MIME-Version: 1.0 X-Document-Type: Workbook Content-Type: multipart/related; boundary="----=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709" This document is a Single File Web Page, also known as a Web Archive file. If you are seeing this message, your browser or editor doesn't support Web Archive files. Please download a browser that supports Web Archive, such as Microsoft Internet Explorer. ------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Workbook.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"

This page should be opened with Microsoft Excel XP or newer.

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet01.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Document and Entity Information
3 Months Ended
Mar. 31, 2013
Apr. 24, 2013
Document and Entity Information [Abstract]
Entity Registrant Name Amgen Inc.
Entity Central Index Key 0000318154
Document Type 10-Q
Document Period End Date Mar 31, 2013
Amendment Flag false
Document Fiscal Year Focus 2013
Document Fiscal Period Focus Q1
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 749,976,556
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet02.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Condensed Consolidated Statements of Income (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Revenues:
Product sales $ 4,151 $ 3,901
Other revenues 87 147
Total revenues 4,238 4,048
Operating expenses:
Cost of sales 744 750
Research and development 878 736
Selling, general and administrative 1,158 1,079
Other 16 6
Total operating expenses 2,796 2,571
Operating income 1,442 1,477
Interest expense, net 263 235
Interest and other income, net 164 124
Income before income taxes 1,343 1,366
(Benefit) provision for income taxes (91) 182
Net income $ 1,434 $ 1,184
Earnings per share:
Basic (in usd per share) $ 1.91 $ 1.5
Diluted (in usd per share) $ 1.88 $ 1.48
Shares used in calculation of earnings per share:
Basic (in shares) 751 791
Diluted (in shares) 764 800
Dividends paid per share (in usd per share) $ 0.47 $ 0.36
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet03.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Statement of Other Comprehensive Income [Abstract]
Net income $ 1,434 $ 1,184
Other comprehensive income (loss), net of reclassification adjustments and taxes:
Foreign currency translation losses (23) (2)
Effective portion of cash flow hedges 75 (65)
Net unrealized gains (losses) on available-for-sale securities (62) 2
Other 1 0
Other comprehensive loss, net of tax (9) (65)
Comprehensive income $ 1,425 $ 1,119
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet04.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Current assets:
Cash and cash equivalents $ 2,530 $ 3,257
Marketable securities 18,741 20,804
Trade receivables, net 2,528 2,518
Inventories 2,737 2,744
Other current assets 2,159 1,886
Total current assets 28,695 31,209
Property, plant and equipment, net 5,296 5,326
Intangible assets, net 3,897 3,968
Goodwill 12,604 12,662
Other assets 1,148 1,133
Total assets 51,640 54,298
Current liabilities:
Accounts payable 940 905
Accrued liabilities 4,195 4,791
Current portion of long-term debt 7 2,495
Total current liabilities 5,142 8,191
Long-term debt 23,885 24,034
Other noncurrent liabilities 3,122 3,013
Contingencies and commitments      
Stockholders' equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding - 749.6 shares in 2013 and 756.3 shares in 2012 29,465 29,337
Accumulated deficit (10,111) (10,423)
Accumulated other comprehensive income 137 146
Total stockholders' equity 19,491 19,060
Total liabilities and stockholders' equity $ 51,640 $ 54,298
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet05.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, except Per Share data, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Statement of Financial Position [Abstract]
Common stock and additional paid-in capital, par value (in usd per share) $ 0.0001 $ 0.0001
Common stock and additional paid-in capital, shares authorized 2,750 2,750
Common stock and additional paid-in capital, shares outstanding 749.6 756.3
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet06.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Cash flows from operating activities:
Net income $ 1,434 $ 1,184
Depreciation and amortization 277 259
Stock-based compensation expense 92 75
Other items, net (38) 67
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net 19 (92)
Inventories (12) (16)
Other assets (10) (133)
Accounts payable 35 226
Accrued income taxes (406) (60)
Other liabilities (342) (538)
Net cash provided by operating activities 1,049 972
Cash flows from investing activities:
Purchases of property, plant and equipment (158) (144)
Cash paid for acquisitions, net of cash acquired 0 (969)
Purchases of marketable securities (6,964) (6,133)
Proceeds from sales of marketable securities 6,013 4,740
Proceeds from maturities of marketable securities 2,924 160
Other (6) 0
Net cash provided by (used in) investing activities 1,809 (2,346)
Cash flows from financing activities:
Repayment of debt (2,500) (84)
Repurchases of common stock (832) (1,375)
Dividends paid (353) (285)
Net proceeds from issuance of common stock in connection with the Company's equity award programs 93 374
Other 7 5
Net cash used in financing activities (3,585) (1,365)
Decrease in cash and cash equivalents (727) (2,739)
Cash and cash equivalents at beginning of period 3,257 6,946
Cash and cash equivalents at end of period $ 2,530 $ 4,207
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet07.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Summary of significant accounting policies
3 Months Ended
Mar. 31, 2013
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. Our medicines help millions of patients in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease, and other serious illnesses. We operate in one business segment: human therapeutics.

Basis of presentation
The financial information for the three months ended March 31, 2013 and 2012, 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.
Prior-period amounts for amortization of certain acquired intangible assets have been reclassified within Operating expenses in our Condensed Consolidated Statements of Income to conform to the current-period presentation.

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, 2012.
Principles of consolidation
The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.
Use of estimates
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.
Property, plant and equipment, net
Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $6.5 billion and $6.6 billion as of March 31, 2013, and December 31, 2012, respectively.
Comprehensive income
In January 2013, we adopted a new accounting standard that requires additional disclosures regarding amounts that are reclassified out of accumulated other comprehensive income (AOCI). In accordance with the requirements of the standard, the effects of significant reclassifications out of AOCI, by component, on the respective lines in the Condensed Consolidated Statement of Income are presented in Note 8, Stockholders' equity. The standard was required to be applied prospectively beginning January 1, 2013.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet08.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Business combinations
3 Months Ended
Mar. 31, 2013
Business Combinations [Abstract]
Business combinations
Business combinations
deCODE Genetics
On December 10, 2012, we acquired all of the outstanding stock of deCODE Genetics (deCODE), a privately held company that is a global leader in human genetics, for total consideration of $401 million in cash. The transaction, which was accounted for as a business combination, provides us with an opportunity to enhance our efforts to identify and validate human disease targets. deCODE's operations, which are not material, have been included in our consolidated financial statements commencing on the acquisition date.
We allocated the consideration to acquire deCODE to finite-lived intangible assets of $465 million comprised of databases and other proprietary information with an estimated useful life of 10 years, $45 million to goodwill which is not deductible for tax purposes, deferred tax liabilities of $93 million and other net liabilities of $16 million. These amounts reflect adjustments recognized during the three months ended March 31, 2013, to the acquisition date fair values of assets acquired and liabilities assumed in this acquisition which did not have a material effect on our current or prior period financial statements. These adjustments reduced goodwill by $48 million due primarily to a revision which increased the acquisition date fair value of finite-lived intangible assets by $64 million.
Our accounting for the acquisition is preliminary and will be finalized upon completion of our analysis to determine the acquisition date fair values of certain assets acquired, liabilities assumed and tax-related items.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet09.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income taxes
3 Months Ended
Mar. 31, 2013
Income Tax Disclosure [Abstract]
Income taxes
Income taxes
The effective tax rates for the three months ended March 31, 2013 and 2012, are different from the federal statutory rates primarily as a result of indefinitely invested earnings of our foreign operations. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be invested indefinitely outside of the United States. In addition, the effective tax rate for the three months ended March 31, 2013 was reduced by two significant events that occurred during the quarter. First, we settled our examination with the Internal Revenue Service (IRS) for the years ended December 31, 2007, 2008 and 2009 during the quarter. We agreed to certain adjustments proposed by the IRS arising out of the examination and remeasured our unrecognized tax benefits (UTBs) accordingly. Also, the federal research and development (R&D) tax credit expired as of December 31, 2011, and the American Taxpayer Relief Act of 2012, which included extension of the federal R&D tax credit for 2013 and retroactively for 2012, was enacted during the three months ended March 31, 2013. Therefore, our effective tax rate for the three months ended March 31, 2013 includes a benefit for both the full-year 2012 federal R&D tax credit, recorded discretely in the quarter, and the effect of the estimated 2013 federal R&D tax credit on our annual effective tax rate. The effective tax rates for the three months ended March 31, 2013 and 2012, were further reduced by foreign tax credits associated with the Puerto Rico excise tax described below.
Commencing January 1, 2011, Puerto Rico imposes a temporary excise tax on the purchase of goods and services from a related manufacturer in Puerto Rico. The excise tax is imposed on the gross intercompany purchase price of the goods and services and was initially effective for a six-year period beginning in 2011, with the excise tax rate declining in each year (4% in 2011, 3.75% in 2012, 2.75% in 2013, 2.5% in 2014, 2.25% in 2015 and 1% in 2016). During the three months ended March 31, 2013, the Puerto Rico government enacted an amendment to the excise tax legislation which increased the excise tax rate to 4% effective July 1, 2013 through December 31, 2017. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred. Excluding the impact of the Puerto Rico excise tax, our effective tax rates for the three months ended March 31, 2013 and 2012, would have been (0.8)% and 18.5%, respectively.
Several of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income among various tax jurisdictions because of differing interpretations of tax laws and regulations. The U.S. federal income tax examinations for years ended on or before December 31, 2009 and the California state income tax examinations for years ended on or before December 31, 2005 have been completed.
During the three months ended March 31, 2013, the gross amount of our UTBs increased by approximately $80 million as a result of tax positions taken during the current year and decreased by approximately $190 million due to the federal and state tax impacts of settlement of our U.S. tax returns with the IRS relating to years ended December 31, 2007, 2008, and 2009. The settlement resulted in recognition of a net tax benefit of approximately $185 million, including interest, penalties and the federal benefit of state taxes. Substantially all of the UTBs as of March 31, 2013, if recognized, would affect our effective tax rate. As of March 31, 2013, we believe it is reasonably possible that our gross liabilities for UTBs may decrease by approximately $90 million within the succeeding 12 months due to the resolution of state audits.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet10.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Earnings per share
3 Months Ended
Mar. 31, 2013
Earnings Per Share [Abstract]
Earnings per share
Earnings per share
The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally shares that may be issued under: our stock option, restricted stock and performance unit awards, determined using the treasury stock method; our convertible notes while outstanding, as discussed below; and our outstanding warrants (collectively, “dilutive securities”). The convertible note hedges purchased in connection with the issuance of our convertible notes, which terminated in February 2013, are excluded from the calculation of diluted EPS because their impact is always anti-dilutive.
Prior to the conversion/maturity of our 0.375% 2013 Convertible Notes in February 2013 (see Note 7, Financing arrangements), the principal amount of the notes had to be settled in cash, and the excess of the conversion value, as defined, over the principal amount could have been settled in cash and/or shares of our common stock upon conversion. Therefore, only the shares of our common stock potentially issuable with respect to the excess of the notes’ conversion value over their principal amount, if any, were considered dilutive potential common shares for purposes of calculating diluted EPS. For the three months ended March 31, 2013, the conversion value of our 0.375% 2013 Convertible Notes, while outstanding, exceeded the related principal amount resulting in the assumed issuance of an additional one million shares calculated on a weighted-average basis for purposes of computing diluted EPS. For the three months ended March 31, 2012, the conversion value of our convertible notes was less than the related principal amounts, and accordingly, no shares were assumed to be issued for purposes of computing diluted EPS.
The computation for basic and diluted EPS was as follows (in millions, except per share data):
 
Three months ended
 
March 31,
 
2013
 
2012
Income (Numerator):
 
 
 
Net income for basic and diluted EPS
$
1,434

 
$
1,184

 
 
 
 
Shares (Denominator):
 
 
 
Weighted-average shares for basic EPS
751

 
791

Effect of dilutive securities
13

 
9

Weighted-average shares for diluted EPS
764

 
800

 
 
 
 
Basic EPS
$
1.91

 
$
1.50

Diluted EPS
$
1.88

 
$
1.48


For the three months ended March 31, 2013, there were no anti-dilutive shares of our common stock from employee stock-based awards calculated on a weighted-average basis. For the three months ended March 31, 2012, there were employee stock-based awards, calculated on a weighted-average basis, to acquire 11 million shares of our common stock that are not included in the computation of diluted EPS because their impact would have been anti-dilutive. In addition, shares of our common stock that may be issued upon exercise of our warrants are not included in the computation of diluted EPS for any of the periods presented above because their impact would have been anti-dilutive.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet11.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-for-sale investments
3 Months Ended
Mar. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Available-for-sale investments
Available-for-sale investments
The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):
Type of security as of March 31, 2013
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair
value
U.S. Treasury securities
 
$
2,698

 
$
9

 
$

 
$
2,707

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 
1,013

 
6

 

 
1,019

Foreign and other
 
1,436

 
35

 
(5
)
 
1,466

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 
3,907

 
72

 
(2
)
 
3,977

Industrial
 
4,380

 
79

 
(2
)
 
4,457

Other
 
470

 
9

 

 
479

Residential mortgage-backed securities
 
1,816

 
9

 
(8
)
 
1,817

Other mortgage- and asset-backed securities
 
1,515

 
2

 
(20
)
 
1,497

Money market mutual funds
 
1,742

 

 

 
1,742

Other short-term interest-bearing securities
 
1,677

 

 

 
1,677

Total interest-bearing securities
 
20,654

 
221

 
(37
)
 
20,838

Equity securities
 
55

 
7

 

 
62

Total available-for-sale investments
 
$
20,709

 
$
228

 
$
(37
)
 
$
20,900


Type of security as of December 31, 2012
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair
value
U.S. Treasury securities
 
$
4,443

 
$
15

 
$

 
$
4,458

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 
1,018

 
12

 

 
1,030

Foreign and other
 
1,549

 
60

 
(1
)
 
1,608

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 
3,266

 
96

 
(1
)
 
3,361

Industrial
 
4,283

 
100

 
(3
)
 
4,380

Other
 
441

 
11

 

 
452

Residential mortgage-backed securities
 
1,828

 
9

 
(8
)
 
1,829

Other mortgage- and asset-backed securities
 
1,769

 
7

 
(9
)
 
1,767

Money market mutual funds
 
2,620

 

 

 
2,620

Other short-term interest-bearing securities
 
2,186

 

 

 
2,186

Total interest-bearing securities
 
23,403

 
310

 
(22
)
 
23,691

Equity securities
 
52

 
2

 

 
54

Total available-for-sale investments
 
$
23,455

 
$
312

 
$
(22
)
 
$
23,745



The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions):
Classification in the Condensed Consolidated Balance Sheets
 
March 31,
2013
 
December 31,
2012
Cash and cash equivalents
 
$
2,097

 
$
2,887

Marketable securities
 
18,741

 
20,804

Other assets — noncurrent
 
62

 
54

Total available-for-sale investments
 
$
20,900

 
$
23,745


Cash and cash equivalents in the table above excludes cash of $433 million and $370 million as of March 31, 2013, and December 31, 2012, respectively.
The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset- backed securities that do not have a single maturity date, were as follows (in millions):
Contractual maturity
 
March 31,
2013
 
December 31,
2012
Maturing in one year or less
 
$
3,916

 
$
7,175

Maturing after one year through three years
 
4,926

 
5,014

Maturing after three years through five years
 
6,919

 
6,286

Maturing after five years through ten years
 
1,763

 
1,620

Mortgage- and asset-backed securities
 
3,314

 
3,596

Total interest-bearing securities
 
$
20,838

 
$
23,691


For the three months ended March 31, 2013 and 2012, realized gains totaled $85 million and $67 million, respectively, and realized losses totaled $18 million and $19 million, respectively. The cost of securities sold is based on the specific identification method.
The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.
We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security. As of March 31, 2013, and December 31, 2012, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet12.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories
3 Months Ended
Mar. 31, 2013
Inventory Disclosure [Abstract]
Inventories
Inventories
Inventories consisted of the following (in millions):
 
March 31,
2013
 
December 31,
2012
Raw materials
$
215

 
$
192

Work in process
1,646

 
1,723

Finished goods
876

 
829

Total inventories
$
2,737

 
$
2,744

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet13.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Financing arrangements
3 Months Ended
Mar. 31, 2013
Debt Disclosure [Abstract]
Financing arrangements
Financing arrangements
The carrying values and the fixed contractual coupon rates of our long-term borrowings were as follows (in millions):

March 31,
2013
 
December 31,
2012
0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes)
$

 
$
2,488

1.875% notes due 2014 (1.875% 2014 Notes)
1,000

 
1,000

4.85% notes due 2014 (4.85% 2014 Notes)
1,000

 
1,000

2.30% notes due 2016 (2.30% 2016 Notes)
749

 
749

2.50% notes due 2016 (2.50% 2016 Notes)
999

 
999

2.125% notes due 2017 (2.125% 2017 Notes)
1,248

 
1,248

5.85% notes due 2017 (5.85% 2017 Notes)
1,099

 
1,099

6.15% notes due 2018 (6.15% 2018 Notes)
499

 
499

4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes)
708

 
723

5.70% notes due 2019 (5.70% 2019 Notes)
999

 
999

2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes)
868

 
887

4.50% notes due 2020 (4.50% 2020 Notes)
300

 
300

3.45% notes due 2020 (3.45% 2020 Notes)
897

 
897

4.10% notes due 2021 (4.10% 2021 Notes)
998

 
998

3.875% notes due 2021 (3.875% 2021 Notes)
1,745

 
1,745

3.625% notes due 2022 (3.625% 2022 Notes)
747

 
747

5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes)
715

 
763

4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes)
1,047

 
1,117

6.375% notes due 2037 (6.375% 2037 Notes)
899

 
899

6.90% notes due 2038 (6.90% 2038 Notes)
499

 
499

6.40% notes due 2039 (6.40% 2039 Notes)
996

 
996

5.75% notes due 2040 (5.75% 2040 Notes)
697

 
697

4.95% notes due 2041 (4.95% 2041 Notes)
595

 
595

5.15% notes due 2041 (5.15% 2041 Notes)
2,232

 
2,232

5.65% notes due 2042 (5.65% 2042 Notes)
1,244

 
1,244

5.375% notes due 2043 (5.375% 2043 Notes)
1,000

 
1,000

Other notes
112

 
109

Total debt
23,892

 
26,529

Less current portion
(7
)
 
(2,495
)
Total noncurrent debt
$
23,885

 
$
24,034



Convertible notes

In February 2013, our 0.375% 2013 Convertible Notes matured/converted, and accordingly, the $2.5 billion principal amount was settled in cash. We also elected to pay the note holders who converted their notes $99 million of cash for the conversion value that exceeded the principal amount of the notes, as allowed under the original terms of the notes. As a result of this conversion, we received $99 million of cash from the counterparty to the related convertible note hedge to offset the corresponding payment to the convertible note holders. In addition, on May 1, 2013, warrants to acquire 32 million shares of our common stock at an exercise price of $104.80 originally sold in connection with the issuance of the 0.375% 2013 Convertible Notes were exercised resulting in a net cash settlement of $100 million.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet14.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' equity
3 Months Ended
Mar. 31, 2013
Equity [Abstract]
Stockholders' equity
Stockholders’ equity
Stock repurchase program
Activity under our stock repurchase program was as follows (in millions):
 
2013
 
2012
 
Shares    
 
Dollars    
 
Shares    
 
Dollars    
First quarter
9.1
 
$
771

 
21.0
 
$
1,429


As of March 31, 2013, $1.6 billion remained available under our Board of Directors-approved stock repurchase program.
Dividends
On December 13, 2012, the Board of Directors declared a quarterly cash dividend of $0.47 per share of common stock, which was paid on March 7, 2013. On March 6, 2013, the Board of Directors declared a quarterly cash dividend of $0.47 per share of common stock, which will be paid on June 7, 2013, to all stockholders of record as of the close of business on May 16, 2013.
Accumulated other comprehensive income
The components of AOCI were as follows (in millions):
 
Foreign
currency
translation
 
Cash flow
hedges
 
Available-for-sale
securities
 
Other
 
AOCI
Balance as of December 31, 2012
$
12

 
$
(35
)
 
$
183

 
$
(14
)
 
$
146

Foreign currency translation adjustments
(36
)
 

 

 

 
(36
)
Unrealized (losses) gains

 
(25
)
 
(32
)
 
1

 
(56
)
Reclassification adjustments to income

 
144

 
(67
)
 

 
77

Income taxes
13

 
(44
)
 
37

 

 
6

Balance as of March 31, 2013
$
(11
)
 
$
40

 
$
121

 
$
(13
)
 
$
137


The reclassifications out of AOCI to Net income were as follows (in millions):
 
 
Amount reclassified out of AOCI
 
 

 
Three months ended
 
Line item affected in the
Components of AOCI
 
March 31, 2013
 
Statement of Income
Cash flow hedges:
 
 
 
 
     Foreign currency contract losses
 
$
(4
)
 
Product sales
     Cross-currency swap contract losses
 
(140
)
 
Interest and other income, net
 
 
(144
)
 
Total before income tax
 
 
53

 
Income tax (expense)/benefit
 
 
$
(91
)
 
Net of income taxes
Available-for-sale securities:
 
 
 
 
     Net realized gains
 
$
67

 
Interest and other income, net
 
 
(25
)
 
Income tax (expense)/benefit
 
 
$
42

 
Net of income taxes
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet15.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair value measurement
3 Months Ended
Mar. 31, 2013
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 the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:
Level 1
—  
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
 
Level 2
—  
Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs
Level 3
—  
Valuations based on inputs that are unobservable and significant to the overall fair value measurement
The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.
The fair value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions):
 
 
Quoted prices  in
active markets for
identical assets
(Level 1)
 
Significant
other  observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
 
Fair value measurement
 
 
 
 
 
as of March 31, 2013, using:
 
 
 
 
Total
Assets:
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
2,707

 
$

 
$

 
$
2,707

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 

 
1,019

 

 
1,019

Foreign and other
 

 
1,466

 

 
1,466

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 

 
3,977

 

 
3,977

Industrial
 

 
4,457

 

 
4,457

Other
 

 
479

 

 
479

Residential mortgage-backed securities
 

 
1,817

 

 
1,817

Other mortgage- and asset-backed securities
 

 
1,497

 

 
1,497

Money market mutual funds
 
1,742

 

 

 
1,742

Other short-term interest-bearing securities
 

 
1,677

 

 
1,677

Equity securities
 
62

 

 

 
62

Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 

 
108

 

 
108

Cross-currency swap contracts
 

 
8

 

 
8

Interest rate swap contracts
 

 
22

 

 
22

Total assets
 
$
4,511

 
$
16,527

 
$

 
$
21,038

Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$

 
$
21

 
$

 
$
21

Cross-currency swap contracts
 

 
72

 

 
72

Contingent consideration obligations in connection with a business combination
 

 

 
222

 
222

Total liabilities
 
$

 
$
93

 
$
222

 
$
315


 
 
Quoted prices  in
active markets for
identical assets
(Level 1)
 
Significant
other  observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
 
Fair value measurement
 
 
 
 
 
as of December 31, 2012, using:
 
 
 
 
Total
Assets:
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
4,458

 
$

 
$

 
$
4,458

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 

 
1,030

 

 
1,030

Foreign and other
 

 
1,608

 

 
1,608

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 

 
3,361

 

 
3,361

Industrial
 

 
4,380

 

 
4,380

Other
 

 
452

 

 
452

Residential mortgage-backed securities
 

 
1,829

 

 
1,829

Other mortgage- and asset-backed securities
 

 
1,767

 

 
1,767

Money market mutual funds
 
2,620

 

 

 
2,620

Other short-term interest-bearing securities
 

 
2,186

 

 
2,186

Equity securities
 
54

 

 

 
54

Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 

 
46

 

 
46

Cross-currency swap contracts
 

 
65

 

 
65

Total assets
 
$
7,132

 
$
16,724

 
$

 
$
23,856

Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$

 
$
59

 
$

 
$
59

Cross-currency swap contracts
 

 
6

 

 
6

Contingent consideration obligations in connection with a business combination
 

 

 
221

 
221

Total liabilities
 
$

 
$
65

 
$
221

 
$
286


The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets with no valuation adjustment.
Most of our other government-related and corporate debt securities are investment grade with maturity dates of five years or less from the balance sheet date. Our other government-related debt securities portfolio is composed of securities with weighted-average credit ratings of A+ by Standard & Poor's (S&P) or Fitch, Inc. (Fitch) and AA- or equivalent by Moody's Investors Service, Inc. (Moody's); and our corporate debt securities portfolio has a weighted-average credit rating of A- or equivalent by S&P, Moody's or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs.
Our residential mortgage-, other mortgage- and asset-backed securities portfolio is composed entirely of senior tranches, with credit ratings of AA+ by S&P and AAA or equivalent by Moody's or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.
We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near term maturity dates.
Substantially all of our foreign currency forward and option derivatives contracts have maturities of three years or less and all are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable, either directly or indirectly. These inputs include foreign currency rates, London Interbank Offered Rates (LIBOR) cash and swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts also include implied volatility measures. These inputs, where applicable, are at commonly quoted intervals. See Note 10, Derivative instruments.
Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimate the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. See Note 10, Derivative instruments.
Our interest rate swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P, Moody’s or Fitch. We estimated the fair values of these contracts by using an income-based industry standard valuation model for which all significant inputs were observable either directly or indirectly. These inputs included LIBOR, swap rates and obligor credit default swap rates.
As a result of our acquisition of BioVex Group, Inc. in March 2011, we are obligated to pay its former shareholders up to $575 million of additional consideration contingent upon achieving up to eight separate regulatory and sales-related milestones with regard to talimogene laherparepvec, which was acquired in the acquisition and is currently in phase 3 clinical development for the treatment of melanoma. The three largest of these potential payments are $125 million each, including the amount due if a Biologics License Application is filed with the U.S. Food and Drug Administration. Potential payments are also due upon the first commercial sale in each of the United States and the European Union following receipt of marketing approval which includes use of the product in specified patient populations and upon achievement of specified levels of sales within specified periods of time.
These contingent consideration obligations are recorded at their estimated fair values with any changes in fair value recognized in earnings. The fair value measurements of these obligations are based on significant unobservable inputs, including the estimated probabilities and timing of achieving the related regulatory events in connection with these milestones and, as applicable, estimated annual sales. Significant changes (increases or decreases) in these inputs would result in corresponding changes in the fair values of the contingent consideration obligations.
We revalue these contingent consideration obligations each reporting period until the related contingencies are resolved. We estimate the fair values of these obligations by using a combination of probability-adjusted discounted cash flows, option pricing techniques and a simulation model of expected annual sales. Quarterly, management in our R&D and commercial sales organizations review key assumptions used in the fair value measurements of these obligations. In the absence of any significant changes in key assumptions, the changes in fair values of these contingent consideration obligations reflect the passage of time and changes in our credit risk adjusted rate used to discount obligations to present value. During the three months ended March 31, 2013 and 2012, there were no significant changes in underlying key assumptions; and the increases in the estimated aggregate fair value of $1 million and $2 million, respectively, were recorded in Other operating expenses in the Condensed Consolidated Statements of Income.

There have been no transfers of assets or liabilities between the fair value measurement levels, and there were no material remeasurements to fair value during the three months ended March 31, 2013 and 2012, of assets and liabilities that are not measured at fair value on a recurring basis.
Summary of the fair value of other financial instruments
Cash equivalents
The estimated fair values of cash equivalents approximate their carrying values due to the short-term nature of these financial instruments.
Borrowings
We estimated the fair values of our convertible notes, while outstanding, (Level 2) by using an income-based industry standard valuation model for which all significant inputs were observable either directly or indirectly, including benchmark yields adjusted for our credit risk. The fair value of our convertible notes represented only the liability components of these instruments, because their equity components are included in Common stock and additional paid-in capital in the Condensed Consolidated Balance Sheets. We estimate the fair values of our other long-term notes (Level 2) by taking into consideration indicative prices obtained from a third-party financial institution that utilizes industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; credit spreads; benchmark yields; foreign currency exchange rates, as applicable; and other observable inputs. As of March 31, 2013, and December 31, 2012, the aggregate fair values of our long-term debt were $26.9 billion and $29.9 billion, respectively, and the carrying values were $23.9 billion and $26.5 billion, respectively.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet16.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments
3 Months Ended
Mar. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative instruments
Derivative instruments

The Company is exposed to foreign currency exchange rate and interest rate risks related to its business operations. To reduce our risks related to these exposures, we utilize or have utilized certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes.
Cash flow hedges
We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates, associated primarily with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are offset partially by the corresponding increases and decreases in our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations on our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales primarily over a three-year time horizon, with, at any given point in time, a higher percentage of nearer-term projected product sales being hedged than in successive periods. As of March 31, 2013, and December 31, 2012, we had open foreign currency forward contracts with notional amounts of $3.7 billion and open foreign currency option contracts with notional amounts of $139 million and $200 million, respectively. These foreign currency forward and option contracts, primarily euro based, have been designated as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI in the Condensed Consolidated Balance Sheets and reclassified to earnings 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 notes denominated in foreign currencies, we entered into cross-currency swap contracts. Under the terms of these contracts, we paid euros/pounds sterling and received U.S. dollars for the notional amounts at the inception of the contracts, and we exchange interest payments based on these notional amounts at fixed rates over the lives of the contracts in which we pay U.S. dollars and receive euros/pounds sterling. In addition, we will pay U.S. dollars to and receive euros/pounds sterling from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged notes, effectively converting the interest payments and principal repayment on these notes from euros/pounds sterling to U.S. dollars. These cross-currency swap contracts have been designated as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI and reclassified to earnings in the same periods during which the hedged debt affects earnings. The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions):
 
 
Foreign currency
 
U.S. dollars
Hedged notes
 
Notional Amount
 
Interest rate
 
Notional Amount
 
Interest rate
2.125% 2019 euro Notes
 
675

 
2.125
%
 
$
864

 
2.6
%
5.50% 2026 pound sterling Notes
 
£
475

 
5.50
%
 
$
748

 
5.8
%
4.00% 2029 pound sterling Notes
 
£
700

 
4.00
%
 
$
1,122

 
4.3
%

In connection with the anticipated issuance of long-term fixed-rate debt, we occasionally enter into forward interest rate contracts in order to hedge the variability in cash flows due to changes in the applicable Treasury rate between the time we enter into these contracts and the time the related debt is issued. Gains and losses on such contracts, which are designated as cash flow hedges, are reported in AOCI and amortized into earnings over the lives of the associated debt issuances.
The effective portion of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges was as follows (in millions):
 
 
Three months ended
 
 
March 31,
Derivatives in cash flow hedging relationships
 
2013
 
2012
Foreign currency contracts
 
$
100

 
$
(87
)
Cross-currency swap contracts
 
(125
)
 
8

Total
 
$
(25
)
 
$
(79
)

    
The location in the Condensed Consolidated Statements of Income and the effective portion of the gain/(loss) reclassified out of AOCI into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):
 
 
 
 
Three months ended
 
 
 
 
March 31,
Derivatives in cash flow hedging relationships
 
Statements of Income location
 
2013
 
2012
Foreign currency contracts
 
Product sales
 
$
(4
)
 
$
11

Cross-currency swap contracts
 
Interest and other income, net
 
(140
)
 
13

Total
 
 
 
$
(144
)
 
$
24


No portions of our cash flow hedge contracts are excluded from the assessment of hedge effectiveness, and the ineffective portions of these hedging instruments were approximately $1 million of gains and $1 million of losses for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013, the amounts expected to be reclassified out of AOCI into earnings over the next 12 months are approximately $25 million of net gains on our foreign currency and cross-currency swap contracts and approximately $1 million of losses on forward interest rate contracts.
Fair value hedges
To achieve a desired mix of fixed and floating interest rates on our long-term debt, we entered into interest rate swap contracts, which qualified and were designated as fair value hedges. The terms of these interest rate swap contracts corresponded to the related hedged debt instruments and effectively converted a fixed interest rate coupon to a floating LIBOR-based coupon over the lives of the respective notes. During the three months ended March 31, 2012, we had outstanding interest rate swap contracts with aggregate notional amounts of $3.6 billion with respect to our 4.85% 2014 Notes, 5.85% 2017 Notes, 6.15% 2018 Notes and 5.70% 2019 Notes with rates that ranged from LIBOR plus 0.3% to LIBOR plus 2.6%. Due to historically low interest rates, during the three months ended June 30, 2012, we terminated all of these interest rate swap contracts. During the three months ended March 31, 2013, we entered into interest rate swap contracts with an aggregate notional amount of $2.5 billion with respect to our 3.875% 2021 Notes and our 3.625% 2022 Notes with rates that range from three-month LIBOR plus 1.6% to three-month LIBOR plus 2.0%.
For derivative instruments that are designated and qualify as fair value hedges, the unrealized gain or loss on the derivative resulting from the change in fair value during the period as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk is recognized in current earnings. For the three months ended March 31, 2013 and 2012, we included the unrealized losses on the hedged debt of $22 million and the unrealized gains on the hedged debt of $18 million, respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized gains of $22 million and the unrealized losses of $18 million, respectively, on the related interest rate swap agreements.
Derivatives not designated as hedges
We enter into foreign currency forward contracts that are not designated as hedging transactions to reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies. These exposures are hedged on a month-to-month basis. As of March 31, 2013, and December 31, 2012, the total notional amounts of these foreign currency forward contracts were $655 million and $629 million, respectively.
The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions):
 
 
 
 
Three months ended
  
 
 
 
March 31,
Derivatives not designated as hedging instruments
 
Statements of Income location
 
2013
 
2012
Foreign currency contracts
 
Interest and other income, net
 
$
(16
)
 
$
(10
)


The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):
 
 
Derivative assets
 
Derivative liabilities
March 31, 2013
 
Balance Sheet location
 
Fair value
 
Balance Sheet location
 
Fair value
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
Cross-currency swap contracts
 
Other current assets/ Other noncurrent assets
 
$
8

 
Accrued liabilities/ Other noncurrent liabilities
 
$
72

Foreign currency contracts
 
Other current assets/ Other noncurrent assets
 
107

 
Accrued liabilities/ Other noncurrent liabilities
 
21

Interest rate swap contracts
 
Other current assets/ Other noncurrent assets
 
22

 
Accrued liabilities/ Other noncurrent liabilities
 

Total derivatives designated as hedging instruments
 
 
 
137

 
 
 
93

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
Other current assets
 
1

 
Accrued liabilities
 

Total derivatives not designated as hedging instruments
 
 
 
1

 
 
 

Total derivatives
 
 
 
$
138

 
 
 
$
93

 
 
Derivative assets
 
Derivative liabilities
December 31, 2012
 
Balance Sheet location
 
Fair value
 
Balance Sheet location
 
Fair value
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
Cross-currency swap contracts
 
Other current assets/ Other noncurrent assets
 
$
65

 
Accrued liabilities/ Other noncurrent liabilities
 
$
6

Foreign currency contracts
 
Other current assets/ Other noncurrent assets
 
45

 
Accrued liabilities/ Other noncurrent liabilities
 
58

Total derivatives designated as hedging instruments
 
 
 
110

 
 
 
64

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
Other current assets
 
1

 
Accrued liabilities
 
1

Total derivatives not designated as hedging instruments
 
 
 
1

 
 
 
1

Total derivatives
 
 
 
$
111

 
 
 
$
65


Our derivative contracts that were in liability positions as of March 31, 2013, contain certain credit-risk-related contingent provisions that would be triggered if: (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due to or from a counterparty under these contracts may only be offset against other amounts due to or from the same counterparty if an event of default or termination, as defined, were to occur.
The cash flow effects of our derivatives contracts for the three months ended March 31, 2013 and 2012, are included within Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet17.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Contingencies and commitments
3 Months Ended
Mar. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Contingencies and commitments
Contingencies and commitments
Contingencies
In the ordinary course of business, we are involved in various legal proceedings and other matters, including those discussed in this Note, that are complex in nature and have outcomes that are difficult to predict. See Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012, for further discussion of certain of our legal proceedings and other matters.

We record accruals for loss contingencies to the extent that we conclude that it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously.

Our legal proceedings range from cases brought by a single plaintiff to a class action with thousands of putative class members. These legal proceedings, as well as other matters, involve various aspects of our business and a variety of claims (including but not limited to marketing, pricing and trade practices and securities law), some of which present novel factual allegations and/or unique legal theories. In each of the matters described in this filing or in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012, plaintiffs seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process (which in complex proceedings of the sort faced by us often extend for several years). As a result, none of the matters described in these filings have progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows.
 
Certain recent developments concerning our legal proceedings and other matters are discussed below:
    
State Derivative Litigation

Birch v. Sharer, et al.

Following plaintiff's voluntary motion to dismiss without prejudice this stockholder derivative lawsuit pending against Amgen and the individual defendants, on March 26, 2013, the Los Angeles Superior Court dismissed the matter without prejudice.

Purnell v. Sharer, et al.

On April 26, 2013, Amgen and the individual defendants filed a motion to dismiss this stockholder derivative lawsuit based on demand futility or, in the alternative, a motion to stay the action. Oral argument has been set for August 15, 2013. 

Other Qui Tam Actions
As previously disclosed, in October 2011 Amgen announced it had reached an agreement in principle to settle various allegations related to its sales and marketing practices arising out of several federal investigations, and on December 19, 2012, Amgen announced that it had finalized a settlement agreement with the U.S. government, 49 states and the District of Columbia related to those allegations (the 2012 Settlement). As previously disclosed, as part of those settlement discussions, Amgen was made aware that it was a defendant in several other civil qui tam actions (the Other Qui Tams) in addition to those included in the October 2011 agreement in principle. As previously disclosed, one of the Other Qui Tams was resolved by the 2012 Settlement and Amgen has been dismissed from two additional Other Qui Tams. Amgen has entered into a settlement agreement to resolve for an immaterial amount the fourth Other Qui Tam, which had been filed in the U.S. District Court for South Carolina. This matter included allegations that Amgen's market share rebate agreements with various long-term care pharmacy providers and the therapeutic interchange programs allegedly instituted by the long-term care pharmacy providers did not comply with the safe harbor requirements of the federal Anti-Kickback Statute. Amgen denied all of these allegations that were resolved by the settlement. Amgen has also reached an agreement in principle to resolve the fifth and final Other Qui Tam action, which remains under seal in the U.S. federal court in which it was filed, for an immaterial amount. This final Other Qui Tam action includes allegations that Amgen's promotional, contracting, sales and marketing activities and arrangements relating to Aranesp®, NEUPOGEN®, Neulasta®, XGEVA®, Prolia®, Vectibix® and Nplate® caused the submission of various false claims under the Federal Civil False Claims Act; until the proposed settlement becomes final, there can be no guarantee that this fifth Other Qui Tam action will be resolved by the agreement in principle.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet18.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Summary of significant accounting policies (Policies)
3 Months Ended
Mar. 31, 2013
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. Our medicines help millions of patients in the fight against cancer, kidney disease, rheumatoid arthritis, bone disease, and other serious illnesses. We operate in one business segment: human therapeutics.
Basis of presentation
Basis of presentation
The financial information for the three months ended March 31, 2013 and 2012, 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.
Prior-period amounts for amortization of certain acquired intangible assets have been reclassified within Operating expenses in our Condensed Consolidated Statements of Income to conform to the current-period presentation.

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, 2012.
Principles of consolidation
Principles of consolidation
The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in any variable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.
Use of estimates
Use of estimates
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.
Property, plant and equipment, net
Property, plant and equipment, net
Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $6.5 billion and $6.6 billion as of March 31, 2013, and December 31, 2012, respectively.
Comprehensive income
Comprehensive income
In January 2013, we adopted a new accounting standard that requires additional disclosures regarding amounts that are reclassified out of accumulated other comprehensive income (AOCI). In accordance with the requirements of the standard, the effects of significant reclassifications out of AOCI, by component, on the respective lines in the Condensed Consolidated Statement of Income are presented in Note 8, Stockholders' equity. The standard was required to be applied prospectively beginning January 1, 2013.
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet19.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Earnings per share (Tables)
3 Months Ended
Mar. 31, 2013
Earnings Per Share [Abstract]
Computation for basic and diluted earnings per share
The computation for basic and diluted EPS was as follows (in millions, except per share data):
 
Three months ended
 
March 31,
 
2013
 
2012
Income (Numerator):
 
 
 
Net income for basic and diluted EPS
$
1,434

 
$
1,184

 
 
 
 
Shares (Denominator):
 
 
 
Weighted-average shares for basic EPS
751

 
791

Effect of dilutive securities
13

 
9

Weighted-average shares for diluted EPS
764

 
800

 
 
 
 
Basic EPS
$
1.91

 
$
1.50

Diluted EPS
$
1.88

 
$
1.48

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet20.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-for-sale investments (Tables)
3 Months Ended
Mar. 31, 2013
Investments, Debt and Equity Securities [Abstract]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):
Type of security as of March 31, 2013
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair
value
U.S. Treasury securities
 
$
2,698

 
$
9

 
$

 
$
2,707

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 
1,013

 
6

 

 
1,019

Foreign and other
 
1,436

 
35

 
(5
)
 
1,466

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 
3,907

 
72

 
(2
)
 
3,977

Industrial
 
4,380

 
79

 
(2
)
 
4,457

Other
 
470

 
9

 

 
479

Residential mortgage-backed securities
 
1,816

 
9

 
(8
)
 
1,817

Other mortgage- and asset-backed securities
 
1,515

 
2

 
(20
)
 
1,497

Money market mutual funds
 
1,742

 

 

 
1,742

Other short-term interest-bearing securities
 
1,677

 

 

 
1,677

Total interest-bearing securities
 
20,654

 
221

 
(37
)
 
20,838

Equity securities
 
55

 
7

 

 
62

Total available-for-sale investments
 
$
20,709

 
$
228

 
$
(37
)
 
$
20,900


Type of security as of December 31, 2012
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair
value
U.S. Treasury securities
 
$
4,443

 
$
15

 
$

 
$
4,458

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 
1,018

 
12

 

 
1,030

Foreign and other
 
1,549

 
60

 
(1
)
 
1,608

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 
3,266

 
96

 
(1
)
 
3,361

Industrial
 
4,283

 
100

 
(3
)
 
4,380

Other
 
441

 
11

 

 
452

Residential mortgage-backed securities
 
1,828

 
9

 
(8
)
 
1,829

Other mortgage- and asset-backed securities
 
1,769

 
7

 
(9
)
 
1,767

Money market mutual funds
 
2,620

 

 

 
2,620

Other short-term interest-bearing securities
 
2,186

 

 

 
2,186

Total interest-bearing securities
 
23,403

 
310

 
(22
)
 
23,691

Equity securities
 
52

 
2

 

 
54

Total available-for-sale investments
 
$
23,455

 
$
312

 
$
(22
)
 
$
23,745

Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets
The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions):
Classification in the Condensed Consolidated Balance Sheets
 
March 31,
2013
 
December 31,
2012
Cash and cash equivalents
 
$
2,097

 
$
2,887

Marketable securities
 
18,741

 
20,804

Other assets — noncurrent
 
62

 
54

Total available-for-sale investments
 
$
20,900

 
$
23,745

Fair values of available-for-sale interest-bearing security investments by contractual maturity
The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset- backed securities that do not have a single maturity date, were as follows (in millions):
Contractual maturity
 
March 31,
2013
 
December 31,
2012
Maturing in one year or less
 
$
3,916

 
$
7,175

Maturing after one year through three years
 
4,926

 
5,014

Maturing after three years through five years
 
6,919

 
6,286

Maturing after five years through ten years
 
1,763

 
1,620

Mortgage- and asset-backed securities
 
3,314

 
3,596

Total interest-bearing securities
 
$
20,838

 
$
23,691

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet21.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories (Tables)
3 Months Ended
Mar. 31, 2013
Inventory Disclosure [Abstract]
Inventories
Inventories consisted of the following (in millions):
 
March 31,
2013
 
December 31,
2012
Raw materials
$
215

 
$
192

Work in process
1,646

 
1,723

Finished goods
876

 
829

Total inventories
$
2,737

 
$
2,744

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet22.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Financing arrangements (Tables)
3 Months Ended
Mar. 31, 2013
Debt Disclosure [Abstract]
Carrying values and the fixed contractual coupon rates of long-term borrowings
The carrying values and the fixed contractual coupon rates of our long-term borrowings were as follows (in millions):

March 31,
2013
 
December 31,
2012
0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes)
$

 
$
2,488

1.875% notes due 2014 (1.875% 2014 Notes)
1,000

 
1,000

4.85% notes due 2014 (4.85% 2014 Notes)
1,000

 
1,000

2.30% notes due 2016 (2.30% 2016 Notes)
749

 
749

2.50% notes due 2016 (2.50% 2016 Notes)
999

 
999

2.125% notes due 2017 (2.125% 2017 Notes)
1,248

 
1,248

5.85% notes due 2017 (5.85% 2017 Notes)
1,099

 
1,099

6.15% notes due 2018 (6.15% 2018 Notes)
499

 
499

4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes)
708

 
723

5.70% notes due 2019 (5.70% 2019 Notes)
999

 
999

2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes)
868

 
887

4.50% notes due 2020 (4.50% 2020 Notes)
300

 
300

3.45% notes due 2020 (3.45% 2020 Notes)
897

 
897

4.10% notes due 2021 (4.10% 2021 Notes)
998

 
998

3.875% notes due 2021 (3.875% 2021 Notes)
1,745

 
1,745

3.625% notes due 2022 (3.625% 2022 Notes)
747

 
747

5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes)
715

 
763

4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes)
1,047

 
1,117

6.375% notes due 2037 (6.375% 2037 Notes)
899

 
899

6.90% notes due 2038 (6.90% 2038 Notes)
499

 
499

6.40% notes due 2039 (6.40% 2039 Notes)
996

 
996

5.75% notes due 2040 (5.75% 2040 Notes)
697

 
697

4.95% notes due 2041 (4.95% 2041 Notes)
595

 
595

5.15% notes due 2041 (5.15% 2041 Notes)
2,232

 
2,232

5.65% notes due 2042 (5.65% 2042 Notes)
1,244

 
1,244

5.375% notes due 2043 (5.375% 2043 Notes)
1,000

 
1,000

Other notes
112

 
109

Total debt
23,892

 
26,529

Less current portion
(7
)
 
(2,495
)
Total noncurrent debt
$
23,885

 
$
24,034

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet23.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' equity (Tables)
3 Months Ended
Mar. 31, 2013
Equity [Abstract]
Summary of activity under our stock repurchase program
Activity under our stock repurchase program was as follows (in millions):
 
2013
 
2012
 
Shares    
 
Dollars    
 
Shares    
 
Dollars    
First quarter
9.1
 
$
771

 
21.0
 
$
1,429

Components of Accumulated Other Comprehensive Income
The components of AOCI were as follows (in millions):
 
Foreign
currency
translation
 
Cash flow
hedges
 
Available-for-sale
securities
 
Other
 
AOCI
Balance as of December 31, 2012
$
12

 
$
(35
)
 
$
183

 
$
(14
)
 
$
146

Foreign currency translation adjustments
(36
)
 

 

 

 
(36
)
Unrealized (losses) gains

 
(25
)
 
(32
)
 
1

 
(56
)
Reclassification adjustments to income

 
144

 
(67
)
 

 
77

Income taxes
13

 
(44
)
 
37

 

 
6

Balance as of March 31, 2013
$
(11
)
 
$
40

 
$
121

 
$
(13
)
 
$
137

Reclassifications out of Accumulated Other Comprehensive Income
The reclassifications out of AOCI to Net income were as follows (in millions):
 
 
Amount reclassified out of AOCI
 
 

 
Three months ended
 
Line item affected in the
Components of AOCI
 
March 31, 2013
 
Statement of Income
Cash flow hedges:
 
 
 
 
     Foreign currency contract losses
 
$
(4
)
 
Product sales
     Cross-currency swap contract losses
 
(140
)
 
Interest and other income, net
 
 
(144
)
 
Total before income tax
 
 
53

 
Income tax (expense)/benefit
 
 
$
(91
)
 
Net of income taxes
Available-for-sale securities:
 
 
 
 
     Net realized gains
 
$
67

 
Interest and other income, net
 
 
(25
)
 
Income tax (expense)/benefit
 
 
$
42

 
Net of income taxes
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet24.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair value measurement (Tables)
3 Months Ended
Mar. 31, 2013
Fair Value Disclosures [Abstract]
Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis
 
 
Quoted prices  in
active markets for
identical assets
(Level 1)
 
Significant
other  observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
 
Fair value measurement
 
 
 
 
 
as of December 31, 2012, using:
 
 
 
 
Total
Assets:
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
4,458

 
$

 
$

 
$
4,458

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 

 
1,030

 

 
1,030

Foreign and other
 

 
1,608

 

 
1,608

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 

 
3,361

 

 
3,361

Industrial
 

 
4,380

 

 
4,380

Other
 

 
452

 

 
452

Residential mortgage-backed securities
 

 
1,829

 

 
1,829

Other mortgage- and asset-backed securities
 

 
1,767

 

 
1,767

Money market mutual funds
 
2,620

 

 

 
2,620

Other short-term interest-bearing securities
 

 
2,186

 

 
2,186

Equity securities
 
54

 

 

 
54

Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 

 
46

 

 
46

Cross-currency swap contracts
 

 
65

 

 
65

Total assets
 
$
7,132

 
$
16,724

 
$

 
$
23,856

Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$

 
$
59

 
$

 
$
59

Cross-currency swap contracts
 

 
6

 

 
6

Contingent consideration obligations in connection with a business combination
 

 

 
221

 
221

Total liabilities
 
$

 
$
65

 
$
221

 
$
286

The fair value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions):
 
 
Quoted prices  in
active markets for
identical assets
(Level 1)
 
Significant
other  observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
 
 
Fair value measurement
 
 
 
 
 
as of March 31, 2013, using:
 
 
 
 
Total
Assets:
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
2,707

 
$

 
$

 
$
2,707

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 

 
1,019

 

 
1,019

Foreign and other
 

 
1,466

 

 
1,466

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 

 
3,977

 

 
3,977

Industrial
 

 
4,457

 

 
4,457

Other
 

 
479

 

 
479

Residential mortgage-backed securities
 

 
1,817

 

 
1,817

Other mortgage- and asset-backed securities
 

 
1,497

 

 
1,497

Money market mutual funds
 
1,742

 

 

 
1,742

Other short-term interest-bearing securities
 

 
1,677

 

 
1,677

Equity securities
 
62

 

 

 
62

Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 

 
108

 

 
108

Cross-currency swap contracts
 

 
8

 

 
8

Interest rate swap contracts
 

 
22

 

 
22

Total assets
 
$
4,511

 
$
16,527

 
$

 
$
21,038

Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$

 
$
21

 
$

 
$
21

Cross-currency swap contracts
 

 
72

 

 
72

Contingent consideration obligations in connection with a business combination
 

 

 
222

 
222

Total liabilities
 
$

 
$
93

 
$
222

 
$
315

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet25.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments (Tables)
3 Months Ended
Mar. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Notional Amounts and Interest Rates for Cross-Currency Swaps [Table Text Block]
The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions):
 
 
Foreign currency
 
U.S. dollars
Hedged notes
 
Notional Amount
 
Interest rate
 
Notional Amount
 
Interest rate
2.125% 2019 euro Notes
 
675

 
2.125
%
 
$
864

 
2.6
%
5.50% 2026 pound sterling Notes
 
£
475

 
5.50
%
 
$
748

 
5.8
%
4.00% 2029 pound sterling Notes
 
£
700

 
4.00
%
 
$
1,122

 
4.3
%
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
The effective portion of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges was as follows (in millions):
 
 
Three months ended
 
 
March 31,
Derivatives in cash flow hedging relationships
 
2013
 
2012
Foreign currency contracts
 
$
100

 
$
(87
)
Cross-currency swap contracts
 
(125
)
 
8

Total
 
$
(25
)
 
$
(79
)
Location in the Condensed Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges
The location in the Condensed Consolidated Statements of Income and the effective portion of the gain/(loss) reclassified out of AOCI into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):
 
 
 
 
Three months ended
 
 
 
 
March 31,
Derivatives in cash flow hedging relationships
 
Statements of Income location
 
2013
 
2012
Foreign currency contracts
 
Product sales
 
$
(4
)
 
$
11

Cross-currency swap contracts
 
Interest and other income, net
 
(140
)
 
13

Total
 
 
 
$
(144
)
 
$
24

Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for the derivative instruments not designated as hedging instruments
The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions):
 
 
 
 
Three months ended
  
 
 
 
March 31,
Derivatives not designated as hedging instruments
 
Statements of Income location
 
2013
 
2012
Foreign currency contracts
 
Interest and other income, net
 
$
(16
)
 
$
(10
)
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
March 31, 2013
 
Balance Sheet location
 
Fair value
 
Balance Sheet location
 
Fair value
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
Cross-currency swap contracts
 
Other current assets/ Other noncurrent assets
 
$
8

 
Accrued liabilities/ Other noncurrent liabilities
 
$
72

Foreign currency contracts
 
Other current assets/ Other noncurrent assets
 
107

 
Accrued liabilities/ Other noncurrent liabilities
 
21

Interest rate swap contracts
 
Other current assets/ Other noncurrent assets
 
22

 
Accrued liabilities/ Other noncurrent liabilities
 

Total derivatives designated as hedging instruments
 
 
 
137

 
 
 
93

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
Other current assets
 
1

 
Accrued liabilities
 

Total derivatives not designated as hedging instruments
 
 
 
1

 
 
 

Total derivatives
 
 
 
$
138

 
 
 
$
93

 
 
Derivative assets
 
Derivative liabilities
December 31, 2012
 
Balance Sheet location
 
Fair value
 
Balance Sheet location
 
Fair value
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
Cross-currency swap contracts
 
Other current assets/ Other noncurrent assets
 
$
65

 
Accrued liabilities/ Other noncurrent liabilities
 
$
6

Foreign currency contracts
 
Other current assets/ Other noncurrent assets
 
45

 
Accrued liabilities/ Other noncurrent liabilities
 
58

Total derivatives designated as hedging instruments
 
 
 
110

 
 
 
64

Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
Other current assets
 
1

 
Accrued liabilities
 
1

Total derivatives not designated as hedging instruments
 
 
 
1

 
 
 
1

Total derivatives
 
 
 
$
111

 
 
 
$
65

------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet26.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Summary of significant accounting policies (Details) (USD $)
In Billions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Accounting Policies [Abstract]
Accumulated depreciation and amortization on property, plant and equipment $ 6.5 $ 6.6
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet27.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Business combinations (Details) (de CODE Genetics [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended
Dec. 10, 2012
Mar. 31, 2013
de CODE Genetics [Member]
Business Combinations (Textual) [Abstract]
Total consideration $ 401
Finite-lived intangible assets comprised of databases and other proprietary information 465
Finite-lived intangible assets, estimated useful life (in years) 10 years
Goodwill arising from business combinations 45
Deferred tax liabiities 93
Other assets and liabilities, net 16
Reduction in acquisition date fair value of goodwill 48
Increase in acquisition date fair value of finite-lived intangible assets $ 64
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet28.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Income taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Puerto Rico Excise Tax Rate [Line Items]
Effective tax rate for the period excluding the impact of the tax credits associated with the new Pr excise tax (0.80%) 18.50%
Income taxes (Textual) [Abstract]
Increase in gross amount of unrecognized tax benefits for period $ 80
Decrease in unrecognized tax benefits resulting from settlement with taxing authorities 190
Net tax benefit from settlement with taxing authorities 185
Decrease in unrecognized tax benefits that is reasonably possible within the succeeding 12 months due to resolution of federal and state audits $ 90
Puerto Rico Excise Tax [Member]
Puerto Rico Excise Tax Rate [Line Items]
Period that excise tax is imposed 6 years
Effective excise tax rate for 2011 4.00%
Effective excise tax rate for 2012 3.75%
Effective excise tax rate for 2013 2.75%
Effective excise tax rate for 2014 2.50%
Effective excise tax rate for 2015 2.25%
Effective excise tax rate for 2016 1.00%
Excise excise tax rate for July 2013 through December 31, 2017 4.00%
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet29.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Earnings per share (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income (Numerator):
Net income for basic and diluted EPS $ 1,434 $ 1,184
Shares (Denominator):
Weighted-average shares for basic EPS 751 791
Effect of dilutive securities 13 9
Weighted-average shares for diluted EPS 764 800
Basic EPS (in usd per share) $ 1.91 $ 1.5
Diluted EPS (in usd per share) $ 1.88 $ 1.48
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet30.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Earnings per share (Details Textual)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Earnings per share (Textual) [Abstract]
Antidilutive securities excluded from computation of diluted earnings per share, amount 0 11
0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes) [Member]
Incremental Common Shares [Line Items]
Additional shares assumed to be issued for the purpose of computing diluted EPS 1
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet31.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-for-sale investments (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost $ 20,709 $ 23,455
Gross unrealized gains 228 312
Gross unrealized losses (37) (22)
Total available-for-sale investments 20,900 23,745
U.S. Treasury securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 2,698 4,443
Gross unrealized gains 9 15
Gross unrealized losses 0 0
Total available-for-sale investments 2,707 4,458
Other government-related debt securities - U.S. [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 1,013 1,018
Gross unrealized gains 6 12
Gross unrealized losses 0 0
Total available-for-sale investments 1,019 1,030
Other government-related debt securities - Foreign and other [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 1,436 1,549
Gross unrealized gains 35 60
Gross unrealized losses (5) (1)
Total available-for-sale investments 1,466 1,608
Corporate debt securities - Financial [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 3,907 3,266
Gross unrealized gains 72 96
Gross unrealized losses (2) (1)
Total available-for-sale investments 3,977 3,361
Corporate debt securities - Industrial [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 4,380 4,283
Gross unrealized gains 79 100
Gross unrealized losses (2) (3)
Total available-for-sale investments 4,457 4,380
Corporate debt securities - Other [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 470 441
Gross unrealized gains 9 11
Gross unrealized losses 0 0
Total available-for-sale investments 479 452
Residential mortgage-backed securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 1,816 1,828
Gross unrealized gains 9 9
Gross unrealized losses (8) (8)
Total available-for-sale investments 1,817 1,829
Other mortgage- and asset-backed securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 1,515 1,769
Gross unrealized gains 2 7
Gross unrealized losses (20) (9)
Total available-for-sale investments 1,497 1,767
Money market mutual funds [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 1,742 2,620
Gross unrealized gains 0 0
Gross unrealized losses 0 0
Total available-for-sale investments 1,742 2,620
Other short-term interest-bearing securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 1,677 2,186
Gross unrealized gains 0 0
Gross unrealized losses 0 0
Total available-for-sale investments 1,677 2,186
Total interest-bearing securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 20,654 23,403
Gross unrealized gains 221 310
Gross unrealized losses (37) (22)
Total available-for-sale investments 20,838 23,691
Equity securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost 55 52
Gross unrealized gains 7 2
Gross unrealized losses 0 0
Total available-for-sale investments $ 62 $ 54
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet32.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-for-sale investments (Details 1) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Mar. 31, 2012
Dec. 31, 2011
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets
Cash and cash equivalents $ 2,530 $ 3,257 $ 4,207 $ 6,946
Marketable securities 18,741 20,804
Other assets - noncurrent 1,148 1,133
Total available-for-sale investments 20,900 23,745
Available-for-sale investments [Member]
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets
Cash and cash equivalents 2,097 2,887
Other assets - noncurrent $ 62 $ 54
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet33.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-for-sale investments (Details 2) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Fair values of available-for-sale debt security investments by contractual maturity
Maturing in one year or less $ 3,916 $ 7,175
Maturing after one year through three years 4,926 5,014
Maturing after three years through five years 6,919 6,286
Maturing after five years through ten years 1,763 1,620
Mortgage- and asset-backed securities 3,314 3,596
Total available-for-sale investments 20,900 23,745
Total interest-bearing securities [Member]
Fair values of available-for-sale debt security investments by contractual maturity
Total available-for-sale investments $ 20,838 $ 23,691
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet34.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Available-for-sale investments (Details Textual) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Available-for-sale investments (Textual) [Abstract]
Cash $ 433 $ 370
Total realized gains 85 67
Total realized losses $ 18 $ 19
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet35.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Inventories (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Inventories
Raw materials $ 215 $ 192
Work in process 1,646 1,723
Finished goods 876 829
Total inventories $ 2,737 $ 2,744
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet36.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Financing arrangements (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Carrying values of long-term borrowings
Other notes $ 112 $ 109
Total debt 23,892 26,529
Less current portion (7) (2,495)
Total noncurrent debt 23,885 24,034
0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 0.38% 0.38%
Carrying values of long-term borrowings
Convertible notes, current 0 2,488
1.875% notes due 2014 (1.875% 2014 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 1.88% 1.88%
Carrying values of long-term borrowings
Total noncurrent debt 1,000 1,000
4.85% notes due 2014 (4.85% 2014 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 4.85% 4.85%
Carrying values of long-term borrowings
Total noncurrent debt 1,000 1,000
2.30% notes due 2016 (2.30% 2016 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 2.30% 2.30%
Carrying values of long-term borrowings
Total noncurrent debt 749 749
2.50% notes due 2016 (2.50% 2016 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 2.50% 2.50%
Carrying values of long-term borrowings
Total noncurrent debt 999 999
2.125% notes due 2017 (2.125% 2017 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 2.13% 2.13%
Carrying values of long-term borrowings
Total noncurrent debt 1,248 1,248
5.85% notes due 2017 (5.85% 2017 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.85% 5.85%
Carrying values of long-term borrowings
Total noncurrent debt 1,099 1,099
6.15% notes due 2018 (6.15% 2018 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 6.15% 6.15%
Carrying values of long-term borrowings
Total noncurrent debt 499 499
4.375% euro denominated notes due 2018 (4.375% 2018 euro Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 4.38% 4.38%
Carrying values of long-term borrowings
Total noncurrent debt 708 723
5.70% notes due 2019 (5.70% 2019 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.70% 5.70%
Carrying values of long-term borrowings
Total noncurrent debt 999 999
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 2.13% 2.13%
Carrying values of long-term borrowings
Total noncurrent debt 868 887
4.50% notes due 2020 (4.50% 2020 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 4.50% 4.50%
Carrying values of long-term borrowings
Total noncurrent debt 300 300
3.45% notes due 2020 (3.45% 2020 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 3.45% 3.45%
Carrying values of long-term borrowings
Total noncurrent debt 897 897
4.10% notes due 2021 (4.10% 2021 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 4.10% 4.10%
Carrying values of long-term borrowings
Total noncurrent debt 998 998
3.875% notes due 2021 (3.875% 2021 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 3.88% 3.88%
Carrying values of long-term borrowings
Total noncurrent debt 1,745 1,745
3.625% notes due 2022 (3.625% 2022 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 3.63% 3.63%
Carrying values of long-term borrowings
Total noncurrent debt 747 747
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.50% 5.50%
Carrying values of long-term borrowings
Total noncurrent debt 715 763
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 4.00% 4.00%
Carrying values of long-term borrowings
Total noncurrent debt 1,047 1,117
6.375% notes due 2037 (6.375% 2037 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 6.38% 6.38%
Carrying values of long-term borrowings
Total noncurrent debt 899 899
6.90% notes due 2038 (6.90% 2038 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 6.90% 6.90%
Carrying values of long-term borrowings
Total noncurrent debt 499 499
6.40% notes due 2039 (6.40% 2039 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 6.40% 6.40%
Carrying values of long-term borrowings
Total noncurrent debt 996 996
5.75% notes due 2040 (5.75% 2040 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.75% 5.75%
Carrying values of long-term borrowings
Total noncurrent debt 697 697
4.95% notes due 2041 (4.95% 2041 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 4.95% 4.95%
Carrying values of long-term borrowings
Total noncurrent debt 595 595
5.15% notes due 2041 (5.15% 2041 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.15% 5.15%
Carrying values of long-term borrowings
Total noncurrent debt 2,232 2,232
5.65% notes due 2042 (5.65% 2042 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.65% 5.65%
Carrying values of long-term borrowings
Total noncurrent debt 1,244 1,244
5.375% notes due 2043 (5.375% 2043 Notes) [Member]
Debt Instruments [Line Items]
Interest rate, stated percentage 5.38% 5.38%
Carrying values of long-term borrowings
Total noncurrent debt $ 1,000 $ 1,000
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet37.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Financing arrangements (Details Textual) (0.375% convertible notes due 2013 (0.375% 2013 Convertible Notes) [Member], USD $)
In Millions, unless otherwise specified
1 Months Ended 0 Months Ended 1 Months Ended
Feb. 28, 2013
May 01, 2013
Subsequent Event [Member]
Feb. 28, 2013
Value in Excess of Principal [Member]
Debt Instruments [Line Items]
Repayment of convertible notes $ 2,500 $ 99
Cash settlement of convertible bond hedge 99
Number of shares acquired by warrants issued in connection with debt 32
Exercise price of warrants (in usd per warrant) 104.8
Net cash settlement of warrants $ 100
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet38.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' equity (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Stock repurchase program
Stock repurchases, in shares 9.1 21
Stock repurchases, in dollars $ 771 $ 1,429
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet39.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' equity Stockholders' equity (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Increase (Decrease) in Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance, Foreign currency translation $ 12
Beginning balance, Cash flow hedges (35)
Beginning balance, Available-for-sale securities 183
Beginning balance, Other (14)
Beginning balance, AOCI 146
Other Comprehensive Income (Loss), before Tax [Abstract]
Foreign currency translation adjustments (36)
Unrealized (losses) gains, Cash flow hedges (25)
Unrealized (losses) gains, Available-for-sale securities (32)
Unrealized (losses) gains, Other 1
Unrealized (losses) gains, AOCI (56)
Reclassification adjustments to income, Foreign currency translation 0
Reclassification adjustments to income, Cash flow hedges 144
Reclassification adjustments to income, Available-for-sale securities (67)
Reclassification adjustments to income, AOCI 77
Income taxes, Foreign currency translation 13
Income taxes, Cash flow hedges (44)
Income taxes, Available-for-sale securities 37
Income taxes, Other 0
Income taxes, AOCI (6)
Ending balance, Foreign currency translation (11)
Ending balance, Cash flow hedges 40
Ending balance, Available-for-sale securities 121
Ending balance, Other (13)
Ending balance, AOCI $ 137
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet40.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' equity Stockholders' equity (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Product sales $ 4,151 $ 3,901
Interest and other income, net 164 124
Income before income taxes 1,343 1,366
Income tax (expense)/benefit 91 (182)
Net income 1,434 1,184
Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Product sales (4)
Interest and other income, net (140)
Income before income taxes (144)
Income tax (expense)/benefit 53
Net income (91)
Realized Gains and Losses on Available-for-sale Securities [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Interest and other income, net 67
Income tax (expense)/benefit (25)
Net income $ 42
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet41.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Stockholders' equity (Details Textual) (USD $)
In Billions, except Per Share data, unless otherwise specified
1 Months Ended 3 Months Ended
Mar. 07, 2013
Mar. 06, 2013
Dec. 13, 2012
Mar. 31, 2013
Mar. 31, 2012
Equity [Abstract]
Amount available for stock repurchases under a board approved stock repurchase plan $ 1.6
Common stock, dividends declared per share (in usd per share) $ 0.47 $ 0.47
Dividends paid per share (in usd per share) $ 0.47 $ 0.47 $ 0.36
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet42.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair value measurement (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Assets:
Total available-for-sale investments $ 20,900 $ 23,745
Fair Value, Measurements, Recurring [Member]
Derivative Assets:
Interest rate swap contracts 22
Total assets 21,038 23,856
Derivative Liabilities:
Contingent consideration obligations in connection with a business combination 222 221
Total liabilities 315 286
Fair Value, Measurements, Recurring [Member] | Foreign currency contracts [Member]
Derivative Assets:
Foreign currency contracts 108 46
Derivative Liabilities:
Foreign currency contracts 21 59
Fair Value, Measurements, Recurring [Member] | Cross currency swap contracts [Member]
Derivative Assets:
Foreign currency contracts 8 65
Derivative Liabilities:
Foreign currency contracts 72 6
Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments 2,707 4,458
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments 1,019 1,030
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments 1,466 1,608
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments 3,977 3,361
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments 4,457 4,380
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments 479 452
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments 1,817 1,829
Fair Value, Measurements, Recurring [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments 1,497 1,767
Fair Value, Measurements, Recurring [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments 1,742 2,620
Fair Value, Measurements, Recurring [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments 1,677 2,186
Fair Value, Measurements, Recurring [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments 62 54
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Derivative Assets:
Interest rate swap contracts 0
Total assets 4,511 7,132
Derivative Liabilities:
Contingent consideration obligations in connection with a business combination 0 0
Total liabilities 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Foreign currency contracts [Member]
Derivative Assets:
Foreign currency contracts 0 0
Derivative Liabilities:
Foreign currency contracts 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Cross currency swap contracts [Member]
Derivative Assets:
Foreign currency contracts 0 0
Derivative Liabilities:
Foreign currency contracts 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments 2,707 4,458
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments 1,742 2,620
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments 62 54
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member]
Derivative Assets:
Interest rate swap contracts 22
Total assets 16,527 16,724
Derivative Liabilities:
Contingent consideration obligations in connection with a business combination 0 0
Total liabilities 93 65
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member]
Derivative Assets:
Foreign currency contracts 108 46
Derivative Liabilities:
Foreign currency contracts 21 59
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross currency swap contracts [Member]
Derivative Assets:
Foreign currency contracts 8 65
Derivative Liabilities:
Foreign currency contracts 72 6
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments 1,019 1,030
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments 1,466 1,608
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments 3,977 3,361
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments 4,457 4,380
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments 479 452
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments 1,817 1,829
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments 1,497 1,767
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments 1,677 2,186
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member]
Derivative Assets:
Interest rate swap contracts 0
Total assets 0 0
Derivative Liabilities:
Contingent consideration obligations in connection with a business combination 222 221
Total liabilities 222 221
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Foreign currency contracts [Member]
Derivative Assets:
Foreign currency contracts 0 0
Derivative Liabilities:
Foreign currency contracts 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Cross currency swap contracts [Member]
Derivative Assets:
Foreign currency contracts 0 0
Derivative Liabilities:
Foreign currency contracts 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments 0 0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments $ 0 $ 0
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet43.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Fair value measurements (Details Textual) (USD $)
3 Months Ended 3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Mar. 31, 2013
BioVex Group Inc [Member]
ContingentConsideration
Mar. 31, 2013
BioVex Group Inc [Member]
Other operating expense [Member]
Mar. 31, 2012
BioVex Group Inc [Member]
Other operating expense [Member]
Mar. 31, 2013
Other Government-related and Corporate Debt Securities [Member]
Business Combinations [Line Items]
Investment maturity period 5 years
Length of time hedged in foreign currency contracts P3Y
Maximum additional consideration due contingent on certain milestones $ 575,000,000
Maximum number of contingent consideration payments for achieving regulatory and sales related milestones 8
The number of payments that will potentially be made that each equal the largest potential contingent consideration payment 3
Largest potential contingent consideration payments 125,000,000
Change in fair values of contingent consideration obligations 1,000,000 2,000,000
Fair Value Measurement (Textual) [Abstract]
Aggregate fair value of long-term debt, including current portion 26,900,000,000 29,900,000,000
Carrying value of long-term debt, including current portion $ 23,892,000,000 $ 26,529,000,000
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet44.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments Derivative Instruments (Details) (Cash flow hedge [Member], Cross currency swap contracts [Member])
In Millions, unless otherwise specified
Mar. 31, 2013
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
USD ($)
Mar. 31, 2013
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
EUR (€)
Mar. 31, 2013
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
USD ($)
Mar. 31, 2013
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
GBP (£)
Mar. 31, 2013
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
USD ($)
Mar. 31, 2013
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
GBP (£)
Mar. 31, 2013
Interest rate received [Member]
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
Mar. 31, 2013
Interest rate received [Member]
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
Mar. 31, 2013
Interest rate received [Member]
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
Mar. 31, 2013
Interest rate paid [Member]
2.125% euro denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
Mar. 31, 2013
Interest rate paid [Member]
5.50% pound sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
Mar. 31, 2013
Interest rate paid [Member]
4.00% pound sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
Derivative [Line Items]
Notional Amount $ 864 € 675 $ 748 £ 475 $ 1,122 £ 700
Fixed Interest Rate 2.13% 5.50% 4.00% 2.60% 5.80% 4.30%
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet45.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments (Details 1) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net $ (25) $ (79)
Foreign currency contracts [Member]
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net 100 (87)
Cross currency swap contracts [Member]
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net $ (125) $ 8
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet46.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Location in the Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges
Total $ (144) $ 24
Foreign currency contracts [Member]
Location in the Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges
The amount of gain (loss) recognized in product sales (4) 11
Cross currency swap contracts [Member]
Location in the Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges
The amount of gain (loss) recognized in interest and other income, net $ (140) $ 13
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet47.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments (Details 3) (Foreign currency contracts [Member], Interest and other income, net [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Foreign currency contracts [Member] | Interest and other income, net [Member]
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for our derivative instruments not designated as hedging instruments
Amount of gain (loss) recognized in interest and other income, net $ (16) $ (10)
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet48.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments (Details 4) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Assets
Total derivative assets, fair value $ 138 $ 111
Liabilities
Total derivative liabilities, fair value 93 65
Derivatives designated as hedging instrument [Member]
Assets
Total derivative assets, fair value 137 110
Liabilities
Total derivative liabilities, fair value 93 64
Derivatives not designated as hedging instrument [Member]
Assets
Total derivative assets, fair value 1 1
Liabilities
Total derivative liabilities, fair value 0 1
Cross currency swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | Derivatives designated as hedging instrument [Member]
Assets
Total derivative assets, fair value 8 65
Cross currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | Derivatives designated as hedging instrument [Member]
Liabilities
Total derivative liabilities, fair value 72 6
Foreign currency contracts [Member] | Other current assets/Other noncurrent assets [Member] | Derivatives designated as hedging instrument [Member]
Assets
Total derivative assets, fair value 107 45
Foreign currency contracts [Member] | Other current assets [Member] | Derivatives not designated as hedging instrument [Member]
Assets
Total derivative assets, fair value 1 1
Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | Derivatives designated as hedging instrument [Member]
Liabilities
Total derivative liabilities, fair value 21 58
Foreign currency contracts [Member] | Accrued liabilities [Member] | Derivatives not designated as hedging instrument [Member]
Liabilities
Total derivative liabilities, fair value 0 1
Interest rate swap contracts [Member] | Other current assets/Other noncurrent assets [Member] | Derivatives designated as hedging instrument [Member]
Assets
Total derivative assets, fair value 22
Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member] | Derivatives designated as hedging instrument [Member]
Liabilities
Total derivative liabilities, fair value $ 0
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet49.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Derivative instruments (Details Textual) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
Interest expense, net [Member]
Mar. 31, 2012
Interest expense, net [Member]
Mar. 31, 2013
Foreign currency forward contracts [Member]
Dec. 31, 2012
Foreign currency forward contracts [Member]
Mar. 31, 2013
Foreign currency option contracts [Member]
Dec. 31, 2012
Foreign currency option contracts [Member]
Mar. 31, 2013
Foreign currency and cross currency swap contracts [Member]
Mar. 31, 2013
Forward interest rate contracts [Member]
Mar. 31, 2013
Rate adjustment to LIBOR on Interest Rate Swap Agreements [Member]
Mar. 31, 2012
Rate adjustment to LIBOR on Interest Rate Swap Agreements [Member]
Derivative Instruments Gain Loss [Line Items]
Ineffective portions of cash flow hedging instruments (approximately), gain (loss) $ 1,000,000 $ (1,000,000)
Length of time hedged in foreign currency contracts P3Y
Notional amount 3,700,000,000 3,700,000,000 139,000,000 200,000,000
Amounts expected to be reclassified from Accumulated Other Comprehensive Income into earnings over the next 12 months - gains (losses) 25,000,000
Amounts expected to be reclassified from Accumulated Other Comprehensive Income into earnings over the next 12 months - gain (loss) (1,000,000)
Interest rate swap contracts - fair value hedge - notional amounts 2,500,000,000 3,600,000,000
Derivative lower range variable interest rate 1.60% 0.30%
Derivative higher range variable interest rate 2.00% 2.60%
Unrealized gain (loss) on the hedged debt (22,000,000) 18,000,000
Unrealized gain (loss) on interest rate swaps 22,000,000 (18,000,000)
Foreign currency open contracts - not designated as hedges - notional amounts $ 655,000,000 $ 629,000,000
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/Sheet50.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Contingencies and commitments (Details)
3 Months Ended
Mar. 31, 2013
2012 Settlement Qui Tam [Member]
actions
Mar. 31, 2013
Additional Other Qui Tam [Member]
actions
Dec. 19, 2012
Settled Litigation Related to Sales and Marketing Practices [Member]
states
Loss Contingencies [Line Items]
Number of states 49
Number of claims settled/dismissed 1 2
------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709 Content-Location: file:///C:/a748eec4_3b24_4a27_a16e_e14d434bd709/Worksheets/filelist.xml Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" ------=_NextPart_a748eec4_3b24_4a27_a16e_e14d434bd709--