Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37702 | |
Entity Registrant Name | Amgen Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-3540776 | |
Entity Address, Address Line One | One Amgen Center Drive | |
Entity Address, City or Town | Thousand Oaks | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91320-1799 | |
City Area Code | 805 | |
Local Phone Number | 447-1000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 533,579,206 | |
Entity Central Index Key | 0000318154 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
The NASDAQ Global Select Market | Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, $0.0001 par value | |
Trading Symbol | AMGN | |
Security Exchange Name | NASDAQ | |
The NASDAQ Global Select Market | 2.00% Senior Notes Due 2026 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 2.00% Senior Notes due 2026 | |
Trading Symbol | AMGN26 | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,143 | $ 1,884 | $ 4,936 | $ 3,994 |
Other comprehensive income, net of reclassification adjustments and taxes: | ||||
Foreign currency translation | (109) | (35) | (225) | (60) |
Cash flow hedges | 138 | 99 | 378 | 241 |
Losses on available-for-sale securities | 0 | (1) | 0 | (1) |
Other | (9) | (3) | (9) | (3) |
Other comprehensive income, net of reclassification adjustments and taxes | 20 | 60 | 144 | 177 |
Comprehensive income | $ 2,163 | $ 1,944 | $ 5,080 | $ 4,171 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total revenues | $ 6,652 | $ 6,706 | $ 19,484 | $ 19,133 |
Operating expenses: | ||||
Cost of sales | 1,588 | 1,609 | 4,659 | 4,736 |
Research and development | 1,112 | 1,422 | 3,110 | 3,471 |
Acquired in-process research and development | 0 | 0 | 0 | 1,505 |
Selling, general and administrative | 1,287 | 1,305 | 3,842 | 3,943 |
Other | 5 | (8) | 537 | 143 |
Total operating expenses | 3,992 | 4,328 | 12,148 | 13,798 |
Operating income | 2,660 | 2,378 | 7,336 | 5,335 |
Interest expense, net | (368) | (296) | (991) | (862) |
Other income (expense), net | 100 | 73 | (747) | 97 |
Income before income taxes | 2,392 | 2,155 | 5,598 | 4,570 |
Provision for income taxes | 249 | 271 | 662 | 576 |
Net income | $ 2,143 | $ 1,884 | $ 4,936 | $ 3,994 |
Earnings per share: | ||||
Basic (in usd per share) | $ 4.01 | $ 3.32 | $ 9.16 | $ 6.98 |
Diluted (in usd per share) | $ 3.98 | $ 3.31 | $ 9.11 | $ 6.93 |
Shares used in calculation of earnings per share: | ||||
Basic (in shares) | 535 | 567 | 539 | 572 |
Diluted (in shares) | 538 | 570 | 542 | 576 |
Product sales | ||||
Revenues: | ||||
Total revenues | $ 6,237 | $ 6,320 | $ 18,249 | $ 18,026 |
Other revenues | ||||
Revenues: | ||||
Total revenues | $ 415 | $ 386 | $ 1,235 | $ 1,107 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 9,502 | $ 7,989 |
Marketable securities | 1,976 | 48 |
Trade receivables, net | 5,326 | 4,895 |
Inventories | 4,757 | 4,086 |
Other current assets | 2,501 | 2,367 |
Total current assets | 24,062 | 19,385 |
Property, plant and equipment, net | 5,188 | 5,184 |
Intangible assets, net | 13,266 | 15,182 |
Goodwill | 14,845 | 14,890 |
Other noncurrent assets | 6,339 | 6,524 |
Total assets | 63,700 | 61,165 |
Current liabilities: | ||
Accounts payable | 1,204 | 1,366 |
Accrued liabilities | 11,584 | 10,731 |
Current portion of long-term debt | 1,543 | 87 |
Total current liabilities | 14,331 | 12,184 |
Long-term debt | 37,161 | 33,222 |
Long-term tax liabilities | 5,680 | 6,594 |
Other noncurrent liabilities | 2,875 | 2,465 |
Contingencies and commitments | ||
Stockholders’ equity: | ||
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—533.5 shares in 2022 and 558.3 shares in 2021 | 32,371 | 32,096 |
Accumulated deficit | (28,066) | (24,600) |
Accumulated other comprehensive loss | (652) | (796) |
Total stockholders’ equity | 3,653 | 6,700 |
Total liabilities and stockholders’ equity | $ 63,700 | $ 61,165 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
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 (in shares) | 2,750 | 2,750 |
Common stock and additional paid-in capital, shares outstanding (in shares) | 533.5 | 558.3 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Number of shares of common stock | Common stock and additional paid-in capital | Accumulated deficit | Accumulated other comprehensive loss |
Beginning Balance (in shares) at Dec. 31, 2020 | 578.3 | ||||
Balance as of beginning of period at Dec. 31, 2020 | $ 9,409 | $ 31,802 | $ (21,408) | $ (985) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 1,646 | 1,646 | |||
Other comprehensive income, net of taxes | 152 | 152 | |||
Dividends declared on common stock | (1,012) | (1,012) | |||
Issuance of common stock in connection with the Company’s equity award programs (in shares) | 0.7 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 6 | 6 | |||
Stock-based compensation expense | 57 | 57 | |||
Tax impact related to employee stock-based compensation expense | (59) | (59) | |||
Repurchases of common stock (in shares) | (3.7) | ||||
Repurchases of common stock | (865) | (865) | |||
Ending Balance (in shares) at Mar. 31, 2021 | 575.3 | ||||
Balance as of end of period at Mar. 31, 2021 | 9,334 | 31,806 | (21,639) | (833) | |
Beginning Balance (in shares) at Dec. 31, 2020 | 578.3 | ||||
Balance as of beginning of period at Dec. 31, 2020 | 9,409 | 31,802 | (21,408) | (985) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 3,994 | ||||
Ending Balance (in shares) at Sep. 30, 2021 | 565 | ||||
Balance as of end of period at Sep. 30, 2021 | 8,217 | 31,989 | (22,964) | (808) | |
Beginning Balance (in shares) at Mar. 31, 2021 | 575.3 | ||||
Balance as of beginning of period at Mar. 31, 2021 | 9,334 | 31,806 | (21,639) | (833) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 464 | 464 | |||
Other comprehensive income, net of taxes | (35) | (35) | |||
Issuance of common stock in connection with the Company’s equity award programs (in shares) | 0.8 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 47 | 47 | |||
Stock-based compensation expense | 100 | 100 | |||
Tax impact related to employee stock-based compensation expense | (76) | (76) | |||
Repurchases of common stock (in shares) | (6.5) | ||||
Repurchases of common stock | (1,592) | (1,592) | |||
Other | 5 | 5 | |||
Ending Balance (in shares) at Jun. 30, 2021 | 569.6 | ||||
Balance as of end of period at Jun. 30, 2021 | 8,247 | 31,877 | (22,762) | (868) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 1,884 | 1,884 | |||
Other comprehensive income, net of taxes | 60 | 60 | |||
Dividends declared on common stock | (1,017) | (1,017) | |||
Issuance of common stock in connection with the Company’s equity award programs (in shares) | 0 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 9 | 9 | |||
Stock-based compensation expense | 111 | 111 | |||
Tax impact related to employee stock-based compensation expense | (8) | (8) | |||
Repurchases of common stock (in shares) | (4.6) | ||||
Repurchases of common stock | (1,069) | (1,069) | |||
Ending Balance (in shares) at Sep. 30, 2021 | 565 | ||||
Balance as of end of period at Sep. 30, 2021 | $ 8,217 | 31,989 | (22,964) | (808) | |
Beginning Balance (in shares) at Dec. 31, 2021 | 558.3 | 558.3 | |||
Balance as of beginning of period at Dec. 31, 2021 | $ 6,700 | 32,096 | (24,600) | (796) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 1,476 | 1,476 | |||
Other comprehensive income, net of taxes | 33 | 33 | |||
Dividends declared on common stock | (1,034) | (1,034) | |||
Issuance of common stock in connection with the Company’s equity award programs (in shares) | 0.5 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 18 | 18 | |||
Stock-based compensation expense | 78 | 78 | |||
Tax impact related to employee stock-based compensation expense | (45) | (45) | |||
Repurchases of common stock (in shares) | (24.6) | ||||
Repurchases of common stock | (6,310) | (900) | (5,410) | ||
Ending Balance (in shares) at Mar. 31, 2022 | 534.2 | ||||
Balance as of end of period at Mar. 31, 2022 | $ 916 | 31,247 | (29,568) | (763) | |
Beginning Balance (in shares) at Dec. 31, 2021 | 558.3 | 558.3 | |||
Balance as of beginning of period at Dec. 31, 2021 | $ 6,700 | 32,096 | (24,600) | (796) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | $ 4,936 | ||||
Ending Balance (in shares) at Sep. 30, 2022 | 533.5 | 533.5 | |||
Balance as of end of period at Sep. 30, 2022 | $ 3,653 | 32,371 | (28,066) | (652) | |
Beginning Balance (in shares) at Mar. 31, 2022 | 534.2 | ||||
Balance as of beginning of period at Mar. 31, 2022 | 916 | 31,247 | (29,568) | (763) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 1,317 | 1,317 | |||
Other comprehensive income, net of taxes | 91 | 91 | |||
Issuance of common stock in connection with the Company’s equity award programs (in shares) | 0.7 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 45 | 45 | |||
Stock-based compensation expense | 120 | 120 | |||
Tax impact related to employee stock-based compensation expense | (69) | (69) | |||
Other | (1) | (1) | |||
Ending Balance (in shares) at Jun. 30, 2022 | 534.9 | ||||
Balance as of end of period at Jun. 30, 2022 | 2,419 | 31,343 | (28,252) | (672) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income for basic and diluted EPS | 2,143 | 2,143 | |||
Other comprehensive income, net of taxes | 20 | 20 | |||
Dividends declared on common stock | (1,057) | (1,057) | |||
Issuance of common stock in connection with the Company’s equity award programs (in shares) | 0.1 | ||||
Issuance of common stock in connection with the Company’s equity award programs | 15 | 15 | |||
Stock-based compensation expense | 121 | 121 | |||
Tax impact related to employee stock-based compensation expense | (8) | (8) | |||
Repurchases of common stock (in shares) | (1.5) | ||||
Repurchases of common stock | $ 0 | 900 | (900) | ||
Ending Balance (in shares) at Sep. 30, 2022 | 533.5 | 533.5 | |||
Balance as of end of period at Sep. 30, 2022 | $ 3,653 | $ 32,371 | $ (28,066) | $ (652) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 1 Months Ended | 3 Months Ended | |||||
Aug. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||||||
Common stock, dividends declared per share (in usd per share) | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.76 | $ 1.76 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 4,936 | $ 3,994 |
Depreciation, amortization and other | 2,506 | 2,546 |
Deferred income taxes | (847) | (264) |
Acquired in-process research and development | 0 | 1,505 |
Income (Loss) from Equity Method Investments | (713) | (130) |
Loss on divestiture | 565 | 0 |
Other items, net | 236 | 57 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade receivables, net | (566) | (269) |
Inventories | (651) | (215) |
Other assets | 166 | (373) |
Accounts payable | (142) | (260) |
Accrued income taxes, net | (492) | (719) |
Long-term tax liabilities | 185 | 102 |
Other liabilities | 463 | 219 |
Net cash provided by operating activities | 7,072 | 6,453 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (2,363) | (8,901) |
Proceeds from sales of marketable securities | 0 | 4,403 |
Proceeds from maturities of marketable securities | 447 | 7,927 |
Purchases of property, plant and equipment | (596) | (593) |
Cash paid for acquisitions, net of cash acquired | 0 | (1,639) |
Other | (59) | (234) |
Net cash (used in) provided by investing activities | (2,571) | 963 |
Cash flows from financing activities: | ||
Net proceeds from issuance of debt | 6,938 | 4,946 |
Extinguishment of debt | (297) | 0 |
Repurchases of common stock (Note 10) | (6,360) | (3,532) |
Dividends paid | (3,156) | (3,023) |
Other | (113) | (104) |
Net cash used in financing activities | (2,988) | (1,713) |
Increase in cash and cash equivalents | 1,513 | 5,703 |
Cash and cash equivalents at beginning of period | 7,989 | 6,266 |
Cash and cash equivalents at end of period | $ 9,502 | $ 11,969 |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. Basis of presentation The financial information for the three and nine months ended September 30, 2022 and 2021, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022. Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. In determining whether we are the primary beneficiary of a variable interest entity, we consider whether we have both the power to direct activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to that entity. We do not have any significant interests in any variable interest entities of which we are the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $9.2 billion and $8.8 billion as of September 30, 2022 and December 31, 2021, respectively. Recent accounting pronouncements In March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens caused by the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment. Moreover, for all types of hedging relationships, an entity is permitted to change the reference rate without having to dedesignate the hedging relationship. The standard is generally effective for all contract modifications made and hedging relationships evaluated through December 31, 2022. In January 2021, the FASB issued a new accounting standard that expanded the scope of the original March 2020 standard to include derivative instruments on discounting transactions. We do not expect the two standards to have a material impact on our consolidated financial statements. |
Acquisitions and divestitures
Acquisitions and divestitures | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and divestitures | Acquisitions and divestitures Acquisition of Teneobio, Inc. On October 19, 2021, we acquired all of the outstanding stock of Teneobio, a privately held, clinical-stage biotechnology company developing a new class of biologics called human heavy-chain antibodies, which are single-chain antibodies composed of the human heavy-chain domain. The transaction, which was accounted for as a business combination, includes Teneobio’s proprietary bispecific and multispecific antibody technologies, which complement Amgen’s existing antibody capabilities and bispecific T-cell engager (BiTE ® ) platform and will enable significant acceleration and efficiency in the discovery and development of new molecules to treat diseases across Amgen’s core therapeutic areas. Upon its acquisition, Teneobio became a wholly owned subsidiary of Amgen, and its operations have been included in our condensed consolidated financial statements commencing on the acquisition date. Measurement period adjustments for the nine months ended September 30, 2022, included changes to the purchase price allocation and total consideration, resulting in a net increase of $22 million to goodwill. The measurement period adjustments resulted primarily from valuation inputs pertaining to certain acquired assets based on facts and circumstances that existed as of the acquisition date and did not result from events subsequent to the acquisition date. These adjustments did not have a significant impact on Amgen’s results of operations during the nine months ended September 30, 2022, and would not have had a significant impact on prior-period results if these adjustments had been made as of the acquisition date. The following table summarizes the final total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed, inclusive of measurement period adjustments (in millions): Amounts Cash purchase price $ 993 Contingent consideration 299 Total consideration $ 1,292 Cash and cash equivalents $ 100 In-process research and development 991 Finite-lived intangible asset – research and development technology rights 115 Finite-lived intangible assets – licensing rights 41 Goodwill 273 Other assets, net 16 Deferred tax liability (244) Total assets acquired, net $ 1,292 Consideration for this transaction comprised of (i) an upfront cash payment of $993 million, which included a working-capital adjustment, and (ii) future contingent milestone payments to Teneobio’s former equity holders of up to $1.6 billion in cash, based on the achievement of various development and regulatory milestones with regard to the lead asset (AMG 340, formerly TNB-585) and to various development milestones for other drug candidates. The estimated fair values of the contingent consideration obligations aggregated $299 million as of the acquisition date and were determined using a probability-weighted expected return methodology. The assumptions in this method include the probability of achieving the milestones and the expected payment dates, with such amounts discounted to present value based on our pretax cost of debt. See Note 11, Fair value measurement, for information regarding the estimated fair value of these obligations as of September 30, 2022. The estimated fair values of acquired IPR&D assets totaled $991 million, of which $784 million relates to AMG 340, that is in a Phase 1 clinical trial for the treatment of metastatic castration-resistant prostate cancer (mCRPC), and the balance relates to four separate preclinical oncology programs. The R&D technology rights of $115 million relate to Teneobio’s proprietary bispecific and multispecific antibody technologies; the amount is being amortized over 10 years by using the straight-line method. Teneobio has also licensed its technology and certain identified targets to various third parties, representing contractual agreements valued at $41 million. The estimated fair values for these intangible assets were determined using a multi-period excess earnings income approach that discounts expected future cash flows to present value by applying a discount rate that represents the estimated rate that market participants would use to value the intangible assets. The projected cash flows were based on certain assumptions attributable to the respective intangible asset, including estimates of future revenues and expenses, the time and resources needed to complete development and the probabilities of obtaining marketing approval from the FDA and other regulatory agencies. A deferred tax liability of $244 million was recognized on temporary differences related to the book bases and tax bases of the acquired identifiable assets and assumed liabilities, primarily driven by the intangible assets acquired. The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed of $273 million was recorded as goodwill, which is not deductible for tax purposes. The goodwill value represents expected synergies from both AMG 340 and the technologies acquired. Acquisition of Five Prime Therapeutics, Inc. On April 16, 2021, Amgen completed its acquisition of Five Prime for a total cash consideration of $1.6 billion, net of cash acquired. The purchase price was funded with cash on hand. This transaction was accounted for as an asset acquisition because substantially all the value of the assets acquired was concentrated in the intellectual property rights of bemarituzumab, a Phase 3 first-in-class program for gastric cancer. Five Prime’s operations have been included in our condensed consolidated financial statements commencing after the acquisition date. We allocated the consideration to acquire Five Prime to: the bemarituzumab IPR&D program of $1.5 billion, which was expensed immediately in Acquired IPR&D expense in the Condensed Consolidated Statements of Income; deferred tax assets of $177 million; and other net liabilities of $47 million. The Acquired IPR&D expense was not tax deductible. Divestiture of Gensenta İlaç Sanayi ve Ticaret A.Ş. On June 28, 2022, we entered into a share purchase agreement with Eczacıbaşı under which Eczacıbaşı would acquire all of our shares in Gensenta, a subsidiary in Turkey, in exchange for $135 million in cash. Net assets related to Gensenta of $76 million met the criteria to be classified as held-for-sale and did not meet the criteria to be classified as discontinued operations. The transaction closed on November 2, 2022, upon satisfaction of closing conditions, including approval from the Turkish Competition Authority. See Note 14, Subsequent events. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues 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. Revenues by product and by geographic area, based on customers’ locations, are presented below. The majority of ROW revenues relates to products sold in Europe. Revenues were as follows (in millions): Three months ended September 30, 2022 2021 U.S. ROW Total U.S. ROW Total ENBREL $ 1,086 $ 20 $ 1,106 $ 1,263 $ 26 $ 1,289 Prolia 590 272 862 530 273 803 Otezla 529 98 627 495 114 609 XGEVA 363 132 495 372 145 517 Aranesp 128 230 358 149 247 396 Repatha 142 167 309 139 133 272 KYPROLIS 217 101 318 198 95 293 Neulasta 205 42 247 360 55 415 Nplate 162 126 288 156 117 273 Other products (1) 1,044 583 1,627 896 557 1,453 Total product sales (2) $ 4,466 $ 1,771 6,237 $ 4,558 $ 1,762 6,320 Other revenues 415 386 Total revenues $ 6,652 $ 6,706 Nine months ended September 30, 2022 2021 U.S. ROW Total U.S. ROW Total ENBREL $ 2,965 $ 54 $ 3,019 $ 3,270 $ 87 $ 3,357 Prolia 1,783 853 2,636 1,569 806 2,375 Otezla 1,366 306 1,672 1,284 335 1,619 XGEVA 1,122 408 1,530 1,061 412 1,473 Aranesp 397 676 1,073 409 709 1,118 Repatha 461 502 963 421 423 844 KYPROLIS 626 296 922 547 277 824 Neulasta 772 133 905 1,215 168 1,383 Nplate 474 364 838 404 341 745 Other products (1) 2,983 1,708 4,691 2,655 1,633 4,288 Total product sales (2) $ 12,949 $ 5,300 18,249 $ 12,835 $ 5,191 18,026 Other revenues 1,235 1,107 Total revenues $ 19,484 $ 19,133 ____________ (1) Consists of product sales of our non-principal products, as well as our Gensenta and Bergamo subsidiaries. (2) Hedging gains and losses, which are included in product sales, were not material for the three and nine months ended September 30, 2022 and 2021. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes The effective tax rates for the three and nine months ended September 30, 2022, were 10.4% and 11.8%, respectively, compared with 12.6% for both of the corresponding periods of the prior year. The decrease in our effective tax rate for the three months ended September 30, 2022, was primarily due to the prior year nondeductible IPR&D expense arising from the acquisition of Five Prime and net favorable items, partially offset by a nondeductible loss from a nonstrategic divestiture. The decrease in our effective tax rate for the nine months ended September 30, 2022, was primarily due to the prior year nondeductible IPR&D expense arising from the acquisition of Five Prime, partially offset by current year net unfavorable items compared to last year and a nondeductible loss from a nonstrategic divestiture. The effective tax rates differ from the federal statutory rate primarily as a result of foreign earnings from the Company’s operations conducted in Puerto Rico, a territory of the United States treated as a foreign jurisdiction for U.S. tax purposes, that are currently subject to a tax incentive grant through 2035. In addition, the Company’s operations conducted in Singapore are subject to a tax incentive grant through 2034. These foreign earnings are also subject to U.S. tax at a reduced rate of 10.5%. See Note 2, Acquisitions and divestitures. The U.S. territory of Puerto Rico imposes a 4% excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. We account for the excise tax as a manufacturing cost that is capitalized in Inventories and expensed in Cost of sales when the related products are sold. For U.S. income tax purposes, in 2022, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred. One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely examined by tax authorities in those jurisdictions. Significant disputes can and have arisen with tax authorities involving issues regarding 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 relevant facts. Tax authorities, including the IRS, are becoming more aggressive and are particularly focused on such matters. In 2017, we received an RAR and a modified RAR from the IRS for the years 2010–2012, proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico. We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2021, we filed a petition in the U.S. Tax Court to contest two duplicate Statutory Notices of Deficiency (Notices) for the years 2010–2012 that we received in May and July 2021, which seek to increase our U.S. taxable income for the years 2010–2012 by an amount that would result in additional federal tax of approximately $3.6 billion plus interest. Any additional tax that could be imposed for the years 2010–2012 would be reduced by up to approximately $900 million of repatriation tax previously accrued on our foreign earnings. In 2020, we received an RAR and a modified RAR from the IRS for the years 2013–2015, also proposing significant adjustments that primarily relate to the allocation of profits between certain of our entities in the United States and the U.S. territory of Puerto Rico similar to those proposed for the years 2010–2012. We disagreed with the proposed adjustments and calculations and pursued resolution with the IRS appeals office but were unable to reach resolution. In July 2022, we filed a petition in the U.S. Tax Court to contest a Notice for the years 2013–2015 that we previously reported receiving in April 2022 that seeks to increase our U.S. taxable income for the years 2013–2015 by an amount that would result in additional federal tax of approximately $5.1 billion, plus interest. In addition, the Notice asserts penalties of approximately $2.0 billion. Any additional tax that could be imposed for the years 2013–2015 would be reduced by up to approximately $2.2 billion of repatriation tax previously accrued on our foreign earnings. We firmly believe that the IRS positions set forth in the 2010–2012 and 2013–2015 Notices are without merit. We are contesting the 2010–2012 and 2013–2015 Notices through the judicial process, and we filed a motion to consolidate the two periods into one case in the U.S. Tax Court. We are currently under examination by the IRS for the years 2016–2018 with respect to issues similar to those for the 2010 through 2015 period. In addition, we have examinations by a number of state and foreign tax jurisdictions. Final resolution of these complex matters is not likely within the next 12 months. We believe our accrual for income tax liabilities is appropriate based on past experience, interpretations of tax law, application of the tax law to our facts and judgments about potential actions by tax authorities; however, due to the complexity of the provision for income taxes and uncertain resolution of these matters, the ultimate outcome of any tax matters may result in payments substantially greater than amounts accrued and could have a material adverse impact on our condensed consolidated financial statements. We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009. See Part II, Item 1A, Risk Factors— The adoption and interpretation of new tax legislation or exposure to additional tax liabilities could affect our profitability in our Quarterly Report on Form 10-Q for the period ended June 30, 2022, for further discussion. During the three and nine months ended September 30, 2022, the gross amounts of our UTBs increased by $25 million and $120 million, respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of September 30, 2022, if recognized, would affect our effective tax rate. |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The computation of basic 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 primarily include shares that may be issued under our stock option, restricted stock and performance unit award programs (collectively, dilutive securities), as determined by using the treasury stock method. The computations for basic and diluted EPS were as follows (in millions, except per-share data): Three months ended Nine months ended 2022 2021 2022 2021 Income (Numerator): Net income for basic and diluted EPS $ 2,143 $ 1,884 $ 4,936 $ 3,994 Shares (Denominator): Weighted-average shares for basic EPS 535 567 539 572 Effect of dilutive securities 3 3 3 4 Weighted-average shares for diluted EPS 538 570 542 576 Basic EPS $ 4.01 $ 3.32 $ 9.16 $ 6.98 Diluted EPS $ 3.98 $ 3.31 $ 9.11 $ 6.93 For the three and nine months ended September 30, 2022 and 2021, the number of antidilutive employee stock-based awards excluded from the computation of diluted EPS was not significant. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available-for-sale investments The amortized cost, gross unrealized gains, gross unrealized losses and fair values of interest-bearing securities, which are considered available-for-sale, by type of security were as follows (in millions): Types of securities as of September 30, 2022 Amortized Gross Gross Fair U.S. Treasury notes $ — $ — $ — $ — U.S. Treasury bills 1,976 — — 1,976 Money market mutual funds 8,945 — — 8,945 Other short-term interest-bearing securities — — — — Total interest-bearing securities $ 10,921 $ — $ — $ 10,921 Types of securities as of December 31, 2021 Amortized Gross Gross Fair U.S. Treasury notes $ 47 $ — $ — $ 47 U.S. Treasury bills 1,400 — — 1,400 Money market mutual funds 5,856 — — 5,856 Other short-term interest-bearing securities 1 — — 1 Total interest-bearing securities $ 7,304 $ — $ — $ 7,304 The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions): Condensed Consolidated Balance Sheets locations September 30, 2022 December 31, 2021 Cash and cash equivalents $ 8,945 $ 7,256 Marketable securities 1,976 48 Total interest-bearing securities $ 10,921 $ 7,304 Cash and cash equivalents in the above table excludes bank account cash of $557 million and $733 million as of September 30, 2022 and December 31, 2021, respectively. All interest-bearing securities as of September 30, 2022 and December 31, 2021, mature in one year or less. For the three and nine months ended September 30, 2022 and 2021, realized gains and losses on interest-bearing securities were not material. Realized gains and losses on interest-bearing securities are recorded in Other income (expense), net, in the Condensed Consolidated Statements of Income. The cost of securities sold is based on the specific-identification method. The primary objective of our investment portfolio is to maintain 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 investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer. Equity securities We held investments in equity securities with readily determinable fair values (publicly traded securities) of $385 million and $611 million as of September 30, 2022 and December 31, 2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three months ended September 30, 2022 and 2021, net unrealized gains on publicly traded securities were $17 million and $135 million, respectively. During the nine months ended September 30, 2022 and 2021, net unrealized gains and losses on publicly traded securities were a $259 million net loss and a $104 million net gain, respectively. Realized gains and losses on sales of publicly traded securities for the three and nine months ended September 30, 2022 and 2021, were not material. We held investments of $227 million and $262 million in equity securities without readily determinable fair values as of September 30, 2022 and December 31, 2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. During the three and nine months ended September 30, 2022, downward adjustments on these securities were $55 million and $64 million, respectively, and upward adjustments for these periods were immaterial. During the three and nine months ended September 30, 2021, downward and upward adjustments were immaterial. Adjustments were based on observable price transactions. Equity method investments BeiGene, Ltd. As of September 30, 2022 and December 31, 2021, we had an ownership interest in BeiGene of approximately 18.2% and 18.4%, respectively, which is included in Other noncurrent assets in the Condensed Consolidated Balance Sheets and accounted for under the equity method of accounting. We amortize the difference between the fair value of equity securities acquired and our proportionate share of the carrying value of the underlying net assets of BeiGene over the useful lives of the assets that gave rise to this basis difference. This amortization and our share of the results of operations of BeiGene are included in Other income (expense), net , in the Condensed Consolidated Statements of Income one quarter in arrears. During the three months ended September 30, 2022 and 2021, the carrying value of our equity investment was adjusted by our share of BeiGene’s net losses of $104 million and $98 million, respectively, and amortization of the basis difference of $48 million and $44 million, respectively. During the nine months ended September 30, 2022 and 2021, the carrying value of our equity investment was adjusted by our share of BeiGene’s net losses of $292 million and $181 million, respectively, and amortization of the basis difference of $143 million and $128 million, respectively. As of September 30, 2022 and December 31, 2021, the carrying values of our investment in BeiGene totaled $2.3 billion and $2.8 billion, respectively, and the fair values of our investment totaled $2.6 billion and $5.1 billion, respectively. As of September 30, 2022, we believe the carrying value of our equity investment in BeiGene is fully recoverable. Neumora Therapeutics, Inc. On September 30, 2021, we acquired an approximately 25.9% ownership interest in Neumora, a privately held company, for $257 million, which is included in Other noncurrent assets in the Condensed Consolidated Balance Sheets, in exchange for a $100 million cash payment and $157 million in noncash consideration primarily related to future services. Although our equity investment provides us with the ability to exercise significant influence over Neumora, we have elected the fair value option to account for our equity investment. Under the fair value option, changes in the fair value of the investment are recognized through earnings each reporting period. We believe the fair value option best reflects the economics of the underlying transaction. During the three months ended September 30, 2022, we made an additional $10 million cash investment via participation in Neumora’s subsequent financing round. As of September 30, 2022 and December 31, 2021, our ownership interest in Neumora was approximately 24.9% and 25.9%, respectively, and the fair values of our investment were $382 million and $220 million, respectively. Accordingly, for t he increases in fair value of our investment during the three and nine months ended September 30, 2022, we recognized net gains of $240 million and $152 million, respectively, in Other income (expense), net, in the Condensed Consolidated Statements of Income. For information on determination of fair values, see Note 11, Fair value measurement. Limited partnerships We held limited partnership investments of $262 million and $573 million as of September 30, 2022 and December 31, 2021, respectively, which are included in Other noncurrent assets in the Condensed Consolidated Balance Sheets. These investments, primarily investment funds of early-stage biotechnology companies, are accounted for by using the equity method of accounting and are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. As of September 30, 2022, unfunded additional commitments to be made for these investments during the next several years were $189 million. For the three months ended September 30, 2022 and 2021, net unrealized losses from our limited partnership investments were $62 million and $43 million, respectively. For the nine months ended September 30, 2022 and 2021, net unrealized gains and losses from our limited partnership investments were a $282 million net loss and a $122 million net gain, respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following (in millions): September 30, 2022 December 31, 2021 Raw materials $ 801 $ 647 Work in process 2,929 2,367 Finished goods 1,027 1,072 Total inventories $ 4,757 $ 4,086 |
Goodwill and other intangible a
Goodwill and other intangible assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets Goodwill The change in the carrying amount of goodwill was as follows (in millions): Nine months ended Beginning balance $ 14,890 Adjustments to goodwill resulting from acquisitions and divestitures, net (1) 6 Currency translation adjustment (51) Ending balance $ 14,845 ____________ (1) Consists of adjustments to goodwill resulting from changes to the acquisition date fair values of net assets acquired in the acquisition of Teneobio and the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures. Other intangible assets Other intangible assets consisted of the following (in millions): September 30, 2022 December 31, 2021 Gross Accumulated Other intangible Gross Accumulated Other intangible Finite-lived intangible assets: Developed-product-technology rights $ 25,504 $ (14,396) $ 11,108 $ 25,561 $ (12,769) $ 12,792 Licensing rights 3,864 (3,087) 777 3,807 (2,973) 834 Marketing-related rights 1,326 (1,146) 180 1,354 (1,112) 242 Research and development technology rights 1,334 (1,142) 192 1,377 (1,133) 244 Total finite-lived intangible assets 32,028 (19,771) 12,257 32,099 (17,987) 14,112 Indefinite-lived intangible assets: In-process research and development 1,009 — 1,009 1,070 — 1,070 Total other intangible assets $ 33,037 $ (19,771) $ 13,266 $ 33,169 $ (17,987) $ 15,182 Developed-product-technology rights consists of rights related to marketed products. Licensing rights primarily consists of contractual rights to receive future milestone, royalty and profit-sharing payments; capitalized payments to third parties for milestones related to regulatory approvals to commercialize products; and upfront payments associated with royalty obligations for marketed products. Marketing-related rights primarily consists of rights related to the sale and distribution of marketed products. R&D technology rights pertains to technologies used in R&D that have 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. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable and upon the establishment of technological feasibility or regulatory approval. |
Financing arrangements
Financing arrangements | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Financing arrangements | Financing arrangements Our borrowings consisted of the following (in millions): September 30, 2022 December 31, 2021 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) $ 709 $ 767 2.25% notes due 2023 (2.25% 2023 Notes) 750 750 3.625% notes due 2024 (3.625% 2024 Notes) 1,400 1,400 1.90% notes due 2025 (1.90% 2025 Notes) 500 500 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) 735 853 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) 531 643 2.20% notes due 2027 (2.20% 2027 Notes) 1,724 1,750 3.20% notes due 2027 (3.20% 2027 Notes) 1,000 1,000 1.65% notes due 2028 (1.65% 2028 Notes) 1,234 1,250 3.00% notes due 2029 (3.00% 2029 Notes) 750 — 4.05% notes due 2029 (4.05% 2029 Notes) 1,250 — 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 782 947 2.45% notes due 2030 (2.45% 2030 Notes) 1,250 1,250 2.30% notes due 2031 (2.30% 2031 Notes) 1,250 1,250 2.00% notes due 2032 (2.00% 2032 Notes) 1,051 1,250 3.35% notes due 2032 (3.35% 2032 Notes) 1,000 — 4.20% notes due 2033 (4.20% 2033 Notes) 750 — 6.375% notes due 2037 (6.375% 2037 Notes) 478 478 6.90% notes due 2038 (6.90% 2038 Notes) 254 254 6.40% notes due 2039 (6.40% 2039 Notes) 333 333 3.15% notes due 2040 (3.15% 2040 Notes) 2,000 2,000 5.75% notes due 2040 (5.75% 2040 Notes) 373 373 2.80% notes due 2041 (2.80% 2041 Notes) 1,110 1,150 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 729 729 5.65% notes due 2042 (5.65% 2042 Notes) 415 415 5.375% notes due 2043 (5.375% 2043 Notes) 185 185 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 3.375% notes due 2050 (3.375% 2050 Notes) 2,250 2,250 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 3,541 3.00% notes due 2052 (3.00% 2052 Notes) 1,254 1,350 4.20% notes due 2052 (4.20% 2052 Notes) 1,000 — 4.875% notes due 2053 (4.875% 2053 Notes) 1,000 — 2.77% notes due 2053 (2.77% 2053 Notes) 940 940 4.40% notes due 2062 (4.40% 2062 Notes) 1,250 — Other notes due 2097 100 100 Unamortized bond discounts, premiums and issuance costs, net (1,252) (1,213) Fair value adjustments (450) 284 Other 13 15 Total carrying value of debt 38,704 33,309 Less current portion (1,543) (87) Total long-term debt $ 37,161 $ 33,222 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, the 4.663% 2051 Notes and the 2.77% 2053 Notes, which have effective interest rates of 6.3%, 5.6% and 5.2%, respectively. Debt issuances During the three months ended March 31, 2022, we issued $4.0 billion of debt consisting of $750 million of the 3.00% 2029 Notes, $1.0 billion of the 3.35% 2032 Notes, $1.0 billion of the 4.20% 2052 Notes and $1.25 billion of the 4.40% 2062 Notes. The 3.00% 2029 Notes were issued to finance eligible projects that meet specified criteria to benefit the environment. In the event of a change-in-control triggering event, as defined in the terms of the notes, we may be required to purchase all or a portion of these notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, these notes may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, which are defined by the terms of the notes. The notes may be redeemed without payment of make-whole amounts if redemption occurs during a specified period of time immediately prior to the maturing of the notes. Such time periods range from two months to six months prior to maturity. During the three months ended September 30, 2022, we issued $3.0 billion of debt consisting of $1.25 billion of the 4.05% 2029 Notes, $750 million of the 4.20% 2033 Notes and $1.0 billion of the 4.875% 2053 Notes. In the event of a change-in-control triggering event, as defined in the terms of the notes, we may be required to purchase all or a portion of these notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, these notes may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, which are defined by the terms of the notes. The notes may be redeemed without payment of make-whole amounts if redemption occurs during a specified period of time immediately prior to the maturing of the notes. Such time periods range from two months to six months prior to maturity. Debt extinguishment During the three months ended September 30, 2022, we repurchased portions of the 2.20% 2027 Notes, the 1.65% 2028 Notes, the 2.00% 2032 Notes, the 2.80% 2041 Notes and the 3.00% 2052 Notes for an aggregate cost of $297 million, which resulted in the recognition of a $78 million gain on extinguishment of debt recorded in Other income (expense), net, in the Condensed Consolidated Statements of Income. |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2022 | |
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): 2022 2021 Shares Dollars Shares Dollars First quarter 24.6 $ 5,410 3.7 $ 865 Second quarter — — 6.5 1,592 Third quarter 1.5 900 4.6 1,069 Total stock repurchases 26.1 $ 6,310 14.8 $ 3,526 On February 24, 2022, the Company entered into ASR agreements with three third-party financial institutions (Dealers). Under the ASR agreements, the Company made payments in an aggregate amount of $6.0 billion on February 25, 2022, to the Dealers and received and retired an initial 23.3 million shares of the Company’s common stock from the Dealers. The payments were recorded as reductions to shareholders’ equity, consisting of a $5.1 billion increase to accumulated deficit, which reflects the value of the initial shares received, and a $0.9 billion decrease in additional paid-in capital, which reflects the value of the stock that remained to be delivered by the Dealers. During the third quarter of 2022, an additional 1.5 million shares of the Company’s common stock were received from the Dealers which constituted final settlement under the ASR agreements, and accordingly, the $0.9 billion decrease in additional paid-in capital recorded in February was reclassified to accumulated deficit. In total, we repurchased 26.1 million shares of common stock during the nine months ended September 30, 2022, consisting primarily of the 24.8 million shares received under the ASR agreements. As of September 30, 2022, $4.6 billion of authorization remained available under our stock repurchase program. In October 2022, the Board of Directors increased the amount authorized under our stock repurchase program by an additional $2.4 billion. Dividends In August 2022, March 2022 and December 2021, the Board of Directors declared quarterly cash dividends of $1.94 per share, which were paid in September 2022, June 2022 and March 2022, respectively. In October 2022, the Board of Directors declared a quarterly cash dividend of $1.94 per share, which will be paid in December 2022. Accumulated other comprehensive income (loss) The components of AOCI were as follows (in millions): Foreign Cash flow Available-for-sale Other AOCI Balance as of December 31, 2021 $ (844) $ 61 $ — $ (13) $ (796) Foreign currency translation adjustments (51) — — — (51) Unrealized gains — 56 — — 56 Reclassification adjustments to income — 51 — — 51 Income taxes — (23) — — (23) Balance as of March 31, 2022 (895) 145 — (13) (763) Foreign currency translation adjustments (65) — — — (65) Unrealized gains — 67 — — 67 Reclassification adjustments to income — 132 — — 132 Income taxes — (43) — — (43) Balance as of June 30, 2022 (960) 301 — (13) (672) Foreign currency translation adjustments (109) — — — (109) Unrealized gains — 45 — — 45 Reclassification adjustments to income — 129 — — 129 Other — — — (9) (9) Income taxes — (36) — — (36) Balance as of September 30, 2022 $ (1,069) $ 439 $ — $ (22) $ (652) Reclassifications out of AOCI and into earnings, including related income tax expenses, were as follows (in millions): Three months ended September 30, Components of AOCI 2022 2021 Condensed Consolidated Cash flow hedges: Foreign currency contract gains (losses) $ 69 $ (5) Product sales Cross-currency swap contract losses (198) (104) Other income (expense), net (129) (109) Income before income taxes 28 23 Provision for income taxes $ (101) $ (86) Net income Nine months ended September 30, Components of AOCI 2022 2021 Condensed Consolidated Cash flow hedges: Foreign currency contract gains (losses) $ 149 $ (24) Product sales Cross-currency swap contract losses (461) (190) Other income (expense), net (312) (214) Income before income taxes 67 45 Provision for income taxes $ (245) $ (169) Net income |
Fair value measurement
Fair value measurement | 9 Months Ended |
Sep. 30, 2022 | |
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 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 sources 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 different 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, inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement. The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Quoted prices in Significant Significant Fair value measurement as of September 30, 2022, using: Total Assets: Available-for-sale securities: U.S. Treasury notes $ — $ — $ — $ — U.S. Treasury bills 1,976 — — 1,976 Money market mutual funds 8,945 — — 8,945 Other short-term interest-bearing securities — — — — Other investments — 135 — 135 Equity securities 385 — 382 767 Derivatives: Foreign currency contracts — 639 — 639 Cross-currency swap contracts — 6 — 6 Interest rate swap contracts — — — — Total assets $ 11,306 $ 780 $ 382 $ 12,468 Liabilities: Derivatives: Foreign currency contracts $ — $ 22 $ — $ 22 Cross-currency swap contracts — 754 — 754 Interest rate swap contracts — 810 — 810 Contingent consideration obligations — — 302 302 Total liabilities $ — $ 1,586 $ 302 $ 1,888 Quoted prices in Significant Significant Fair value measurement as of December 31, 2021, using: Total Assets: Available-for-sale securities: U.S. Treasury notes $ 47 $ — $ — $ 47 U.S. Treasury bills 1,400 — — 1,400 Money market mutual funds 5,856 — — 5,856 Other short-term interest-bearing securities — 1 — 1 Other investments — — — — Equity securities 611 — 220 831 Derivatives: Foreign currency contracts — 183 — 183 Cross-currency swap contracts — 66 — 66 Interest rate swap contracts — 16 — 16 Total assets $ 7,914 $ 266 $ 220 $ 8,400 Liabilities: Derivatives: Foreign currency contracts $ — $ 39 $ — $ 39 Cross-currency swap contracts — 339 — 339 Interest rate swap contracts — 156 — 156 Contingent consideration obligations — — 342 342 Total liabilities $ — $ 534 $ 342 $ 876 Interest-bearing and equity securities The fair values of our U.S. Treasury securities, money market mutual funds and equity investments in publicly traded securities are based on quoted market prices in active markets, with no valuation adjustment. Other investments consist of interest-bearing deposits that are valued at amortized cost, which approximates fair value given their near term maturity. The fair value of equity securities without readily determinable fair values are initially valued at the transaction price and subsequently valued based on a combination of observable price transactions, when available, market performance and publicly available market information for similar companies that have actively traded equity securities. Derivatives All of our foreign currency forward derivative 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 uses 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, when applicable, are at commonly quoted intervals. See Note 12, Derivative instruments. Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that uses an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency-basis swap spreads. See Note 12, Derivative instruments. Our interest rate swap contracts are with counterparties that have minimum credit ratings of A– or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by using an income-based industry-standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include LIBOR, swap rates and obligor credit default swap rates. See Note 12, Derivative instruments. Contingent consideration obligations As a result of our business acquisitions, we have 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 licensing rights and product candidates acquired in business combinations, and they are reviewed quarterly by management in our R&D and commercial sales organizations. The inputs include, as applicable, estimated probabilities and the timing of achieving specified development, regulatory and commercial milestones as well as estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related development, regulatory and commercial events or 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 Condensed Consolidated Statements of Income. Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Three months ended Nine months ended 2022 2021 2022 2021 Beginning balance $ 310 $ 48 $ 342 $ 33 Payments (2) (2) (5) (5) Net changes in valuations (6) (11) (35) 7 Ending balance $ 302 $ 35 $ 302 $ 35 As of September 30, 2022 and December 31, 2021, our contingent consideration obligations are primarily the result of our acquisition of Teneobio in October 2021, which obligates us to pay the former shareholders up to $1.6 billion upon achieving separate development and regulatory milestones with regard to various R&D programs. See Note 2, Acquisitions and divestitures. 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 values of our borrowings by using Level 2 inputs. As of September 30, 2022 and December 31, 2021, the aggregate fair values of our borrowings were $34.2 billion and $37.9 billion, respectively, and the carrying values were $38.7 billion and $33.3 billion, respectively. Investment in BeiGene, Ltd. We estimated the fair value of our investment in BeiGene by using Level 1 inputs. As of September 30, 2022 and December 31, 2021, the fair values were $2.6 billion and $5.1 billion, and the carrying values were $2.3 billion and $2.8 billion, respectively. During the three and nine months ended September 30, 2022 and 2021, there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis, except with respect to the impairment of net assets in connection with the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures. |
Derivative instruments
Derivative instruments | 9 Months Ended |
Sep. 30, 2022 | |
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 use or have used certain derivative instruments, including foreign currency forward, 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 primarily associated 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 partially offset 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 with regard to our international product sales, we enter into foreign currency forward contracts to hedge a portion of our projected international product sales up to a maximum of three years into the future; and at any given point in time, a higher percentage of nearer-term projected product sales is being hedged than in successive periods. As of September 30, 2022 and December 31, 2021, we had outstanding foreign currency forward contracts with aggregate notional amounts of $5.5 billion and $5.7 billion, respectively. We have designated these foreign currency forward contracts, which are primarily euro based, as cash flow hedges. Accordingly, we report the unrealized gains and losses on these contracts in AOCI in the Condensed Consolidated Balance Sheets, and we reclassify them to Product sales in the Condensed Consolidated Statements of Income in the same periods during which the hedged transactions affect earnings. 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, thereby 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. Accordingly, the unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and reclassified to Other income (expense), net, in the Condensed Consolidated Statements of Income in the same periods during which the hedged debt affects earnings. The notional amounts and interest rates of our cross-currency swaps as of September 30, 2022, were as follows (notional amounts in millions): Foreign currency U.S. dollars Hedged notes Notional amounts Interest rates Notional amounts Interest rates 0.41% 2023 Swiss franc Bonds CHF 700 0.4 % $ 704 3.4 % 2.00% 2026 euro Notes € 750 2.0 % $ 833 3.9 % 5.50% 2026 pound sterling Notes £ 475 5.5 % $ 747 6.0 % 4.00% 2029 pound sterling Notes £ 700 4.0 % $ 1,111 4.6 % 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 U.S. 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 i n the Condensed Consolidated Balance Sheets and are amortized into Interest expense, net, in the Condensed Consolidated Statements of Income over the lives of the associated debt issuances. Amounts recognized in connection with forward interest rate swaps during the nine months ended September 30, 2022, and amounts expected to be recognized during the subsequent 12 months are not material. The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Nine months ended Derivatives in cash flow hedging relationships 2022 2021 2022 2021 Foreign currency contracts $ 324 $ 136 $ 654 $ 273 Cross-currency swap contracts (279) (120) (486) (180) Total unrealized gains $ 45 $ 16 $ 168 $ 93 Fair value hedges To achieve a desired mix of fixed-rate and floating-rate debt, we entered into interest rate swap contracts that qualified for and were designated as fair value hedges. These interest rate swap contracts effectively convert fixed-rate coupons to floating-rate LIBOR-based coupons over the terms of the related hedge contracts. As of September 30, 2022 and December 31, 2021, we had interest rate swap contracts with aggregate notional amounts of $6.7 billion that hedge certain portions of our long-term debt issuances. For interest rate swap contracts that qualify for and are designated as fair value hedges, we recognize in Interest expense, net, in the Condensed Consolidated Statements of Income 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. If a hedging relationship involving an interest rate swap contract is terminated, the gain or loss realized on contract termination is recorded as an adjustment to the carrying value of the debt and amortized into Interest expense, net, over the remaining life of the previously hedged debt. The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions): Carrying amounts of hedged liabilities (1) Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities (2) Condensed Consolidated Balance Sheets locations September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Current portion of long-term debt $ 82 $ 85 $ 82 $ 85 Long-term debt $ 6,002 $ 6,729 $ (532) $ 199 ____________ (1) Current portion of long-term debt includes $82 million and $85 million of carrying value with discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. Long-term debt includes $378 million and $440 million of carrying value with discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. (2) Current portion of long-term debt includes $82 million and $85 million of hedging adjustments on discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. Long-term debt includes $278 million and $340 million of hedging adjustments on discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. Impact of hedging transactions The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions): Three months ended September 30, 2022 Nine months ended September 30, 2022 Product sales Other income (expense), net Interest expense, net Product sales Other income (expense), net Interest expense, net Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income $ 6,237 $ 100 $ (368) $ 18,249 $ (747) $ (991) The effects of cash flow and fair value hedging: Gains (losses) on cash flow hedging relationships reclassified out of AOCI: Foreign currency contracts $ 69 $ — $ — $ 149 $ — $ — Cross-currency swap contracts $ — $ (198) $ — $ — $ (461) $ — Gains (losses) on fair value hedging relationships—interest rate swap agreements: Hedged items (1) $ — $ — $ 240 $ — $ — $ 734 Derivatives designated as hedging instruments $ — $ — $ (220) $ — $ — $ (670) Three months ended September 30, 2021 Nine months ended September 30, 2021 Product sales Other income (expense), net Interest expense, net Product sales Other income (expense), net Interest expense, net Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income $ 6,320 $ 73 $ (296) $ 18,026 $ 97 $ (862) The effects of cash flow and fair value hedging: Losses on cash flow hedging relationships reclassified out of AOCI: Foreign currency contracts $ (5) $ — $ — $ (24) $ — $ — Cross-currency swap contracts $ — $ (104) $ — $ — $ (190) $ — Gains (losses) on fair value hedging relationships—interest rate swap agreements: Hedged items (1) $ — $ — $ 54 $ — $ — $ 195 Derivatives designated as hedging instruments $ — $ — $ (31) $ — $ — $ (128) __________ (1) Gains on hedged items do not exactly offset losses on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships and the recognition of gains on terminated hedges when the corresponding hedged item was paid down in the period. No portions of our cash flow hedge contracts were excluded from the assessment of hedge effectiveness. As of September 30, 2022, we expected to reclassify $304 million of net gains on our foreign currency and cross-currency swap contracts out of AOCI and into earnings during the next 12 months. Derivatives not designated as hedges To reduce our exposure to foreign currency fluctuations in certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. Most of these exposures are hedged on a month-to-month basis. As of September 30, 2022 and December 31, 2021, the total notional amounts of these foreign currency forward contracts were $501 million and $680 million, respectively. Gains and losses recognized in earnings for our derivative instruments not designated as hedging instruments were not material for the three and nine months ended September 30, 2022 and 2021. The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities September 30, 2022 Condensed Consolidated Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 639 Accrued liabilities/ Other noncurrent liabilities $ 22 Cross-currency swap contracts Other current assets/ Other noncurrent assets 6 Accrued liabilities/ Other noncurrent liabilities 754 Interest rate swap contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities 810 Total derivatives designated as hedging instruments $ 645 $ 1,586 Derivative assets Derivative liabilities December 31, 2021 Condensed Consolidated Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 183 Accrued liabilities/ Other noncurrent liabilities $ 39 Cross-currency swap contracts Other current assets/ Other noncurrent assets 66 Accrued liabilities/ Other noncurrent liabilities 339 Interest rate swap contracts Other current assets/ Other noncurrent assets 16 Accrued liabilities/ Other noncurrent liabilities 156 Total derivatives designated as hedging instruments $ 265 $ 534 Our derivative contracts that were in liability positions as of September 30, 2022, 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 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 in the Condensed Consolidated Statements of Cash Flows are included in Net cash provided by operating activities, except for the settlement of notional amounts of cross-currency swaps, which are included in Net cash used in financing activities. |
Contingencies and commitments
Contingencies and commitments | 9 Months Ended |
Sep. 30, 2022 | |
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 our Annual Report on Form 10-K for the year ended December 31, 2021, 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; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022. 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, some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022, in which we could incur a liability, our opponents 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 described in this filing; in Note 19, Contingencies and commitments, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2021; and in Note 13, Contingencies and commitments, to the condensed consolidated financial statements in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022, in which we could incur a liability, 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. Although 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 recent developments concerning our legal proceedings and other matters are discussed below: ANDA Patent Litigation Otezla ANDA Patent Litigation Amgen Inc. v. Apotex Inc. On October 14, 2022, Apotex Inc. (Apotex) filed its answer to Amgen’s complaint in the U.S. District Court for the District of New Jersey (the New Jersey District Court) in a lawsuit filed by Amgen for infringement of U.S. Patent Nos. 7,427,638, 9,872,854 and 10,092,541, which are listed in the Orange Book for Otezla. Apotex’s answer disputed infringement and/or validity of the patents-in-suit. Along with its answer, Apotex also filed declaratory judgment counterclaims asserting that the patents-in-suit are not infringed and/or are invalid. Amgen’s lawsuit is based on Apotex’s submission of an ANDA seeking FDA approval to market a generic version of Otezla and seeks an order of the New Jersey District Court making any FDA approval of Apotex’s ANDA effective no earlier than the expiration of the applicable patents. Repatha Patent Litigation Amgen Inc., et al. v. Sanofi, et al. On November 18, 2021, Amgen filed a petition for writ of certiorari with the U.S. Supreme Court seeking review of the invalidation of claims 19 and 29 of U.S. Patent No. 8,829,165 and claim 7 of U.S. Patent No. 8,859,741 as lacking an enabling disclosure of the invention. On April 18, 2022, the U.S. Supreme Court requested that the Office of the Solicitor General of the United States submit a brief providing the government’s view on the issues raised by Amgen’s petition. On September 21, 2022, the Solicitor General submitted a brief expressing the view that the U.S. Supreme Court should deny Amgen’s petition for writ of certiorari. Patent Disputes in the International Region On August 16, 2022, the Opposition Division of the European Patent Office issued a written decision upholding the validity of the European Patent No. 2,756,004 claims at issue, with narrowing amendments. Proceedings before the Technical Board of Appeal commenced on August 17, 2022. Antitrust Actions Regeneron Pharmaceuticals, Inc. Antitrust Action On August 11, 2022, Amgen moved to stay the case pending the ultimate decision on the merits of the ongoing patent litigation between Amgen and Regeneron Pharmaceuticals, Inc. in Amgen Inc., et al. v. Sanofi, et al. The motion to stay is scheduled for oral argument on January 6, 2023, and Amgen’s motion to dismiss that was filed on August 1, 2022 is also set to be heard on that date. U.S. Tax Litigation Amgen Inc. & Subsidiaries v. Commissioner of Internal Revenue See Note 4, Income taxes, for discussion of the IRS tax dispute and the Company’s petition in the U.S. Tax Court. ChemoCentryx, Inc. Securities Matters On May 5 and June 8 of 2021, ChemoCentryx and its Chief Executive Officer were named as defendants in two putative shareholder class actions filed in the U.S. District Court for the Northern District of California (Northern District Court of California). These cases were consolidated into Homyk v. ChemoCentryx, Inc. in which the plaintiffs allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act in connection with statements regarding the New Drug Application for TAVNEOS ® (avacopan) and the underlying Phase 3 clinical trial, seeking an award of damages, interest and attorneys’ fees. On March 28, 2022, the plaintiffs filed their consolidated amended complaint, and on May 19, 2022, ChemoCentryx moved to dismiss these claims. On January 25, 2022, the Board of Directors and certain of ChemoCentryx’s officers were named as defendants in a putative shareholder derivative action filed in the Northern District Court of California, Napoli v. Schall, and on March 11, 2022, the Northern District Court of California stayed the action until judgment is entered in the Homyk v. ChemoCentryx, Inc. action. |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events Acquisition of ChemoCentryx, Inc. On October 20, 2022, Amgen completed its acquisition of ChemoCentryx for $52.00 per share in cash, for an aggregate merger consideration of approximately $3.7 billion. ChemoCentryx is a biopharmaceutical company focused on orally administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer. The accounting impact of this acquisition and the results of operations for ChemoCentryx will be included in our consolidated financial statements beginning in the fourth quarter of 2022. The initial accounting for this acquisition is incomplete, pending identification and measurement of the assets acquired and liabilities assumed. Divestiture of Gensenta İlaç Sanayi ve Ticaret A.Ş. On November 2, 2022, Amgen completed its divestiture transaction with Eczacıbaşı. The accounting impact upon completion of this divestiture will be included in our consolidated financial statements in the fourth quarter of 2022. See Note 2, Acquisitions and divestitures. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Business | Business Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics. |
Basis of presentation | Basis of presentation The financial information for the three and nine months ended September 30, 2022 and 2021, is unaudited but includes all adjustments (consisting of only normal, recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2022 and June 30, 2022. |
Principles of consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. In determining whether we are the primary beneficiary of a variable interest entity, we consider whether we have both the power to direct activities of the entity that most significantly impact the entity’s economic performance and the obligation to absorb losses of or the right to receive benefits from the entity that could potentially be significant to that entity. We do not have any significant interests in any variable interest entities of which we are the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $9.2 billion and $8.8 billion as of September 30, 2022 and December 31, 2021, respectively. |
Recent accounting pronouncements | Recent accounting pronouncements In March 2020, the FASB issued a new accounting standard to ease the financial reporting burdens caused by the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, commonly referred to as reference rate reform. The new standard provides temporary optional expedients and exceptions to current GAAP guidance on contract modifications and hedge accounting. Specifically, a modification to transition to an alternative reference rate is treated as an event that does not require contract remeasurement or reassessment of a previous accounting treatment. Moreover, for all types of hedging relationships, an entity is permitted to change the reference rate without having to dedesignate the hedging relationship. The standard is generally effective for all contract modifications made and hedging relationships evaluated through December 31, 2022. In January 2021, the FASB issued a new accounting standard that expanded the scope of the original March 2020 standard to include derivative instruments on discounting transactions. We do not expect the two standards to have a material impact on our consolidated financial statements. |
Acquisitions and divestitures (
Acquisitions and divestitures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the final total consideration and allocated acquisition date fair values of assets acquired and liabilities assumed, inclusive of measurement period adjustments (in millions): Amounts Cash purchase price $ 993 Contingent consideration 299 Total consideration $ 1,292 Cash and cash equivalents $ 100 In-process research and development 991 Finite-lived intangible asset – research and development technology rights 115 Finite-lived intangible assets – licensing rights 41 Goodwill 273 Other assets, net 16 Deferred tax liability (244) Total assets acquired, net $ 1,292 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue by product and by geographic area | Revenues were as follows (in millions): Three months ended September 30, 2022 2021 U.S. ROW Total U.S. ROW Total ENBREL $ 1,086 $ 20 $ 1,106 $ 1,263 $ 26 $ 1,289 Prolia 590 272 862 530 273 803 Otezla 529 98 627 495 114 609 XGEVA 363 132 495 372 145 517 Aranesp 128 230 358 149 247 396 Repatha 142 167 309 139 133 272 KYPROLIS 217 101 318 198 95 293 Neulasta 205 42 247 360 55 415 Nplate 162 126 288 156 117 273 Other products (1) 1,044 583 1,627 896 557 1,453 Total product sales (2) $ 4,466 $ 1,771 6,237 $ 4,558 $ 1,762 6,320 Other revenues 415 386 Total revenues $ 6,652 $ 6,706 Nine months ended September 30, 2022 2021 U.S. ROW Total U.S. ROW Total ENBREL $ 2,965 $ 54 $ 3,019 $ 3,270 $ 87 $ 3,357 Prolia 1,783 853 2,636 1,569 806 2,375 Otezla 1,366 306 1,672 1,284 335 1,619 XGEVA 1,122 408 1,530 1,061 412 1,473 Aranesp 397 676 1,073 409 709 1,118 Repatha 461 502 963 421 423 844 KYPROLIS 626 296 922 547 277 824 Neulasta 772 133 905 1,215 168 1,383 Nplate 474 364 838 404 341 745 Other products (1) 2,983 1,708 4,691 2,655 1,633 4,288 Total product sales (2) $ 12,949 $ 5,300 18,249 $ 12,835 $ 5,191 18,026 Other revenues 1,235 1,107 Total revenues $ 19,484 $ 19,133 ____________ (1) Consists of product sales of our non-principal products, as well as our Gensenta and Bergamo subsidiaries. (2) Hedging gains and losses, which are included in product sales, were not material for the three and nine months ended September 30, 2022 and 2021. |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation for basic and diluted earnings per share | The computations for basic and diluted EPS were as follows (in millions, except per-share data): Three months ended Nine months ended 2022 2021 2022 2021 Income (Numerator): Net income for basic and diluted EPS $ 2,143 $ 1,884 $ 4,936 $ 3,994 Shares (Denominator): Weighted-average shares for basic EPS 535 567 539 572 Effect of dilutive securities 3 3 3 4 Weighted-average shares for diluted EPS 538 570 542 576 Basic EPS $ 4.01 $ 3.32 $ 9.16 $ 6.98 Diluted EPS $ 3.98 $ 3.31 $ 9.11 $ 6.93 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 interest-bearing securities, which are considered available-for-sale, by type of security were as follows (in millions): Types of securities as of September 30, 2022 Amortized Gross Gross Fair U.S. Treasury notes $ — $ — $ — $ — U.S. Treasury bills 1,976 — — 1,976 Money market mutual funds 8,945 — — 8,945 Other short-term interest-bearing securities — — — — Total interest-bearing securities $ 10,921 $ — $ — $ 10,921 Types of securities as of December 31, 2021 Amortized Gross Gross Fair U.S. Treasury notes $ 47 $ — $ — $ 47 U.S. Treasury bills 1,400 — — 1,400 Money market mutual funds 5,856 — — 5,856 Other short-term interest-bearing securities 1 — — 1 Total interest-bearing securities $ 7,304 $ — $ — $ 7,304 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | The fair values of interest-bearing securities by location in the Condensed Consolidated Balance Sheets were as follows (in millions): Condensed Consolidated Balance Sheets locations September 30, 2022 December 31, 2021 Cash and cash equivalents $ 8,945 $ 7,256 Marketable securities 1,976 48 Total interest-bearing securities $ 10,921 $ 7,304 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following (in millions): September 30, 2022 December 31, 2021 Raw materials $ 801 $ 647 Work in process 2,929 2,367 Finished goods 1,027 1,072 Total inventories $ 4,757 $ 4,086 |
Goodwill and other intangible_2
Goodwill and other intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The change in the carrying amount of goodwill was as follows (in millions): Nine months ended Beginning balance $ 14,890 Adjustments to goodwill resulting from acquisitions and divestitures, net (1) 6 Currency translation adjustment (51) Ending balance $ 14,845 ____________ (1) Consists of adjustments to goodwill resulting from changes to the acquisition date fair values of net assets acquired in the acquisition of Teneobio and the nonstrategic Gensenta divestiture. See Note 2, Acquisitions and divestitures. |
Schedule of identifiable intangible assets | Other intangible assets consisted of the following (in millions): September 30, 2022 December 31, 2021 Gross Accumulated Other intangible Gross Accumulated Other intangible Finite-lived intangible assets: Developed-product-technology rights $ 25,504 $ (14,396) $ 11,108 $ 25,561 $ (12,769) $ 12,792 Licensing rights 3,864 (3,087) 777 3,807 (2,973) 834 Marketing-related rights 1,326 (1,146) 180 1,354 (1,112) 242 Research and development technology rights 1,334 (1,142) 192 1,377 (1,133) 244 Total finite-lived intangible assets 32,028 (19,771) 12,257 32,099 (17,987) 14,112 Indefinite-lived intangible assets: In-process research and development 1,009 — 1,009 1,070 — 1,070 Total other intangible assets $ 33,037 $ (19,771) $ 13,266 $ 33,169 $ (17,987) $ 15,182 |
Financing arrangements (Tables)
Financing arrangements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | Our borrowings consisted of the following (in millions): September 30, 2022 December 31, 2021 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) $ 709 $ 767 2.25% notes due 2023 (2.25% 2023 Notes) 750 750 3.625% notes due 2024 (3.625% 2024 Notes) 1,400 1,400 1.90% notes due 2025 (1.90% 2025 Notes) 500 500 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) 735 853 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) 531 643 2.20% notes due 2027 (2.20% 2027 Notes) 1,724 1,750 3.20% notes due 2027 (3.20% 2027 Notes) 1,000 1,000 1.65% notes due 2028 (1.65% 2028 Notes) 1,234 1,250 3.00% notes due 2029 (3.00% 2029 Notes) 750 — 4.05% notes due 2029 (4.05% 2029 Notes) 1,250 — 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) 782 947 2.45% notes due 2030 (2.45% 2030 Notes) 1,250 1,250 2.30% notes due 2031 (2.30% 2031 Notes) 1,250 1,250 2.00% notes due 2032 (2.00% 2032 Notes) 1,051 1,250 3.35% notes due 2032 (3.35% 2032 Notes) 1,000 — 4.20% notes due 2033 (4.20% 2033 Notes) 750 — 6.375% notes due 2037 (6.375% 2037 Notes) 478 478 6.90% notes due 2038 (6.90% 2038 Notes) 254 254 6.40% notes due 2039 (6.40% 2039 Notes) 333 333 3.15% notes due 2040 (3.15% 2040 Notes) 2,000 2,000 5.75% notes due 2040 (5.75% 2040 Notes) 373 373 2.80% notes due 2041 (2.80% 2041 Notes) 1,110 1,150 4.95% notes due 2041 (4.95% 2041 Notes) 600 600 5.15% notes due 2041 (5.15% 2041 Notes) 729 729 5.65% notes due 2042 (5.65% 2042 Notes) 415 415 5.375% notes due 2043 (5.375% 2043 Notes) 185 185 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 3.375% notes due 2050 (3.375% 2050 Notes) 2,250 2,250 4.663% notes due 2051 (4.663% 2051 Notes) 3,541 3,541 3.00% notes due 2052 (3.00% 2052 Notes) 1,254 1,350 4.20% notes due 2052 (4.20% 2052 Notes) 1,000 — 4.875% notes due 2053 (4.875% 2053 Notes) 1,000 — 2.77% notes due 2053 (2.77% 2053 Notes) 940 940 4.40% notes due 2062 (4.40% 2062 Notes) 1,250 — Other notes due 2097 100 100 Unamortized bond discounts, premiums and issuance costs, net (1,252) (1,213) Fair value adjustments (450) 284 Other 13 15 Total carrying value of debt 38,704 33,309 Less current portion (1,543) (87) Total long-term debt $ 37,161 $ 33,222 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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): 2022 2021 Shares Dollars Shares Dollars First quarter 24.6 $ 5,410 3.7 $ 865 Second quarter — — 6.5 1,592 Third quarter 1.5 900 4.6 1,069 Total stock repurchases 26.1 $ 6,310 14.8 $ 3,526 |
Components of accumulated other comprehensive income | The components of AOCI were as follows (in millions): Foreign Cash flow Available-for-sale Other AOCI Balance as of December 31, 2021 $ (844) $ 61 $ — $ (13) $ (796) Foreign currency translation adjustments (51) — — — (51) Unrealized gains — 56 — — 56 Reclassification adjustments to income — 51 — — 51 Income taxes — (23) — — (23) Balance as of March 31, 2022 (895) 145 — (13) (763) Foreign currency translation adjustments (65) — — — (65) Unrealized gains — 67 — — 67 Reclassification adjustments to income — 132 — — 132 Income taxes — (43) — — (43) Balance as of June 30, 2022 (960) 301 — (13) (672) Foreign currency translation adjustments (109) — — — (109) Unrealized gains — 45 — — 45 Reclassification adjustments to income — 129 — — 129 Other — — — (9) (9) Income taxes — (36) — — (36) Balance as of September 30, 2022 $ (1,069) $ 439 $ — $ (22) $ (652) |
Reclassifications out of accumulated other comprehensive income | Reclassifications out of AOCI and into earnings, including related income tax expenses, were as follows (in millions): Three months ended September 30, Components of AOCI 2022 2021 Condensed Consolidated Cash flow hedges: Foreign currency contract gains (losses) $ 69 $ (5) Product sales Cross-currency swap contract losses (198) (104) Other income (expense), net (129) (109) Income before income taxes 28 23 Provision for income taxes $ (101) $ (86) Net income Nine months ended September 30, Components of AOCI 2022 2021 Condensed Consolidated Cash flow hedges: Foreign currency contract gains (losses) $ 149 $ (24) Product sales Cross-currency swap contract losses (461) (190) Other income (expense), net (312) (214) Income before income taxes 67 45 Provision for income taxes $ (245) $ (169) Net income |
Fair value measurement (Tables)
Fair value measurement (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis | The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions): Quoted prices in Significant Significant Fair value measurement as of September 30, 2022, using: Total Assets: Available-for-sale securities: U.S. Treasury notes $ — $ — $ — $ — U.S. Treasury bills 1,976 — — 1,976 Money market mutual funds 8,945 — — 8,945 Other short-term interest-bearing securities — — — — Other investments — 135 — 135 Equity securities 385 — 382 767 Derivatives: Foreign currency contracts — 639 — 639 Cross-currency swap contracts — 6 — 6 Interest rate swap contracts — — — — Total assets $ 11,306 $ 780 $ 382 $ 12,468 Liabilities: Derivatives: Foreign currency contracts $ — $ 22 $ — $ 22 Cross-currency swap contracts — 754 — 754 Interest rate swap contracts — 810 — 810 Contingent consideration obligations — — 302 302 Total liabilities $ — $ 1,586 $ 302 $ 1,888 Quoted prices in Significant Significant Fair value measurement as of December 31, 2021, using: Total Assets: Available-for-sale securities: U.S. Treasury notes $ 47 $ — $ — $ 47 U.S. Treasury bills 1,400 — — 1,400 Money market mutual funds 5,856 — — 5,856 Other short-term interest-bearing securities — 1 — 1 Other investments — — — — Equity securities 611 — 220 831 Derivatives: Foreign currency contracts — 183 — 183 Cross-currency swap contracts — 66 — 66 Interest rate swap contracts — 16 — 16 Total assets $ 7,914 $ 266 $ 220 $ 8,400 Liabilities: Derivatives: Foreign currency contracts $ — $ 39 $ — $ 39 Cross-currency swap contracts — 339 — 339 Interest rate swap contracts — 156 — 156 Contingent consideration obligations — — 342 342 Total liabilities $ — $ 534 $ 342 $ 876 |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | Changes in the carrying amounts of contingent consideration obligations were as follows (in millions): Three months ended Nine months ended 2022 2021 2022 2021 Beginning balance $ 310 $ 48 $ 342 $ 33 Payments (2) (2) (5) (5) Net changes in valuations (6) (11) (35) 7 Ending balance $ 302 $ 35 $ 302 $ 35 |
Derivative instruments (Tables)
Derivative instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022, were as follows (notional amounts in millions): Foreign currency U.S. dollars Hedged notes Notional amounts Interest rates Notional amounts Interest rates 0.41% 2023 Swiss franc Bonds CHF 700 0.4 % $ 704 3.4 % 2.00% 2026 euro Notes € 750 2.0 % $ 833 3.9 % 5.50% 2026 pound sterling Notes £ 475 5.5 % $ 747 6.0 % 4.00% 2029 pound sterling Notes £ 700 4.0 % $ 1,111 4.6 % |
Unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges | The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions): Three months ended Nine months ended Derivatives in cash flow hedging relationships 2022 2021 2022 2021 Foreign currency contracts $ 324 $ 136 $ 654 $ 273 Cross-currency swap contracts (279) (120) (486) (180) Total unrealized gains $ 45 $ 16 $ 168 $ 93 |
Derivatives in fair value hedging relationships | The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions): Carrying amounts of hedged liabilities (1) Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities (2) Condensed Consolidated Balance Sheets locations September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Current portion of long-term debt $ 82 $ 85 $ 82 $ 85 Long-term debt $ 6,002 $ 6,729 $ (532) $ 199 ____________ (1) Current portion of long-term debt includes $82 million and $85 million of carrying value with discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. Long-term debt includes $378 million and $440 million of carrying value with discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. (2) Current portion of long-term debt includes $82 million and $85 million of hedging adjustments on discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. Long-term debt includes $278 million and $340 million of hedging adjustments on discontinued hedging relationships as of September 30, 2022 and December 31, 2021, respectively. |
Summary of amounts of income and expense line items | The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions): Three months ended September 30, 2022 Nine months ended September 30, 2022 Product sales Other income (expense), net Interest expense, net Product sales Other income (expense), net Interest expense, net Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income $ 6,237 $ 100 $ (368) $ 18,249 $ (747) $ (991) The effects of cash flow and fair value hedging: Gains (losses) on cash flow hedging relationships reclassified out of AOCI: Foreign currency contracts $ 69 $ — $ — $ 149 $ — $ — Cross-currency swap contracts $ — $ (198) $ — $ — $ (461) $ — Gains (losses) on fair value hedging relationships—interest rate swap agreements: Hedged items (1) $ — $ — $ 240 $ — $ — $ 734 Derivatives designated as hedging instruments $ — $ — $ (220) $ — $ — $ (670) Three months ended September 30, 2021 Nine months ended September 30, 2021 Product sales Other income (expense), net Interest expense, net Product sales Other income (expense), net Interest expense, net Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income $ 6,320 $ 73 $ (296) $ 18,026 $ 97 $ (862) The effects of cash flow and fair value hedging: Losses on cash flow hedging relationships reclassified out of AOCI: Foreign currency contracts $ (5) $ — $ — $ (24) $ — $ — Cross-currency swap contracts $ — $ (104) $ — $ — $ (190) $ — Gains (losses) on fair value hedging relationships—interest rate swap agreements: Hedged items (1) $ — $ — $ 54 $ — $ — $ 195 Derivatives designated as hedging instruments $ — $ — $ (31) $ — $ — $ (128) __________ (1) Gains on hedged items do not exactly offset losses on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships and the recognition of gains on terminated hedges when the corresponding hedged item was paid down in the period. |
Fair values of derivatives included in the Condensed Consolidated Balance Sheets | The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions): Derivative assets Derivative liabilities September 30, 2022 Condensed Consolidated Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 639 Accrued liabilities/ Other noncurrent liabilities $ 22 Cross-currency swap contracts Other current assets/ Other noncurrent assets 6 Accrued liabilities/ Other noncurrent liabilities 754 Interest rate swap contracts Other current assets/ Other noncurrent assets — Accrued liabilities/ Other noncurrent liabilities 810 Total derivatives designated as hedging instruments $ 645 $ 1,586 Derivative assets Derivative liabilities December 31, 2021 Condensed Consolidated Fair values Condensed Consolidated Fair values Derivatives designated as hedging instruments: Foreign currency contracts Other current assets/ Other noncurrent assets $ 183 Accrued liabilities/ Other noncurrent liabilities $ 39 Cross-currency swap contracts Other current assets/ Other noncurrent assets 66 Accrued liabilities/ Other noncurrent liabilities 339 Interest rate swap contracts Other current assets/ Other noncurrent assets 16 Accrued liabilities/ Other noncurrent liabilities 156 Total derivatives designated as hedging instruments $ 265 $ 534 |
Summary of significant accoun_3
Summary of significant accounting policies (Details) $ in Billions | 9 Months Ended | |
Sep. 30, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | segment | 1 | |
Accumulated depreciation and amortization on property, plant and equipment | $ | $ 9.2 | $ 8.8 |
Acquisitions and divestitures -
Acquisitions and divestitures - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jun. 28, 2022 | Apr. 16, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||
Adjustments to goodwill resulting from acquisitions and divestitures, net | $ 6 | ||||||
Goodwill | $ 14,845 | 14,845 | $ 14,890 | ||||
Payments to acquire business | 0 | $ 1,639 | |||||
Acquired in-process research and development | 0 | $ 0 | 0 | 1,505 | |||
Loss on divestiture | 565 | $ 0 | |||||
Gensenta Ilac Sanayi vs Ticaret | |||||||
Business Acquisition [Line Items] | |||||||
Proceeds from divestiture of business | $ 135 | ||||||
Including discontinued operation, assets | $ 76 | ||||||
Held-for-sale assets | 94 | 94 | |||||
Held-for-sale liabilities | 18 | 18 | |||||
Gensenta Ilac Sanayi vs Ticaret | Other Operating Income (Expense) | |||||||
Business Acquisition [Line Items] | |||||||
Loss on divestiture | 565 | ||||||
Teneobio | |||||||
Business Acquisition [Line Items] | |||||||
Adjustments to goodwill resulting from acquisitions and divestitures, net | 22 | ||||||
Cash purchase price | 993 | ||||||
Maximum additional consideration due contingent on certain milestones | 1,600 | 1,600 | |||||
Contingent consideration | 299 | ||||||
Acquired in-process research and development | 991 | 991 | |||||
Deferred tax liability | 244 | 244 | |||||
Goodwill | 273 | 273 | |||||
Teneobio | R & D Technology rights | |||||||
Business Acquisition [Line Items] | |||||||
Value of intangible assets acquired | $ 115 | ||||||
Weighted average period of amortization | 10 years | ||||||
Teneobio | Licensing rights | |||||||
Business Acquisition [Line Items] | |||||||
Value of intangible assets acquired | $ 41 | ||||||
Teneobio | In-process research and development | AMG 340 | |||||||
Business Acquisition [Line Items] | |||||||
Acquired in-process research and development | $ 784 | $ 784 | |||||
Five Prime Therapeutics, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Payments to acquire business | $ 1,600 | ||||||
Acquired in-process research and development | 1,500 | ||||||
Deferred tax asset | 177 | ||||||
Other liabilities | $ 47 |
Acquisitions and divestitures_2
Acquisitions and divestitures - Aggregate Consideration Paid (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 14,845 | $ 14,890 |
Teneobio | ||
Business Acquisition [Line Items] | ||
Cash purchase price | 993 | |
Contingent consideration | 299 | |
Total consideration | 1,292 | |
Cash and cash equivalents | 100 | |
In-process research and development | 991 | |
Goodwill | 273 | |
Other assets, net | 16 | |
Deferred tax liability | (244) | |
Total assets acquired, net | 1,292 | |
Teneobio | R & D Technology rights | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | 115 | |
Teneobio | Licensing rights | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets | $ 41 |
Revenues (Details)
Revenues (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||||
Number of operating segments | segment | 1 | |||
Revenue from External Customer [Line Items] | ||||
Total revenues | $ 6,652 | $ 6,706 | $ 19,484 | $ 19,133 |
Product sales | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 6,237 | 6,320 | 18,249 | 18,026 |
Product sales | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 4,466 | 4,558 | 12,949 | 12,835 |
Product sales | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 1,771 | 1,762 | 5,300 | 5,191 |
ENBREL | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 1,106 | 1,289 | 3,019 | 3,357 |
ENBREL | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 1,086 | 1,263 | 2,965 | 3,270 |
ENBREL | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 20 | 26 | 54 | 87 |
Prolia | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 862 | 803 | 2,636 | 2,375 |
Prolia | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 590 | 530 | 1,783 | 1,569 |
Prolia | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 272 | 273 | 853 | 806 |
Otezla | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 627 | 609 | 1,672 | 1,619 |
Otezla | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 529 | 495 | 1,366 | 1,284 |
Otezla | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 98 | 114 | 306 | 335 |
XGEVA | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 495 | 517 | 1,530 | 1,473 |
XGEVA | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 363 | 372 | 1,122 | 1,061 |
XGEVA | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 132 | 145 | 408 | 412 |
Aranesp | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 358 | 396 | 1,073 | 1,118 |
Aranesp | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 128 | 149 | 397 | 409 |
Aranesp | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 230 | 247 | 676 | 709 |
Repatha | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 309 | 272 | 963 | 844 |
Repatha | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 142 | 139 | 461 | 421 |
Repatha | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 167 | 133 | 502 | 423 |
KYPROLIS | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 318 | 293 | 922 | 824 |
KYPROLIS | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 217 | 198 | 626 | 547 |
KYPROLIS | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 101 | 95 | 296 | 277 |
Neulasta | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 247 | 415 | 905 | 1,383 |
Neulasta | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 205 | 360 | 772 | 1,215 |
Neulasta | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 42 | 55 | 133 | 168 |
Nplate | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 288 | 273 | 838 | 745 |
Nplate | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 162 | 156 | 474 | 404 |
Nplate | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 126 | 117 | 364 | 341 |
Other products | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 1,627 | 1,453 | 4,691 | 4,288 |
Other products | U.S. | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 1,044 | 896 | 2,983 | 2,655 |
Other products | ROW | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | 583 | 557 | 1,708 | 1,633 |
Other revenues | ||||
Revenue from External Customer [Line Items] | ||||
Total revenues | $ 415 | $ 386 | $ 1,235 | $ 1,107 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 28, 2022 | May 31, 2021 | |
Income Tax Examination [Line Items] | ||||||||||
Effective income tax rate | 10.40% | 12.60% | 11.80% | 12.60% | ||||||
Increase in unrecognized tax benefits resulting from tax positions taken during the current period | $ 25 | $ 120 | ||||||||
Stock repurchased | $ 900 | $ 0 | $ 5,410 | $ 1,069 | $ 1,592 | $ 865 | $ 6,310 | $ 3,526 | ||
Domestic Tax Authority | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Proposed additional income tax | $ 3,600 | |||||||||
Repatriation tax on proposed additional tax | $ 900 | |||||||||
Proposed additional income tax 2013-2015 | $ 5,100 | |||||||||
Penalties on proposed additional income tax 2013-2015 | 2,000 | |||||||||
Repatriation tax on proposed additional tax 2013-2015 | $ 2,200 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income (Numerator): | ||||||||
Net income for basic and diluted EPS | $ 2,143 | $ 1,317 | $ 1,476 | $ 1,884 | $ 464 | $ 1,646 | $ 4,936 | $ 3,994 |
Shares (Denominator): | ||||||||
Weighted-average shares for basic EPS (in shares) | 535 | 567 | 539 | 572 | ||||
Effect of dilutive securities (in shares) | 3 | 3 | 3 | 4 | ||||
Weighted-average shares for diluted EPS (in shares) | 538 | 570 | 542 | 576 | ||||
Basic EPS (in usd per share) | $ 4.01 | $ 3.32 | $ 9.16 | $ 6.98 | ||||
Diluted EPS (in usd per share) | $ 3.98 | $ 3.31 | $ 9.11 | $ 6.93 |
Investments (Details)
Investments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 10,921 | $ 7,304 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 10,921 | 7,304 |
U.S. Treasury notes | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 0 | 47 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 0 | 47 |
U.S. Treasury bills | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 1,976 | 1,400 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 1,976 | 1,400 |
Money market mutual funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 8,945 | 5,856 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | 8,945 | 5,856 |
Other short-term interest-bearing securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 0 | 1 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | 0 |
Fair values | $ 0 | $ 1 |
Investments (Fair Values by Cla
Investments (Fair Values by Classification) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||
Marketable securities | $ 1,976 | $ 48 |
Total interest-bearing securities | 10,921 | 7,304 |
Available-for-sale investments [Member] | ||
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets | ||
Cash and cash equivalents | 8,945 | 7,256 |
Marketable securities | 1,976 | 48 |
Total interest-bearing securities | $ 10,921 | $ 7,304 |
Investments (Available-for-sale
Investments (Available-for-sale Investments) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Cash | $ 557 | $ 733 |
Investments (Equity Securities)
Investments (Equity Securities) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Securities, Available-for-sale [Line Items] | |||||
Equity securities | $ 767 | $ 767 | $ 831 | ||
Equity Securities, FV-NI, Unrealized Gain (Loss) | 17 | $ 135 | (259) | $ 104 | |
Equity securities without readily determinable fair value | 227 | 227 | 262 | ||
Equity Securities without Readily Determinable Fair Value, Downward Price Adjustment, Annual Amount | 55 | 64 | |||
Fair Value, Inputs, Level 1 | |||||
Debt Securities, Available-for-sale [Line Items] | |||||
Equity securities | $ 385 | $ 385 | $ 611 |
Investments (BeiGene) (Details)
Investments (BeiGene) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Net Investment Income [Line Items] | |||||
Income (Loss) from Equity Method Investments | $ (713) | $ (130) | |||
BeiGene | |||||
Net Investment Income [Line Items] | |||||
Ownership percentage | 18.20% | 18.20% | 18.40% | ||
Income (Loss) from Equity Method Investments | $ (104) | $ (98) | $ (292) | (181) | |
Equity Method Investment, Amortization of Difference Between Carrying Amount and Underlying Equity | 48 | $ 44 | 143 | $ 128 | |
Carrying value of equity method investment | 2,300 | 2,300 | $ 2,800 | ||
Equity Method Investments,Quoted Market Price | $ 2,600 | $ 2,600 | $ 5,100 |
Investments (Neumora Therapeuti
Investments (Neumora Therapeutics, Inc.) (Details) - Neumora Therapeutics, Inc. - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Net Investment Income [Line Items] | ||||
Ownership percentage | 25.90% | 24.90% | 24.90% | 25.90% |
Equity Method Investment, Aggregate Cost | $ 257 | |||
Payments to Acquire Equity Method Investments | 100 | $ 10 | ||
Noncash or Part Noncash Acquisition, Investments Acquired | $ 157 | |||
Equity Method Investments, Fair Value Disclosure | 382 | $ 382 | $ 220 | |
Equity method investment, change in carrying value | $ 240 | $ 152 |
Investments Investments (Limite
Investments Investments (Limited Partnership Investments) (Details) - Fair Value Measured at Net Asset Value Per Share - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Net Investment Income [Line Items] | |||||
Investment Company, Financial Support to Investee Contractually Required, Amount | $ 189 | $ 189 | |||
Limited Partnership | |||||
Net Investment Income [Line Items] | |||||
Alternative investments | 262 | 262 | $ 573 | ||
Net gains (losses) from limited partnership investments | $ (62) | $ (43) | $ (282) | $ 122 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 801 | $ 647 |
Work in process | 2,929 | 2,367 |
Finished goods | 1,027 | 1,072 |
Total inventories | $ 4,757 | $ 4,086 |
Goodwill and other intangible_3
Goodwill and other intangible assets (Goodwill Roll Forward) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 14,890 |
Adjustments to goodwill resulting from acquisitions and divestitures, net | 6 |
Currency translation adjustment | (51) |
Ending balance | $ 14,845 |
Goodwill and other intangible_4
Goodwill and other intangible assets (Identifiable Intangible Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amounts | $ 32,028 | $ 32,028 | $ 32,099 | ||
Accumulated amortization | (19,771) | (19,771) | (17,987) | ||
Other intangible assets, net | 12,257 | 12,257 | 14,112 | ||
Gross carrying amount | 33,037 | 33,037 | 33,169 | ||
Accumulated amortization | (19,771) | (19,771) | (17,987) | ||
Intangible assets, net | 13,266 | 13,266 | 15,182 | ||
Amortization charges associated with finite-lived intangible assets | 628 | $ 642 | 1,900 | $ 1,900 | |
In-process research and development | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets: | 1,009 | 1,009 | 1,070 | ||
Developed-product-technology rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amounts | 25,504 | 25,504 | 25,561 | ||
Accumulated amortization | (14,396) | (14,396) | (12,769) | ||
Other intangible assets, net | 11,108 | 11,108 | 12,792 | ||
Licensing rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amounts | 3,864 | 3,864 | 3,807 | ||
Accumulated amortization | (3,087) | (3,087) | (2,973) | ||
Other intangible assets, net | 777 | 777 | 834 | ||
Marketing-related rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amounts | 1,326 | 1,326 | 1,354 | ||
Accumulated amortization | (1,146) | (1,146) | (1,112) | ||
Other intangible assets, net | 180 | 180 | 242 | ||
Research and development technology rights | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross carrying amounts | 1,334 | 1,334 | 1,377 | ||
Accumulated amortization | (1,142) | (1,142) | (1,133) | ||
Other intangible assets, net | $ 192 | $ 192 | $ 244 |
Goodwill and other intangible_5
Goodwill and other intangible assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization charges associated with finite-lived intangible assets | $ 628 | $ 642 | $ 1,900 | $ 1,900 |
Total estimated amortization of finite-lived intangible assets for the remainder of the year | 600 | 600 | ||
Total estimated amortization of finite-lived intangible assets for year one | 2,500 | 2,500 | ||
Total estimated amortization of finite-lived intangible assets for year two | 2,400 | 2,400 | ||
Total estimated amortization of finite-lived intangible assets for year three | 2,200 | 2,200 | ||
Total estimated amortization of finite-lived intangible assets for year four | 1,800 | 1,800 | ||
Total estimated amortization of finite-lived intangible assets for year five | $ 1,800 | $ 1,800 |
Financing arrangements (Princip
Financing arrangements (Principal Amounts and Carrying Value of Long-term Borrowings) (Details) $ in Millions | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CHF (SFr) | Sep. 30, 2022 EUR (€) | Sep. 30, 2022 GBP (£) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Debt Instrument [Line Items] | ||||||
Unamortized bond discounts, premiums and issuance costs, net | $ (1,252) | $ (1,213) | ||||
Fair value adjustments | (450) | 284 | ||||
Other | 13 | 15 | ||||
Total carrying value of debt | 38,704 | 33,309 | ||||
Less current portion | (1,543) | (87) | ||||
Total long-term debt | 37,161 | 33,222 | ||||
4.20% 2052 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 1,000 | |||||
Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 3,000 | $ 4,000 | ||||
Notes | 0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds) | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 0.41% | 0.41% | 0.41% | 0.41% | ||
Long-term debt, gross | $ 709 | 767 | ||||
Face amount | SFr | SFr 700,000,000 | |||||
Notes | 2.25% notes due 2023 (2.25% 2023 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.25% | 2.25% | 2.25% | 2.25% | ||
Long-term debt, gross | $ 750 | 750 | ||||
Notes | 3.625% notes due 2024 (3.625% 2024 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3.625% | 3.625% | 3.625% | 3.625% | ||
Long-term debt, gross | $ 1,400 | 1,400 | ||||
Notes | 1.90% notes due 2025 (1.90% 2025 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 1.90% | 1.90% | 1.90% | 1.90% | ||
Long-term debt, gross | $ 500 | 500 | ||||
Notes | 3.125% notes due 2025 (3.125% 2025 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3.125% | 3.125% | 3.125% | 3.125% | ||
Long-term debt, gross | $ 1,000 | 1,000 | ||||
Notes | 2.00% €750 million notes due 2026 (2.00% 2026 euro Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2% | 2% | 2% | 2% | ||
Long-term debt, gross | $ 735 | 853 | ||||
Face amount | € | € 750,000,000 | |||||
Notes | 2.60% notes due 2026 (2.60% 2026 notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.60% | 2.60% | 2.60% | 2.60% | ||
Long-term debt, gross | $ 1,250 | 1,250 | ||||
Notes | 5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.50% | 5.50% | 5.50% | 5.50% | ||
Long-term debt, gross | $ 531 | 643 | ||||
Face amount | £ | £ 475,000,000 | |||||
Notes | 2.20% notes due 2027 (2.20% 2027 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.20% | 2.20% | 2.20% | 2.20% | ||
Long-term debt, gross | $ 1,724 | 1,750 | ||||
Notes | 3.20% notes due 2027 (3.20% 2027 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3.20% | 3.20% | 3.20% | 3.20% | ||
Long-term debt, gross | $ 1,000 | 1,000 | ||||
Notes | 1.65% notes due 2028 (1.65% 2028 Notes) [Member} | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 1.65% | 1.65% | 1.65% | 1.65% | ||
Long-term debt, gross | $ 1,234 | 1,250 | ||||
Notes | 3.00% 2029 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3% | 3% | 3% | 3% | 3% | |
Long-term debt, gross | $ 750 | 0 | ||||
Face amount | $ 750 | |||||
Notes | 4.05% 2029 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.05% | 4.05% | 4.05% | 4.05% | ||
Long-term debt, gross | $ 1,250 | 0 | ||||
Face amount | $ 1,250 | |||||
Notes | 4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4% | 4% | 4% | 4% | ||
Long-term debt, gross | $ 782 | 947 | ||||
Face amount | £ | £ 700,000,000 | |||||
Notes | 2.45% notes due 2030 (2.45% 2030 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.45% | 2.45% | 2.45% | 2.45% | ||
Long-term debt, gross | $ 1,250 | 1,250 | ||||
Notes | 2.30% notes due 2031 (2.30% 2031 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.30% | 2.30% | 2.30% | 2.30% | ||
Long-term debt, gross | $ 1,250 | 1,250 | ||||
Notes | 2.00% notes due 2032 (2.00% 2032 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2% | 2% | 2% | 2% | ||
Long-term debt, gross | $ 1,051 | 1,250 | ||||
Notes | 3.35% 2032 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3.35% | 3.35% | 3.35% | 3.35% | 3.35% | |
Long-term debt, gross | $ 1,000 | 0 | ||||
Face amount | $ 1,000 | |||||
Notes | 4.20% 2033 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.20% | 4.20% | 4.20% | 4.20% | ||
Long-term debt, gross | $ 750 | 0 | ||||
Face amount | $ 750 | |||||
Notes | 6.375% notes due 2037 (6.375% 2037 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 6.375% | 6.375% | 6.375% | 6.375% | ||
Long-term debt, gross | $ 478 | 478 | ||||
Notes | 6.90% notes due 2038 (6.90% 2038 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 6.90% | 6.90% | 6.90% | 6.90% | ||
Long-term debt, gross | $ 254 | 254 | ||||
Notes | 6.40% notes due 2039 (6.40% 2039 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 6.40% | 6.40% | 6.40% | 6.40% | ||
Long-term debt, gross | $ 333 | 333 | ||||
Notes | 3.15% notes due 2040 (3.15% 2040 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3.15% | 3.15% | 3.15% | 3.15% | ||
Long-term debt, gross | $ 2,000 | 2,000 | ||||
Notes | 5.75% notes due 2040 (5.75% 2040 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.75% | 5.75% | 5.75% | 5.75% | ||
Long-term debt, gross | $ 373 | 373 | ||||
Notes | 2.80% notes due 2041 (2.80% 2041 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.80% | 2.80% | 2.80% | 2.80% | ||
Long-term debt, gross | $ 1,110 | 1,150 | ||||
Notes | 4.95% notes due 2041 (4.95% 2041 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.95% | 4.95% | 4.95% | 4.95% | ||
Long-term debt, gross | $ 600 | 600 | ||||
Notes | 5.15% notes due 2041 (5.15% 2041 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.15% | 5.15% | 5.15% | 5.15% | ||
Long-term debt, gross | $ 729 | 729 | ||||
Notes | 5.65% notes due 2042 (5.65% 2042 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.65% | 5.65% | 5.65% | 5.65% | ||
Long-term debt, gross | $ 415 | 415 | ||||
Notes | 5.375% notes due 2043 (5.375% 2043 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 5.375% | 5.375% | 5.375% | 5.375% | ||
Long-term debt, gross | $ 185 | 185 | ||||
Notes | 4.40% notes due 2045 (4.40% 2045 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.40% | 4.40% | 4.40% | 4.40% | ||
Long-term debt, gross | $ 2,250 | 2,250 | ||||
Notes | 4.563% notes due 2048 (4.563% 2048 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.563% | 4.563% | 4.563% | 4.563% | ||
Long-term debt, gross | $ 1,415 | 1,415 | ||||
Notes | 3.375% notes due 2050 (3.375% 2050 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3.375% | 3.375% | 3.375% | 3.375% | ||
Long-term debt, gross | $ 2,250 | 2,250 | ||||
Notes | 4.663% notes due 2051 (4.663% 2051 Notes) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.663% | 4.663% | 4.663% | 4.663% | ||
Long-term debt, gross | $ 3,541 | 3,541 | ||||
Notes | 3.00% notes due 2052 (3.00% 2052 Notes) | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 3% | 3% | 3% | 3% | ||
Long-term debt, gross | $ 1,254 | 1,350 | ||||
Notes | 4.20% 2052 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.20% | 4.20% | 4.20% | 4.20% | 4.20% | |
Long-term debt, gross | $ 1,000 | 0 | ||||
Notes | 4.875% 2053 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.875% | 4.875% | 4.875% | 4.875% | ||
Long-term debt, gross | $ 1,000 | 0 | ||||
Face amount | $ 1,000 | |||||
Notes | Two Point Seven Seven Percent Notes Due Two Zero Five Three | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 2.77% | 2.77% | 2.77% | 2.77% | ||
Long-term debt, gross | $ 940 | 940 | ||||
Notes | 4.40% 2062 Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate, stated percentage | 4.40% | 4.40% | 4.40% | 4.40% | 4.40% | |
Long-term debt, gross | $ 1,250 | 0 | ||||
Face amount | $ 1,250 | |||||
Notes | Other notes due 2097 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term debt, gross | $ 100 | $ 100 |
Financing arrangements (Narrati
Financing arrangements (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | |||
Extinguishment of debt | $ 297 | ||
Gain (loss) on extinguishment of debt | 78 | ||
4.20% 2052 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Face amount | $ 1,000 | ||
Notes | |||
Debt Instrument [Line Items] | |||
Face amount | $ 3,000 | $ 3,000 | $ 4,000 |
Notes | 4.563% notes due 2048 (4.563% 2048 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.563% | 4.563% | |
Effective interest rate | 6.30% | 6.30% | |
Notes | 4.663% notes due 2051 (4.663% 2051 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.663% | 4.663% | |
Effective interest rate | 5.60% | 5.60% | |
Notes | Two Point Seven Seven Percent Notes Due Two Zero Five Three | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.77% | 2.77% | |
Effective interest rate | 5.20% | 5.20% | |
Notes | 3.00% 2029 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3% | 3% | 3% |
Face amount | $ 750 | ||
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 3.35% 2032 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3.35% | 3.35% | 3.35% |
Face amount | $ 1,000 | ||
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 4.20% 2052 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.20% | 4.20% | 4.20% |
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 4.40% 2062 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.40% | 4.40% | 4.40% |
Face amount | $ 1,250 | ||
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 4.05% 2029 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.05% | 4.05% | |
Face amount | $ 1,250 | $ 1,250 | |
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 4.20% 2033 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.20% | 4.20% | |
Face amount | $ 750 | $ 750 | |
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 4.875% 2053 Notes [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 4.875% | 4.875% | |
Face amount | $ 1,000 | $ 1,000 | |
Percentage of prinicipal amount of notes that may be paid upon occurance of change in control triggering event | 101% | ||
Notes | 2.20% notes due 2027 (2.20% 2027 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.20% | 2.20% | |
Notes | 1.65% notes due 2028 (1.65% 2028 Notes) [Member} | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 1.65% | 1.65% | |
Notes | 2.00% notes due 2032 (2.00% 2032 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2% | 2% | |
Notes | 2.80% notes due 2041 (2.80% 2041 Notes) [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 2.80% | 2.80% | |
Notes | 3.00% notes due 2052 (3.00% 2052 Notes) | |||
Debt Instrument [Line Items] | |||
Interest rate, stated percentage | 3% | 3% | |
Minimum | Debt Securities Payable | |||
Debt Instrument [Line Items] | |||
Redemption period without payment of make whole amount | 2 months | ||
Maximum | Debt Securities Payable | |||
Debt Instrument [Line Items] | |||
Redemption period without payment of make whole amount | 6 months |
Stockholders' equity (Share Rep
Stockholders' equity (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Abstract] | ||||||||
Stock repurchased (in shares) | 1.5 | 0 | 24.6 | 4.6 | 6.5 | 3.7 | 26.1 | 14.8 |
Stock repurchased | $ 900 | $ 0 | $ 5,410 | $ 1,069 | $ 1,592 | $ 865 | $ 6,310 | $ 3,526 |
Stockholders' equity (Narrative
Stockholders' equity (Narrative) (Details) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||
Feb. 25, 2022 USD ($) shares | Dec. 30, 2022 $ / shares | Oct. 31, 2022 USD ($) $ / shares | Sep. 30, 2022 USD ($) $ / shares | Aug. 31, 2022 $ / shares | Jun. 30, 2022 $ / shares | Mar. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) shares | Mar. 31, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | Jun. 30, 2021 USD ($) shares | Mar. 31, 2021 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Feb. 24, 2022 financial_institution | |
Class of Stock [Line Items] | |||||||||||||||||
Stock repurchased (in shares) | shares | 1.5 | 0 | 24.6 | 4.6 | 6.5 | 3.7 | 26.1 | 14.8 | |||||||||
Stock repurchased | $ 900 | $ 0 | $ 5,410 | $ 1,069 | $ 1,592 | $ 865 | $ 6,310 | $ 3,526 | |||||||||
Repurchases of common stock | 0 | $ 6,310 | $ 1,069 | 1,592 | $ 865 | ||||||||||||
Amount available for stock repurchases under a board approved stock repurchase plan | $ 4,600 | $ 4,600 | $ 4,600 | ||||||||||||||
Dividends declared per share (in usd per share) | $ / shares | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.94 | $ 1.76 | $ 1.76 | ||||||||||
Dividends paid per share (in usd per share) | $ / shares | $ 1.94 | $ 1.94 | $ 1.94 | ||||||||||||||
Subsequent Event | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Stock repurchase program, additional authorized amount | $ 2,400 | ||||||||||||||||
Dividends declared per share (in usd per share) | $ / shares | $ 1.94 | ||||||||||||||||
Accumulated deficit | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Repurchases of common stock | $ 900 | $ 5,410 | $ 1,069 | $ 1,592 | $ 865 | ||||||||||||
Common stock and additional paid-in capital | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Repurchases of common stock | $ (900) | $ 900 | |||||||||||||||
Accelerated stock repurchase agreement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Number of Third-Party Financial Institutions | financial_institution | 3 | ||||||||||||||||
Stock repurchased (in shares) | shares | 23.3 | 1.5 | 24.8 | ||||||||||||||
Stock repurchased | $ 6,000 | ||||||||||||||||
Accelerated stock repurchase agreement | Accumulated deficit | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Repurchases of common stock | 5,100 | $ 900 | |||||||||||||||
Accelerated stock repurchase agreement | Common stock and additional paid-in capital | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Repurchases of common stock | $ 900 | ||||||||||||||||
Forecast | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Dividends paid per share (in usd per share) | $ / shares | $ 1.94 |
Stockholders' equity (Component
Stockholders' equity (Components of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | $ 2,419 | $ 916 | $ 6,700 | $ 8,247 | $ 6,700 | $ 9,409 |
Foreign currency translation adjustments | (109) | (35) | (225) | (60) | ||
Balance as of end of period | 3,653 | 2,419 | 916 | 8,217 | 3,653 | 8,217 |
Foreign currency translation | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | (960) | (895) | (844) | (844) | ||
Foreign currency translation adjustments | (65) | (51) | (109) | |||
Income taxes | 0 | 0 | 0 | |||
Balance as of end of period | (1,069) | (960) | (895) | (1,069) | ||
Cash flow hedges | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | 301 | 145 | 61 | 61 | ||
Unrealized gains | 67 | 56 | 45 | |||
Reclassification adjustments to income | 132 | 51 | 129 | |||
Income taxes | (43) | (23) | (36) | |||
Balance as of end of period | 439 | 301 | 145 | 439 | ||
Available-for-sale securities | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | 0 | 0 | 0 | 0 | ||
Unrealized gains | 0 | 0 | 0 | |||
Reclassification adjustments to income | 0 | 0 | 0 | |||
Income taxes | 0 | 0 | 0 | |||
Balance as of end of period | 0 | 0 | 0 | 0 | ||
Other | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | (13) | (13) | (13) | (13) | ||
Unrealized gains | 0 | 0 | 0 | |||
Other | (9) | |||||
Balance as of end of period | (22) | (13) | (13) | (22) | ||
AOCI | ||||||
Increase (Decrease) in AOCI [Roll Forward] | ||||||
Balance as of beginning of period | (672) | (763) | (796) | (868) | (796) | (985) |
Foreign currency translation adjustments | (65) | (51) | (109) | |||
Unrealized gains | 67 | 56 | 45 | |||
Reclassification adjustments to income | 132 | 51 | 129 | |||
Other | (9) | |||||
Income taxes | (43) | (23) | (36) | |||
Balance as of end of period | $ (652) | $ (672) | $ (763) | $ (808) | $ (652) | $ (808) |
Stockholders' equity (Reclassif
Stockholders' equity (Reclassifications out of AOCI) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Total revenues | $ 6,652 | $ 6,706 | $ 19,484 | $ 19,133 | ||||
Other income (expense), net | 100 | 73 | (747) | 97 | ||||
Income before income taxes | 2,392 | 2,155 | 5,598 | 4,570 | ||||
Provision for income taxes | (249) | (271) | (662) | (576) | ||||
Net income | 2,143 | $ 1,317 | $ 1,476 | 1,884 | $ 464 | $ 1,646 | 4,936 | 3,994 |
Product sales | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Total revenues | 6,237 | 6,320 | 18,249 | 18,026 | ||||
Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Income before income taxes | (129) | (109) | (312) | (214) | ||||
Provision for income taxes | 28 | 23 | 67 | 45 | ||||
Net income | (101) | (86) | (245) | (169) | ||||
Reclassification out of Accumulated Other Comprehensive Income | Foreign currency contract gains (losses) | Cash flow hedges | Product sales | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Total revenues | 69 | (5) | 149 | (24) | ||||
Reclassification out of Accumulated Other Comprehensive Income | Cross-currency swap contract losses | Cash flow hedges | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Other income (expense), net | (198) | (104) | (461) | (190) | ||||
Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | Foreign currency contract gains (losses) | Cash flow hedges | Product sales | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Total revenues | 69 | (5) | 149 | (24) | ||||
Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | Cross-currency swap contract losses | Cash flow hedges | ||||||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | ||||||||
Other income (expense), net | $ (198) | $ (104) | $ (461) | $ (190) |
Fair value measurement (Details
Fair value measurement (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Assets: | ||||||
Interest-bearing securities | $ 10,921 | $ 7,304 | ||||
Other investments | 135 | 0 | ||||
Equity securities | 767 | 831 | ||||
Derivatives: | ||||||
Total assets | 12,468 | 8,400 | ||||
Derivatives: | ||||||
Contingent consideration obligations | 302 | $ 310 | 342 | $ 35 | $ 48 | $ 33 |
Total liabilities | 1,888 | 876 | ||||
Foreign currency contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 639 | 183 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 22 | 39 | ||||
Cross-currency swap contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 6 | 66 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 754 | 339 | ||||
Interest rate swap contracts | ||||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 16 | ||||
Derivatives: | ||||||
Interest rate swap contracts | 810 | 156 | ||||
Quoted prices in active markets for identical assets (Level 1) | ||||||
Assets: | ||||||
Other investments | 0 | 0 | ||||
Equity securities | 385 | 611 | ||||
Derivatives: | ||||||
Total assets | 11,306 | 7,914 | ||||
Derivatives: | ||||||
Contingent consideration obligations | 0 | 0 | ||||
Total liabilities | 0 | 0 | ||||
Quoted prices in active markets for identical assets (Level 1) | Foreign currency contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Quoted prices in active markets for identical assets (Level 1) | Cross-currency swap contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Quoted prices in active markets for identical assets (Level 1) | Interest rate swap contracts | ||||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Significant other observable inputs (Level 2) | ||||||
Assets: | ||||||
Other investments | 135 | 0 | ||||
Equity securities | 0 | 0 | ||||
Derivatives: | ||||||
Total assets | 780 | 266 | ||||
Derivatives: | ||||||
Contingent consideration obligations | 0 | 0 | ||||
Total liabilities | 1,586 | 534 | ||||
Significant other observable inputs (Level 2) | Foreign currency contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 639 | 183 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 22 | 39 | ||||
Significant other observable inputs (Level 2) | Cross-currency swap contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 6 | 66 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 754 | 339 | ||||
Significant other observable inputs (Level 2) | Interest rate swap contracts | ||||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 16 | ||||
Derivatives: | ||||||
Interest rate swap contracts | 810 | 156 | ||||
Significant unobservable inputs (Level 3) | ||||||
Assets: | ||||||
Other investments | 0 | 0 | ||||
Equity securities | 382 | 220 | ||||
Derivatives: | ||||||
Total assets | 382 | 220 | ||||
Derivatives: | ||||||
Contingent consideration obligations | 302 | 342 | ||||
Total liabilities | 302 | 342 | ||||
Significant unobservable inputs (Level 3) | Foreign currency contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Significant unobservable inputs (Level 3) | Cross-currency swap contracts | ||||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Foreign currency and cross-currency swap contracts | 0 | 0 | ||||
Significant unobservable inputs (Level 3) | Interest rate swap contracts | ||||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
Derivatives: | ||||||
Interest rate swap contracts | 0 | 0 | ||||
U.S. Treasury notes | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 47 | ||||
U.S. Treasury notes | Quoted prices in active markets for identical assets (Level 1) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 47 | ||||
U.S. Treasury notes | Significant other observable inputs (Level 2) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
U.S. Treasury notes | Significant unobservable inputs (Level 3) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
U.S. Treasury bills | ||||||
Assets: | ||||||
Interest-bearing securities | 1,976 | 1,400 | ||||
U.S. Treasury bills | Quoted prices in active markets for identical assets (Level 1) | ||||||
Assets: | ||||||
Interest-bearing securities | 1,976 | 1,400 | ||||
U.S. Treasury bills | Significant other observable inputs (Level 2) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
U.S. Treasury bills | Significant unobservable inputs (Level 3) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Money market mutual funds | ||||||
Assets: | ||||||
Interest-bearing securities | 8,945 | 5,856 | ||||
Money market mutual funds | Quoted prices in active markets for identical assets (Level 1) | ||||||
Assets: | ||||||
Interest-bearing securities | 8,945 | 5,856 | ||||
Money market mutual funds | Significant other observable inputs (Level 2) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Money market mutual funds | Significant unobservable inputs (Level 3) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Other short-term interest-bearing securities | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 1 | ||||
Other short-term interest-bearing securities | Quoted prices in active markets for identical assets (Level 1) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 0 | ||||
Other short-term interest-bearing securities | Significant other observable inputs (Level 2) | ||||||
Assets: | ||||||
Interest-bearing securities | 0 | 1 | ||||
Other short-term interest-bearing securities | Significant unobservable inputs (Level 3) | ||||||
Assets: | ||||||
Interest-bearing securities | $ 0 | $ 0 |
Fair value measurement (Detai_2
Fair value measurement (Details Textual) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Length of time hedged in foreign currency contracts (or less) | 3 years | |
Long-term debt, fair value | $ 34,200 | $ 37,900 |
Carrying value of debt | 38,704 | 33,309 |
Teneobio Inc. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Maximum additional consideration due contingent on certain milestones | 1,600 | 1,600 |
BeiGene | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity Method Investments,Quoted Market Price | 2,600 | 5,100 |
Carrying value of equity method investment | $ 2,300 | $ 2,800 |
Fair value measurement (Conting
Fair value measurement (Contingent Consideration Obligations) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Combination, Contingent Consideration [Roll Forward] | ||||
Beginning balance | $ 310 | $ 48 | $ 342 | $ 33 |
Payments | (2) | (2) | (5) | (5) |
Net changes in valuations | (6) | (11) | (35) | 7 |
Ending balance | $ 302 | $ 35 | $ 302 | $ 35 |
Derivative instruments (Narrati
Derivative instruments (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts expected to be reclassified from AOCI into earnings over the next 12 months, foreign currency and cross-currency swaps | $ 304 | |
Forward Contracts | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amounts | 5,500 | $ 5,700 |
Forward Contracts | Derivatives not designated as hedging instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amounts | 501 | 680 |
Interest Rate Swap | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional amounts | $ 6,700 | $ 6,700 |
Derivative instruments (Cross-c
Derivative instruments (Cross-currency Swaps) (Details) - Cash flow hedge - Cross-currency swap contracts € in Millions, £ in Millions, SFr in Millions, $ in Millions | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CHF (SFr) | Sep. 30, 2022 EUR (€) | Sep. 30, 2022 GBP (£) |
0.41% 2023 Swiss franc Bonds | ||||
Derivative [Line Items] | ||||
Notional amounts | $ 704 | SFr 700 | ||
2.00% 2026 euro Notes | ||||
Derivative [Line Items] | ||||
Notional amounts | 833 | € 750 | ||
5.50% 2026 pound sterling Notes | ||||
Derivative [Line Items] | ||||
Notional amounts | 747 | £ 475 | ||
4.00% 2029 pound sterling Notes | ||||
Derivative [Line Items] | ||||
Notional amounts | $ 1,111 | £ 700 | ||
Euro Member Countries, Euro | 2.00% 2026 euro Notes | ||||
Derivative [Line Items] | ||||
Interest rates | 2% | 2% | 2% | 2% |
Switzerland, Francs | 0.41% 2023 Swiss franc Bonds | ||||
Derivative [Line Items] | ||||
Interest rates | 0.40% | 0.40% | 0.40% | 0.40% |
United Kingdom, Pounds | 5.50% 2026 pound sterling Notes | ||||
Derivative [Line Items] | ||||
Interest rates | 5.50% | 5.50% | 5.50% | 5.50% |
United Kingdom, Pounds | 4.00% 2029 pound sterling Notes | ||||
Derivative [Line Items] | ||||
Interest rates | 4% | 4% | 4% | 4% |
United States of America, Dollars | 0.41% 2023 Swiss franc Bonds | ||||
Derivative [Line Items] | ||||
Interest rates | 3.40% | 3.40% | 3.40% | 3.40% |
United States of America, Dollars | 2.00% 2026 euro Notes | ||||
Derivative [Line Items] | ||||
Interest rates | 3.90% | 3.90% | 3.90% | 3.90% |
United States of America, Dollars | 5.50% 2026 pound sterling Notes | ||||
Derivative [Line Items] | ||||
Interest rates | 6% | 6% | 6% | 6% |
United States of America, Dollars | 4.00% 2029 pound sterling Notes | ||||
Derivative [Line Items] | ||||
Interest rates | 4.60% | 4.60% | 4.60% | 4.60% |
Derivative instruments (Effecti
Derivative instruments (Effective Portion of Unrealized Gain (Loss)) (Details) - Cash flow hedge - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized gains (losses) | $ 45 | $ 16 | $ 168 | $ 93 |
Foreign currency contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized gains (losses) | 324 | 136 | 654 | 273 |
Cross-currency swap contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total unrealized gains (losses) | $ (279) | $ (120) | $ (486) | $ (180) |
Derivative instruments (Hedged
Derivative instruments (Hedged Liabilities and Cumulative Amount) (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | $ (450) | $ 284 |
Current portion of long-term debt | ||
Derivative [Line Items] | ||
Hedged Liability, Fair Value Hedge | 82 | 85 |
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | 82 | 85 |
Carrying value with discontinued hedging relationships | 82 | 85 |
Hedging adjustments on discontinued hedging relationships | 82 | 85 |
Long-term debt | ||
Derivative [Line Items] | ||
Hedged Liability, Fair Value Hedge | 6,002 | 6,729 |
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities | (532) | 199 |
Carrying value with discontinued hedging relationships | 378 | 440 |
Hedging adjustments on discontinued hedging relationships | $ 278 | $ 340 |
Derivative instruments (Summary
Derivative instruments (Summary of Income and Expense Line Items) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total revenues | $ 6,652 | $ 6,706 | $ 19,484 | $ 19,133 |
Other income (expense), net | 100 | 73 | (747) | 97 |
Interest expense, net | (368) | (296) | (991) | (862) |
Interest rate swap agreements | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on fair value hedging relationships, Hedged items | 240 | 54 | 734 | 195 |
Gains (losses) on fair value hedging relationships, Derivatives designated as hedging instruments | (220) | (31) | (670) | (128) |
Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | Cross-currency swap contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other income (expense), net | (198) | (104) | (461) | (190) |
Product sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total revenues | 6,237 | 6,320 | 18,249 | 18,026 |
Product sales | Reclassification out of Accumulated Other Comprehensive Income | Cash flow hedges | Foreign currency contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total revenues | $ 69 | $ (5) | $ 149 | $ (24) |
Derivative instruments (Fair Va
Derivative instruments (Fair Value of Derivatives) (Details) - Derivatives designated as hedging instrument - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Total derivative assets, fair value | $ 645 | $ 265 |
Liabilities | ||
Total derivative liabilities, fair value | 1,586 | 534 |
Foreign currency contracts | Other current assets/ Other noncurrent assets | ||
Assets | ||
Total derivative assets, fair value | 639 | 183 |
Foreign currency contracts | Accrued liabilities/ Other noncurrent liabilities | ||
Liabilities | ||
Total derivative liabilities, fair value | 22 | 39 |
Cross-currency swap contracts | Other current assets/ Other noncurrent assets | ||
Assets | ||
Total derivative assets, fair value | 6 | 66 |
Cross-currency swap contracts | Accrued liabilities/ Other noncurrent liabilities | ||
Liabilities | ||
Total derivative liabilities, fair value | 754 | 339 |
Interest rate swap contracts | Other current assets/ Other noncurrent assets | ||
Assets | ||
Total derivative assets, fair value | 0 | 16 |
Interest rate swap contracts | Accrued liabilities/ Other noncurrent liabilities | ||
Liabilities | ||
Total derivative liabilities, fair value | $ 810 | $ 156 |
Contingencies and commitments (
Contingencies and commitments (Narrative) (Details) | 1 Months Ended |
Jun. 08, 2021 lawsuit | |
ChemoCentryx, Inc. Securities Matters | |
Loss Contingencies [Line Items] | |
Number of class action suits | 2 |
Subsequent events (Details)
Subsequent events (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Oct. 20, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | |||
Payments to acquire business | $ 0 | $ 1,639 | |
ChemoCentryx, Inc. | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Business acquisition, share price (in dollars per share) | $ 52 | ||
Payments to acquire business | $ 3,700 |