Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 09, 2018 | Jun. 30, 2017 | |
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, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
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 | $ 125,649,811,435 | ||
Entity Common Stock, Shares Outstanding | 720,562,246 | ||
Shares of common stock held by directors and executive officers | 1,188,740 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Product sales | $ 21,795 | $ 21,892 | $ 20,944 |
Other revenues | 1,054 | 1,099 | 718 |
Total revenues | 22,849 | 22,991 | 21,662 |
Operating expenses: | |||
Cost of sales | 4,069 | 4,162 | 4,227 |
Research and development | 3,562 | 3,840 | 4,070 |
Selling, general and administrative | 4,870 | 5,062 | 4,846 |
Other | 375 | 133 | 49 |
Total operating expenses | 12,876 | 13,197 | 13,192 |
Operating income | 9,973 | 9,794 | 8,470 |
Interest expense, net | 1,304 | 1,260 | 1,095 |
Interest and other income, net | 928 | 629 | 603 |
Income before income taxes | 9,597 | 9,163 | 7,978 |
Provision for income taxes | 7,618 | 1,441 | 1,039 |
Net income | $ 1,979 | $ 7,722 | $ 6,939 |
Earnings per share: | |||
Basic (in usd per share) | $ 2.71 | $ 10.32 | $ 9.15 |
Diluted (in usd per share) | $ 2.69 | $ 10.24 | $ 9.06 |
Shares used in the calculation of earnings per share: | |||
Basic (in shares) | 731 | 748 | 758 |
Diluted (in shares) | 735 | 754 | 766 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,979 | $ 7,722 | $ 6,939 |
Other comprehensive (loss) income, net of reclassification adjustments and taxes: | |||
Foreign currency translation gains (losses) | 81 | (99) | (247) |
Effective portion of cash flow hedges | (288) | (15) | 7 |
Net unrealized (losses) gains on available-for-sale securities | (6) | 122 | (241) |
Other | 5 | 1 | 9 |
Other comprehensive (loss) income, net of tax | (208) | 9 | (472) |
Comprehensive income | $ 1,771 | $ 7,731 | $ 6,467 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,800 | $ 3,241 |
Marketable securities | 37,878 | 34,844 |
Trade receivables, net | 3,237 | 3,165 |
Inventories | 2,834 | 2,745 |
Other current assets | 1,727 | 2,015 |
Total current assets | 49,476 | 46,010 |
Property, plant and equipment, net | 4,989 | 4,961 |
Intangible assets, net | 8,609 | 10,279 |
Goodwill | 14,761 | 14,751 |
Other assets | 2,119 | 1,625 |
Total assets | 79,954 | 77,626 |
Current liabilities: | ||
Accounts payable | 1,352 | 917 |
Accrued liabilities | 6,516 | 5,884 |
Short-term borrowings and current portion of long-term debt | 1,152 | 4,403 |
Total current liabilities | 9,020 | 11,204 |
Long-term debt | 34,190 | 30,193 |
Long-term deferred tax liabilities | 1,166 | 2,436 |
Long-term tax liabilities | 9,099 | 2,419 |
Other noncurrent liabilities | 1,238 | 1,499 |
Contingencies and commitments | ||
Stockholders’ equity: | ||
Common stock and additional paid-in capital; $0.0001 par value per share; 2,750.0 shares authorized; outstanding—722.2 shares in 2017 and 738.2 shares in 2016 | 30,992 | 30,784 |
Accumulated deficit | (5,072) | (438) |
Accumulated other comprehensive loss | (679) | (471) |
Total stockholders’ equity | 25,241 | 29,875 |
Total liabilities and stockholders’ equity | $ 79,954 | $ 77,626 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 2,750 |
Common stock and additional paid-in capital, shares outstanding | 722.2 | 738.2 |
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 (loss) [Member] |
Beginning Balance, Shares at Dec. 31, 2014 | 760.4 | ||||
Beginning 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 expense | 319 | 319 | |||
Tax impact related to employee stock-based compensation expense | (162) | (162) | |||
Repurchases of common stock, Shares | (12) | ||||
Repurchases of common stock | (1,853) | (1,853) | |||
Ending Balance, Shares at Dec. 31, 2015 | 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 expense | 342 | 342 | |||
Tax impact related to employee stock-based compensation expense | (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) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 1,979 | 1,979 | |||
Other comprehensive income (loss), net of tax | (208) | (208) | |||
Dividends | (3,487) | (3,487) | |||
Issuance of common stock in connection with the Company’s equity award programs, Shares | 2.5 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 52 | 52 | |||
Stock-based compensation expense | 347 | 347 | |||
Tax impact related to employee stock-based compensation expense | (191) | (191) | 0 | ||
Repurchases of common stock, Shares | (18.5) | ||||
Repurchases of common stock | $ (3,126) | (3,126) | |||
Ending Balance, Shares at Dec. 31, 2017 | 722.2 | 722.2 | |||
Ending Balance at Dec. 31, 2017 | $ 25,241 | $ 30,992 | $ (5,072) | $ (679) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 1,979 | $ 7,722 | $ 6,939 |
Depreciation and amortization | 1,955 | 2,105 | 2,108 |
Stock-based compensation expense | 329 | 311 | 322 |
Deferred income taxes | (1,330) | 183 | (607) |
Other items, net | 334 | 32 | (146) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Trade receivables, net | (58) | (214) | (420) |
Inventories | 133 | (80) | 481 |
Other assets | (24) | (128) | 155 |
Accounts payable | 424 | (44) | (12) |
Accrued income taxes, net | 523 | (301) | 509 |
Long-term tax liability | 6,681 | 445 | 409 |
Other liabilities | 231 | 323 | (7) |
Net cash provided by operating activities | 11,177 | 10,354 | 9,731 |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (664) | (738) | (594) |
Cash paid for acquisitions, net of cash acquired | (19) | 0 | (359) |
Purchases of marketable securities | (33,607) | (28,094) | (25,977) |
Proceeds from sales of marketable securities | 24,240 | 17,958 | 18,029 |
Proceeds from maturities of marketable securities | 6,174 | 2,459 | 3,527 |
Proceeds from sales of property, plant and equipment | 11 | 78 | 274 |
Other | (159) | (321) | (447) |
Net cash used in investing activities | (4,024) | (8,658) | (5,547) |
Cash flows from financing activities: | |||
Net proceeds from issuance of debt | 4,476 | 7,318 | 3,465 |
Repayment of debt | (4,405) | (3,725) | (2,400) |
Repurchases of common stock | (3,160) | (2,965) | (1,867) |
Dividends paid | (3,365) | (2,998) | (2,396) |
Settlement of contingent consideration obligations | 0 | 0 | (253) |
Withholding taxes arising from shares withheld for share-based payments | (191) | (260) | (401) |
Other | 51 | 31 | 81 |
Net cash used in financing activities | (6,594) | (2,599) | (3,771) |
Increase (decrease) in cash and cash equivalents | 559 | (903) | 413 |
Cash and cash equivalents at beginning of year | 3,241 | 4,144 | 3,731 |
Cash and cash equivalents at end of year | $ 3,800 | $ 3,241 | $ 4,144 |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2017 | |
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 U.S. generally accepted accounting principles (GAAP) 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 collectibility 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, Collaborations, 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, 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, Collaborations, 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 and were $620 million , $489 million and $346 million during the years ended December 31, 2017, 2016 and 2015, respectively. SG&A expenses also include costs and cost recoveries associated with marketing and promotion efforts under certain collaborative 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, Collaborations. 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 fair values of RSUs and stock option awards, which are subject only to service conditions with graded vesting, are recognized as compensation expense, generally on a straight-line basis over the service period, net of estimated forfeitures. The fair values of performance unit awards are recognized as compensation expense, generally on a straight-line basis 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. Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. Deferred income taxes are recorded for the expected tax consequences of temporary differences between the bases of assets and liabilities, as well as for loss and tax credit carryforwards 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 consolidated 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. On December 22, 2017, the Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118 (SAB 118) to address the accounting implications of the U.S. federal tax reform enacted on December 22, 2017. SAB 118 allows a company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. 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 Accumulated other comprehensive income (loss) (AOCI). 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 net realizable value. Cost, which includes amounts related to materials, labor and overhead, is determined in a manner that approximates the first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. 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 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 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 AOCI. The earnings of these subsidiaries are translated into U.S. dollars using average exchange rates. Recent accounting pronouncements 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 recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning on January 1, 2018. The new standards are required to be adopted using either a full-retrospective or a modified-retrospective approach. We will adopt these standards using the modified-retrospective approach beginning in 2018. We have completed our impact assessment and do not anticipate a material impact to Total revenues in our Consolidated Statements of Income, accounting policies, business processes, internal controls or disclosures. In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision requiring that equity investments (except for investments accounted for under the equity method of accounting) 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. With the exception of equity investments currently being accounted for at cost, adjustments are applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. The new standard will be applied prospectively to investments currently accounted for at cost which had a carrying value of $95 million as of December 31, 2017. Upon adoption, on January 1, 2018, we will record an immaterial adjustment to Retained earnings from AOCI, which represents the net unrealized gain on all equity investments with a readily determinable fair value as of December 31, 2017. The impact that this new standard will have on our Consolidated Statements of Income after adoption will depend on the changes in fair values of equity securities in our portfolio in the future. See Note 9, Available-for-sale investments for the fair value of all equity securities as of December 31, 2017. 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, including leases classified as operating leases under current GAAP, and disclose qualitative and quantitative information about leasing arrangements. The new standard requires a modified-retrospective approach to adoption and is effective for interim and annual periods beginning on January 1, 2019, but may be adopted earlier. We expect to adopt this standard beginning in 2019. We do not expect that this standard will have a material impact on our Consolidated Statements of Income, but we do expect that upon adoption, this standard will have a material impact on our assets and liabilities on our Consolidated Balance Sheets. The primary effect of adoption will be the requirement to record right-of-use assets and corresponding lease obligations for current operating leases. In addition, the standard will require that we update our systems, processes and controls we use to track, record and account for our lease portfolio. We have selected a lease accounting information system and engaged third-party consultants to provide system implementation services. System readiness, including implementation and functionality of software procured from third-party providers, is essential to enable the preparation of financial information required for this standard. 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. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income 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, but may be adopted earlier, beginning on January 1, 2019. With certain exceptions, adjustments are to be applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In October 2016, the FASB issued a new accounting standard that amends the income tax accounting guidance for intra-entity transfers of assets other than inventory. The new standard requires that entities recognize the income tax consequences of an intercompany transfer of an asset, other than inventory, in the period the transfer occurs. The current exception to defer the recognition of any tax impact on intercompany transfers of inventory until the inventory is sold to a third party remains unaffected. The new standard is effective for interim and annual periods beginning on January 1, 2018. The standard will be applied prospectively to any transaction occurring on or after the adoption date. We have completed our impact assessment and do not anticipate a material impact 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 the evaluation of when a set of assets acquired or disposed of should be considered a business. The new standard requires that an entity evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets; if so, the set of assets would not be considered a business. The new standard also requires that a business include at least one substantive process and narrows the definition of outputs. The new standard will be applied prospectively and is effective for interim and annual periods beginning on January 1, 2018. Adoption of this new standard may result in more transactions being accounted for as asset acquisitions versus business combinations; however, the impact on our consolidated financial statements will depend on the facts and circumstances of future transactions. |
Restructuring and other cost sa
Restructuring and other cost savings initiatives | 12 Months Ended |
Dec. 31, 2017 | |
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 estimate that we will incur $825 million to $900 million of pre-tax charges in connection with our restructuring, including: (i) separation and other headcount-related costs of $560 million to $600 million with respect to staff reductions and (ii) asset-related charges of $265 million to $300 million that consist primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. Through December 31, 2017 , we have incurred $558 million of separation and other headcount-related costs and $239 million of net asset-related charges. In order to support our ongoing transformation and process improvement efforts, we expect that we will incur most of the remaining costs in 2018. The charges recorded during the years ended December 31, 2017 and 2016 were not material for all types of activities presented below. The following tables summarize charges recorded related to the restructuring plan by type of activity and the locations recognized within the Consolidated Statements of Income (in millions): 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 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): 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 Expense 72 7 79 Payments (20 ) $ (11 ) (31 ) Restructuring liabilities as of December 31, 2017 $ 63 $ 5 $ 68 |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2017 | |
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) whose lead molecule is AMG 899 (formerly TA-8995), an oral, once-daily cholesteryl ester transfer protein inhibitor that had completed certain phase 2 trials. The aggregate acquisition date consideration to acquire Dezima was $410 million , including $110 million for the fair value of contingent consideration obligations related to the development of AMG 899. The fair values of assets acquired and liabilities assumed primarily included an IPR&D asset of $400 million , goodwill of $108 million (which is not deductible for tax purposes) and deferred tax liabilities of $100 million . The goodwill was attributable primarily to the expected synergies and other benefits that we believed would result from expanding our cardiovascular portfolio with AMG 899; and the deferred tax consequences of acquired IPR&D recorded for financial statement purposes. During the year ended December 31, 2017, we decided to discontinue the internal development of AMG 899, resulting in an impairment charge of $400 million for the IPR&D asset and the release of the then fair value of the related contingent consideration liabilities of $116 million . See Note 16, Fair value measurement. |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Dec. 31, 2017 | |
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 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, 2017 , the Amended 2009 Plan provides for future grants and/or issuances of up to 36 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, 2017 2016 2015 RSUs $ 174 $ 177 $ 190 Performance units 133 123 132 Stock options 22 11 — Total stock-based compensation expense, pretax 329 311 322 Tax benefit from stock-based compensation expense (118 ) (112 ) (120 ) Total stock-based compensation expense, net of tax $ 211 $ 199 $ 202 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 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 during the years ended December 31, 2017 , 2016 and 2015 were $163.99 , $156.76 and $166.74 , respectively. The following table summarizes information regarding our RSUs: Year ended December 31, 2017 Units (in millions) Weighted-average grant date fair value Balance nonvested at December 31, 2016 3.9 $ 141.07 Granted 1.3 $ 163.99 Vested (1.5 ) $ 125.32 Forfeited (0.3 ) $ 149.79 Balance nonvested at December 31, 2017 3.4 $ 155.11 The total grant date fair values of RSUs that vested during the years ended December 31, 2017 , 2016 and 2015 , were $182 million , $193 million and $206 million , respectively. As of December 31, 2017 , there was $304 million of unrecognized compensation cost related to nonvested RSU awards, which is expected to be recognized over a weighted-average period of 1.8 years. Stock options The exercise price for stock options is set as the closing price of our common stock on the grant date 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 value of stock options. The weighted-average assumptions used in the option valuation model and the resulting weighted-average grant date fair values of stock options granted were as follows: Years ended December 31, 2017 2016 Closing price of our common stock on grant date $ 162.60 $ 156.35 Expected volatility (average of implied and historical volatility) 22.7 % 24.3 % Expected life (in years) 5.8 5.8 Risk-free interest rate 2.1 % 1.5 % Expected dividend yield 2.8 % 2.6 % Fair value of stock options granted $ 27.54 $ 27.55 The following table summarizes information regarding our stock options: Year ended December 31, 2017 Options (in millions) Weighted- average exercise price Weighted- average remaining contractual life (in years) Aggregate intrinsic value (in millions) Balance unexercised at December 31, 2016 3.1 $ 100.21 Granted 1.5 $ 162.60 Exercised (0.5 ) $ 57.24 Expired/forfeited (0.1 ) $ 159.13 Balance unexercised at December 31, 2017 4.0 $ 127.08 6.9 $ 186 Vested or expected to vest at December 31, 2017 3.7 $ 124.84 6.8 $ 182 Exercisable at December 31, 2017 1.3 $ 58.23 2.8 $ 147 The total intrinsic values of options exercised during the years ended December 31, 2017 , 2016 and 2015 , were $60 million , $102 million and $150 million , respectively. The actual tax benefits realized from tax deductions from option exercises during the years ended December 31, 2017 , 2016 and 2015 , were $21 million , $37 million and $55 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 during the years ended December 31, 2017 , 2016 and 2015 , 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 during the years ended December 31, 2017 and 2016, Amgen’s standalone financial performance measures, which are considered performance conditions. The expense recognized for awards granted during the years ended December 31, 2017 and 2016 are 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 during the year ended December 31, 2015 was 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 use a payout simulation model to estimate the grant date fair value of performance units. The weighted-average assumptions used in this model and the resulting weighted-average grant date fair values of performance units granted were as follows: Years ended December 31, 2017 2016 2015 Closing price of our common stock on grant date $ 162.60 $ 156.35 $ 164.26 Volatility 25.9 % 25.8 % 24.3 % Risk-free interest rate 1.4 % 0.9 % 0.8 % Fair value of units granted $ 178.87 $ 170.56 $ 182.55 The payout simulation model assumes 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, 2017 and 2016 , 2.2 million and 2.8 million performance units were outstanding with weighted-average grant date fair values of $177.16 and $144.43 per unit, respectively. During the year ended December 31, 2017 , 0.8 million performance units with a weighted-average grant date fair value of $178.87 were granted and 0.1 million performance units with a weighted-average grant date fair value of $179.58 were forfeited. The total fair values of performance units that vested during the years ended December 31, 2017 and 2016 were $219 million and $347 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, 2017 , there was $144 million of unrecognized compensation cost that is expected to be recognized over a weighted-average period of 1 year. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes On December 22, 2017, the United States enacted major tax reform legislation, Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (2017 Tax Act). The 2017 Tax Act imposes a repatriation tax on accumulated earnings of foreign subsidiaries, implements a territorial tax system together with a current tax on certain foreign earnings and lowers the general corporate income tax rate to 21% . On December 22, 2017, the SEC staff issued SAB 118 that allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We currently are analyzing the 2017 Tax Act, and in certain areas, have made reasonable estimates of the effects on our consolidated financial statements and tax disclosures, including the amount of the repatriation tax and changes to our existing deferred tax balances. The repatriation tax is based primarily on our accumulated foreign earnings and profits that we previously deferred from U.S. income taxes. We recorded an estimated amount for our repatriation tax liability of $7.3 billion as of December 31, 2017. See Note 18, Contingencies and commitments. We no longer reinvest our undistributed earnings of our foreign operations indefinitely outside the United States. In addition, we remeasured certain net deferred and other tax liabilities based on the tax rates at which they are expected to reverse in the future. The estimated amount recorded related to the remeasurement of these balances was a net benefit of $1.2 billion . The net estimated impact of the 2017 Tax Act is $6.1 billion . We consider the key estimates on the repatriation tax, net deferred tax remeasurement and the impact on our unrealized tax benefits to be incomplete due to our continuing analysis of final year-end data and tax positions. Our analysis could affect the measurement of these balances and give rise to new deferred and other tax assets and liabilities. Since the 2017 Tax Act was passed late in the fourth quarter of 2017, and further guidance and accounting interpretation is expected over the next 12 months, our review is still pending. We expect to complete our analysis within the measurement period. Income before income taxes included the following (in millions): Years ended December 31, 2017 2016 2015 Domestic $ 4,436 $ 4,478 $ 3,532 Foreign 5,161 4,685 4,446 Total income before income taxes $ 9,597 $ 9,163 $ 7,978 The provision for income taxes included the following (in millions): Years ended December 31, 2017 2016 2015 Current provision: Federal $ 8,615 $ 984 $ 1,129 State 5 65 40 Foreign 275 176 272 Total current provision 8,895 1,225 1,441 Deferred (benefit) provision: Federal (1,120 ) 372 (290 ) State — (69 ) (78 ) Foreign (157 ) (87 ) (34 ) Total deferred (benefit) provision (1,277 ) 216 (402 ) Total provision for income taxes $ 7,618 $ 1,441 $ 1,039 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, 2017 2016 Deferred income tax assets: NOL and credit carryforwards $ 812 $ 688 Accrued expenses 362 562 Expenses capitalized for tax 155 255 Stock-based compensation 99 167 Other 154 117 Total deferred income tax assets 1,582 1,789 Valuation allowance (497 ) (381 ) Net deferred income tax assets 1,085 1,408 Deferred income tax liabilities: Acquired intangible assets (1,748 ) (3,139 ) Debt (184 ) (345 ) Other (240 ) (307 ) Total deferred income tax liabilities (2,172 ) (3,791 ) Total deferred income taxes, net $ (1,087 ) $ (2,383 ) 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 2017 due primarily to the Company’s expectation that some state R&D credits and foreign NOLs will not be utilized. This increase was offset partially by the release of state R&D credits projected to be utilized in 2018 related to the repatriation tax on foreign earnings. 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. As of December 31, 2017 , 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 2035. We had $524 million of state tax credit carryforwards available to reduce future state income taxes and have provided a valuation allowance for $392 million of those state tax credit carryforwards. The state credits for which no valuation allowance has been provided will begin to expire in 2022. As of December 31, 2017 , we had $146 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 $425 million of NOL carryforwards available to reduce future state income taxes and have provided a valuation allowance for $400 million of those state NOL carryforwards. The state NOLs for which no valuation allowance has been provided expire between 2018 and 2032. We had $2.0 billion of NOL carryforwards available to reduce future foreign income taxes and have provided a valuation allowance for $819 million of those foreign NOL carryforwards. For the foreign NOLs with no valuation allowance provided, $678 million has no expiry; and the remainder will expire starting in 2018. 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): Years ended December 31, 2017 2016 2015 Beginning balance $ 2,543 $ 2,114 $ 1,772 Additions based on tax positions related to the current year 447 425 413 Additions based on tax positions related to prior years 1 18 9 Reductions for tax positions of prior years (5 ) (7 ) (32 ) Reductions for expiration of statute of limitations (5 ) — — Settlements (28 ) (7 ) (48 ) Ending balance $ 2,953 $ 2,543 $ 2,114 Substantially all of the UTBs as of December 31, 2017 , if recognized, would affect our effective tax rate. During the year ended December 31, 2017 , we effectively settled various examinations with federal and state tax authorities for prior tax years. As a result of these developments, we remeasured our UTBs accordingly. As of December 31, 2017 , 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 examinations. Interest and penalties related to UTBs are included in our provision for income taxes. During the years ended December 31, 2017 , 2016 and 2015 , we recognized $56 million , $125 million and $17 million , respectively, of interest and penalties through the income tax provision in the Consolidated Statements of Income. As of December 31, 2017 and 2016 , accrued interest and penalties associated with UTBs were $332 million and $276 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, 2017 2016 2015 Federal statutory tax rate 35.0 % 35.0 % 35.0 % 2017 Tax Act, net repatriation tax 71.5 % — % — % Foreign earnings (15.8 )% (15.5 )% (18.1 )% 2017 Tax Act, net deferred tax remeasurement (7.7 )% — % — % Credits, Puerto Rico Excise Tax (2.2 )% (2.3 )% (2.5 )% Share-based payments (0.7 )% (1.3 )% — % Credits, primarily federal R&D (0.6 )% (0.7 )% (1.4 )% State taxes 0.3 % 0.1 % 0.1 % Audit settlements (federal, state, foreign) (0.3 )% — % (0.5 )% Other, net (0.1 )% 0.4 % 0.4 % Effective tax rate 79.4 % 15.7 % 13.0 % The effective tax rates for the year ended December 31, 2017 , differ from the federal statutory rates due primarily to impacts of the 2017 Tax Act, including the repatriation tax on accumulated foreign earnings, offset partially by the remeasurement of certain net deferred and other tax liabilities. The effective tax rates for 2016 and 2015 differ from the federal statutory rates primarily as a result of indefinitely invested earnings of our foreign operations. In the past, we have not provided for U.S. income taxes on undistributed earnings of our foreign operations that were intended to be invested indefinitely outside the United States. Substantially all of the foreign earnings that impact 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. The U.S. territory of 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% is effective through 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, 2017 , 2016 and 2015 , were $1.5 billion , $1.1 billion and $919 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 authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws, regulations and the interpretation of the relevant facts. As previously disclosed, we received a Revenue Agent Report (RAR) from the Internal Revenue Service (IRS) for the years 2010, 2011 and 2012. The RAR proposes to make significant adjustments that relate primarily to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. On November 29, 2017, we received a modified RAR that revised their calculation but continued to propose substantial adjustments. We disagree with the proposed adjustments and are pursuing resolution through the IRS administrative appeals process, which we believe will likely not be concluded within the next 12 months. Final resolution of the IRS audit could have a material impact on our results of operations and cash flows if not resolved favorably, however, we believe our income tax reserves are appropriately provided for all open tax years. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009. In addition, we are currently under examination by a number of other state and foreign tax jurisdictions. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 Income (Numerator): Net income for basic and diluted EPS $ 1,979 $ 7,722 $ 6,939 Shares (Denominator): Weighted-average shares for basic EPS 731 748 758 Effect of dilutive securities 4 6 8 Weighted-average shares for diluted EPS 735 754 766 Basic EPS $ 2.71 $ 10.32 $ 9.15 Diluted EPS $ 2.69 $ 10.24 $ 9.06 For each of the three years ended December 31, 2017 , the number of anti-dilutive employee stock-based awards excluded from the computation of diluted EPS was not significant. |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2017 | |
Collaborative Arrangements [Abstract] | |
Collaborations | Collaborations A collaborative arrangement is a contractual arrangement that involves a joint operating activity. Such arrangements involve two or more parties that 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 arrangements are performed with no guarantee of either technological or commercial success, and each is unique in nature. Our significant arrangements are discussed below. Novartis AG In April 2017, we expanded our existing migraine collaboration with Novartis AG (Novartis). In the United States, Amgen and Novartis will jointly develop and collaborate on the commercialization of Aimovig ™ . Amgen, as the principal, will recognize product sales of Aimovig ™ in the United States, will share U.S. commercialization costs with Novartis and will pay Novartis a significant royalty on net sales in the United States. Novartis holds global co-development rights and exclusive commercial rights outside the United States and Japan for Aimovig ™ and other specified migraine programs. Novartis will pay Amgen double-digit royalties on net sales of the products in the Novartis exclusive territories. Novartis will fund a portion of global R&D expenses. Novartis will also make payments to Amgen that could collectively amount to approximately $400 million if certain regulatory events occur and commercial thresholds are achieved with respect to Aimovig ™ in the United States. Amgen will manufacture and supply Aimovig ™ worldwide. The migraine collaboration will continue for the commercial life of the products unless terminated in accordance with its terms. During the years ended December 31, 2017 , 2016 and 2015, costs recovered from Novartis for the migraine products were $124 million , $33 million and $6 million , respectively. Costs recovered were recorded primarily in Research and development expense in the Consolidated Statements of Income. During the year ended December 31, 2017 , we received a milestone payment of $60 million from Novartis, which was recorded in Other revenues in the Consolidated Statement of Income. During the year ended December 31, 2015, we paid an upfront license fee of $30 million to Novartis, which was recorded in Research and development expense in the Consolidated Statement of Income. 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 2015 and 2016, the residual royalty payments ranged from 11% to 10% of 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 and 2015, residual royalties due to Pfizer on ENBREL sales were $470 million and $561 million , respectively. These amounts were recorded 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, Japan and Hong Kong. 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, 2017 , 2016 and 2015, the net costs recovered from UCB were $56 million , $48 million and $60 million , respectively, which were recorded 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 R&D 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, 2017, 2016 and 2015, Amgen recorded Nexavar ® net profits of $161 million , $167 million and $257 million , respectively, which were recognized as Other revenues in the Consolidated Statements of Income. During the years ended December 31, 2017, 2016 and 2015, Amgen recorded royalty income of $133 million , $137 million and $72 million , respectively, in Other revenues in the Consolidated Statements of Income, pursuant to the 2015 amendment to the collaboration agreement. Net R&D expenses related to the agreement were not material for the years ended December 31, 2017, 2016, and 2015. 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, 2017 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions As of December 31, 2017 and 2016, we owned 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. O n October 30, 2017, we announced that we agreed to acquire the remaining 50% ownership of K-A from Kirin. The transaction will be accounted for as a business combination and was completed in the first quarter of 2018, making K-A a wholly owned subsidiary of Amgen. See Note 21, Subsequent event. Prior to the closing of the share acquisition, we accounted for our interest in K-A using the equity method and included 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, 2017 , 2016 and 2015 , our share of K-A’s profits was $68 million , $58 million and $65 million , respectively. The carrying value of our equity method investment in K-A was $570 million and $501 million as of December 31, 2017 and 2016 , respectively, and is included in 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 (J&J) under separate product license contracts for certain geographic areas outside the United States. During the years ended December 31, 2017 , 2016 and 2015 , K-A earned royalties from us of $221 million , $239 million and $264 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, 2017 , 2016 and 2015 , we earned revenues from K-A of $28 million , $31 million and $65 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. Cost recoveries from K-A recorded during the year ended December 31, 2017 were insignificant. During the years ended December 31, 2016 and 2015 , we recorded cost recoveries from K-A of $7 million and $90 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, 2017 and 2016 , we owed K-A $80 million and $69 million , respectively, which is included in Accrued liabilities in the Consolidated Balance Sheets. Subsequent to the closing of the share acquisition, K-A’s results of operations will be included in our consolidated financial statements, and as a result, transactions between us and K-A will be eliminated in consolidation. License agreements with Kirin and J&J will remain in place. |
Available-for-sale investments
Available-for-sale investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale investments | Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and fair values of available-for-sale investments by type of security were as follows (in millions): Year ended December 31, 2017 Type of security Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury securities $ 8,313 $ 1 $ (72 ) $ 8,242 Other government-related debt securities: U.S. 225 — (2 ) 223 Foreign and other 2,415 18 (11 ) 2,422 Corporate debt securities: Financial 10,089 17 (34 ) 10,072 Industrial 9,688 34 (52 ) 9,670 Other 1,393 3 (6 ) 1,390 Residential mortgage-backed securities 2,198 — (30 ) 2,168 Other mortgage- and asset-backed securities 2,312 — (15 ) 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities 1,440 — — 1,440 Total interest-bearing securities 41,318 73 (222 ) 41,169 Equity securities 135 14 — 149 Total available-for-sale investments $ 41,453 $ 87 $ (222 ) $ 41,318 Year ended December 31, 2016 Type of security Amortized cost Gross unrealized gains Gross unrealized losses 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 The fair values of available-for-sale investments by location in the Consolidated Balance Sheets were as follows (in millions): December 31, Consolidated Balance Sheets location 2017 2016 Cash and cash equivalents $ 3,291 $ 2,783 Marketable securities 37,878 34,844 Other assets 149 154 Total available-for-sale investments $ 41,318 $ 37,781 Cash and cash equivalents in the above table excludes bank account cash of $509 million and $458 million as of December 31, 2017 and 2016 , 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 2017 2016 Maturing in one year or less $ 6,733 $ 8,393 Maturing after one year through three years 12,820 10,404 Maturing after three years through five years 13,836 12,157 Maturing after five years through ten years 3,263 2,974 Maturing after ten years 52 40 Mortgage- and asset-backed securities 4,465 3,659 Total interest-bearing securities $ 41,169 $ 37,627 For the years ended December 31, 2017 , 2016 and 2015 , realized gains were $172 million , $306 million and $132 million , respectively, and realized losses were $213 million , $367 million and $208 million , respectively. The cost of securities sold is based on the specific identification method. Information on the fair values and gross unrealized losses of available-for-sale investments in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position was as follows (in millions): Less than 12 months 12 months or greater Type of security as of December 31, 2017 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 7,728 $ (70 ) $ 195 $ (2 ) Other government-related debt securities: U.S. 188 (1 ) 34 (1 ) Foreign and other 1,163 (9 ) 115 (2 ) Corporate debt securities: Financial 5,928 (28 ) 462 (6 ) Industrial 5,760 (43 ) 612 (9 ) Other 868 (4 ) 117 (2 ) Residential mortgage-backed securities 1,838 (24 ) 276 (6 ) Other mortgage- and asset-backed securities 1,777 (12 ) 250 (3 ) Total $ 25,250 $ (191 ) $ 2,061 $ (31 ) 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 ) 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, 2017 and 2016 , we believe the cost bases for our available-for-sale investments were recoverable in all material aspects. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in millions): December 31, 2017 2016 Raw materials $ 232 $ 225 Work in process 1,668 1,608 Finished goods 934 912 Total inventories $ 2,834 $ 2,745 |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2017 | |
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) 2017 2016 Land — $ 283 $ 295 Buildings and improvements 10-40 3,507 3,640 Manufacturing equipment 8-12 2,372 2,275 Laboratory equipment 8-12 1,179 1,092 Other 3-15 4,404 4,380 Construction in progress — 834 745 Property, plant and equipment, gross 12,579 12,427 Less accumulated depreciation and amortization (7,590 ) (7,466 ) Property, plant and equipment, net $ 4,989 $ 4,961 During the years ended December 31, 2017 , 2016 and 2015 , we recognized depreciation and amortization expense associated with our property, plant and equipment of $604 million , $619 million and $727 million , respectively. |
Goodwill and intangible assets
Goodwill and intangible assets | 12 Months Ended |
Dec. 31, 2017 | |
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): Years ended December 31, 2017 2016 Beginning balance $ 14,751 $ 14,787 Goodwill related to acquisitions of businesses — 2 Currency translation adjustments 10 (38 ) Ending balance $ 14,761 $ 14,751 Other intangible assets Other intangible assets consisted of the following (in millions): December 31, 2017 2016 Gross carrying amount Accumulated amortization Other intangible assets, net Gross carrying amount Accumulated amortization Other intangible assets, net Finite-lived intangible assets: Developed product technology rights $ 12,589 $ (6,796 ) $ 5,793 $ 12,534 $ (5,947 ) $ 6,587 Licensing rights 3,275 (1,601 ) 1,674 3,275 (1,300 ) 1,975 Marketing-related rights 1,319 (920 ) 399 1,333 (793 ) 540 R&D technology rights 1,161 (804 ) 357 1,122 (704 ) 418 Total finite-lived intangible assets 18,344 (10,121 ) 8,223 18,264 (8,744 ) 9,520 Indefinite-lived intangible assets: IPR&D 386 — 386 759 — 759 Total other intangible assets $ 18,730 $ (10,121 ) $ 8,609 $ 19,023 $ (8,744 ) $ 10,279 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 required regulatory approvals. During 2017, we decided to discontinue the internal development of AMG 899 acquired in the acquisition of Dezima in 2015 (see Note 3, Business combinations), resulting in an impairment charge of $400 million , which was recognized in Other operating expenses in the Consolidated Statement of Income and included in Other items, net in the Consolidated Statement of Cash Flows. See Note 16, Fair value measurement, for the impact on the related contingent consideration liabilities. As of December 31, 2017 , IPR&D consists primarily of the oprozomib project, acquired in the acquisition of Onyx Pharmaceuticals, Inc. in 2013. All IPR&D projects have major risks and uncertainties associated with the timely and successful completion of development and commercialization of product candidates, 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 permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require the completion of clinical trials that demonstrate that 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 the acquired IPR&D projects may vary from their 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, 2017 , 2016 and 2015 , we recognized amortization expense associated with our finite-lived intangible assets, included primarily in Cost of sales in the Consolidated Statements of Income, of $1.3 billion , $1.5 billion and $1.4 billion , respectively. The total estimated amortization expense for each of the next five years for our intangible assets is $1.2 billion , $1.1 billion , $1.1 billion , $0.9 billion and $0.9 billion in 2018, 2019, 2020, 2021 and 2022, respectively. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities Accrued liabilities consisted of the following (in millions): December 31, 2017 2016 Sales deductions $ 2,247 $ 1,874 Dividends payable 953 849 Employee compensation and benefits 816 920 Sales returns reserve 455 437 Other 2,045 1,804 Total accrued liabilities $ 6,516 $ 5,884 |
Financing arrangements
Financing arrangements | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 Short-term loan $ — $ 605 2.125% notes due 2017 (2.125% 2017 Notes) — 1,250 Floating Rate Notes due 2017 — 600 1.25% notes due 2017 (1.25% 2017 Notes) — 850 5.85% notes due 2017 (5.85% 2017 Notes) — 1,100 6.15% notes due 2018 (6.15% 2018 Notes) 500 500 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) 653 577 5.70% notes due 2019 (5.70% 2019 Notes) 1,000 1,000 1.90% notes due 2019 (1.90% 2019 Notes) 700 — Floating Rate Notes due 2019 550 250 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) 810 710 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 750 750 Floating Rate Notes due 2020 300 — 2.20% notes due 2020 (2.20% 2020 Notes) 700 — 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) 750 750 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) 1,501 1,315 2.70% notes due 2022 (2.70% 2022 Notes) 500 500 2.65% notes due 2022 (2.65% 2022 Notes) 1,500 — 3.625% notes due 2022 (3.625% 2022 Notes) 750 750 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 719 687 2.25% notes due 2023 (2.25% 2023 Notes) 750 750 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) 901 789 2.60% notes due 2026 (2.60% 2026 Notes) 1,250 1,250 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 642 586 3.20% notes due 2027 (3.20% 2027 Notes) 1,000 — 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 946 864 6.375% notes due 2037 (6.375% 2037 Notes) 552 552 6.90% notes due 2038 (6.90% 2038 Notes) 291 291 6.40% notes due 2039 (6.40% 2039 Notes) 466 466 5.75% notes due 2040 (5.75% 2040 Notes) 412 412 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 974 974 5.65% notes due 2042 (5.65% 2042 Notes) 487 487 5.375% notes due 2043 (5.375% 2043 Notes) 261 261 4.40% notes due 2045 (4.40% 2045 Notes) 2,250 2,250 4.563% notes due 2048 (4.563% 2048 Notes) 1,415 1,415 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 3,541 Other notes due 2097 100 100 Unamortized bond discounts, premiums and issuance costs, net (929 ) (936 ) Total carrying value of debt 35,342 34,596 Less current portion (1,152 ) (4,403 ) Total noncurrent debt $ 34,190 $ 30,193 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 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 due 2097, 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 due 2097, 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 a make-whole amount, which is defined by the terms of the notes. Certain of the redeemable notes do not require the payment of a make-whole amount if redeemed during a specified period of time immediately prior to the maturity of the notes. Such time periods range from one to six months prior to maturity. Debt issuances We issued debt and debt securities in various offerings during the years ended December 31, 2017 , 2016 and 2015 including: • In 2017, we issued $4.5 billion principal amount of notes, consisting of the Floating-Rate Notes due 2019, the 1.90% 2019 Notes, the Floating-Rate Notes due 2020, the 2.20% 2020 Notes, the 2.65% 2022 Notes and the 3.20% 2027 Notes. • 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. • 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. As of December 31, 2017 , 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. During the year ended December 31, 2017, we issued and repaid an aggregate of $12.3 billion commercial paper and had a maximum outstanding balance of $1.5 billion under our commercial paper program. During the years ended December 31, 2016 and 2015, we did not issue any commercial paper. No commercial paper was outstanding as of December 31, 2017 or 2016. Debt repayments In 2017, we repaid the $605 million short-term floating rate loan, the $1.25 billion aggregate principal amount of the 2.125% 2017 Notes, the $600 million aggregate principal amount of the Floating-Rate Notes due 2017, the $850 million aggregate principal amount of the 1.25% 2017 Notes and the $1.1 billion aggregate principal amount of the 5.85% 2017 Notes. In 2016, we repaid $3.7 billion of debt, including the remaining $1.975 billion of principal on a term loan credit facility, 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 a term loan credit facility. 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, in the Consolidated Statements of Income. Transaction costs of $24 million incurred for the exchange were expensed immediately in Interest and other income, net, in the Consolidated Statement of Income. Interest rate swaps To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that effectively converted fixed-rate interest coupons for certain of our debt issuances to floating London Interbank Offered Rate (LIBOR)-based coupons over the lives of the respective notes. These interest rate swap contracts qualified and are designated as fair value hedges. The effective interest rates on notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions): December 31, 2017 2016 Notes Effective interest rate Notional amount 1.25% 2017 Notes LIBOR + 0.4% $ — $ 850 2.20% 2019 Notes LIBOR + 0.6% 1,400 1,400 3.45% 2020 Notes LIBOR + 1.1% 900 900 4.10% 2021 Notes LIBOR + 1.7% 1,000 1,000 3.875% 2021 Notes LIBOR + 2.0% 1,750 1,750 3.625% 2022 Notes LIBOR + 1.6% 750 750 3.625% 2024 Notes LIBOR + 1.4% 1,400 — 3.125% 2025 Notes LIBOR + 0.9% 1,000 — 2.600% 2026 Notes LIBOR + 0.3% 1,250 — Total notional amounts $ 9,450 $ 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 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, 2017 and 2016 , no amounts were outstanding under this facility. In 2017, 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 in February 2020. 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, 2017 . Contractual maturities of debt obligations The aggregate contractual maturities of all borrowings due subsequent to December 31, 2017 , are as follows (in millions): Maturity date Amount 2018 $ 1,153 2019 4,460 2020 2,950 2021 3,500 2022 4,251 Thereafter 19,957 Total $ 36,271 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, 2017 , 2016 and 2015 , was $1.3 billion , $1.3 billion and $1.1 billion , respectively. Interest costs capitalized for the years ended December 31, 2017 , 2016 and 2015 , 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, 2017 , 2016 and 2015 , was $1.3 billion , $1.2 billion and $1.0 billion , respectively. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2017 | |
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): Years ended December 31, 2017 2016 2015 Shares Dollars Shares Dollars Shares Dollars First quarter 3.4 $ 555 4.7 $ 690 2.9 $ 451 Second quarter 6.2 1,006 3.9 591 3.3 515 Third quarter 4.4 769 4.4 747 4.6 703 Fourth quarter 4.5 796 6.7 999 1.2 184 Total stock repurchases 18.5 $ 3,126 19.7 $ 3,027 12.0 $ 1,853 As of December 31, 2017 , $4.4 billion remained available under our stock repurchase program. In January 2018, our Board of Directors authorized an additional $10.0 billion under our stock repurchase program. On February 5, 2018, we announced a tender offer to purchase up to $10.0 billion of our common stock at a price not greater than $200 per share nor less than $175 per share. The tender offer expires at 12:00 Midnight, New York City time, at the end of Monday, March 5, 2018, unless the offer is extended. Dividends Our Board of Directors declared quarterly dividends per share of $1.15 , $1.00 and $0.79 that were paid in each of the four quarters of 2017 , 2016 , and 2015 , 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 12, 2017, the Board of Directors declared a quarterly cash dividend of $1.32 per share of common stock, which will be paid on March 8, 2018, to all stockholders of record as of the close of business on February 15, 2018. Accumulated other comprehensive income (loss) The components of AOCI were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2014 $ (264 ) $ 290 $ (19 ) $ (15 ) $ (8 ) Foreign currency translation adjustments (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 ) Foreign currency translation adjustments 77 — — — 77 Unrealized gains (losses) — 192 (46 ) — 146 Reclassification adjustments to income — (638 ) 41 — (597 ) Other — — — 5 5 Income taxes 4 158 (1 ) — 161 Balance as of December 31, 2017 $ (529 ) $ (6 ) $ (144 ) $ — $ (679 ) With respect to the table above, income tax expenses or benefits for unrealized gains and losses and the related reclassification adjustments to income for cash flow hedges were a $68 million expense and $226 million benefit in 2017 , a $68 million benefit and $46 million expense in 2016 and a $53 million expense and $53 million benefit in 2015 , respectively. Income tax expenses or benefits for unrealized gains and losses and the related reclassification adjustments to income for available-for-sale securities were a $9 million expense and $8 million benefit for 2017 , a $9 million benefit and $11 million expense in 2016 and a $0 million benefit and $18 million expense in 2015 , respectively. The reclassifications out of AOCI to earnings were as follows (in millions): Years ended December 31, Components of AOCI 2017 2016 2015 Consolidated Statements of Income location Cash flow hedges: Foreign currency contract gains $ 65 $ 308 $ 326 Product sales Cross-currency swap contract gains (losses) 574 (446 ) (182 ) Interest and other income, net Forward interest rate contract losses (1 ) (1 ) (1 ) Interest expense, net 638 (139 ) 143 Income before income taxes (226 ) 46 (53 ) Provision for income taxes $ 412 $ (93 ) $ 90 Net income Available-for-sale securities: Net realized losses $ (41 ) $ (61 ) $ (76 ) Interest and other income, net (8 ) 11 18 Provision for income taxes $ (49 ) $ (50 ) $ (58 ) 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, 2017 and 2016 , no shares of preferred stock were issued or outstanding. |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2017 | |
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 values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Fair value measurement as of December 31, 2017, 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 $ 8,242 $ — $ — $ 8,242 Other government-related debt securities: U.S. — 223 — 223 Foreign and other — 2,422 — 2,422 Corporate debt securities: Financial — 10,072 — 10,072 Industrial — 9,670 — 9,670 Other — 1,390 — 1,390 Residential mortgage-backed securities — 2,168 — 2,168 Other mortgage- and asset-backed securities — 2,297 — 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities — 1,440 — 1,440 Equity securities 149 — — 149 Derivatives: Foreign currency contracts — 6 — 6 Cross-currency swap contracts — 270 — 270 Interest rate swap contracts — 10 — 10 Total assets $ 11,636 $ 29,968 $ — $ 41,604 Liabilities: Derivatives: Foreign currency contracts $ — $ 204 $ — $ 204 Cross-currency swap contracts — 220 — 220 Interest rate swap contracts — 61 — 61 Contingent consideration obligations in connection with business combinations — — 69 69 Total liabilities $ — $ 485 $ 69 $ 554 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 Excluded from the tables above are limited partnership investments of $213 million and $158 million as of December 31, 2017 and 2016, respectively, which are included in Other assets in the Consolidated Balance Sheets. These investments are measured using net asset values of the underlying investments as a practical expedient. These investments are typically only redeemable through distributions upon liquidation of the underlying assets. As of December 31, 2017, unfunded additional commitments to be made over the next several years for these investments were approximately $100 million . 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 and have 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 BBB+ or equivalent by Standard & Poor’s Financial Services LLC (S&P), and A- or equivalent by Moody’s Investors Service, Inc. (Moody’s) or Fitch Ratings Inc. (Fitch); and our corporate debt securities portfolio has a weighted-average credit rating of A- or equivalent by Fitch, and BBB + or equivalent by S&P or Moody’s. 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. The 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. The inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs. We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates. All of our foreign currency forward and option derivatives contracts have maturities of three years or less, and all are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We 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, Moody’s or Fitch. 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, Moody’s or Fitch. 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 include 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. The contingent consideration obligations are recorded at their fair values by using probability-adjusted discounted cash flows, and we revalue these obligations each reporting period until the related contingencies have been 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, that shorten or lengthen the time required to achieve such events, or that increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of the 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): Years ended December 31, 2017 2016 2015 Beginning balance $ 179 $ 188 $ 215 Addition from Dezima acquisition — — 110 Payment to former BioVex Group, Inc. shareholders — — (125 ) Net changes in valuation (110 ) (9 ) (12 ) Ending balance $ 69 $ 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 for AMG 899. The fair values of the contingent consideration obligations had an aggregate value of $110 million at acquisition. During 2017, we decided to discontinue the internal development of AMG 899, and accordingly, reduced to zero these contingent consideration liabilities. The remeasurement of these liabilities was included in Other items, net in the Consolidated Statement of Cash Flows during the year ended December 31, 2017. See Note 12, Goodwill and other intangible assets, for the impact on the related IPR&D asset. As a result of our acquisition of BioVex Group Inc. 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 related to IMLYGIC ® are achieved within specified periods of time. During the years ended December 31, 2017 and 2016 , there were no transfers of assets or liabilities between fair value measurement levels, and, except with respect to an IPR&D asset discussed in Note 12, Goodwill and other intangible assets, 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 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 borrowings (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, 2017 and 2016 , the aggregate fair values of our borrowings were $38.6 billion and $36.5 billion , respectively, and the carrying values were $35.3 billion and $34.6 billion , respectively. |
Derivative instruments
Derivative instruments | 12 Months Ended |
Dec. 31, 2017 | |
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 such 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, 2017 , 2016 and 2015 , we had open foreign currency forward contracts with notional amounts of $4.6 billion , $3.4 billion and $3.3 billion , respectively, and open foreign currency option contracts with notional amounts of $74 million , $608 million and $225 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, we enter into cross-currency swap contracts. Under the terms of such 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 as of December 31, 2017 , were 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 hedge 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 on forward interest rate contracts, which are designated as cash flow hedges, are recognized in AOCI in the Consolidated Balance Sheets and are amortized into earnings over the lives of the associated debt issuances. The effective portions of unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions): Years ended December 31, Derivatives in cash flow hedging relationships 2017 2016 2015 Foreign currency contracts $ (402 ) $ 115 $ 425 Cross-currency swap contracts 581 (281 ) (275 ) Forward interest rate contracts 13 (10 ) — Total unrealized gains (losses) $ 192 $ (176 ) $ 150 The locations in the Consolidated Statements of Income and the effective portions of the gains and losses reclassified out of AOCI and 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 Consolidated Statements of Income location 2017 2016 2015 Foreign currency contracts Product sales $ 65 $ 308 $ 326 Cross-currency swap contracts Interest and other income, net 574 (446 ) (182 ) Forward interest rate contracts Interest expense, net (1 ) (1 ) (1 ) Total realized gains (losses) $ 638 $ (139 ) $ 143 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, 2017 , 2016 and 2015 . As of December 31, 2017 , the amounts expected to be reclassified out of AOCI and into earnings over the next 12 months are $175 million of net losses on our foreign currency and cross-currency swap contracts. The net amount expected to be reclassified out of AOCI and into earnings over the next 12 months on our forward interest rate contracts is not material. Fair value hedges To achieve the 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, 2017 and 2016 , we had interest rate swap agreements with aggregate notional amounts of $9.45 billion and $6.65 billion , respectively, that hedge certain of our long-term debt issuances. See Note 14, Financing arrangements—Interest rate swaps. For derivative instruments that qualify for and are designated as fair value hedges, we recognize in 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 years ended December 31, 2017 and 2016, we included unrealized losses on interest rate swap agreements of $85 million and $34 million , respectively, in the same line item, Interest expense, net, in the Consolidated Statements of Income, as the offsetting unrealized gains of $85 million and $34 million , respectively, on the related hedged debt. During the year ended December 31, 2015 , we included unrealized gains on interest rate swap agreements of $48 million in the same line item, Interest expense, net, in the Consolidated Statement of Income, as the offsetting unrealized losses of $48 million on the related hedged debt. 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, 2017 , 2016 and 2015 , the total notional amounts of these foreign currency forward contracts were $757 million , $666 million and $911 million , respectively. The location in the Consolidated Statements of Income and the amount of gains (losses) 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 Consolidated Statements of Income location 2017 2016 2015 Foreign currency contracts Interest and other income, net $ 24 $ (56 ) $ (16 ) The fair values of derivatives included on the Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities December 31, 2017 Consolidated Balance Sheet location Fair value Consolidated Balance Sheet location Fair value Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 6 Accrued liabilities/ Other noncurrent liabilities $ 204 Cross-currency swap contracts Other current assets/ Other noncurrent assets 270 Accrued liabilities/ Other noncurrent liabilities 220 Interest rate swap contracts Other current assets/ Other noncurrent assets 10 Accrued liabilities/ Other noncurrent liabilities 61 Total derivatives designated as hedging instruments $ 286 $ 485 Derivative assets Derivative liabilities December 31, 2016 Consolidated Balance Sheet location Fair value Consolidated 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 Our derivative contracts that were in liability positions as of December 31, 2017 , 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 either to or from a counterparty under the contracts may only be offset against other amounts due either to or from the same counterparty only if an event of default or termination, as defined, were to occur. The cash flow effects of our derivative contracts 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, 2017 | |
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 footnote. 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 involve various aspects of our business and a variety of claims-including but not limited to patent validity and infringement, regulatory standards, marketing, and other corporate and commercial matters-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 we face 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 the 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 for the District 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 seeks 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 (AML) 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 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 12, 2017, Sanofi and Regeneron filed an appeal of the judgment and the permanent injunction to the U.S. Court of Appeals for the Federal Circuit (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. On October 5, 2017, the Federal Circuit Court reversed-in-part the judgment of the Delaware District Court and remanded for a new trial two of defendants’ patent validity defenses (failure to meet the law’s requirements for patentability of written description and enablement of the claimed inventions), and affirmed the Delaware District Court’s judgment of infringement of claims 2, 7, 9, 15, 19 and 29 of the ’165 Patent and claim 7 of the ’741 Patent and patent validity on the defendants’ third patent validity defense (finding that the claimed inventions were not obvious to a person of ordinary skill in the field of the patents). The Federal Circuit Court also vacated and remanded for further consideration by the Delaware District Court the permanent injunction. On December 6, 2017, Amgen petitioned the Federal Circuit Court for rehearing en banc . 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 filed its response on May 2, 2017. The EPO has scheduled oral proceedings to begin on November 28, 2018. 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. Sensipar ® (cinacalcet) Litigation Sensipar ® Abbreviated New Drug Application (ANDA) Patent Litigation Beginning in September 2016, Amgen filed 14 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) Micro Labs Ltd. and Micro Labs USA, Inc. (collectively, Micro Labs), (3) Watson Laboratories, Inc., Actavis, Inc. and Actavis Pharma, Inc., (4) Cipla Limited and Cipla USA, Inc. (collectively, Cipla), (5) Strides Pharma Global PTE Limited and Strides Pharma, Inc., (6) Sun Pharma Global FZE and Sun Pharmaceutical Industries, Inc. (collectively, Sun), (7) Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (collectively, Dr. Reddy’s), (8) Ajanta Pharma Limited and Ajanta Pharma USA, Inc. (collectively, Ajanta), (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 (collectively, Hetero), (12) Breckenridge Pharmaceutical, Inc. (Breckenridge), (13) Mylan Pharmaceuticals Inc. and Mylan Inc., and (14) Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Ltd. (collectively, Zydus). In November 2016, Actavis, Inc. was dismissed from the applicable lawsuit by joint stipulation of the parties. The Delaware District Court consolidated these 14 lawsuits into a single case, Amgen Inc. v. Aurobindo Pharma Ltd. et al. , which is scheduled for trial on March 5, 2018. The ’405 Patent is entitled “Rapid Dissolution Formulation of a Calcium Receptor-Active Compound” and expires in 2026. 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. All defendants have responded to the complaint denying infringement and seeking judgment that the ’405 Patent is invalid and/or not infringed. Amgen filed, and the Delaware District Court signed, stipulated dismissals of the lawsuit against defendants Apotex on September 11, 2017, and Micro Labs on September 20, 2017. The Delaware District Court signed consent judgments filed by Amgen and Breckenridge on September 21, 2017, by Amgen and Sun on November 2, 2017, by Amgen and Hetero on November 2, 2017, and by Amgen and Ajanta on November 9, 2017, each stipulating to entry of judgment of infringement and validity of the ’405 Patent and an injunction prohibiting the manufacture, use, sale, offer to sell, importation of, or distribution into the United States of the respective defendant’s cinacalcet product during the term of the ’405 Patent unless specifically authorized pursuant to the confidential settlement agreement. In June 2017, Amgen filed four additional lawsuits in the Delaware District Court for infringement of the ’405 Patent against: (1) Piramal Healthcare UK Limited (Piramal), (2) Alkem Laboratories Ltd. (Alkem), (3) Lupin Ltd. and Lupin Pharmaceuticals, Inc. (collectively, Lupin), and (4) Macleods Pharmaceuticals Ltd. and Macleods Pharma USA, Inc. (collectively, Macleods). In each lawsuit, all defendants have responded to the complaint denying infringement and seeking a declaration of non-infringement and invalidity of the ’405 Patent. Macleods’ response also included a counterclaim alleging sham litigation in violation of the Sherman Antitrust Act, which Amgen has denied. On August 15, 2017, the Delaware District Court consolidated the lawsuit filed against Piramal into the existing consolidated case. The Delaware District Court consolidated the lawsuits filed against Alkem, Lupin and Macleods into a separate single case, Amgen Inc. v. Alkem et al., on December 13, 2017, stayed Macleods’ Sherman Antitrust counterclaim pending resolution of the patent claims, and has scheduled trial on the patent claims for April 29, 2019. In December 2017, Amgen filed four additional lawsuits in the Delaware District Court for infringement of the ’405 Patent against (1) Watson Laboratories, Inc. and Actavis Pharma Inc., (2) Teva Pharmaceuticals, USA, Inc., (3) Barr Laboratories, Inc., and (4) Torrent Pharmaceuticals Ltd. Sensipar ® Pediatric Exclusivity Litigation On May 25, 2017, Amgen filed a lawsuit in the U.S. District Court for the District of Columbia (the D.C. District Court) seeking effectively to reverse the FDA’s May 22, 2017 rejection of Amgen’s request for pediatric exclusivity for cinacalcet hydrochloride (Sensipar ® /Mimpara ® ). Four companies seeking to market generic versions of Sensipar ® were granted leave to intervene, but all but Amneal Pharmaceuticals LLC have subsequently withdrawn from the case. On January 26, 2018, the D.C. District Court granted in part and denied in part the summary judgment motions filed separately by each of the parties and remanded the case to the FDA for the limited purpose of the FDA addressing whether the FDA’s denial of pediatric exclusivity in the case is inconsistent with a prior FDA pediatric exclusivity decision on a different drug. The FDA has responded that its denial of pediatric exclusivity for cinacalcet hydrochloride was appropriate and not inconsistent with its prior decisions. The parties await the court’s ruling on the remaining portions of their summary judgment motions. KYPROLIS ® (carfilzomib) ANDA Patent Litigation Beginning in October 2016, our subsidiary Onyx Therapeutics, Inc. (Onyx Therapeutics), filed four separate lawsuits in the Delaware District Court against: Cipla; Sagent Pharmaceuticals, Inc.; Breckenridge; and Fresenius Kabi, USA LLC, Fresenius Kabi USA, Inc., Fresenius Pharmaceuticals Holding, Inc., and Fresenius Kabi Oncology Limited; each for infringing U.S. Patent Nos. 7,232,818 (the ’818 Patent); 7,417,042 (the ’042 Patent); 7,491,704 (the ’704 Patent); 7,737,112 (the ’112 Patent); 8,129,346 (the ’346 Patent); 8,207,125 (the ’125 Patent); 8,207,126 (the ’126 Patent); 8,207,127 (the ’127 Patent); and 8,207,297 (the ’297 Patent). By joint stipulation of the parties, Fresenius Pharmaceuticals Holding, Inc. and Fresenius Kabi Oncology Limited were subsequently dismissed from that lawsuit. In October and November 2016, Onyx Therapeutics also filed four separate lawsuits in the Delaware District Court against: MSN Laboratories Private Limited and MSN Pharmaceuticals, Inc. (collectively, MSN); Dr. Reddy’s; Qilu Pharma, Inc. and Qilu Pharmaceutical Co. Ltd. (collectively, Qilu); and Apotex; each for infringing the ’112 Patent; and a separate lawsuit against InnoPharma, Inc. for infringement of the ’042, ’112 and ’297 Patents. In April 2017, Onyx Therapeutics filed a separate lawsuit in the Delaware District Court against Teva Pharmaceuticals USA, Inc. and Teva Pharmaceutical Industries Ltd. for infringement of the ’818, ’042, ’704, ’112, ’346, ’125, ’126, ’127 and ’297 Patents. The Delaware District Court has consolidated these ten lawsuits for purposes of discovery into a single case, Onyx Therapeutics, Inc. v. CIPLA Ltd., et al . These ten lawsuits are based on 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 the applicable patents. Responses to the complaints have been filed by all defendants alleging invalidity and, in certain instances, non-infringement of the patents. Trial is scheduled to commence on March 11, 2019. In August 2017, Onyx Therapeutics filed additional lawsuits in the Delaware District Court against InnoPharma, Inc. for infringement of the ’818, ’704, ’346, ’125, ’126 and ’127 Patents; and against Apotex and Qilu for infringement of the ’818, ’042, ’704, ’346, ’125, ’126, ’127 and ’297 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 the applicable patents. On September 14, 2017, the Delaware District Court consolidated these three additional lawsuits for purposes of discovery into the existing consolidated case. Responses to these new complaints have been filed by InnoPharma, Inc., Apotex and Qilu alleging invalidity and, in certain instances, non-infringement of the patents. In September 2017, by joint stipulation of the parties, Teva Pharmaceutical Industries Ltd. was dismissed from the patent infringement lawsuit that was filed in the Delaware District Court in April 2017, leaving Teva Pharmaceuticals USA, Inc. as the remaining defendant in that litigation. In November 2017, Onyx Therapeutics filed a lawsuit in the Delaware District Court against Aurobindo Pharma USA, Inc. for infringement of the ’818, ’042, ’704, ’112, ’346, ’125, ’126, ’127 and ’297 Patents. In December 2017, Onyx Therapeutics filed additional lawsuits in the Delaware District Court against Dr. Reddy’s for infringement of the ’818, ’042, ’704, ’346, ’125, ’126, ’127 and ’297 Patents, and against MSN for infringement of the ’112 Patent. In January, Onyx Therapeutics filed a lawsuit in the Delaware District Court against Apotex for infringement of the ’818, ’042, ’704, ’112, ’346, ’125, ’126, ’127 and ’297 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 the applicable patents. Responses to these complaints have been filed by Auobindo Pharma USA, Inc., Dr. Reddy’s, and MSN alleging invalidity and, in certain instances, non-infringement of the patents. In February 2018, Qilu was dismissed from the applicable lawsuit by joint stipulation of the parties. NEUPOGEN ® (filgrastim)/ Neulasta ® (pegfilgrastim) Litigation Sandoz NEUPOGEN ® Patent Litigation On October 24, 2014, Amgen Inc. and AML (collectively, 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) 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 Biologics Price Competition and Innovation Act (BPCIA), while having deliberately failed to comply with the BPCIA’s disclosure requirement to Amgen as the reference product sponsor. By its complaint, Amgen seeks, among other remedies, an injunction to cease Sandoz’s unauthorized reliance on Amgen’s Biologics License Application (BLA) for filgrastim 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 California Northern District Court’s dismissal of Amgen’s state law claims concluding 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). 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 June 12, 2017, the U.S. Supreme Court reversed the Federal Circuit Court ruling that a biosimilar applicant must wait to give the 180-day advance notice of first commercial marketing until after the FDA has licensed the biosimilar product, holding that such notice can be given either before or after the FDA approval. On a second issue, the U.S. Supreme Court vacated the Federal Circuit Court’s decision that the only remedy available when a biosimilar applicant refuses to provide its BLA is to bring a patent infringement claim. The U.S. Supreme Court agreed with the Federal Circuit Court that there is no remedy under federal law for failing to make the disclosure but remanded the case to the Federal Circuit Court to determine whether California law would treat noncompliance with such requirement as unlawful and, if so, to determine whether the BPCIA pre-empts any additional remedy available under state law and whether Sandoz forfeited any pre-emption defense. On December 14, 2017, the Federal Circuit Court affirmed the California Northern District Court’s dismissal of Amgen’s state law claims, holding that the BPCIA pre-empts state law remedies for a biosimilar applicant’s failure to comply with the BPCIA’s disclosure requirement. Following the California Northern District Court’s September 8, 2015 lift of the stay of the case, the parties continued to litigate the remaining patent infringement claim, counterclaim and defenses. On October 15, 2015, Amgen filed a first supplemental and amended complaint adding to the lawsuit Sandoz’s infringement of U.S. Patent No. 8,940,878 (the ’878 Patent), which covers methods of purifying proteins. On September 13, 2017, by joint stipulation of the parties, the California Northern District Court dismissed from the case the parties’ respective claims and counterclaims related to the ’427 Patent. On October 25, 2017, Sandoz filed motions for summary judgment of noninfringement of the ’878 Patent and for summary judgment regarding damages. On December 19, 2017, the California Northern District Court granted Sandoz’s summary judgment of noninfringement. Sandoz’s motion for summary judgment regarding damages was denied as moot. On January 8, 2018, the California Northern District Court entered judgment of noninfringement of the ’878 and ’427 Patents and dismissed without prejudice Sandoz’s counterclaims of invalidity of the ’878 and ’427 Patents. Amgen filed an appeal of the judgment on February 5, 2018. Sandoz Neulasta ® Patent Litigation On May 12, 2016, Amgen filed a lawsuit in the California Northern District Court against Sandoz and Lek Pharmaceuticals d.d. for infringement of the ’878 Patent and 5,824,784 (the ’784 Patent) in accordance with the patent provisions of the BPCIA. The lawsuit stems from Sandoz filing an application for FDA licensure of a pegfilgrastim product as biosimilar to Neulasta ® . 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 the ’784 Patent. On October 25, 2017, Sandoz filed motions for summary judgment of noninfringement of the ’878 Patent and for summary judgment regarding damages. On December 19, 2017, the California Northern District Court granted Sandoz’s summary judgment of noninfringement of the ’878 Patent. Sandoz’s motion for summary judgment regarding damages was denied as moot. On January 8, 2018, the California Northern District Court entered judgment of noninfringement of the ’878 Patent and dismissed without prejudice Sandoz’s counterclaims of invalidity of the ’878 Patent. Amgen filed an appeal of the judgment on February 5, 2018. Apotex NEUPOGEN ® /Neulasta ® Patent Litigation On August 6 and October 2, 2015, Amgen filed two separate lawsuits 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), the ’784 Patent and the ’427 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. These lawsuits stem from Apotex’s submissions of applications for FDA licensure of a pegfilgrastim product as biosimilar to Amgen’s Neulasta ® , and a filgrastim product as biosimilar to Amgen’s NEUPOGEN ® , respectively. By its complaints, Amgen seeks, among other remedies, an injunction prohibiting Apotex from infringing the ’138, ’784 and ’427 Patents and enjoining Apotex from commencing commercial marketing of any biosimilar pegfilgrastim product or biosimilar filgrastim product, respectively, until a date that is at least 180 days after Apotex provides legally effective notice to Amgen. Apotex answered the August 6 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 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 15, 2016, the Florida Southern District Court dismissed without prejudice all claims and counterclaims related to the ’427 and ’784 Patents 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 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 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. Amgen appealed and on November 13, 2017, the Federal Circuit Court affirmed the Florida Southern District Court’s judgment. On February 17, 2017, the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office granted Apotex’s petition to institute an inter partes review (IPR) of the ’138 Patent, challenging claims of the ’138 Patent as unpatentable. On May 22, 2017, Amgen filed its response and oral argument was held before the PTAB on December 13, 2017. Coherus Neulasta ® Patent Litigation On May 10, 2017, Amgen filed a lawsuit in the Delaware District Court against Coherus BioSciences, Inc. (Coherus) for infringement of our U.S. Patent No. 8,273,707 (the ’707 Patent). This lawsuit stems from Coherus’ submission of an application for FDA licensure of a pegfilgrastim product as biosimilar to Amgen’s Neulasta ® under the BPCIA. By its complaint, Amgen seeks, among other remedies, an injunction prohibiting Coherus from infringing the ’707 Patent. On June 1, 2017, Coherus filed a motion to dismiss the complaint as purportedly failing to state a claim of patent infringement. On December 7, 2018, a magistrate judge recommended that the motion be granted with prejudice. Amgen filed objections to the recommendation and awaits a ruling by the court on Coherus’ motion to dismiss. A claim construction hearing is scheduled for June 25, 2018, and trial is scheduled to commence on September 16, 2019. Mylan Neulasta ® Patent Litigation On September 22, 2017, Amgen Inc. and AML (collectively, Amgen) filed a lawsuit in the District Court for the Western District of Pennsylvania against Mylan Inc., Mylan Pharmaceuticals Inc., Mylan GmbH, and Mylan N.V. (collectively, Mylan) for infringement of our ’707 Patent and U.S. Patent No. 9,643,997 (the ’997 Patent). This lawsuit stems from Mylan’s submission of an application for FDA licensure of a pegfilgrastim product as biosimilar to Amgen’s Neulasta ® under the BPCIA. By its complaint, Amgen seeks, among other remedies, an injunction prohibiting Mylan from infringing the ’707 and ’997 Patents. On November 22, 2017, Mylan answered the complaint, denying patent infringement and alleging that the patents are invalid. ENBREL (etanercept) Litigation Sandoz ENBREL Patent Litigation On February 26, 2016, two affiliates of Amgen Inc. (Immunex Corporation and AML (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 (the ’182 Patent); 8,163,522 (the ’552 Patent); 7,915,225; 8,119,605; and 8,722,631 (the ’631 Patent). By their complaint, Amgen and Roche seek 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 invalid. 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. On September 14, 2017, Amgen filed a motion for summary judgment that Sandoz infringed claim 1 of the ’631 Patent and, on October 23, 2017, Sandoz filed its brief in opposition to the motion. Coherus ENBREL Patent Challenge On August 4 and September 7, 2017, Coherus filed separate petitions seeking to institute IPR proceedings before the PTAB of the U.S. Patent and Trademark Office to challenge the patentability of each claim of the ’522 Patent and the ’182 Patent, respectively. Both the ’522 Patent and the ’182 Patent relate to ENBREL and are exclusively licensed to our subsidiary Immunex Corporation by Roche. Patent owner preliminary responses to the Coherus IPR petition were filed on December 13, 2017 regarding the ’522 Patent and on December 15, 2017 regarding the ’182 Patent, explaining that Coherus’ petitions are without merit and requesting that the PTAB not institute IPR proceedings. The deadlines by which the PTAB is expected to render a decision regarding whether to institute IPR trial proceedings on the ’522 Patent and the ’182 Patent are March 15 and March 26, 2018, respectively. Hospira EPOGEN ® (epoetin alfa) Patent 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 produc |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 Product sales: ENBREL $ 5,433 $ 5,965 $ 5,364 Neulasta ® 4,534 4,648 4,715 Aranesp ® 2,053 2,093 1,951 Prolia ® 1,968 1,635 1,312 Sensipar ® /Mimpara ® 1,718 1,582 1,415 XGEVA ® 1,575 1,529 1,405 EPOGEN ® 1,096 1,282 1,856 KYPROLIS ® 835 692 512 Vectibix ® 642 611 549 Nplate ® 642 584 525 NEUPOGEN ® 549 765 1,049 Repatha ® 319 141 10 BLINCYTO ® 175 115 77 Other 256 250 204 Total product sales 21,795 21,892 20,944 Other revenues 1,054 1,099 718 Total revenues $ 22,849 $ 22,991 $ 21,662 Geographic information Outside the United States, we sell products principally in Europe. The geographic classification of product sales is based on the location of the customer. The geographic classification of all other revenues is 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, 2017 2016 2015 Revenues: United States $ 18,029 $ 18,326 $ 17,167 Rest of the world (ROW) 4,820 4,665 4,495 Total revenues $ 22,849 $ 22,991 $ 21,662 December 31, 2017 2016 Long-lived assets: United States $ 2,349 $ 2,328 Puerto Rico 1,527 1,591 ROW 1,113 1,042 Total long-lived assets $ 4,989 $ 4,961 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 or obtaining credit insurance. We had product sales to three customers each accounting for more than 10% of total revenues for each of the years ended December 31, 2017 , 2016 and 2015 . For the year ended December 31, 2017, 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, 2017 2016 2015 AmerisourceBergen Corporation: Gross product sales $ 10,742 $ 10,100 $ 10,038 % of total gross revenues 31 % 31 % 34 % % of U.S. gross product sales 37 % 38 % 42 % McKesson Corporation: Gross product sales $ 10,625 $ 9,710 $ 8,766 % of total gross revenues 30 % 30 % 30 % % of U.S. gross product sales 35 % 34 % 34 % Cardinal Health, Inc.: Gross product sales $ 7,049 $ 6,520 $ 5,045 % of total gross revenues 20 % 20 % 17 % % of U.S. gross product sales 24 % 24 % 21 % As of December 31, 2017 and 2016 , amounts due from these three customers each exceeded 10% of gross trade receivables and accounted for 75% and 76% , respectively, of net trade receivables on a combined basis. As of December 31, 2017 and 2016 , 14% and 21% , 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, 2017 and 2016 was not material. |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | Quarterly financial data (unaudited) The following tables summarize the Company’s unaudited financial data on a quarterly basis. The sum of the quarterly earnings (loss) per share amounts may not equal the amount reported for the full year since per share amounts are computed independently for each quarter and for the full year based on respective weighted-average shares outstanding and dilutive securities. Quarterly financial data is summarized as follows (in millions, except per share data): 2017 Quarters ended December 31 September 30 June 30 March 31 Product sales $ 5,569 $ 5,453 $ 5,574 $ 5,199 Gross profit from product sales $ 4,510 $ 4,463 $ 4,550 $ 4,203 Net (loss) income $ (4,264 ) $ 2,021 $ 2,151 $ 2,071 (Loss) earnings per share: Basic $ (5.89 ) $ 2.78 $ 2.93 $ 2.81 Diluted (1) $ (5.89 ) $ 2.76 $ 2.91 $ 2.79 2016 Quarters ended 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 (1) During periods of net loss, diluted loss per share is equal to basic loss per share as the anti-dilutive effect of potential common shares is disregarded. |
Subsequent Event Subsequent Eve
Subsequent Event Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent event On October 30, 2017, we announced that we had agreed to acquire the remaining 50% ownership of K-A from Kirin, making K-A a wholly owned subsidiary of Amgen. Under the terms of the agreement, Kirin will receive $780 million for its shares of K-A. Amgen will make additional payments to Kirin upon the occurrence of certain sales (valued by Amgen at approximately $30 million ). As sole shareholder of K-A, Amgen will own the product rights and remaining cash held by K-A. License agreements between K-A and Kirin in certain Asian territories, as well as license agreements with J&J, will remain in place. See Note 8, Related party transactions. The transaction will be accounted for as a business combination and was effective in the first quarter of 2018. Given the timing of the closing of this share transaction, we are currently in the process of valuing the assets acquired and liabilities assumed in the business combination. As a result, we are not yet able to provide the amounts to be recognized as of the share acquisition date for the major classes of assets acquired and liabilities assumed and other related disclosures. We will disclose this and other related information in our Form 10-Q for the quarter ended March 31, 2018. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts Disclosure | SCHEDULE II AMGEN INC. VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2017, 2016 and 2015 (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, 2017 $ 51 $ 4 $ — $ 4 $ 51 Year ended December 31, 2016 $ 55 $ 11 $ — $ 15 $ 51 Year ended December 31, 2015 $ 50 $ 18 $ — $ 13 $ 55 |
Summary of significant accoun30
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 U.S. generally accepted accounting principles (GAAP) 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 collectibility 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, Collaborations, 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, 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, Collaborations, 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 and were $620 million , $489 million and $346 million during the years ended December 31, 2017, 2016 and 2015, respectively. SG&A expenses also include costs and cost recoveries associated with marketing and promotion efforts under certain collaborative 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, Collaborations. |
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 fair values of RSUs and stock option awards, which are subject only to service conditions with graded vesting, are recognized as compensation expense, generally on a straight-line basis over the service period, net of estimated forfeitures. The fair values of performance unit awards are recognized as compensation expense, generally on a straight-line basis 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. Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws. Deferred income taxes are recorded for the expected tax consequences of temporary differences between the bases of assets and liabilities, as well as for loss and tax credit carryforwards 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 consolidated 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. On December 22, 2017, the Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118 (SAB 118) to address the accounting implications of the U.S. federal tax reform enacted on December 22, 2017. SAB 118 allows a company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. 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 Accumulated other comprehensive income (loss) (AOCI). 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 net realizable value. Cost, which includes amounts related to materials, labor and overhead, is determined in a manner that approximates the first-in, first-out method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. 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 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 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 AOCI. The earnings of these subsidiaries are translated into U.S. dollars using average exchange rates. |
Recent accounting pronouncements | Recent accounting pronouncements 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 recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning on January 1, 2018. The new standards are required to be adopted using either a full-retrospective or a modified-retrospective approach. We will adopt these standards using the modified-retrospective approach beginning in 2018. We have completed our impact assessment and do not anticipate a material impact to Total revenues in our Consolidated Statements of Income, accounting policies, business processes, internal controls or disclosures. In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision requiring that equity investments (except for investments accounted for under the equity method of accounting) 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. With the exception of equity investments currently being accounted for at cost, adjustments are applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. The new standard will be applied prospectively to investments currently accounted for at cost which had a carrying value of $95 million as of December 31, 2017. Upon adoption, on January 1, 2018, we will record an immaterial adjustment to Retained earnings from AOCI, which represents the net unrealized gain on all equity investments with a readily determinable fair value as of December 31, 2017. The impact that this new standard will have on our Consolidated Statements of Income after adoption will depend on the changes in fair values of equity securities in our portfolio in the future. See Note 9, Available-for-sale investments for the fair value of all equity securities as of December 31, 2017. 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, including leases classified as operating leases under current GAAP, and disclose qualitative and quantitative information about leasing arrangements. The new standard requires a modified-retrospective approach to adoption and is effective for interim and annual periods beginning on January 1, 2019, but may be adopted earlier. We expect to adopt this standard beginning in 2019. We do not expect that this standard will have a material impact on our Consolidated Statements of Income, but we do expect that upon adoption, this standard will have a material impact on our assets and liabilities on our Consolidated Balance Sheets. The primary effect of adoption will be the requirement to record right-of-use assets and corresponding lease obligations for current operating leases. In addition, the standard will require that we update our systems, processes and controls we use to track, record and account for our lease portfolio. We have selected a lease accounting information system and engaged third-party consultants to provide system implementation services. System readiness, including implementation and functionality of software procured from third-party providers, is essential to enable the preparation of financial information required for this standard. 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. This new standard also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income 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, but may be adopted earlier, beginning on January 1, 2019. With certain exceptions, adjustments are to be applied using a modified-retrospective approach by reflecting adjustments through a cumulative-effect impact on retained earnings as of the beginning of the fiscal year of adoption. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In October 2016, the FASB issued a new accounting standard that amends the income tax accounting guidance for intra-entity transfers of assets other than inventory. The new standard requires that entities recognize the income tax consequences of an intercompany transfer of an asset, other than inventory, in the period the transfer occurs. The current exception to defer the recognition of any tax impact on intercompany transfers of inventory until the inventory is sold to a third party remains unaffected. The new standard is effective for interim and annual periods beginning on January 1, 2018. The standard will be applied prospectively to any transaction occurring on or after the adoption date. We have completed our impact assessment and do not anticipate a material impact 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 the evaluation of when a set of assets acquired or disposed of should be considered a business. The new standard requires that an entity evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets; if so, the set of assets would not be considered a business. The new standard also requires that a business include at least one substantive process and narrows the definition of outputs. The new standard will be applied prospectively and is effective for interim and annual periods beginning on January 1, 2018. Adoption of this new standard may result in more transactions being accounted for as asset acquisitions versus business combinations; however, the impact on our consolidated financial statements will depend on the facts and circumstances of future transactions. |
Restructuring and other cost 31
Restructuring and other cost savings initiatives (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Summary of restructuring charges by type of activity | The following tables summarize charges recorded related to the restructuring plan by type of activity and the locations recognized within the Consolidated Statements of Income (in millions): 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 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): 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 Expense 72 7 79 Payments (20 ) $ (11 ) (31 ) Restructuring liabilities as of December 31, 2017 $ 63 $ 5 $ 68 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The weighted-average assumptions used in the option valuation model and the resulting weighted-average grant date fair values of stock options granted were as follows: Years ended December 31, 2017 2016 Closing price of our common stock on grant date $ 162.60 $ 156.35 Expected volatility (average of implied and historical volatility) 22.7 % 24.3 % Expected life (in years) 5.8 5.8 Risk-free interest rate 2.1 % 1.5 % Expected dividend yield 2.8 % 2.6 % Fair value of stock options granted $ 27.54 $ 27.55 |
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, 2017 2016 2015 RSUs $ 174 $ 177 $ 190 Performance units 133 123 132 Stock options 22 11 — Total stock-based compensation expense, pretax 329 311 322 Tax benefit from stock-based compensation expense (118 ) (112 ) (120 ) Total stock-based compensation expense, net of tax $ 211 $ 199 $ 202 |
Summary of RSUs | The following table summarizes information regarding our RSUs: Year ended December 31, 2017 Units (in millions) Weighted-average grant date fair value Balance nonvested at December 31, 2016 3.9 $ 141.07 Granted 1.3 $ 163.99 Vested (1.5 ) $ 125.32 Forfeited (0.3 ) $ 149.79 Balance nonvested at December 31, 2017 3.4 $ 155.11 |
Weighted average assumptions used and the resulting weighted average grant date fair value of performance units | The weighted-average assumptions used in this model and the resulting weighted-average grant date fair values of performance units granted were as follows: Years ended December 31, 2017 2016 2015 Closing price of our common stock on grant date $ 162.60 $ 156.35 $ 164.26 Volatility 25.9 % 25.8 % 24.3 % Risk-free interest rate 1.4 % 0.9 % 0.8 % Fair value of units granted $ 178.87 $ 170.56 $ 182.55 |
Summary of stock options | The following table summarizes information regarding our stock options: Year ended December 31, 2017 Options (in millions) Weighted- average exercise price Weighted- average remaining contractual life (in years) Aggregate intrinsic value (in millions) Balance unexercised at December 31, 2016 3.1 $ 100.21 Granted 1.5 $ 162.60 Exercised (0.5 ) $ 57.24 Expired/forfeited (0.1 ) $ 159.13 Balance unexercised at December 31, 2017 4.0 $ 127.08 6.9 $ 186 Vested or expected to vest at December 31, 2017 3.7 $ 124.84 6.8 $ 182 Exercisable at December 31, 2017 1.3 $ 58.23 2.8 $ 147 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 Domestic $ 4,436 $ 4,478 $ 3,532 Foreign 5,161 4,685 4,446 Total income before income taxes $ 9,597 $ 9,163 $ 7,978 |
Provision for income taxes | The provision for income taxes included the following (in millions): Years ended December 31, 2017 2016 2015 Current provision: Federal $ 8,615 $ 984 $ 1,129 State 5 65 40 Foreign 275 176 272 Total current provision 8,895 1,225 1,441 Deferred (benefit) provision: Federal (1,120 ) 372 (290 ) State — (69 ) (78 ) Foreign (157 ) (87 ) (34 ) Total deferred (benefit) provision (1,277 ) 216 (402 ) Total provision for income taxes $ 7,618 $ 1,441 $ 1,039 |
Significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities were as follows (in millions): December 31, 2017 2016 Deferred income tax assets: NOL and credit carryforwards $ 812 $ 688 Accrued expenses 362 562 Expenses capitalized for tax 155 255 Stock-based compensation 99 167 Other 154 117 Total deferred income tax assets 1,582 1,789 Valuation allowance (497 ) (381 ) Net deferred income tax assets 1,085 1,408 Deferred income tax liabilities: Acquired intangible assets (1,748 ) (3,139 ) Debt (184 ) (345 ) Other (240 ) (307 ) Total deferred income tax liabilities (2,172 ) (3,791 ) Total deferred income taxes, net $ (1,087 ) $ (2,383 ) |
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): Years ended December 31, 2017 2016 2015 Beginning balance $ 2,543 $ 2,114 $ 1,772 Additions based on tax positions related to the current year 447 425 413 Additions based on tax positions related to prior years 1 18 9 Reductions for tax positions of prior years (5 ) (7 ) (32 ) Reductions for expiration of statute of limitations (5 ) — — Settlements (28 ) (7 ) (48 ) Ending balance $ 2,953 $ 2,543 $ 2,114 |
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, 2017 2016 2015 Federal statutory tax rate 35.0 % 35.0 % 35.0 % 2017 Tax Act, net repatriation tax 71.5 % — % — % Foreign earnings (15.8 )% (15.5 )% (18.1 )% 2017 Tax Act, net deferred tax remeasurement (7.7 )% — % — % Credits, Puerto Rico Excise Tax (2.2 )% (2.3 )% (2.5 )% Share-based payments (0.7 )% (1.3 )% — % Credits, primarily federal R&D (0.6 )% (0.7 )% (1.4 )% State taxes 0.3 % 0.1 % 0.1 % Audit settlements (federal, state, foreign) (0.3 )% — % (0.5 )% Other, net (0.1 )% 0.4 % 0.4 % Effective tax rate 79.4 % 15.7 % 13.0 % |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 2015 Income (Numerator): Net income for basic and diluted EPS $ 1,979 $ 7,722 $ 6,939 Shares (Denominator): Weighted-average shares for basic EPS 731 748 758 Effect of dilutive securities 4 6 8 Weighted-average shares for diluted EPS 735 754 766 Basic EPS $ 2.71 $ 10.32 $ 9.15 Diluted EPS $ 2.69 $ 10.24 $ 9.06 |
Available-for-sale investments
Available-for-sale investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 fair values of available-for-sale investments by type of security were as follows (in millions): Year ended December 31, 2017 Type of security Amortized cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury securities $ 8,313 $ 1 $ (72 ) $ 8,242 Other government-related debt securities: U.S. 225 — (2 ) 223 Foreign and other 2,415 18 (11 ) 2,422 Corporate debt securities: Financial 10,089 17 (34 ) 10,072 Industrial 9,688 34 (52 ) 9,670 Other 1,393 3 (6 ) 1,390 Residential mortgage-backed securities 2,198 — (30 ) 2,168 Other mortgage- and asset-backed securities 2,312 — (15 ) 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities 1,440 — — 1,440 Total interest-bearing securities 41,318 73 (222 ) 41,169 Equity securities 135 14 — 149 Total available-for-sale investments $ 41,453 $ 87 $ (222 ) $ 41,318 Year ended December 31, 2016 Type of security Amortized cost Gross unrealized gains Gross unrealized losses 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 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | The fair values of available-for-sale investments by location in the Consolidated Balance Sheets were as follows (in millions): December 31, Consolidated Balance Sheets location 2017 2016 Cash and cash equivalents $ 3,291 $ 2,783 Marketable securities 37,878 34,844 Other assets 149 154 Total available-for-sale investments $ 41,318 $ 37,781 |
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 2017 2016 Maturing in one year or less $ 6,733 $ 8,393 Maturing after one year through three years 12,820 10,404 Maturing after three years through five years 13,836 12,157 Maturing after five years through ten years 3,263 2,974 Maturing after ten years 52 40 Mortgage- and asset-backed securities 4,465 3,659 Total interest-bearing securities $ 41,169 $ 37,627 |
Available-for-sale securities, continuous unrealized loss position, fair value | Information on the fair values and gross unrealized losses of available-for-sale investments in an unrealized loss position aggregated by type and length of time that the securities have been in a continuous loss position was as follows (in millions): Less than 12 months 12 months or greater Type of security as of December 31, 2017 Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities $ 7,728 $ (70 ) $ 195 $ (2 ) Other government-related debt securities: U.S. 188 (1 ) 34 (1 ) Foreign and other 1,163 (9 ) 115 (2 ) Corporate debt securities: Financial 5,928 (28 ) 462 (6 ) Industrial 5,760 (43 ) 612 (9 ) Other 868 (4 ) 117 (2 ) Residential mortgage-backed securities 1,838 (24 ) 276 (6 ) Other mortgage- and asset-backed securities 1,777 (12 ) 250 (3 ) Total $ 25,250 $ (191 ) $ 2,061 $ (31 ) 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 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in millions): December 31, 2017 2016 Raw materials $ 232 $ 225 Work in process 1,668 1,608 Finished goods 934 912 Total inventories $ 2,834 $ 2,745 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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) 2017 2016 Land — $ 283 $ 295 Buildings and improvements 10-40 3,507 3,640 Manufacturing equipment 8-12 2,372 2,275 Laboratory equipment 8-12 1,179 1,092 Other 3-15 4,404 4,380 Construction in progress — 834 745 Property, plant and equipment, gross 12,579 12,427 Less accumulated depreciation and amortization (7,590 ) (7,466 ) Property, plant and equipment, net $ 4,989 $ 4,961 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Changes in the carrying amounts of goodwill were as follows (in millions): Years ended December 31, 2017 2016 Beginning balance $ 14,751 $ 14,787 Goodwill related to acquisitions of businesses — 2 Currency translation adjustments 10 (38 ) Ending balance $ 14,761 $ 14,751 |
Schedule of identifiable intangible assets | Other intangible assets consisted of the following (in millions): December 31, 2017 2016 Gross carrying amount Accumulated amortization Other intangible assets, net Gross carrying amount Accumulated amortization Other intangible assets, net Finite-lived intangible assets: Developed product technology rights $ 12,589 $ (6,796 ) $ 5,793 $ 12,534 $ (5,947 ) $ 6,587 Licensing rights 3,275 (1,601 ) 1,674 3,275 (1,300 ) 1,975 Marketing-related rights 1,319 (920 ) 399 1,333 (793 ) 540 R&D technology rights 1,161 (804 ) 357 1,122 (704 ) 418 Total finite-lived intangible assets 18,344 (10,121 ) 8,223 18,264 (8,744 ) 9,520 Indefinite-lived intangible assets: IPR&D 386 — 386 759 — 759 Total other intangible assets $ 18,730 $ (10,121 ) $ 8,609 $ 19,023 $ (8,744 ) $ 10,279 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities consisted of the following (in millions): December 31, 2017 2016 Sales deductions $ 2,247 $ 1,874 Dividends payable 953 849 Employee compensation and benefits 816 920 Sales returns reserve 455 437 Other 2,045 1,804 Total accrued liabilities $ 6,516 $ 5,884 |
Financing arrangements (Tables)
Financing arrangements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 2016 Short-term loan $ — $ 605 2.125% notes due 2017 (2.125% 2017 Notes) — 1,250 Floating Rate Notes due 2017 — 600 1.25% notes due 2017 (1.25% 2017 Notes) — 850 5.85% notes due 2017 (5.85% 2017 Notes) — 1,100 6.15% notes due 2018 (6.15% 2018 Notes) 500 500 4.375% €550 million notes due 2018 (4.375% 2018 euro Notes) 653 577 5.70% notes due 2019 (5.70% 2019 Notes) 1,000 1,000 1.90% notes due 2019 (1.90% 2019 Notes) 700 — Floating Rate Notes due 2019 550 250 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) 810 710 4.50% notes due 2020 (4.50% 2020 Notes) 300 300 2.125% notes due 2020 (2.125% 2020 Notes) 750 750 Floating Rate Notes due 2020 300 — 2.20% notes due 2020 (2.20% 2020 Notes) 700 — 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) 750 750 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) 1,501 1,315 2.70% notes due 2022 (2.70% 2022 Notes) 500 500 2.65% notes due 2022 (2.65% 2022 Notes) 1,500 — 3.625% notes due 2022 (3.625% 2022 Notes) 750 750 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) 719 687 2.25% notes due 2023 (2.25% 2023 Notes) 750 750 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) 901 789 2.60% notes due 2026 (2.60% 2026 Notes) 1,250 1,250 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) 642 586 3.20% notes due 2027 (3.20% 2027 Notes) 1,000 — 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 946 864 6.375% notes due 2037 (6.375% 2037 Notes) 552 552 6.90% notes due 2038 (6.90% 2038 Notes) 291 291 6.40% notes due 2039 (6.40% 2039 Notes) 466 466 5.75% notes due 2040 (5.75% 2040 Notes) 412 412 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 974 974 5.65% notes due 2042 (5.65% 2042 Notes) 487 487 5.375% notes due 2043 (5.375% 2043 Notes) 261 261 4.40% notes due 2045 (4.40% 2045 Notes) 2,250 2,250 4.563% notes due 2048 (4.563% 2048 Notes) 1,415 1,415 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 3,541 Other notes due 2097 100 100 Unamortized bond discounts, premiums and issuance costs, net (929 ) (936 ) Total carrying value of debt 35,342 34,596 Less current portion (1,152 ) (4,403 ) Total noncurrent debt $ 34,190 $ 30,193 |
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 notes for which we have entered into interest rate swap contracts and the related notional amounts of these contracts were as follows (dollar amounts in millions): December 31, 2017 2016 Notes Effective interest rate Notional amount 1.25% 2017 Notes LIBOR + 0.4% $ — $ 850 2.20% 2019 Notes LIBOR + 0.6% 1,400 1,400 3.45% 2020 Notes LIBOR + 1.1% 900 900 4.10% 2021 Notes LIBOR + 1.7% 1,000 1,000 3.875% 2021 Notes LIBOR + 2.0% 1,750 1,750 3.625% 2022 Notes LIBOR + 1.6% 750 750 3.625% 2024 Notes LIBOR + 1.4% 1,400 — 3.125% 2025 Notes LIBOR + 0.9% 1,000 — 2.600% 2026 Notes LIBOR + 0.3% 1,250 — Total notional amounts $ 9,450 $ 6,650 |
Aggregate contractual maturities of long-term debt obligations | The aggregate contractual maturities of all borrowings due subsequent to December 31, 2017 , are as follows (in millions): Maturity date Amount 2018 $ 1,153 2019 4,460 2020 2,950 2021 3,500 2022 4,251 Thereafter 19,957 Total $ 36,271 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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): Years ended December 31, 2017 2016 2015 Shares Dollars Shares Dollars Shares Dollars First quarter 3.4 $ 555 4.7 $ 690 2.9 $ 451 Second quarter 6.2 1,006 3.9 591 3.3 515 Third quarter 4.4 769 4.4 747 4.6 703 Fourth quarter 4.5 796 6.7 999 1.2 184 Total stock repurchases 18.5 $ 3,126 19.7 $ 3,027 12.0 $ 1,853 |
Components of accumulated other comprehensive income | The components of AOCI were as follows (in millions): Foreign currency translation Cash flow hedges Available-for-sale securities Other AOCI Balance as of December 31, 2014 $ (264 ) $ 290 $ (19 ) $ (15 ) $ (8 ) Foreign currency translation adjustments (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 ) Foreign currency translation adjustments 77 — — — 77 Unrealized gains (losses) — 192 (46 ) — 146 Reclassification adjustments to income — (638 ) 41 — (597 ) Other — — — 5 5 Income taxes 4 158 (1 ) — 161 Balance as of December 31, 2017 $ (529 ) $ (6 ) $ (144 ) $ — $ (679 ) |
Reclassifications out of accumulated other comprehensive income | The reclassifications out of AOCI to earnings were as follows (in millions): Years ended December 31, Components of AOCI 2017 2016 2015 Consolidated Statements of Income location Cash flow hedges: Foreign currency contract gains $ 65 $ 308 $ 326 Product sales Cross-currency swap contract gains (losses) 574 (446 ) (182 ) Interest and other income, net Forward interest rate contract losses (1 ) (1 ) (1 ) Interest expense, net 638 (139 ) 143 Income before income taxes (226 ) 46 (53 ) Provision for income taxes $ 412 $ (93 ) $ 90 Net income Available-for-sale securities: Net realized losses $ (41 ) $ (61 ) $ (76 ) Interest and other income, net (8 ) 11 18 Provision for income taxes $ (49 ) $ (50 ) $ (58 ) Net income |
Fair value measurement (Tables)
Fair value measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis | The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Fair value measurement as of December 31, 2017, 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 $ 8,242 $ — $ — $ 8,242 Other government-related debt securities: U.S. — 223 — 223 Foreign and other — 2,422 — 2,422 Corporate debt securities: Financial — 10,072 — 10,072 Industrial — 9,670 — 9,670 Other — 1,390 — 1,390 Residential mortgage-backed securities — 2,168 — 2,168 Other mortgage- and asset-backed securities — 2,297 — 2,297 Money market mutual funds 3,245 — — 3,245 Other short-term interest-bearing securities — 1,440 — 1,440 Equity securities 149 — — 149 Derivatives: Foreign currency contracts — 6 — 6 Cross-currency swap contracts — 270 — 270 Interest rate swap contracts — 10 — 10 Total assets $ 11,636 $ 29,968 $ — $ 41,604 Liabilities: Derivatives: Foreign currency contracts $ — $ 204 $ — $ 204 Cross-currency swap contracts — 220 — 220 Interest rate swap contracts — 61 — 61 Contingent consideration obligations in connection with business combinations — — 69 69 Total liabilities $ — $ 485 $ 69 $ 554 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 |
Change in carrying amounts of contingent consideration obligations | Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Years ended December 31, 2017 2016 2015 Beginning balance $ 179 $ 188 $ 215 Addition from Dezima acquisition — — 110 Payment to former BioVex Group, Inc. shareholders — — (125 ) Net changes in valuation (110 ) (9 ) (12 ) Ending balance $ 69 $ 179 $ 188 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 as of December 31, 2017 , were 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 unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions): Years ended December 31, Derivatives in cash flow hedging relationships 2017 2016 2015 Foreign currency contracts $ (402 ) $ 115 $ 425 Cross-currency swap contracts 581 (281 ) (275 ) Forward interest rate contracts 13 (10 ) — Total unrealized gains (losses) $ 192 $ (176 ) $ 150 |
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 gains and losses reclassified out of AOCI and 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 Consolidated Statements of Income location 2017 2016 2015 Foreign currency contracts Product sales $ 65 $ 308 $ 326 Cross-currency swap contracts Interest and other income, net 574 (446 ) (182 ) Forward interest rate contracts Interest expense, net (1 ) (1 ) (1 ) Total realized gains (losses) $ 638 $ (139 ) $ 143 |
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 gains (losses) 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 Consolidated Statements of Income location 2017 2016 2015 Foreign currency contracts Interest and other income, net $ 24 $ (56 ) $ (16 ) |
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, 2017 Consolidated Balance Sheet location Fair value Consolidated Balance Sheet location Fair value Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 6 Accrued liabilities/ Other noncurrent liabilities $ 204 Cross-currency swap contracts Other current assets/ Other noncurrent assets 270 Accrued liabilities/ Other noncurrent liabilities 220 Interest rate swap contracts Other current assets/ Other noncurrent assets 10 Accrued liabilities/ Other noncurrent liabilities 61 Total derivatives designated as hedging instruments $ 286 $ 485 Derivative assets Derivative liabilities December 31, 2016 Consolidated Balance Sheet location Fair value Consolidated 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 |
Contingencies and commitments (
Contingencies and commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2017 (in millions): Amount 2018 $ 158 2019 126 2020 116 2021 100 2022 59 Thereafter 91 Total minimum operating lease commitments $ 650 |
U.S. repatriation tax commitments | Under the 2017 Tax Act, we will elect to pay the repatriation tax primarily related to our prior indefinitely invested earnings of our foreign operations in eight annual installments beginning in April 2018. See Note 5, Income taxes. As of December 31, 2017, we expect to pay $7.3 billion in repatriation taxes during the following years (in millions): Amount 2018 $ 585 2019 585 2020 585 2021 585 2022 585 Thereafter 4,391 Total U.S. repatriation tax commitments $ 7,316 |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Revenues | Revenues were as follows (in millions): Years ended December 31, 2017 2016 2015 Product sales: ENBREL $ 5,433 $ 5,965 $ 5,364 Neulasta ® 4,534 4,648 4,715 Aranesp ® 2,053 2,093 1,951 Prolia ® 1,968 1,635 1,312 Sensipar ® /Mimpara ® 1,718 1,582 1,415 XGEVA ® 1,575 1,529 1,405 EPOGEN ® 1,096 1,282 1,856 KYPROLIS ® 835 692 512 Vectibix ® 642 611 549 Nplate ® 642 584 525 NEUPOGEN ® 549 765 1,049 Repatha ® 319 141 10 BLINCYTO ® 175 115 77 Other 256 250 204 Total product sales 21,795 21,892 20,944 Other revenues 1,054 1,099 718 Total revenues $ 22,849 $ 22,991 $ 21,662 |
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, 2017 2016 2015 Revenues: United States $ 18,029 $ 18,326 $ 17,167 Rest of the world (ROW) 4,820 4,665 4,495 Total revenues $ 22,849 $ 22,991 $ 21,662 December 31, 2017 2016 Long-lived assets: United States $ 2,349 $ 2,328 Puerto Rico 1,527 1,591 ROW 1,113 1,042 Total long-lived assets $ 4,989 $ 4,961 |
Revenues earned from major customers | Certain information with respect to these customers was as follows (dollar amounts in millions): Years ended December 31, 2017 2016 2015 AmerisourceBergen Corporation: Gross product sales $ 10,742 $ 10,100 $ 10,038 % of total gross revenues 31 % 31 % 34 % % of U.S. gross product sales 37 % 38 % 42 % McKesson Corporation: Gross product sales $ 10,625 $ 9,710 $ 8,766 % of total gross revenues 30 % 30 % 30 % % of U.S. gross product sales 35 % 34 % 34 % Cardinal Health, Inc.: Gross product sales $ 7,049 $ 6,520 $ 5,045 % of total gross revenues 20 % 20 % 17 % % of U.S. gross product sales 24 % 24 % 21 % |
Quarterly financial data (una46
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | Quarterly financial data is summarized as follows (in millions, except per share data): 2017 Quarters ended December 31 September 30 June 30 March 31 Product sales $ 5,569 $ 5,453 $ 5,574 $ 5,199 Gross profit from product sales $ 4,510 $ 4,463 $ 4,550 $ 4,203 Net (loss) income $ (4,264 ) $ 2,021 $ 2,151 $ 2,071 (Loss) earnings per share: Basic $ (5.89 ) $ 2.78 $ 2.93 $ 2.81 Diluted (1) $ (5.89 ) $ 2.76 $ 2.91 $ 2.79 2016 Quarters ended 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 (1) During periods of net loss, diluted loss per share is equal to basic loss per share as the anti-dilutive effect of potential common shares is disregarded. |
Summary of significant accoun47
Summary of significant accounting policies (Details Textual) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017segment | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Accounting Policies [Abstract] | ||||
Number of business segment | segment | 1 | 1 | ||
Advertising cost | $ 620 | $ 489 | $ 346 | |
Accounting Standards Update 2016-01 [Member] | ||||
Item Effected [Line Items] | ||||
Investments | $ 95 |
Restructuring and other cost 48
Restructuring and other cost savings initiatives (Details Textual) $ in Millions | Dec. 31, 2017USD ($) |
Separation and other headcount-related costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | $ 558 |
Asset-related charges [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 239 |
Minimum [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring expected cost | 825 |
Restructuring expected separation and other headcount-related cost | 560 |
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 | 600 |
Restructuring expected asset impairments, accelerated depreciation and other related costs | $ 300 |
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 operating income (expense) [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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Reserve [Roll Forward] | ||||
Restructuring liabilities as of beginning of period | $ 20 | $ 118 | $ 244 | $ 0 |
Expense | 79 | 19 | 132 | 385 |
Payments | (31) | (117) | (258) | (141) |
Restructuring liabilities as of end of period | 68 | 20 | 118 | 244 |
Separation costs [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring liabilities as of beginning of period | 11 | 95 | 221 | 0 |
Expense | 72 | 6 | 52 | 353 |
Payments | (20) | (90) | (178) | (132) |
Restructuring liabilities as of end of period | 63 | 11 | 95 | 221 |
Other [Member] | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring liabilities as of beginning of period | 9 | 23 | 23 | 0 |
Expense | 7 | 13 | 80 | 32 |
Payments | (11) | (27) | (80) | (9) |
Restructuring liabilities as of end of period | $ 5 | $ 9 | $ 23 | $ 23 |
Business combinations (Details
Business combinations (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 14,761 | $ 14,787 | $ 14,751 |
Dezima [Member] | |||
Business Acquisition [Line Items] | |||
Consideration transferred | 410 | ||
Contingent consideration obligations in connection with business combinations | 0 | 110 | |
Indefinite-lived intangible assets - IPR&D | 400 | ||
Goodwill | 108 | ||
Deferred tax liabilities | $ 100 | ||
IPR&D impairment charge | 400 | ||
Net changes in valuation | $ 116 |
Stock-based compensation (Compo
Stock-based compensation (Components of Stock-based Compensation Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | $ 329 | $ 311 | $ 322 |
Tax benefit from stock-based compensation expense | (118) | (112) | (120) |
Total stock-based compensation expense, net of tax | 211 | 199 | 202 |
RSUs [Member] | |||
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | 174 | 177 | 190 |
Performance units [Member] | |||
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | 133 | 123 | 132 |
Stock options [Member] | |||
Components of stock-based compensation expense [Abstract] | |||
Total stock-based compensation expense, pretax | $ 22 | $ 11 | $ 0 |
Stock-based compensation (Summa
Stock-based compensation (Summary of RSUs) (Details) - RSUs [Member] - $ / shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Units | |||
Balance nonvested at beginning of period (in shares) | 3.9 | ||
Granted (in shares) | 1.3 | ||
Vested (in shares) | (1.5) | ||
Forfeited (in shares) | (0.3) | ||
Balance nonvested at end of period (in shares) | 3.4 | 3.9 | |
Weighted-average grant date fair value | |||
Balance nonvested at beginning of period (in usd per share) | $ 141.07 | ||
Granted (in usd per share) | 163.99 | $ 156.76 | $ 166.74 |
Vested (in usd per share) | 125.32 | ||
Forfeited (in usd per share) | 149.79 | ||
Balance nonvested at end of period (in usd per share) | $ 155.11 | $ 141.07 |
Stock-based compensation Stock-
Stock-based compensation Stock-based compensation (Summary of Stock Options) (Details) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Closing price of our common stock on grant date (in usd per share) | $ 162.60 | $ 156.35 |
Volatility | 22.70% | 24.30% |
Expected life | 5 years 9 months 18 days | 5 years 9 months 18 days |
Risk-free interest rate | 2.10% | 1.50% |
Expected dividend yield | 2.80% | 2.60% |
Granted (in usd per share) | $ 27.54 | $ 27.55 |
Stock-based compensation (Sum55
Stock-based compensation (Summary of Stock Options) (Details) - Stock options [Member] $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Options | |
Balance unexercised at beginning of period (in shares) | shares | 3.1 |
Granted (in shares) | shares | 1.5 |
Exercised (in shares) | shares | (0.5) |
Expired/forfeited (in shares) | shares | (0.1) |
Balance unexercised at end of period (in shares) | shares | 4 |
Vested or expected to vest (in shares) | shares | 3.7 |
Exercisable (in shares) | shares | 1.3 |
Weighted- average exercise price | |
Balance unexercised at beginning of period (in usd per share) | $ / shares | $ 100.21 |
Granted (in usd per share) | $ / shares | 162.60 |
Exercised (in usd per share) | $ / shares | 57.24 |
Expired/forfeited (in usd per share) | $ / shares | 159.13 |
Balance unexercised at end of period (in shares) | $ / shares | 127.08 |
Weighted-average exercise price, vested or expected to vest (in usd per share) | $ / shares | 124.84 |
Weighted-average exercise price, exercisable (in usd per share) | $ / shares | $ 58.23 |
Stock options information [Abstract] | |
Weighted-average remaining contractual life (years), unexercised | 6 years 10 months 24 days |
Weighted-average remaining contractual life (years), vested or expected to vest | 6 years 9 months 18 days |
Weighted-average remaining contractual life (years), exercisable | 2 years 9 months 18 days |
Aggregate intrinsic value, unexercised | $ | $ 186 |
Aggregate intrinsic value, vested or expected to vest | $ | 182 |
Aggregate intrinsic value, exercisable | $ | $ 147 |
Stock-based compensation (Weigh
Stock-based compensation (Weighted-average Assumptions) (Details) - Performance units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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) | $ 162.60 | $ 156.35 | $ 164.26 |
Volatility | 25.90% | 25.80% | 24.30% |
Risk-free interest rate | 1.40% | 0.90% | 0.80% |
Fair value of unit (in usd per share) | $ 178.87 | $ 170.56 | $ 182.55 |
Stock-based compensation (Detai
Stock-based compensation (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | ||
The amount of common stock available under the plan for future grants and/or issuances (in shares) | 36,000,000 | ||
Description of vesting of restricted stock units and stock options | RSUs and stock options generally vest in 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 | ||
Number of shares added back for tax withholding on full value awards | 1.9 | ||
Weighted average grant date fair value, granted (in usd per share) | $ 163.99 | $ 156.76 | $ 166.74 |
Total fair value of units that vested during the year | $ 182,000,000 | $ 193,000,000 | $ 206,000,000 |
Total unrecognized compensation cost related to nonvested awards | $ 304,000,000 | ||
Weighted average number of years over which compensation cost related to nonvested awards is expected to be recognized | 1 year 9 months 18 days | ||
Units outstanding (in shares) | 3,400,000 | 3,900,000 | |
Weighted-average grant date fair value | $ 155.11 | $ 141.07 | |
Units granted (in shares) | 1,300,000 | ||
Units, forfeited (in shares) | 300,000 | ||
Weighted average grant date fair value, forfeited (in usd per share) | $ 149.79 | ||
Stock options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period of stock options from date of grant | 10 years | ||
Total intrinsic value of stock options exercised during the year | $ 60,000,000 | $ 102,000,000 | 150,000,000 |
Actual tax benefits realized from tax deductions from option exercises | $ 21,000,000 | $ 37,000,000 | $ 55,000,000 |
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 | ||
Number of shares added back for tax withholding on full value awards | 1.9 | ||
Weighted average grant date fair value, granted (in usd per share) | $ 178.87 | $ 170.56 | $ 182.55 |
Total fair value of units that vested during the year | $ 219,000,000 | $ 347,000,000 | $ 0 |
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) | 2,200,000 | 2,800,000 | |
Weighted-average grant date fair value | $ 177.16 | $ 144.43 | |
Units granted (in shares) | 800,000 | ||
Units, forfeited (in shares) | 100,000 | ||
Weighted average grant date fair value, forfeited (in usd per share) | $ 179.58 |
Income taxes (Income Before Inc
Income taxes (Income Before Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Examination [Line Items] | |||
Income before income taxes | $ 9,597 | $ 9,163 | $ 7,978 |
Domestic | |||
Income Tax Examination [Line Items] | |||
Income before income taxes | 4,436 | 4,478 | 3,532 |
Foreign | |||
Income Tax Examination [Line Items] | |||
Income before income taxes | $ 5,161 | $ 4,685 | $ 4,446 |
Income taxes (Provision for Inc
Income taxes (Provision for Income Taxes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current provision: | |||
Federal | $ 8,615 | $ 984 | $ 1,129 |
State | 5 | 65 | 40 |
Foreign | 275 | 176 | 272 |
Total current provision | 8,895 | 1,225 | 1,441 |
Deferred (benefit) provision: | |||
Federal | (1,120) | 372 | (290) |
State | 0 | (69) | (78) |
Foreign | (157) | (87) | (34) |
Total deferred (benefit) provision | (1,277) | 216 | (402) |
Total provision for income taxes | $ 7,618 | $ 1,441 | $ 1,039 |
Income taxes (Components of Def
Income taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred income tax assets: | ||
NOL and credit carryforwards | $ 812 | $ 688 |
Accrued expenses | 362 | 562 |
Expenses capitalized for tax | 155 | 255 |
Stock-based compensation | 99 | 167 |
Other | 154 | 117 |
Total deferred income tax assets | 1,582 | 1,789 |
Valuation allowance | (497) | (381) |
Net deferred income tax assets | 1,085 | 1,408 |
Deferred income tax liabilities: | ||
Acquired intangible assets | (1,748) | (3,139) |
Debt | (184) | (345) |
Other | (240) | (307) |
Total deferred income tax liabilities | (2,172) | (3,791) |
Total deferred income taxes, net | $ (1,087) | $ (2,383) |
Income taxes (Reconciliation of
Income taxes (Reconciliation of Total Gross Amounts of UTBs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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) | |||
Beginning balance | $ 2,543 | $ 2,114 | $ 1,772 |
Additions based on tax positions related to the current year | 447 | 425 | 413 |
Additions based on tax positions related to prior years | 1 | 18 | 9 |
Reductions for tax positions of prior years | (5) | (7) | (32) |
Reductions for expiration of statute of limitations | (5) | 0 | 0 |
Settlements | (28) | (7) | (48) |
Ending balance | $ 2,953 | $ 2,543 | $ 2,114 |
Income taxes (Reconciliation 62
Income taxes (Reconciliation of Federal Statutory Tax Rate) (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 35.00% | 35.00% | 35.00% |
2017 Tax Act, net repatriation tax | 71.50% | 0.00% | 0.00% |
Foreign earnings | (15.80%) | (15.50%) | (18.10%) |
2017 Tax Act, net deferred tax remeasurement | (7.70%) | 0.00% | 0.00% |
Credits, Puerto Rico Excise Tax | (2.20%) | (2.30%) | (2.50%) |
Share-based payments | (0.70%) | (1.30%) | (0.00%) |
Credits, primarily federal R&D | (0.60%) | (0.70%) | (1.40%) |
State taxes | 0.30% | 0.10% | 0.10% |
Audit settlements (federal, state, foreign) | (0.30%) | (0.00%) | (0.50%) |
Other, net | (0.10%) | 0.40% | 0.40% |
Effective tax rate | 79.40% | 15.70% | 13.00% |
Income taxes (Details Textual)
Income taxes (Details Textual) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Credit Carryforward [Line Items] | |||
Total U.S. repatriation tax commitments | $ 7,316,000,000 | ||
Remeasurement of net deferred and other tax liabilities, provisional income tax expense (benefit) | (1,200,000,000) | ||
Provisional income tax expense (benefit) | 6,100,000,000 | ||
Significant change in UTB is reasonably possible, amount of unrecorded benefit | 63,000,000 | ||
Interest and penalties related to unrecognized tax benefits recognized in income tax provision | 56,000,000 | $ 125,000,000 | $ 17,000,000 |
Accrued interest and penalties associated with unrecognized tax benefits | 332,000,000 | 276,000,000 | |
Income taxes paid | $ 1,500,000,000 | $ 1,100,000,000 | $ 919,000,000 |
Puerto Rico [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Tax rate | 4.00% | ||
Domestic [Member] | |||
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 | 146,000,000 | ||
NOL carryforwards, valuation allowance | 6,000,000 | ||
State [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards available to reduce income taxes | 524,000,000 | ||
Tax credit carryforwards, valuation allowance | 392,000,000 | ||
NOL carryforwards available to reduce income taxes | 425,000,000 | ||
NOL carryforwards, valuation allowance | 400,000,000 | ||
Foreign [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards available to reduce income taxes | 2,000,000,000 | ||
NOL carryforwards, valuation allowance | 819,000,000 | ||
NOLs with no valuation allowance and no expiration | 678,000,000 | ||
Expiration in tax years beginning 2022 [Member] | State [Member] | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards, valuation allowance | 0 | ||
Operating Losses That Expire Between 2020 and 2035 [Member] | Domestic [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards, valuation allowance | 0 | ||
Operating Losses That Expire Between 2018 and 2032 [Member] | State [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL carryforwards, valuation allowance | 0 | ||
Operating Losses With No Expiry or Expiry Beginning 2018 [Member] | Foreign [Member] | |||
Tax Credit Carryforward [Line Items] | |||
NOL 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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (Numerator): | |||||||||||
Net income for basic and diluted EPS | $ (4,264) | $ 2,021 | $ 2,151 | $ 2,071 | $ 1,935 | $ 2,017 | $ 1,870 | $ 1,900 | $ 1,979 | $ 7,722 | $ 6,939 |
Shares (Denominator): | |||||||||||
Weighted-average shares for basic EPS | 731 | 748 | 758 | ||||||||
Effect of dilutive securities (in shares) | 4 | 6 | 8 | ||||||||
Weighted-average shares for diluted EPS | 735 | 754 | 766 | ||||||||
Basic EPS (in usd per share) | $ (5.89) | $ 2.78 | $ 2.93 | $ 2.81 | $ 2.61 | $ 2.70 | $ 2.49 | $ 2.52 | $ 2.71 | $ 10.32 | $ 9.15 |
Diluted EPS (in usd per share) | $ (5.89) | $ 2.76 | $ 2.91 | $ 2.79 | $ 2.59 | $ 2.68 | $ 2.47 | $ 2.50 | $ 2.69 | $ 10.24 | $ 9.06 |
Collaborations (Novartis Pharma
Collaborations (Novartis Pharma AG) (Details) - Novartis Pharma AG [Member] - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recognition, milestone method, potential future milestone payment | $ 400,000,000 | |||
Research and development [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Cost recoveries | $ 124,000,000 | $ 33,000,000 | $ 6,000,000 | |
License fee | $ 30,000,000 | |||
Other revenues [Member] | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Revenue recognition, milestone method, revenue recognized | $ 60,000,000 |
Collaborations (Pfizer Inc.) (D
Collaborations (Pfizer Inc.) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Annual residual royalty payments | 10.00% | 11.00% |
Pfizer [Member] | Selling, general and administrative [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Royalties due | $ 470 | $ 561 |
Collaborations (UCB) (Details)
Collaborations (UCB) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
UCB [Member] | Research and development expense [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Cost recoveries | $ 56 | $ 48 | $ 60 |
Collaborations (Bayer HealthCar
Collaborations (Bayer HealthCare Pharmaceuticals Inc.) (Details) - Bayer [Member] - Nexavar [Member] $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)country | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
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 | $ 161 | $ 167 | $ 257 |
Royalty income | $ 133 | $ 137 | $ 72 |
Related party transactions (Det
Related party transactions (Details) - Kirin-Amgen [Member] - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 30, 2017 | |
Related Party Transaction [Line Items] | ||||
Ownership interest (in percent) in related party | 50.00% | 50.00% | ||
Percentage of interest acquired, announcement date | 50.00% | |||
Noncurrent other assets [Member] | ||||
Related Party Transaction [Line Items] | ||||
Approximate carrying value of the company's equity method investment | $ 570 | $ 501 | ||
Accrued liabilities [Member] | ||||
Related Party Transaction [Line Items] | ||||
Amount due to related party | 80 | 69 | ||
Selling, general and administrative [Member] | ||||
Related Party Transaction [Line Items] | ||||
Company's share of profits (losses) of related party | 68 | 58 | $ 65 | |
Cost of sales [Member] | ||||
Related Party Transaction [Line Items] | ||||
Royalties earned by related party from Amgen | 221 | 239 | 264 | |
Other revenues [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenues earned by Amgen from related party | $ 28 | 31 | 65 | |
Research and development expense [Member] | ||||
Related Party Transaction [Line Items] | ||||
Cost recoveries by Amgen from related party | $ 7 | $ 90 |
Available-for-sale investment70
Available-for-sale investments (Schedule) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | $ 41,453 | $ 37,911 |
Gross unrealized gains | 87 | 128 |
Gross unrealized losses | (222) | (258) |
Fair value | 41,318 | 37,781 |
U.S. Treasury securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 8,313 | 6,681 |
Gross unrealized gains | 1 | 1 |
Gross unrealized losses | (72) | (68) |
Fair value | 8,242 | 6,614 |
Other government-related debt securities - U.S. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 225 | 302 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | (2) | (3) |
Fair value | 223 | 299 |
Other government-related debt securities - Foreign and other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,415 | 1,784 |
Gross unrealized gains | 18 | 9 |
Gross unrealized losses | (11) | (34) |
Fair value | 2,422 | 1,759 |
Corporate debt securities - Financial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 10,089 | 8,476 |
Gross unrealized gains | 17 | 21 |
Gross unrealized losses | (34) | (37) |
Fair value | 10,072 | 8,460 |
Corporate debt securities - Industrial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 9,688 | 8,793 |
Gross unrealized gains | 34 | 59 |
Gross unrealized losses | (52) | (63) |
Fair value | 9,670 | 8,789 |
Corporate debt securities - Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,393 | 1,079 |
Gross unrealized gains | 3 | 5 |
Gross unrealized losses | (6) | (7) |
Fair value | 1,390 | 1,077 |
Residential mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,198 | 1,968 |
Gross unrealized gains | 0 | 1 |
Gross unrealized losses | (30) | (29) |
Fair value | 2,168 | 1,940 |
Other mortgage- and asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 2,312 | 1,731 |
Gross unrealized gains | 0 | 1 |
Gross unrealized losses | (15) | (13) |
Fair value | 2,297 | 1,719 |
Money market mutual funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 3,245 | 2,782 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 3,245 | 2,782 |
Other short-term interest-bearing securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 1,440 | 4,188 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair value | 1,440 | 4,188 |
Total interest-bearing securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 41,318 | 37,784 |
Gross unrealized gains | 73 | 97 |
Gross unrealized losses | (222) | (254) |
Fair value | 41,169 | 37,627 |
Equity securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized cost | 135 | 127 |
Gross unrealized gains | 14 | 31 |
Gross unrealized losses | 0 | (4) |
Fair value | $ 149 | $ 154 |
Available-for-sale investment71
Available-for-sale investments (Fair Values by Classification) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets location | ||||
Cash and cash equivalents | $ 3,800 | $ 3,241 | $ 4,144 | $ 3,731 |
Marketable securities | 37,878 | 34,844 | ||
Other assets | 2,119 | 1,625 | ||
Total available-for-sale investments | 41,318 | 37,781 | ||
Available-for-sale investments [Member] | ||||
Consolidated Balance Sheets location | ||||
Cash and cash equivalents | 3,291 | 2,783 | ||
Marketable securities | 37,878 | 34,844 | ||
Other assets | 149 | 154 | ||
Total available-for-sale investments | $ 41,318 | $ 37,781 |
Available-for-sale investment72
Available-for-sale investments (Fair Values by Contractual Maturity) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Contractual maturity | ||
Total available-for-sale investments | $ 41,318 | $ 37,781 |
Total interest-bearing securities [Member] | ||
Contractual maturity | ||
Maturing in one year or less | 6,733 | 8,393 |
Maturing after one year through three years | 12,820 | 10,404 |
Maturing after three years through five years | 13,836 | 12,157 |
Maturing after five years through ten years | 3,263 | 2,974 |
Maturing after ten years | 52 | 40 |
Mortgage- and asset-backed securities | 4,465 | 3,659 |
Total available-for-sale investments | $ 41,169 | $ 37,627 |
Available-for-sale investment73
Available-for-sale investments (Unrealized Losses and Fair Values) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | $ 25,250 | $ 18,281 |
Less than 12 months, Unrealized losses | (191) | (250) |
12 months or greater, Fair value | 2,061 | 493 |
12 months or greater, Unrealized losses | (31) | (8) |
U.S. Treasury securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 7,728 | 5,774 |
Less than 12 months, Unrealized losses | (70) | (68) |
12 months or greater, Fair value | 195 | 0 |
12 months or greater, Unrealized losses | (2) | 0 |
Other government-related debt securities - U.S. [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 188 | 201 |
Less than 12 months, Unrealized losses | (1) | (3) |
12 months or greater, Fair value | 34 | 0 |
12 months or greater, Unrealized losses | (1) | 0 |
Other government-related debt securities - Foreign and other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,163 | 1,192 |
Less than 12 months, Unrealized losses | (9) | (34) |
12 months or greater, Fair value | 115 | 17 |
12 months or greater, Unrealized losses | (2) | 0 |
Corporate debt securities - Financial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 5,928 | 3,975 |
Less than 12 months, Unrealized losses | (28) | (37) |
12 months or greater, Fair value | 462 | 44 |
12 months or greater, Unrealized losses | (6) | 0 |
Corporate debt securities - Industrial [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 5,760 | 3,913 |
Less than 12 months, Unrealized losses | (43) | (61) |
12 months or greater, Fair value | 612 | 149 |
12 months or greater, Unrealized losses | (9) | (2) |
Corporate debt securities - Other [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 868 | 486 |
Less than 12 months, Unrealized losses | (4) | (7) |
12 months or greater, Fair value | 117 | 7 |
12 months or greater, Unrealized losses | (2) | 0 |
Residential mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,838 | 1,631 |
Less than 12 months, Unrealized losses | (24) | (26) |
12 months or greater, Fair value | 276 | 158 |
12 months or greater, Unrealized losses | (6) | (3) |
Other mortgage- and asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Less than 12 months, Fair value | 1,777 | 1,087 |
Less than 12 months, Unrealized losses | (12) | (10) |
12 months or greater, Fair value | 250 | 118 |
12 months or greater, Unrealized losses | $ (3) | (3) |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |||
Cash and cash equivalents | $ 509 | $ 458 | |
Realized gains | 172 | 306 | $ 132 |
Realized losses | $ 213 | $ 367 | $ 208 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 232 | $ 225 |
Work in process | 1,668 | 1,608 |
Finished goods | 934 | 912 |
Total inventories | $ 2,834 | $ 2,745 |
Property, plant and equipment76
Property, plant and equipment (Schedule) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Land | $ 283 | $ 295 | |
Buildings and improvements | 3,507 | 3,640 | |
Manufacturing equipment | 2,372 | 2,275 | |
Laboratory equipment | 1,179 | 1,092 | |
Other | 4,404 | 4,380 | |
Construction in progress | 834 | 745 | |
Property, plant and equipment, gross | 12,579 | 12,427 | |
Less accumulated depreciation and amortization | (7,590) | (7,466) | |
Property, plant and equipment, net | 4,989 | 4,961 | |
Depreciation and amortization charges associated with property, plant and equipment | $ 604 | $ 619 | $ 727 |
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 |
Goodwill and intangible asset77
Goodwill and intangible assets (Goodwill Roll Forward) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 14,751 | $ 14,787 |
Goodwill related to acquisitions of businesses | 0 | 2 |
Currency translation adjustments | 10 | (38) |
Ending balance | $ 14,761 | $ 14,751 |
Goodwill and intangible asset78
Goodwill and intangible assets (Identifiable Intangible Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-lived intangible assets: | ||
Gross carrying amount | $ 18,344 | $ 18,264 |
Accumulated amortization | (10,121) | (8,744) |
Other intangible assets, net | 8,223 | 9,520 |
Indefinite-lived intangible assets: | ||
Identifiable intangible assets | 18,730 | 19,023 |
Accumulated amortization | (10,121) | (8,744) |
Identifiable intangible assets, net | 8,609 | 10,279 |
IPR&D [Member] | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 386 | 759 |
Developed product technology rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 12,589 | 12,534 |
Accumulated amortization | (6,796) | (5,947) |
Other intangible assets, net | 5,793 | 6,587 |
Licensing rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 3,275 | 3,275 |
Accumulated amortization | (1,601) | (1,300) |
Other intangible assets, net | 1,674 | 1,975 |
Marketing-related rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 1,319 | 1,333 |
Accumulated amortization | (920) | (793) |
Other intangible assets, net | 399 | 540 |
R&D technology rights [Member] | ||
Finite-lived intangible assets: | ||
Gross carrying amount | 1,161 | 1,122 |
Accumulated amortization | (804) | (704) |
Other intangible assets, net | $ 357 | $ 418 |
Goodwill and intangible asset79
Goodwill and intangible assets (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Amortization charges associated with finite-lived intangible assets | $ 1,300 | $ 1,500 | $ 1,400 |
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 | ||
Total estimated amortization of finite-lived intangible assets for 2022 | 900 | ||
Other operating income (expense) [Member] | IPR&D [Member] | AMG 899 [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
IPR&D impairment charge | $ 400 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Sales deductions | $ 2,247 | $ 1,874 |
Employee compensation and benefits | 953 | 849 |
Dividends payable | 816 | 920 |
Sales returns reserve | 455 | 437 |
Other | 2,045 | 1,804 |
Total accrued liabilities | $ 6,516 | $ 5,884 |
Financing arrangements (Long-te
Financing arrangements (Long-term Borrowings) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Carrying values of long-term borrowings | |||
Short-term loan | $ 0 | $ 605 | |
Total carrying value of debt | 35,342 | 34,596 | |
Less current portion | (1,152) | (4,403) | |
Total noncurrent debt | $ 34,190 | $ 30,193 | |
2.125% notes due 2017 (2.125% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.125% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 1,250 | ||
Floating rate notes due 2017 [Member] | |||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 600 | ||
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 850 | ||
5.85% notes due 2017 (5.85% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 5.85% | ||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | $ 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 | |
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 | $ 653 | 577 | |
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 | |
1.90% notes due 2019 (1.90% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.90% | ||
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 | $ 700 | ||
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 | $ 550 | 250 | |
2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 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 | $ 810 | 710 | |
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 | |
Floating Rate Notes Due 2020 [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 | $ 300 | ||
2.20% notes due 2020 (2.20% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 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 | $ 700 | ||
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% | 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 | $ 750 | |
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% | 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 | $ 1,501 | $ 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 | |
2.65% notes due 2022 (2.65% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.65% | ||
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 | $ 1,500 | ||
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% | 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 | $ 719 | $ 687 | |
2.25% notes due 2023 (2.25% 2023 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.25% | 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 | $ 750 | |
3.625% notes due 2024 (3.625% 2024 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 | $ 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% | 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 | $ 901 | $ 789 | |
2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.60% | 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 | $ 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 | $ 642 | 586 | |
3.20% notes due 2027 (3.20% 2027 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.20% | ||
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 | $ 1,000 | ||
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 | $ 946 | 864 | |
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 | 552 | |
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 | 291 | |
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 | 466 | |
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 | 412 | |
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 | 974 | |
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 | 487 | |
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 | $ 261 | |
4.40% notes due 2045 (4.40% 2045 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 4.40% | 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 | $ 2,250 | |
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 | 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 | 3,541 | |
Other notes due 2097 [Member] | |||
Carrying values of long-term borrowings | |||
Notes payable, noncurrent | 100 | 100 | |
Debt Securities Payable [Member] | |||
Carrying values of long-term borrowings | |||
Unamortized bond discounts and issuance costs | $ 929 | $ 936 | |
Minimum [Member] | Debt Securities Payable [Member] | |||
Carrying values of long-term borrowings | |||
Redemption period without payment of make whole amount | 1 month | ||
Maximum [Member] | Debt Securities Payable [Member] | |||
Carrying values of long-term borrowings | |||
Redemption period without payment of make whole amount | 6 months |
Financing arrangements (Debt Is
Financing arrangements (Debt Issuances) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | 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 | 0 | $ 605,000,000 | |
Commercial paper, repayment | $ 605,000,000 | ||
1.90% notes due 2019 (1.90% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.90% | ||
2.20% notes due 2020 (2.20% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.20% | ||
2.65% notes due 2022 (2.65% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.65% | ||
3.20% notes due 2027 (3.20% 2027 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.20% | ||
1.85% notes due 2021 (1.85% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.85% | 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% | 1.25% | |
0.41% 2023 Swiss franc Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 0.41% | 0.41% | |
2.25% notes due 2023 (2.25% 2023 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.25% | 2.25% | |
2.00% 2026 euro Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.00% | 2.00% | |
2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.60% | 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% | 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% | |
Senior notes [Member] | 4.40% notes due 2045 (4.40% 2045 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, unamortized premium | $ 79,000,000 | ||
Commercial Paper [Member] | |||
Debt Instrument [Line Items] | |||
Commercial paper, maximum borrowing capacity | $ 2,500,000,000 | ||
Commercial paper, issued | 12,300,000,000 | ||
Commercial paper, maximum outstanding | 1,500,000,000 | ||
Commercial paper, repayment | $ 12,300,000,000 |
Financing arrangements (Debt Re
Financing arrangements (Debt Repayments) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Repayments of short-term debt | $ 605,000,000 | ||
Repayments of debt | 4,405,000,000 | $ 3,725,000,000 | $ 2,400,000,000 |
2.125% notes due 2017 (2.125% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 1,250,000,000 | ||
Stated contractual interest rate on note | 2.125% | ||
Floating rate notes due 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 600,000,000 | ||
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 850,000,000 | ||
Stated contractual interest rate on note | 1.25% | ||
5.85% notes due 2017 (5.85% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 1,100,000,000 | ||
Stated contractual interest rate on note | 5.85% | ||
Term loan due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | 1,975,000,000 | $ 2,400,000,000 | |
2.30% notes due 2016 (2.30% 2016 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 750,000,000 | ||
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 | $ 1,000,000,000 | ||
Stated contractual interest rate on note | 2.50% |
Financing arrangements (Debt Ex
Financing arrangements (Debt Exchange) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||
Aggregate principal amount of notes issued | $ 6,700 | $ 4,500 | $ 3,500 |
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% | ||
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 | ||
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 | ||
Stated contractual interest rate on note | 4.663% | ||
Debt Securities Payable [Member] | |||
Debt Instrument [Line Items] | |||
Unamortized bond discounts and issuance costs | $ 936 | $ 929 | |
Debt Securities Payable [Member] | 6.375% notes due 2037 (6.375% 2037 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 348 | ||
Debt Securities Payable [Member] | 6.90% notes due 2038 (6.90% 2038 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 209 | ||
Debt Securities Payable [Member] | 6.40% notes due 2039 (6.40% 2039 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 534 | ||
Debt Securities Payable [Member] | 5.75% notes due 2040 (5.75% 2040 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 288 | ||
Debt Securities Payable [Member] | 5.15% notes due 2041 (5.15% 2041 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 1,276 | ||
Debt Securities Payable [Member] | 5.65% notes due 2042 (5.65% 2042 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 763 | ||
Debt Securities Payable [Member] | 5.375% notes due 2043 (5.375% 2043 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, amount | 739 | ||
Nonoperating Income (Expense) [Member] | Debt Securities Payable [Member] | New senior notes [Member] | |||
Debt Instrument [Line Items] | |||
Unamortized bond discounts and issuance costs | 801 | ||
Debt related commitment fees and debt issuance costs | $ 24 |
Financing arrangements (Interes
Financing arrangements (Interest Rate and Cross-currency Swaps) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 1.25% | ||
2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 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% | ||
3.625% notes due 2024 (3.625% 2024 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.625% | ||
3.125% notes due 2025 (3.125% 2025 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 3.125% | 3.125% | |
2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.60% | 2.60% | |
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% | 1.25% | |
0.41% 2023 Swiss franc Bonds [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 0.41% | 0.41% | |
2.00% 2026 euro Notes [Member] | |||
Debt Instrument [Line Items] | |||
Stated contractual interest rate on note | 2.00% | 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 | $ 9,450 | $ 6,650 | |
Notes payable [Member] | 1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 0 | 850 | |
Notes payable [Member] | 2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 1,400 | 1,400 | |
Notes payable [Member] | 3.45% notes due 2020 (3.45% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 900 | 900 | |
Notes payable [Member] | 4.10% notes due 2021 (4.10% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 1,000 | 1,000 | |
Notes payable [Member] | 3.875% notes due 2021 (3.875% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 1,750 | 1,750 | |
Notes payable [Member] | 3.625% notes due 2022 (3.625% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 750 | 750 | |
Notes payable [Member] | 3.625% notes due 2024 (3.625% 2024 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 1,400 | 0 | |
Notes payable [Member] | 3.125% notes due 2025 (3.125% 2025 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | 1,000 | 0 | |
Notes payable [Member] | 2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Notional amount | $ 1,250 | $ 0 | |
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% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 1.25% notes due 2017 (1.25% 2017 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 0.40% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 2.20% notes due 2019 (2.20% 2019 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 0.60% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 3.45% notes due 2020 (3.45% 2020 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 1.10% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 4.10% notes due 2021 (4.10% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 1.70% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 3.875% notes due 2021 (3.875% 2021 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 2.00% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 3.625% notes due 2022 (3.625% 2022 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 1.60% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 3.625% notes due 2024 (3.625% 2024 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 1.40% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 3.125% notes due 2025 (3.125% 2025 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 0.90% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes payable [Member] | 2.60% notes due 2026 (2.60% 2026 notes) [Member] | |||
Debt Instrument [Line Items] | |||
Derivative, effective interest rate | 0.30% |
Financing arrangements (Shelf R
Financing arrangements (Shelf Registration Statements and Other Facilities) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Additional period for extension of commitment term | 1 year | ||
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 |
Financing arrangements (Contrac
Financing arrangements (Contractual Maturities of Long-term Debt) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Maturities of Long-term Debt [Abstract] | |
2,018 | $ 1,153 |
2,019 | 4,460 |
2,020 | 2,950 |
2,021 | 3,500 |
2,022 | 4,251 |
Thereafter | 19,957 |
Total | $ 36,271 |
Financing arrangements (Inter88
Financing arrangements (Interest Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |||
Interest expense, net | $ 1,304 | $ 1,260 | $ 1,095 |
Interest paid, net of interest rate and cross currency swaps | $ 1,300 | $ 1,200 | $ 1,000 |
Stockholders' equity (Shares Re
Stockholders' equity (Shares Repurchase Program) (Details) - USD ($) $ / shares in Units, shares in Millions | Mar. 06, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | 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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 05, 2018 | Jan. 31, 2018 |
Equity [Abstract] | ||||||||||||||||||
Total stock repurchases, Shares | 4.5 | 4.4 | 6.2 | 3.4 | 6.7 | 4.4 | 3.9 | 4.7 | 1.2 | 4.6 | 3.3 | 2.9 | 18.5 | 19.7 | 12 | |||
Total stock repurchases | $ 796,000,000 | $ 769,000,000 | $ 1,006,000,000 | $ 555,000,000 | $ 999,000,000 | $ 747,000,000 | $ 591,000,000 | $ 690,000,000 | $ 184,000,000 | $ 703,000,000 | $ 515,000,000 | $ 451,000,000 | $ 3,126,000,000 | $ 3,027,000,000 | $ 1,853,000,000 | |||
Amount available for stock repurchases under a board approved stock repurchase plan | $ 4,400,000,000 | $ 4,400,000,000 | ||||||||||||||||
Subsequent event [Member] | ||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||
Stock repurchase program, additional authorized amount | $ 10,000,000,000 | |||||||||||||||||
Stock repurchase program, tender offer amount | $ 10,000,000,000 | |||||||||||||||||
Forecast [Member] | Maximum [Member] | ||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||
Stock repurchase program, cost per share | $ 200 | |||||||||||||||||
Forecast [Member] | Minimum [Member] | ||||||||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||||||||
Stock repurchase program, cost per share | $ 175 |
Stockholders' equity (Component
Stockholders' equity (Components of AOCI) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | $ 29,875 | $ 28,083 | $ 25,778 |
Ending Balance | 25,241 | 29,875 | 28,083 |
Foreign currency translation [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (610) | (511) | (264) |
Foreign currency translation adjustments | 77 | (93) | (257) |
Income taxes | 4 | (6) | 10 |
Ending Balance | (529) | (610) | (511) |
Cash flow hedges [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | 282 | 297 | 290 |
Unrealized gains (losses) | 192 | (176) | 150 |
Reclassification adjustments to income | (638) | 139 | (143) |
Income taxes | 158 | 22 | 0 |
Ending Balance | (6) | 282 | 297 |
Available-for-sale securities [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (138) | (260) | (19) |
Unrealized gains (losses) | (46) | 63 | (299) |
Reclassification adjustments to income | 41 | 61 | 76 |
Income taxes | (1) | (2) | (18) |
Ending Balance | (144) | (138) | (260) |
Other [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (5) | (6) | (15) |
Unrealized gains (losses) | 0 | 0 | 8 |
Other | 5 | 1 | 1 |
Ending Balance | 0 | (5) | (6) |
AOCI [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning Balance | (471) | (480) | (8) |
Foreign currency translation adjustments | 77 | (93) | (257) |
Unrealized gains (losses) | 146 | (113) | (141) |
Reclassification adjustments to income | (597) | 200 | (67) |
Other | 5 | 1 | 1 |
Income taxes | 161 | 14 | (8) |
Ending Balance | $ (679) | $ (471) | $ (480) |
Stockholders' equity (Reclassif
Stockholders' equity (Reclassifications out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Product sales | $ 5,569 | $ 5,453 | $ 5,574 | $ 5,199 | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 21,795 | $ 21,892 | $ 20,944 |
Interest and other income, net | 928 | 629 | 603 | ||||||||
Interest expense, net | (1,304) | (1,260) | (1,095) | ||||||||
Income before income taxes | 9,597 | 9,163 | 7,978 | ||||||||
Provision for income taxes | (7,618) | (1,441) | (1,039) | ||||||||
Net income | $ (4,264) | $ 2,021 | $ 2,151 | $ 2,071 | $ 1,935 | $ 2,017 | $ 1,870 | $ 1,900 | 1,979 | 7,722 | 6,939 |
Reclassification out of AOCI [Member] | Cash flow hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Income before income taxes | 638 | (139) | 143 | ||||||||
Provision for income taxes | (226) | 46 | (53) | ||||||||
Net income | 412 | (93) | 90 | ||||||||
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 | (41) | (61) | (76) | ||||||||
Provision for income taxes | (8) | 11 | 18 | ||||||||
Net income | (49) | (50) | (58) | ||||||||
Cash flow hedge [Member] | Reclassification out of AOCI [Member] | Cash flow hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Income before income taxes | 638 | (139) | 143 | ||||||||
Foreign currency contracts [Member] | Cash flow hedge [Member] | Reclassification out of AOCI [Member] | Cash flow hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Product sales | 65 | 308 | 326 | ||||||||
Cross-currency swap contracts [Member] | Cash flow hedge [Member] | Reclassification out of AOCI [Member] | Cash flow hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest and other income, net | 574 | (446) | (182) | ||||||||
Forward interest rate contract [Member] | Cash flow hedge [Member] | Reclassification out of AOCI [Member] | Cash flow hedges [Member] | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Interest expense, net | $ (1) | $ (1) | $ (1) |
Stockholders' equity (Details T
Stockholders' equity (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | 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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||||||||||||||
Amount available for stock repurchases under a board approved stock repurchase plan | $ 4,400 | $ 4,400 | |||||||||||||
Common stock, dividends paid per share (in usd per share) | $ 1.15 | $ 1.15 | $ 1.15 | $ 1.15 | $ 1 | $ 1 | $ 1 | $ 1 | $ 0.79 | $ 0.79 | $ 0.79 | $ 0.79 | |||
Common stock, dividends declared per share (in usd per share) | $ 1.32 | ||||||||||||||
Income taxes expense or (benefit) for unrealized gains and losses for cash flow hedges | 68 | $ (68) | $ 53 | ||||||||||||
Income tax expense or (benefit) reclassification adjustments to income for cash flow hedges | (226) | 46 | (53) | ||||||||||||
Income taxes expense or (benefit) for unrealized gains and losses for available-for-sale securities | 9 | (9) | 0 | ||||||||||||
Income tax expense or (benefit) for reclassification adjustments to income for available-for-sale securities | $ (8) | $ 11 | $ 18 | ||||||||||||
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 (in shares) | 0 | 0 | 0 | 0 | |||||||||||
Preferred stock, shares outstanding (in shares) | 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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||||
Total available-for-sale investments | $ 41,318 | $ 37,781 | ||
Recurring [Member] | ||||
Derivative Assets: | ||||
Total assets | 41,604 | 38,025 | ||
Derivative Liabilities: | ||||
Contingent consideration obligations in connection with business combinations | 69 | 179 | ||
Total liabilities | 554 | 713 | ||
Recurring [Member] | Foreign currency contracts [Member] | ||||
Derivative Assets: | ||||
Foreign currency contracts | 6 | 203 | ||
Derivative Liabilities: | ||||
Foreign currency contracts | 204 | 4 | ||
Recurring [Member] | Cross-currency swap contracts [Member] | ||||
Derivative Assets: | ||||
Foreign currency contracts | 270 | |||
Derivative Liabilities: | ||||
Foreign currency contracts | 220 | 523 | ||
Recurring [Member] | Interest rate swap contracts [Member] | ||||
Derivative Assets: | ||||
Interest rate swap contracts | 10 | 41 | ||
Derivative Liabilities: | ||||
Interest rate swap contracts | 61 | 7 | ||
Recurring [Member] | U.S. Treasury securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 8,242 | 6,614 | ||
Recurring [Member] | Other government-related debt securities - U.S. [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 223 | 299 | ||
Recurring [Member] | Other government-related debt securities - Foreign and other [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 2,422 | 1,759 | ||
Recurring [Member] | Corporate debt securities - Financial [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 10,072 | 8,460 | ||
Recurring [Member] | Corporate debt securities - Industrial [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 9,670 | 8,789 | ||
Recurring [Member] | Corporate debt securities - Other [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 1,390 | 1,077 | ||
Recurring [Member] | Residential mortgage-backed securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 2,168 | 1,940 | ||
Recurring [Member] | Other mortgage- and asset-backed securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 2,297 | 1,719 | ||
Recurring [Member] | Money market mutual funds [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 3,245 | 2,782 | ||
Recurring [Member] | Other short-term interest-bearing securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 1,440 | 4,188 | ||
Recurring [Member] | Equity securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 149 | 154 | ||
Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||
Derivative Assets: | ||||
Total assets | 11,636 | 9,550 | ||
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] | Cross-currency swap contracts [Member] | ||||
Derivative Assets: | ||||
Foreign currency contracts | 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] | U.S. Treasury securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 8,242 | 6,614 | ||
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 | 3,245 | 2,782 | ||
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 | 149 | 154 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | ||||
Derivative Assets: | ||||
Total assets | 29,968 | 28,475 | ||
Derivative Liabilities: | ||||
Contingent consideration obligations in connection with business combinations | 0 | 0 | ||
Total liabilities | 485 | 534 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member] | ||||
Derivative Assets: | ||||
Foreign currency contracts | 6 | 203 | ||
Derivative Liabilities: | ||||
Foreign currency contracts | 204 | 4 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross-currency swap contracts [Member] | ||||
Derivative Assets: | ||||
Foreign currency contracts | 270 | |||
Derivative Liabilities: | ||||
Foreign currency contracts | 220 | 523 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Interest rate swap contracts [Member] | ||||
Derivative Assets: | ||||
Interest rate swap contracts | 10 | 41 | ||
Derivative Liabilities: | ||||
Interest rate swap contracts | 61 | 7 | ||
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 | 223 | 299 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 2,422 | 1,759 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 10,072 | 8,460 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 9,670 | 8,789 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 1,390 | 1,077 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 2,168 | 1,940 | ||
Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member] | ||||
Assets: | ||||
Total available-for-sale investments | 2,297 | 1,719 | ||
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 | 1,440 | 4,188 | ||
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 | 69 | 179 | $ 188 | $ 215 |
Total liabilities | 69 | 179 | ||
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] | Cross-currency swap contracts [Member] | ||||
Derivative Assets: | ||||
Foreign currency contracts | 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] | 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 | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dezima [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Addition from Dezima acquisition | $ 0 | $ 110 | |
Net changes in valuation | 116 | ||
Biovex [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Settlement of contingent consideration obligations | (125) | ||
Recurring [Member] | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Beginning balance | 179 | ||
Ending balance | 69 | $ 179 | |
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 | 179 | 188 | 215 |
Net changes in valuation | (110) | (9) | (12) |
Ending balance | 69 | 179 | 188 |
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] | |||
Addition from Dezima acquisition | 0 | 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] | |||
Settlement of contingent consideration obligations | $ 0 | $ 0 | $ (125) |
Fair value measurement (Details
Fair value measurement (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | |
Fair Value Measurement (Textual) [Abstract] | |||
Unfunded commitments, measured at NAV | $ 100 | ||
Length of time hedged in foreign currency contracts | 3 years | ||
Aggregate fair value of long-term debt, including current portion | $ 38,600 | $ 36,500 | |
Carrying value of long-term debt, including current portion | 35,342 | 34,596 | |
Dezima [Member] | |||
Fair Value Measurement (Textual) [Abstract] | |||
Maximum additional consideration due contingent on certain milestones | $ 1,250 | ||
Net changes in valuation | (116) | ||
Contingent consideration obligations in connection with business combinations | 0 | 110 | |
Biovex [Member] | |||
Fair Value Measurement (Textual) [Abstract] | |||
Payment of contingent consideration obligation | $ 125 | ||
Additional contingent consideration upon achievement of milestones | $ 325 | ||
Other government-related and corporate debt securities [Member] | |||
Fair Value Measurement (Textual) [Abstract] | |||
Investment maturity period | 5 years | ||
Limited Partnership [Member] | |||
Fair Value Measurement (Textual) [Abstract] | |||
Investments, measured at NAV | $ 213 | $ 158 |
Derivative instruments (Details
Derivative instruments (Details Textual) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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] | |||
Offsetting unrealized gain (loss) on related interest rate swaps | $ (85) | $ (34) | $ 48 |
Unrealized gain (loss) on the hedged debt | 85 | 34 | (48) |
Foreign currency option contracts [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | 74 | 608 | 225 |
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 | 175 | ||
Interest rate swap [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | 9,450 | 6,650 | |
Foreign currency forward contracts [Member] | Derivatives designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | 4,600 | 3,400 | 3,300 |
Foreign currency forward contracts [Member] | Derivatives not designated as hedging instruments [Member] | |||
Derivative Instruments Gain Loss [Line Items] | |||
Notional amount | $ 757 | $ 666 | $ 911 |
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, 2017USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017CHF (SFr) | Dec. 31, 2017EUR (€) |
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, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | $ 192 | $ (176) | $ 150 |
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 | (402) | 115 | 425 |
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 | 581 | (281) | (275) |
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 | $ 13 | $ (10) | $ 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, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Product sales | $ 5,569 | $ 5,453 | $ 5,574 | $ 5,199 | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 21,795 | $ 21,892 | $ 20,944 |
Interest and other income, net | 928 | 629 | 603 | ||||||||
Interest expense, net | (1,304) | (1,260) | (1,095) | ||||||||
Income before income taxes | 9,597 | 9,163 | 7,978 | ||||||||
Accumulated net gain (loss) from designated or qualifying cash flow hedges [Member] | Reclassification out of AOCI [Member] | |||||||||||
Derivative Instruments Gain Loss [Line Items] | |||||||||||
Income before income taxes | 638 | (139) | 143 | ||||||||
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 | 638 | (139) | 143 | ||||||||
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 | 65 | 308 | 326 | ||||||||
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 | 574 | (446) | (182) | ||||||||
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 (Loca100
Derivative instruments (Locations and Gain (Loss) for Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | $ 24 | $ (56) | $ (16) |
Derivative instruments (Fair Va
Derivative instruments (Fair Value of Derivatives) (Details) - Derivatives designated as hedging instruments [Member] - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Total derivative assets, fair value | $ 286 | $ 244 |
Liabilities | ||
Total derivative liabilities, fair value | 485 | 534 |
Foreign currency contracts [Member] | Other current assets/Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 6 | 203 |
Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 204 | 4 |
Cross-currency swap contracts [Member] | Other current assets/ Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 270 | 0 |
Cross-currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | 220 | 523 |
Interest rate swap contracts [Member] | Other current assets/ Other noncurrent assets [Member] | ||
Assets | ||
Total derivative assets, fair value | 10 | 41 |
Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | ||
Liabilities | ||
Total derivative liabilities, fair value | $ 61 | $ 7 |
Contingencies and commitment102
Contingencies and commitments (Details Textual) $ in Millions | Jan. 22, 2018lawsuit | Oct. 18, 2017patent | Oct. 06, 2017patent | Oct. 05, 2017defendants | Sep. 22, 2017USD ($) | Sep. 14, 2017lawsuit | Jan. 23, 2017patent | Nov. 08, 2016lawsuit | Nov. 01, 2016lawsuit | Feb. 26, 2016patentaffiliate | Dec. 15, 2014patent | Dec. 31, 2017USD ($)lawsuit | Jun. 30, 2017lawsuit | Sep. 30, 2016lawsuit | Mar. 31, 2016 | Oct. 02, 2015lawsuit | Dec. 31, 2017USD ($)actionsplaintiffslawsuit | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Loss Contingencies [Line Items] | |||||||||||||||||||
Future rental commitments for abandoned leases | $ | $ 264 | $ 264 | |||||||||||||||||
Future rental income relating to noncancelable subleases of abandoned facilities | $ | $ 205 | 205 | |||||||||||||||||
Rental expense on operating leases | $ | $ 159 | $ 134 | $ 133 | ||||||||||||||||
Sanofi/Regeneron Patent Litigation [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed | patent | 7 | ||||||||||||||||||
Length of trial | 5 days | ||||||||||||||||||
Loss contingency, number of defendants | defendants | 2 | ||||||||||||||||||
Sensipar (cinacalcet) Patent Litigation [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of lawsuits filed | lawsuit | 4 | 4 | 14 | ||||||||||||||||
KYPROLIS (carfilzomib) Patent Litigation [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of lawsuits filed | lawsuit | 3 | 10 | |||||||||||||||||
Apotex NEUPOGEN/Neulasta [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of lawsuits filed | lawsuit | 2 | ||||||||||||||||||
ENBREL (etanercept) [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed | patent | 5 | ||||||||||||||||||
Gain contingency, number of affiliates | affiliate | 2 | ||||||||||||||||||
Epoetin Alfa Litigation [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed | patent | 2 | ||||||||||||||||||
Length of trial | 5 days | ||||||||||||||||||
Aount awarded from other party | $ | $ 70 | ||||||||||||||||||
Mvasi Patent Litigation, Genentech, Inc. (Genentech) and the City of Hope [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of patents allegedly infringed | patent | 27 | ||||||||||||||||||
Loss contingency, patents allegedly infringed | patent | 25 | 24 | |||||||||||||||||
State Derivative Litigation [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Loss contingency, number of plaintiffs | plaintiffs | 3 | ||||||||||||||||||
Loss contingency, number of lawsuits | actions | 1 | ||||||||||||||||||
Onyx Therapeutics, Inc [Member] | KYPROLIS (carfilzomib) Patent Litigation [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of lawsuits filed | lawsuit | 4 | 4 | |||||||||||||||||
Subsequent event [Member] | Mvasi Patent Litigation, Genentech, Inc. (Genentech) and the City of Hope [Member] | |||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||
Number of lawsuits filed | lawsuit | 2 |
Contingencies and commitment103
Contingencies and commitments (Future Minimum Rental Commitments) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 158 |
2,019 | 126 |
2,020 | 116 |
2,021 | 100 |
2,022 | 59 |
Thereafter | 91 |
Total minimum operating lease commitments | $ 650 |
Contingencies and Commitment104
Contingencies and Commitments (U.S. Repatriation Tax Commitments) (Details) $ in Millions | Dec. 31, 2017USD ($)installment |
Commitments and Contingencies Disclosure [Abstract] | |
U.S. repatriation tax commitments, number of annual installments | installment | 8 |
U.S. repatriation tax commitments, 2018 | $ 585 |
U.S. repatriation tax commitments, 2019 | 585 |
U.S. repatriation tax commitments, 2020 | 585 |
U.S. repatriation tax commitments, 2021 | 585 |
U.S. repatriation tax commitments, 2022 | 585 |
U.S. repatriation tax commitments, Thereafter | 4,391 |
Total U.S. repatriation tax commitments | $ 7,316 |
Segment information (Revenues b
Segment information (Revenues by Product) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues [Abstract] | |||||||||||
Product sales | $ 5,569 | $ 5,453 | $ 5,574 | $ 5,199 | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 21,795 | $ 21,892 | $ 20,944 |
Other revenues | 1,054 | 1,099 | 718 | ||||||||
Total revenues | 22,849 | 22,991 | 21,662 | ||||||||
ENBREL [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 5,433 | 5,965 | 5,364 | ||||||||
Neulasta [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 4,534 | 4,648 | 4,715 | ||||||||
Aranesp [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 2,053 | 2,093 | 1,951 | ||||||||
Prolia [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,968 | 1,635 | 1,312 | ||||||||
Sensipar Mimpara [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,718 | 1,582 | 1,415 | ||||||||
XGEVA [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,575 | 1,529 | 1,405 | ||||||||
EPOGEN [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 1,096 | 1,282 | 1,856 | ||||||||
Kyprolis [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 835 | 692 | 512 | ||||||||
Vectibix [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 642 | 611 | 549 | ||||||||
Nplate [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 642 | 584 | 525 | ||||||||
NEUPOGEN [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 549 | 765 | 1,049 | ||||||||
Repatha [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 319 | 141 | 10 | ||||||||
BLINCYTO [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | 175 | 115 | 77 | ||||||||
Other [Member] | |||||||||||
Revenues [Abstract] | |||||||||||
Product sales | $ 256 | $ 250 | $ 204 |
Segment information (Revenue106
Segment information (Revenues by Geographic Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Geographical Information With Respect To Revenues [Abstract] | |||
Revenues | $ 22,849 | $ 22,991 | $ 21,662 |
United States [Member] | |||
Geographical Information With Respect To Revenues [Abstract] | |||
Revenues | 18,029 | 18,326 | 17,167 |
Rest of the world (ROW) [Member] | |||
Geographical Information With Respect To Revenues [Abstract] | |||
Revenues | $ 4,820 | $ 4,665 | $ 4,495 |
Segment information (Long-lived
Segment information (Long-lived Assets by Geographic Information) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Long Lived Assets [Abstract] | ||
Total long-lived assets | $ 4,989 | $ 4,961 |
United States [Member] | ||
Long Lived Assets [Abstract] | ||
Total long-lived assets | 2,349 | 2,328 |
Puerto Rico [Member] | ||
Long Lived Assets [Abstract] | ||
Total long-lived assets | 1,527 | 1,591 |
ROW [Member] | ||
Long Lived Assets [Abstract] | ||
Total long-lived assets | $ 1,113 | $ 1,042 |
Segment information (Customer C
Segment information (Customer Concentration, Product Sales) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 22,849 | $ 22,991 | $ 21,662 |
AmerisourceBergen Corporation [Member] | |||
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 10,742 | $ 10,100 | $ 10,038 |
Gross product sales to major customer (as defined) as a percentage of total gross revenues | 31.00% | 31.00% | 34.00% |
Gross product sales to major customer (as defined) as a percentage of U.S. gross product sales | 37.00% | 38.00% | 42.00% |
McKesson Corporation [Member] | |||
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 10,625 | $ 9,710 | $ 8,766 |
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 | 35.00% | 34.00% | 34.00% |
Cardinal Health, Inc. [Member] | |||
Revenues Earned from Major Customers [Abstract] | |||
Revenues | $ 7,049 | $ 6,520 | $ 5,045 |
Gross product sales to major customer (as defined) as a percentage of total gross revenues | 20.00% | 20.00% | 17.00% |
Gross product sales to major customer (as defined) as a percentage of U.S. gross product sales | 24.00% | 24.00% | 21.00% |
Segment information (Details Te
Segment information (Details Textual) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017segment | Dec. 31, 2017segmentcustomer | Dec. 31, 2016customer | Dec. 31, 2015customer | |
Segment Reporting Information [Line Items] | ||||
Number of business segment | segment | 1 | 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 | 75.00% | 76.00% | ||
Percentage of net trade receivables due from customers located outside the United States, primarily in Europe | 14.00% | 21.00% | ||
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 (un110
Quarterly financial data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Product sales | $ 5,569 | $ 5,453 | $ 5,574 | $ 5,199 | $ 5,663 | $ 5,516 | $ 5,474 | $ 5,239 | $ 21,795 | $ 21,892 | $ 20,944 |
Gross profit from product sales | 4,510 | 4,463 | 4,550 | 4,203 | 4,596 | 4,489 | 4,424 | 4,221 | |||
Net income | $ (4,264) | $ 2,021 | $ 2,151 | $ 2,071 | $ 1,935 | $ 2,017 | $ 1,870 | $ 1,900 | $ 1,979 | $ 7,722 | $ 6,939 |
(Loss) earnings per share: | |||||||||||
Basic (in usd per share) | $ (5.89) | $ 2.78 | $ 2.93 | $ 2.81 | $ 2.61 | $ 2.70 | $ 2.49 | $ 2.52 | $ 2.71 | $ 10.32 | $ 9.15 |
Diluted (in usd per share) | $ (5.89) | $ 2.76 | $ 2.91 | $ 2.79 | $ 2.59 | $ 2.68 | $ 2.47 | $ 2.50 | $ 2.69 | $ 10.24 | $ 9.06 |
Subsequent Event (Details)
Subsequent Event (Details) - Kirin-Amgen [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Oct. 30, 2017 | |
Subsequent Event [Line Items] | ||
Percentage of interest acquired, announcement date | 50.00% | |
Forecast [Member] | ||
Subsequent Event [Line Items] | ||
Payments to acquire ownership interest | $ 780 | |
Additional payments to acquire ownership interest, sales milestone | $ 30 |
SCHEDULE II - VALUATION AND 112
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts [Roll Forward] | |||
Balance at beginning of period | $ 51 | $ 55 | $ 50 |
Additions charged to costs and expenses | 4 | 11 | 18 |
Other additions | 0 | 0 | 0 |
Deductions | 4 | 15 | 13 |
Balance at end of period | $ 51 | $ 51 | $ 55 |