||||||
ENBREL [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 5,965 | 5,364 | 4,688 | ||||||||
Neulasta [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 4,648 | 4,715 | 4,596 | ||||||||
Aranesp [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 2,093 | 1,951 | 1,930 | ||||||||
Prolia [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,635 | 1,312 | 1,030 | ||||||||
Sensipar Mimpara [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,582 | 1,415 | 1,158 | ||||||||
XGEVA [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,529 | 1,405 | 1,221 | ||||||||
EPOGEN [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,282 | 1,856 | 2,031 | ||||||||
NEUPOGEN [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 765 | 1,049 | 1,159 | ||||||||
Kyprolis [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 692 | 512 | 331 | ||||||||
Vectibix [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 611 | 549 | 505 | ||||||||
Nplate [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 584 | 525 | 469 | ||||||||
Repatha [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 141 | 10 | 0 | ||||||||
BLINCYTO [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 115 | 77 | 3 | ||||||||
Other [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | $ 250 | $ 204 | $ 206 |
Segment information (Revenue107
Segment information (Revenues by Geographic Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Geographical Information With Respect To Revenues [Abstract] | |||
Revenues | $ 22,991 | $ 21,662 | $ 20,063 |
United States [Member] | |||
Geographical Information With Respect To Revenues [Abstract] | |||
Revenues | 18,326 | 17,167 | 15,396 |
Rest of the world (ROW) [Member] | |||
Geographical Information With Respect To Revenues [Abstract] | |||
Revenues | $ 4,665 | $ 4,495 | $ 4,667 |
Segment information (Long-lived
Segment information (Long-lived Assets by Geographic Information) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Long Lived Assets [Abstract] | ||
Total long-lived assets | $ 4,961 | $ 4,907 |
United States [Member] | ||
Long Lived Assets [Abstract] | ||
Total long-lived assets | 2,328 | 2,275 |
Puerto Rico [Member] | ||
Long Lived Assets [Abstract] | ||
Total long-lived assets | 1,591 | 1,679 |
ROW [Member] | ||
Long Lived Assets [Abstract] | ||
Total long-lived assets | $ 1,042 | $ 953 |
Segment information (Customer C
Segment information (Customer Concentration, Product Sales) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 22,991 | $ 21,662 | $ 20,063 |
AmerisourceBergen Corporation [Member] | |||
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 10,100 | $ 10,038 | $ 9,142 |
Gross product sales to major customer (as defined) as a percentage of total gross revenues | 31.00% | 34.00% | 34.00% |
Gross product sales to major customer (as defined) as a percentage of U.S. gross product sales | 38.00% | 42.00% | 43.00% |
McKesson Corporation [Member] | |||
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 9,710 | $ 8,766 | $ 8,011 |
Gross product sales to major customer (as defined) as a percentage of total gross revenues | 30.00% | 30.00% | 30.00% |
Gross product sales to major customer (as defined) as a percentage of U.S. gross product sales | 34.00% | 34.00% | 35.00% |
Cardinal Health, Inc. [Member] | |||
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 6,520 | $ 5,045 | $ 3,407 |
Gross product sales to major customer (as defined) as a percentage of total gross revenues | 20.00% | 17.00% | 13.00% |
Gross product sales to major customer (as defined) as a percentage of U.S. gross product sales | 24.00% | 21.00% | 16.00% |
Segment information (Details Te
Segment information (Details Textual) | 12 Months Ended | ||
Dec. 31, 2016segmentcustomer | Dec. 31, 2015customer | Dec. 31, 2014customer | |
Segment Reporting Information [Line Items] | |||
Number of business segment | segment | 1 | ||
Number of major customers (as defined) accounting for more than 10% of total revenue | 3 | 3 | 3 |
Threshold as a percentage of total revenues for determining a major customer for additional disclosures | 10.00% | 10.00% | 10.00% |
Percentage of worldwide gross revenues derived from major customers (as defined) on a combined basis | 81.00% | ||
Percentage of United States gross product sales derived from major customers (as defined) on a combined basis | 96.00% | ||
Major customers (as defined) accounting for more than 10% of gross trade receivables | 3 | 3 | |
Combined trade receivables for all major customers (as defined) as a percentage of net trade receivables | 76.00% | 75.00% | |
Percentage of net trade receivables due from customers located outside the United States, primarily in Europe | 21.00% | 23.00% | |
AmerisourceBergen Corporation [Member] | |||
Segment Reporting Information [Line Items] | |||
Amount due from major customer (as defined) as a percentage of gross trade receivables | exceeded 10% | exceeded 10% | |
McKesson Corporation [Member] | |||
Segment Reporting Information [Line Items] | |||
Amount due from major customer (as defined) as a percentage of gross trade receivables | exceeded 10% | exceeded 10% | |
Cardinal Health, Inc. [Member] | |||
Segment Reporting Information [Line Items] | |||
Amount due from major customer (as defined) as a percentage of gross trade receivables | exceeded 10% | exceeded 10% |
Quarterly financial data (un111
Quarterly financial data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Product sales | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 5,329 | $ 5,516 | $ 5,225 | $ 4,874 | $ 21,892 | $ 20,944 | $ 19,327 |
Gross profit from product sales | 4,596 | 4,489 | 4,424 | 4,221 | 4,258 | 4,482 | 4,136 | 3,841 | |||
Net income | $ 1,935 | $ 2,017 | $ 1,870 | $ 1,900 | $ 1,800 | $ 1,863 | $ 1,653 | $ 1,623 | $ 7,722 | $ 6,939 | $ 5,158 |
Earnings per share: | |||||||||||
Basic (in usd per share) | $ 2.61 | $ 2.70 | $ 2.49 | $ 2.52 | $ 2.39 | $ 2.46 | $ 2.18 | $ 2.13 | $ 10.32 | $ 9.15 | $ 6.80 |
Diluted (in usd per share) | $ 2.59 | $ 2.68 | $ 2.47 | $ 2.50 | $ 2.37 | $ 2.44 | $ 2.15 | $ 2.11 | $ 10.24 | $ 9.06 | $ 6.70 |
SCHEDULE II - VALUATION AND 112
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts [Roll Forward] | |||
Balance at beginning of period | $ 55 | $ 50 | $ 59 |
Additions charged to costs and expenses | 11 | 18 | 3 |
Other additions | 0 | 0 | 0 |
Deductions | 15 | 13 | 12 |
Balance at end of period | $ 51 | $ 55 | $ 50 |